Exhibit 10.5

 

CONFORMED AS EXECUTED

 

 

CREDIT AGREEMENT

 

Dated as of October 31, 2006

 

among

 

MICHAELS STORES, INC.,

 

as Borrower,

 

DEUTSCHE BANK AG NEW YORK BRANCH,

 

as Administrative Agent,

 

THE OTHER LENDERS PARTY HERETO,

 

JPMORGAN CHASE BANK, N.A.,

 

as Syndication Agent,

 

and

 

BANK OF AMERICA, N.A. and

 

CREDIT SUISSE,

 

as Co-Documentation Agents

 

 

DEUTSCHE BANK SECURITIES INC.,

J.P. MORGAN SECURITIES INC. and

BANC OF AMERICA SECURITIES LLC,

as Co-Lead Arrangers and Joint Bookrunners

 

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Table of Contents

 

 

 

Page

 

 

 

ARTICLE I Definitions and Accounting Terms

 

1

SECTION 1.01. Defined Terms

 

1

SECTION 1.02. Other Interpretive Provisions

 

58

SECTION 1.03. Accounting Terms

 

59

SECTION 1.04. Rounding

 

60

SECTION 1.05. References to Agreements, Laws, Etc

 

60

SECTION 1.06. Times of Day

 

61

SECTION 1.07. Timing of Payment or Performance

 

61

SECTION 1.08. Currency Equivalents Generally

 

61

SECTION 1.09. Change of Currency

 

61

ARTICLE II The Commitments and Credit Extensions

 

61

SECTION 2.01. The Loans

 

61

SECTION 2.02. Borrowings, Conversions and Continuations of Loans

 

61

SECTION 2.03. [Reserved]

 

63

SECTION 2.04. [Reserved]

 

63

SECTION 2.05. Prepayments

 

63

SECTION 2.06. Termination of Commitments

 

67

SECTION 2.07. Amortization of Loans

 

67

SECTION 2.08. Interest

 

67

SECTION 2.09. Fees

 

67

SECTION 2.10. Computation of Interest and Fees

 

67

SECTION 2.11. Evidence of Indebtedness

 

68

SECTION 2.12. Payments Generally

 

68

SECTION 2.13. Sharing of Payments

 

70

SECTION 2.14. Provisions Applicable to Canadian Loan Parties

 

71

ARTICLE III Taxes, Increased Costs Protection and Illegality

 

71

SECTION 3.01. Taxes

 

71

SECTION 3.02. Illegality

 

74

SECTION 3.03. Inability to Determine Rates

 

74

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

 

74

SECTION 3.05. Funding Losses

 

76

SECTION 3.06. Matters Applicable to All Requests for Compensation

 

76

SECTION 3.07. Replacement of Lenders under Certain Circumstances

 

77

SECTION 3.08. Survival

 

78

ARTICLE IV Conditions Precedent to Credit Extensions

 

78

SECTION 4.01. Conditions of Making of Loans

 

78

ARTICLE V Representations and Warranties

 

81

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

 

81

SECTION 5.02. Authorization; No Contravention

 

81

SECTION 5.03. Governmental Authorization; Other Consents

 

82

 

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Page

 

 

 

SECTION 5.04. Binding Effect

 

82

SECTION 5.05. Financial Statements; No Material Adverse Effect

 

82

SECTION 5.06. Litigation

 

83

SECTION 5.07. No Default

 

83

SECTION 5.08. Ownership of Property; Liens

 

84

SECTION 5.09. Environmental Compliance

 

84

SECTION 5.10. Taxes

 

85

SECTION 5.11. ERISA Compliance

 

85

SECTION 5.12. Subsidiaries; Equity Interests

 

86

SECTION 5.13. Margin Regulations; Investment Company Act

 

86

SECTION 5.14. Disclosure

 

86

SECTION 5.15. Intellectual Property; Licenses, Etc

 

86

SECTION 5.16. Solvency

 

87

SECTION 5.17. Subordination of Junior Financing

 

87

SECTION 5.18. Labor Matters

 

87

ARTICLE VI Affirmative Covenants

 

87

SECTION 6.01. Financial Statements

 

87

SECTION 6.02. Certificates; Other Information

 

89

SECTION 6.03. Notices

 

91

SECTION 6.04. Payment of Obligations

 

91

SECTION 6.05. Preservation of Existence, Etc

 

91

SECTION 6.06. Maintenance of Properties

 

92

SECTION 6.07. Maintenance of Insurance

 

92

SECTION 6.08. Compliance with Laws

 

93

SECTION 6.09. Books and Records

 

93

SECTION 6.10. Inspection Rights

 

93

SECTION 6.11. Covenant to Guarantee Obligations and Give Security

 

93

SECTION 6.12. Compliance with Environmental Laws

 

96

SECTION 6.13. Further Assurances and Post-Closing Conditions

 

96

SECTION 6.14. Corporate Separateness

 

97

SECTION 6.15. Pension Plans

 

98

ARTICLE VII Negative Covenants

 

98

SECTION 7.01. Asset Sales

 

98

SECTION 7.02. Limitation on Restricted Payments

 

99

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

 

107

SECTION 7.04. Liens

 

112

SECTION 7.05. Consolidated Secured Debt Ratio

 

112

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

 

113

SECTION 7.07. Transactions with Affiliates

 

115

SECTION 7.08. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries

 

117

SECTION 7.09. Limitation on Guarantees of Indebtedness by Restricted
Subsidiaries

 

118

 

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Page

 

 

 

SECTION 7.10. Change in Nature of Business

 

119

SECTION 7.11. [Reserved]

 

119

SECTION 7.12. Use of Proceeds

 

119

SECTION 7.13. Accounting Changes

 

119

SECTION 7.14. Amendments of Indebtedness, Etc

 

120

ARTICLE VIII Events Of Default and Remedies

 

120

SECTION 8.01. Events of Default

 

120

SECTION 8.02. Remedies Upon Event of Default

 

123

SECTION 8.03. Exclusion of Immaterial Subsidiaries

 

124

SECTION 8.04. Application of Funds

 

124

SECTION 8.05. Company’s Right to Cure

 

125

ARTICLE IX Administrative Agent and Other Agents

 

125

SECTION 9.01. Appointment and Authorization of Agents

 

125

SECTION 9.02. Delegation of Duties

 

126

SECTION 9.03. Liability of Agents

 

126

SECTION 9.04. Reliance by Agents

 

126

SECTION 9.05. Notice of Default

 

127

SECTION 9.06. Credit Decision; Disclosure of Information by Agents

 

127

SECTION 9.07. Indemnification of Agents

 

128

SECTION 9.08. Agents in their Individual Capacities

 

128

SECTION 9.09. Successor Agents

 

128

SECTION 9.10. Administrative Agent May File Proofs of Claim

 

129

SECTION 9.11. Collateral and Guaranty Matters

 

130

SECTION 9.12. Other Agents; Arrangers and Managers

 

131

SECTION 9.13. Appointment of Supplemental Administrative Agents

 

131

SECTION 9.14. Solidary Interests/Quebec Liens (Hypothecs)

 

132

ARTICLE X Miscellaneous

 

133

SECTION 10.01. Amendments, Etc

 

133

SECTION 10.02. Notices and Other Communications; Facsimile Copies

 

134

SECTION 10.03. No Waiver; Cumulative Remedies

 

135

SECTION 10.04. Attorney Costs and Expenses

 

136

SECTION 10.05. Indemnification by the Borrower

 

136

SECTION 10.06. Payments Set Aside

 

137

SECTION 10.07. Successors and Assigns

 

137

SECTION 10.08. Confidentiality

 

141

SECTION 10.09. Setoff

 

141

SECTION 10.10. Interest Rate Limitation

 

142

SECTION 10.11. Counterparts

 

142

SECTION 10.12. Integration

 

142

SECTION 10.13. Survival of Representations and Warranties

 

142

SECTION 10.14. Severability

 

143

SECTION 10.15. Tax Forms

 

143

SECTION 10.16. GOVERNING LAW

 

145

 

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Page

 

 

 

SECTION 10.17. WAIVER OF RIGHT TO TRIAL BY JURY

 

145

SECTION 10.18. Binding Effect

 

146

SECTION 10.19. Lender Action

 

146

SECTION 10.20. USA PATRIOT Act; Proceeds of Crime Act

 

146

SECTION 10.21. Judgment Currency

 

146

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

 

147

SECTION 10.23. Assignment of Obligations

 

147

 

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SCHEDULES

 

 

 

 

 

1.01A

[Reserved]

 

 

1.01B

Collateral Documents

 

 

1.01C

[Reserved]

 

 

1.01D

Mortgaged Properties

 

 

1.01E

Excluded Subsidiary

 

 

1.01F

Foreign Subsidiary

 

 

2.01

Commitments

 

 

5.05

Financial Statement Exceptions

 

 

5.10

Taxes

 

 

5.11

ERISA and other Pension Plan Compliance

 

 

5.12

Subsidiaries and Other Equity Investments

 

 

6.07

Insurance

 

 

7.03

Existing Indebtedness

 

 

7.04

Existing Liens

 

 

10.02

Administrative Agent’s Office, Certain Addresses for Notices

 

 

 

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EXHIBITS

 

 

 

 

 

 

 

Form of

 

 

 

 

 

 

 

A

Committed Loan Notice

 

 

B

[Reserved]

 

 

C

Note

 

 

D

Compliance Certificate

 

 

E

Assignment and Assumption

 

 

F-1

Domestic Guaranty

 

 

F-2

Canadian Guarantee

 

 

G-1

Security Agreement

 

 

G-2

Canadian Security Agreement

 

 

H

Intercreditor Agreement

 

 

I

Opinion Matters — Counsel to Loan Parties

 

 

J

Intercompany Note

 

 

 

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CREDIT AGREEMENT

 

This CREDIT AGREEMENT (“Agreement”) is entered into as of October 31, 2006,
among MICHAELS STORES, INC., a Delaware corporation (the “Borrower”), DEUTSCHE
BANK AG NEW YORK BRANCH, as Administrative Agent, each lender from time to time
party hereto (collectively, the “Lenders” and individually, a “Lender”),
JPMORGAN CHASE BANK, N.A., as Syndication Agent, and BANK OF AMERICA, N.A. and
CREDIT SUISSE, as Co-Documentation Agents.

 

PRELIMINARY STATEMENTS

 

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

 

The Borrower has requested that simultaneously with the consummation of the
Recapitalization, the Lenders make Loans to the Borrower in an initial aggregate
principal amount of $2,400,000,000.

 

The proceeds of the Loans made on the Closing Date, together with the proceeds
of (i) the issuance of the New Notes, (ii) the funding of $400,000,000 under the
ABL Credit Agreement on the Closing Date and (iii) the Equity Contribution, will
be used to finance the Debt Prepayment and pay the Merger Consideration and the
Transaction Expenses.

 

The Lenders have indicated their willingness to lend on the terms and subject to
the conditions set forth herein.

 

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

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.01.  DEFINED TERMS.  AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS
SHALL HAVE THE MEANINGS SET FORTH BELOW:

 

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

 

“ABL Collateral Documents” shall mean the “Security Documents” as defined in the
ABL Credit Agreement.

 

“ABL Credit Agreement” shall mean the Credit Agreement, dated as of October 31,
2006, among the Borrower, as the lead borrower, the other borrowers named
therein, the facility guarantors identified therein, Bank of America, N.A., as
administrative agent and as collateral agent, and the lenders identified
therein, as the same may be amended, restated,

 

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modified, supplemented, extended, renewed, refunded, replaced or refinanced from
time to time in one or more agreements or indentures (in each case with the same
or new lenders, institutional investors or agents), including any agreement or
indenture extending the maturity thereof or otherwise restructuring all or any
portion of the Indebtedness thereunder or increasing the amount loaned or issued
thereunder or altering the maturity thereof (so long as, in the case of any
replacement or refinancing, all commitments under the agreements or indentures
so replaced or refinanced shall have been terminated, all unpaid amounts
thereunder (other than indemnities) shall have been paid in full and all parties
to any replacement or refinancing agreements or indentures, or a trustee or
agent on their behalf, shall have become party to the Intercreditor Agreement as
of the applicable date of replacement or refinancing, as the case may be).

 

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

 

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

 

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

 

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

 

“ACH” means automated clearing house transfers.

 

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

 

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

 

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

 

“Additional Assets” means (a) any asset used or useful in a Similar Business,
including any such asset acquired through any capital expenditure, (b) the
Capital Stock of a Person that becomes a Restricted Subsidiary as a result of
the acquisition of such Capital Stock

 

2

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by the Borrower or another Restricted Subsidiary or is merged or amalgamated
with or into the Borrower or another Restricted Subsidiary and that is primarily
engaged in a Similar Business, (c) Capital Stock constituting a minority
interest in any Person that at such time is a Restricted Subsidiary that is
primarily engaged in a Similar Business, (d) all or substantially all of the
assets of a Similar Business or (e) any other asset that replaces an asset that
is the subject of an Asset Sale.

 

“Additional Interest” means all additional interest then owing with respect to
any New Notes pursuant to the relevant Registration Rights Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Agreement” means this Credit Agreement.

 

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

 

“Alternative Average Monthly Balance” means, with respect to any Indebtedness
incurred by the Borrower or its Restricted Subsidiaries under a revolving credit

 

3

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facility, the quotient of (x) the sum of each Alternative Individual Monthly
Balance for each fiscal month ended on or prior to such date of determination
and included in the Relevant Reference Period divided by (y) 12.

 

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

 

“Applicable Rate” means a percentage per annum equal to (i) in the case of
Eurocurrency Rate Loans, 3.00% and (ii) in the case of Base Rate Loans, 2.00%,
less, in each case the sum of (i) if (but only if) the Consolidated Total
Leverage Ratio as set forth in the most recent Compliance Certificate received
by the Administrative Agent pursuant to Section 6.02(b) is less than 5.50 to
1.00, 0.25% and (ii) if (but only if) the Moody’s Applicable Corporate Rating
then most recently published is B1 or higher (with at least a stable outlook),
0.25%.  Any increase or decrease in the Applicable Rate resulting from a change
in the Consolidated Total Leverage Ratio or the Moody’s Applicable Corporate
Rating shall become effective as of the first Business Day immediately following
the date a Compliance Certificate is delivered pursuant to Section 6.02(b) or
the then most recent Moody’s Applicable Corporate Rating is published, as the
case may be; provided that at the option of the Administrative Agent or the
Required Lenders, no deduction shall apply (x) in the case of clause (i) above,
as of the first Business Day after the date on which a Compliance Certificate
was required to have been delivered but was not delivered, and shall continue
not to apply to and including the date on which a subsequent Compliance
Certificate is actually delivered (with any deduction as otherwise determined in
accordance with this definition to apply thereafter), (y) in the case of clause
(ii) above, as of the first Business Day after the date on which Moody’s ceases
to maintain or publish a Moody’s Applicable Corporate Rating (of any level), and
shall continue not to apply to and including the date on which a new Moody’s
Applicable Corporate Rating is so published (with any deduction as otherwise
determined in accordance with this definition to apply thereafter), and (z) in
the case of clauses (i) and (ii) above, as of the first Business Day after an
Event of Default under Section 8.01(a), (f) or (g) shall have occurred and be
continuing, and shall continue not to apply to but excluding the date on which
such Event of Default is cured or waived (with any deduction as otherwise
determined in accordance with this definition to apply thereafter).

 

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

 

“Arrangers” means Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and
Banc of America Securities LLC, each in its capacity as a Joint Bookrunner and a
Co-Lead Arranger under this Agreement.

 

“Asset Sale” means (a) the sale, conveyance, transfer or other disposition,
whether in a single transaction or a series of related transactions, of property
or assets (including by way of a Sale and Lease-Back Transaction) of the
Borrower or any of its Restricted Subsidiaries (each referred to in this
definition as a “disposition”) or (b) the issuance or sale of

 

4

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Equity Interests of any Restricted Subsidiary, whether in a single transaction
or a series of related transactions (other than directors’ qualifying shares and
shares issued to foreign nationals as required under applicable law); in each
case, other than:

 

(I)            ANY DISPOSITION OF CASH EQUIVALENTS OR INVESTMENT GRADE
SECURITIES OR OBSOLETE OR WORN OUT PROPERTY OR EQUIPMENT IN THE ORDINARY COURSE
OF BUSINESS OR ANY DISPOSITION OF INVENTORY OR GOODS (OR OTHER ASSETS) HELD FOR
SALE IN THE ORDINARY COURSE OF BUSINESS (IT BEING UNDERSTOOD THAT THE SALE OF
INVENTORY OR GOODS (OR OTHER ASSETS) IN BULK IN CONNECTION WITH THE CLOSING OF
ANY NUMBER OF STORES IN THE ORDINARY COURSE OF BUSINESS SHALL BE CONSIDERED A
SALE IN THE ORDINARY COURSE OF BUSINESS);

 

(II)           THE DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE
BORROWER IN A MANNER PERMITTED PURSUANT TO SECTION 7.06 OR ANY DISPOSITION THAT
CONSTITUTES A CHANGE OF CONTROL;

 

(III)          THE MAKING OF ANY RESTRICTED PAYMENT THAT IS PERMITTED TO BE
MADE, AND IS MADE, UNDER SECTION 7.02 OR THE MAKING OF ANY PERMITTED INVESTMENT;

 

(IV)          (X) ANY DISPOSITION OF ASSETS OR ISSUANCE OR SALE OF EQUITY
INTERESTS OF ANY RESTRICTED SUBSIDIARY, IN EACH CASE THAT DO NOT OR WOULD NOT
UPON DISPOSITION OR ISSUANCE CONSTITUTE TL PRIORITY COLLATERAL, IN ANY
TRANSACTION OR SERIES OF TRANSACTIONS WITH AN AGGREGATE FAIR MARKET VALUE OF
LESS THAN $25,000,000 AND (Y) ANY DISPOSITION OF ASSETS OR ISSUANCE OR SALE OF
EQUITY INTERESTS OF ANY RESTRICTED SUBSIDIARY, IN EACH CASE THAT CONSTITUTES, OR
UPON DISPOSITION OR ISSUANCE WOULD CONSTITUTE, TL PRIORITY COLLATERAL IN ANY
TRANSACTION OR SERIES OF TRANSACTIONS WITH AN AGGREGATE FAIR MARKET VALUE OF
LESS THAN $10,000,000;

 

(V)           ANY DISPOSITION OF PROPERTY OR ASSETS OR ISSUANCE OF SECURITIES BY
A RESTRICTED SUBSIDIARY OF THE BORROWER TO THE BORROWER OR BY THE BORROWER OR A
RESTRICTED SUBSIDIARY OF THE BORROWER TO ANOTHER RESTRICTED SUBSIDIARY OF THE
BORROWER;

 

(VI)          TO THE EXTENT ALLOWABLE UNDER SECTION 1031 OF THE CODE, ANY
EXCHANGE OF LIKE PROPERTY (EXCLUDING ANY BOOT THEREON) FOR USE IN A SIMILAR
BUSINESS;

 

(VII)         THE LEASE, ASSIGNMENT, SUBLEASE, LICENSE OR SUBLICENSE OF ANY REAL
OR PERSONAL PROPERTY IN THE ORDINARY COURSE OF BUSINESS;

 

(VIII)        ANY ISSUANCE OR SALE OF EQUITY INTERESTS IN, OR INDEBTEDNESS OR
OTHER SECURITIES OF, AN UNRESTRICTED SUBSIDIARY;

 

(IX)           FORECLOSURES ON OR EXPROPRIATIONS OF ASSETS;

 

(X)            (A) SALES OF ACCOUNTS RECEIVABLE, OR PARTICIPATIONS THEREIN, IN
CONNECTION WITH ANY RECEIVABLES FACILITY, OR (B) THE DISPOSITION OF AN ACCOUNT

 

5

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RECEIVABLE IN CONNECTION WITH THE COLLECTION OR COMPROMISE THEREOF IN THE
ORDINARY COURSE OF BUSINESS AND NOT AS PART OF A FINANCING TRANSACTION;

 

(XI)           THE GRANTING OF A LIEN THAT IS A PERMITTED LIEN OR A PERMITTED
COLLATERAL LIEN;

 

(XII)          THE ISSUANCE BY A RESTRICTED SUBSIDIARY OF PREFERRED STOCK OR
DISQUALIFIED STOCK THAT IS PERMITTED BY SECTION 7.03; AND

 

(XIII)         ANY FINANCING TRANSACTION WITH RESPECT TO PROPERTY BUILT OR
ACQUIRED BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY AFTER THE CLOSING DATE,
INCLUDING ASSET SECURITIZATIONS PERMITTED BY THIS AGREEMENT BUT EXCLUDING ANY
SALE AND LEASE-BACK TRANSACTION.

 

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

 

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

 

“Assignment and Assumption” means an Assignment and Assumption substantially in
the form of Exhibit E.

 

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

 

“Audited Financial Statements” means the audited consolidated balance sheets of
the Borrower and its Subsidiaries as of each of January 28, 2006 and January 29,
2005, and the related audited consolidated statements of income, stockholders’
equity and cash flows for the Borrower and its Subsidiaries for the fiscal years
ended January 28, 2006, January 29, 2005 and January 31, 2004, respectively.

 

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

 

6

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ended prior to the date of the respective repayment of such Indebtedness shall
be decreased by the aggregate principal amount of such Indebtedness so repaid
(it being understood that a notice delivered in good faith by a Responsible
Officer of the Borrower pursuant to Section 6.02(h), and any judgment made in
good faith by a Responsible Officer of the Borrower that no notice is required
to be delivered pursuant to the terms of Section 6.02(h) in connection with a
given incurrence or repayment of Indebtedness under a revolving credit facility
(e.g., because proceeds of a revolving credit facility are not then being
applied to finance an Acquisition, Investment or other Restricted Payment),
shall be conclusive for purposes of any determination of an increase or decrease
of the Average Monthly Balance pursuant to this proviso).  Notwithstanding the
foregoing, the Individual Monthly Balance for each fiscal month occurring prior
to the Closing Date and used in determining the Average Monthly Balance in
respect of a Relevant Reference Period ending on or prior to October 31, 2007
shall be deemed to be the following:

 

Fiscal Month Ended

 

Individual Monthly Balance ($ million)

 

 

 

 

 

November 30, 2005

 

316.7

 

December 31, 2005

 

194.6

 

January 31, 2006

 

170.8

 

February 28, 2006

 

154.4

 

March 31, 2006

 

197.6

 

April 30, 2006

 

154.1

 

May 31, 2006

 

190.0

 

June 30, 2006

 

235.5

 

July 31, 2006

 

221.3

 

August 31, 2006

 

273.0

 

September 30, 2006

 

315.5

 

October 31, 2006

 

308.4

 

 

“Base Rate” means for any day a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as publicly announced from time to time by DBNY as its
“prime rate.”  The “prime rate” is a rate set by DBNY based upon various factors
including DBNY costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate.  Any change in such rate

 

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announced by DBNY shall take effect at the opening of business on the day
specified in the public announcement of such change.

 

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

 

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

 

“Borrower” has the meaning provided in the introductory paragraph of this
Agreement; provided that when used in the context of determining the fair market
value of an asset or liability under this Agreement, “Borrower” shall, unless
otherwise expressly stated, be deemed to mean the Board of Directors of the
Borrower when the fair market value of such asset or liability is equal to or in
excess of $100,000,000 (unless otherwise expressly stated).

 

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

 

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type
and, in the case of Eurocurrency Rate Loans, having the same Interest Period
made by each of the Lenders pursuant to Section 2.01.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and if
such day relates to any interest rate settings as to a Eurocurrency Rate Loan,
any fundings, disbursements, settlements and payments in respect of any such
Eurocurrency Rate Loan, or any other dealings to be carried out pursuant to this
Agreement in respect of any such Eurocurrency Rate Loan, means any such day on
which dealings in deposits in Dollars are conducted by and between banks in the
London interbank eurodollar market.

 

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

 

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

 

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

 

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

 

“Capital Expenditures” means, for any period, the aggregate of (a) all
expenditures (whether paid in cash or accrued as liabilities) by the Borrower
and the Restricted Subsidiaries during such period that, in conformity with
GAAP, are or are required to be included as additions during such period to
property, plant or equipment reflected in the consolidated balance sheet of the
Borrower and the Restricted Subsidiaries and (b) the value of all assets under
(or subject to) Capitalized Lease Obligations incurred by the Borrower and the
Restricted Subsidiaries during such period; provided that the term “Capital
Expenditures” shall not include (i) expenditures made in connection with the
replacement, substitution, restoration or repair of assets to the extent
financed with (x) insurance proceeds paid on account of the loss of or damage to
the assets being replaced, restored or repaired or (y) awards of compensation
arising from the taking by eminent domain or condemnation of the assets being
replaced, (ii) the purchase price of equipment that is purchased simultaneously
with the trade-in of existing equipment to the extent that the gross amount of
such purchase price is reduced by the credit granted by the seller of such
equipment for the equipment being traded in at such time, (iii) the purchase of
plant, property or equipment or software to the extent financed with the
proceeds of Asset Sales that are not required to be applied to prepay Loans
pursuant to Section 2.05(c), (iv) expenditures that are accounted for as capital
expenditures by the Borrower or any Restricted Subsidiary and that actually are
paid for by a Person other than the Borrower or any Restricted Subsidiary, to
the extent neither the Borrower nor any Restricted Subsidiary has provided or is
required to provide or incur, directly or indirectly, any consideration or
obligation to such Person or any other Person (whether before, during or after
such period), (v) the book value of any asset owned by the Borrower or any
Restricted Subsidiary prior to or during such period to the extent that such
book value is included as a capital expenditure during such period as a result
of such Person reusing or beginning to reuse such asset during such period
without a corresponding expenditure actually having been made in such period,
provided that (A) any expenditure necessary in order to permit such asset to be
reused shall be included as a Capital Expenditure during the period in which
such expenditure actually is made and (B) such book value shall have been
included in Capital Expenditures when such asset was originally acquired, (vi)
expenditures that constitute Acquisitions permitted hereunder, (vii) any
expenditure which but for this clause (vii) would otherwise constitute a
“Capital Expenditure”, to the extent financed with the proceeds of the sale or
issuance of any Equity Interests of the Borrower or (viii) that portion of
interest on Indebtedness incurred for Capital Expenditures which is paid in cash
and capitalized in accordance with GAAP during such period.

 

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

 

9

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

 

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

 

“Cash Equivalents” means:

 

(A)           UNITED STATES DOLLARS AND CANADIAN DOLLARS;

 

(B)           (I)  EURO, OR ANY NATIONAL CURRENCY OF ANY PARTICIPATING MEMBER
STATE OF THE EMU; OR

 

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

 

(C)           SECURITIES ISSUED OR DIRECTLY AND FULLY AND UNCONDITIONALLY
GUARANTEED OR INSURED BY THE U.S. GOVERNMENT OR ANY AGENCY OR INSTRUMENTALITY
THEREOF THE SECURITIES OF WHICH ARE UNCONDITIONALLY GUARANTEED AS A FULL FAITH
AND CREDIT OBLIGATION OF SUCH GOVERNMENT WITH MATURITIES OF 24 MONTHS OR LESS
FROM THE DATE OF ACQUISITION;

 

(D)           CERTIFICATES OF DEPOSIT, TIME DEPOSITS AND EURODOLLAR TIME
DEPOSITS WITH MATURITIES OF ONE YEAR OR LESS FROM THE DATE OF ACQUISITION,
BANKERS’ ACCEPTANCES WITH MATURITIES NOT EXCEEDING ONE YEAR AND OVERNIGHT BANK
DEPOSITS, IN EACH CASE WITH ANY COMMERCIAL BANK HAVING CAPITAL AND SURPLUS OF
NOT LESS THAN $250,000,000 IN THE CASE OF U.S. BANKS AND, IN THE CASE OF ANY
FOREIGN SUBSIDIARY THAT IS A RESTRICTED SUBSIDIARY, $100,000,000 (OR THE U.S.
DOLLAR EQUIVALENT AS OF THE DATE OF DETERMINATION) IN THE CASE OF NON-U.S.
BANKS, AND IN EACH CASE IN A CURRENCY PERMITTED UNDER CLAUSES (A) OR (B) ABOVE;

 

(E)           REPURCHASE OBLIGATIONS FOR UNDERLYING SECURITIES OF THE TYPES
DESCRIBED IN CLAUSES (C) AND (D) ENTERED INTO WITH ANY FINANCIAL INSTITUTION
MEETING THE QUALIFICATIONS SPECIFIED IN CLAUSE (D) ABOVE AND IN EACH CASE IN A
CURRENCY PERMITTED UNDER CLAUSES (A) OR (B) ABOVE;

 

(F)            COMMERCIAL PAPER RATED AT LEAST P-2 BY MOODY’S OR AT LEAST A-2 BY
S&P AND IN EACH CASE MATURING WITHIN 24 MONTHS AFTER THE DATE OF CREATION
THEREOF AND IN EACH CASE IN A CURRENCY PERMITTED UNDER CLAUSES (A) OR (B) ABOVE;

 

(G)           MARKETABLE SHORT TERM MONEY MARKET AND SIMILAR SECURITIES HAVING A
RATING OF AT LEAST P-2 OR A-2 FROM EITHER MOODY’S OR S&P, RESPECTIVELY (OR, IF
AT ANY TIME NEITHER MOODY’S NOR S&P SHALL BE RATING SUCH OBLIGATIONS, AN
EQUIVALENT RATING FROM ANOTHER RATING AGENCY) AND IN EACH CASE MATURING WITHIN
24 MONTHS AFTER THE DATE OF CREATION THEREOF AND IN EACH CASE IN A CURRENCY
PERMITTED UNDER CLAUSES (A) OR (B) ABOVE;

 

10

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(H)           READILY MARKETABLE DIRECT OBLIGATIONS ISSUED BY ANY STATE,
COMMONWEALTH OR TERRITORY OF THE UNITED STATES OR ANY POLITICAL SUBDIVISION OR
TAXING AUTHORITY THEREOF HAVING AN INVESTMENT GRADE RATING FROM EITHER MOODY’S
OR S&P WITH MATURITIES OF 24 MONTHS OR LESS FROM THE DATE OF ACQUISITION;

 

(I)            INDEBTEDNESS OR PREFERRED STOCK ISSUED BY PERSONS WITH A RATING
OF A OR HIGHER FROM S&P OR A2 OR HIGHER FROM MOODY’S WITH MATURITIES OF 24
MONTHS OR LESS FROM THE DATE OF ACQUISITION AND IN EACH CASE IN A CURRENCY
PERMITTED UNDER CLAUSES (A) OR (B) ABOVE;

 

(J)            INVESTMENTS WITH AVERAGE MATURITIES OF 12 MONTHS OR LESS FROM THE
DATE OF ACQUISITION IN MONEY MARKET FUNDS RATED AAA- (OR THE EQUIVALENT THEREOF)
OR BETTER BY S&P OR AAA3 (OR THE EQUIVALENT THEREOF) OR BETTER BY MOODY’S AND IN
EACH CASE IN A CURRENCY PERMITTED UNDER CLAUSES (A) OR (B) ABOVE;

 

(K)           INVESTMENT FUNDS INVESTING SUBSTANTIALLY ALL OF THEIR ASSETS IN
SECURITIES OF THE TYPE DESCRIBED IN CLAUSES (A) THROUGH (J) ABOVE; AND

 

(L)            CREDIT CARD RECEIVABLES AND DEBIT CARD RECEIVABLES SO LONG AS
SAME ARE PAYABLE BY A FINANCIAL INSTITUTION AND ARE CONSIDERED “CASH
EQUIVALENTS” IN ACCORDANCE WITH GAAP AND ARE SO REFLECTED ON THE BORROWER’S
BALANCE SHEET.

 

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

 

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

 

“Casualty Event” means any event that gives rise to the receipt by the Borrower
or any Restricted Subsidiary of any insurance proceeds or condemnation awards in
respect of any equipment, fixed assets or real property (including any
improvements thereon) to replace or repair such equipment, fixed assets or real
property.

 

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

 

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

 

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

 

(A)           THE SALE, LEASE OR TRANSFER, IN ONE OR A SERIES OF RELATED
TRANSACTIONS (OTHER THAN BY WAY OF MERGER OR CONSOLIDATION), OF ALL OR
SUBSTANTIALLY ALL OF THE ASSETS OF THE

 

11

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BORROWER AND ITS SUBSIDIARIES, TAKEN AS A WHOLE, TO ANY PERSON OTHER THAN ONE OR
MORE PERMITTED HOLDERS; OR

 

(B)           THE BORROWER BECOMES AWARE OF (BY WAY OF A REPORT OR ANY OTHER
FILING PURSUANT TO SECTION 13(D) OF THE EXCHANGE ACT, PROXY, VOTE, WRITTEN
NOTICE OR OTHERWISE) THE ACQUISITION BY (I) ANY PERSON (OTHER THAN ONE OR MORE
PERMITTED HOLDERS) OR (II) PERSONS (OTHER THAN ONE OR MORE PERMITTED HOLDERS)
THAT TOGETHER ARE (1) A GROUP (WITHIN THE MEANING OF SECTION 13(D)(3) OR SECTION
14(D)(2) OF THE EXCHANGE ACT, OR ANY SUCCESSOR PROVISION), OR (2) ACTING FOR THE
PURPOSE OF ACQUIRING, HOLDING OR DISPOSING OF SECURITIES (WITHIN THE MEANING OF
RULE 13D-5(B)(1) UNDER THE EXCHANGE ACT) AS A GROUP IN A SINGLE TRANSACTION OR
IN A RELATED SERIES OF TRANSACTIONS, BY WAY OF MERGER, CONSOLIDATION OR OTHER
BUSINESS COMBINATION OR PURCHASE OF BENEFICIAL OWNERSHIP (WITHIN THE MEANING OF
RULE 13D-3 UNDER THE EXCHANGE ACT, OR ANY SUCCESSOR PROVISION) OF 50% OR MORE OF
THE TOTAL VOTING POWER OF THE VOTING STOCK OF THE BORROWER OR ANY OF ITS DIRECT
OR INDIRECT PARENT COMPANIES HOLDING DIRECTLY OR INDIRECTLY 100% OF THE TOTAL
VOTING POWER OF THE VOTING STOCK OF THE BORROWER; OR

 

(C)           ANY “CHANGE OF CONTROL” (OR ANY COMPARABLE TERM) IN ANY DOCUMENT
PERTAINING TO (I) THE ABL CREDIT AGREEMENT, (II) THE SENIOR NOTES, THE SENIOR
SUBORDINATED NOTES, THE SUBORDINATED DISCOUNT NOTES OR ANY REFINANCING
INDEBTEDNESS IN RESPECT OF THE FOREGOING WITH AN AGGREGATE OUTSTANDING PRINCIPAL
AMOUNT IN EXCESS OF THE THRESHOLD AMOUNT OR (III) ANY DISQUALIFIED STOCK WITH AN
AGGREGATE LIQUIDATION PREFERENCE IN EXCESS OF THE THRESHOLD AMOUNT.

 

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

 

“Closing Date” means the first date on which all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 4.01.

 

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

 

“Co-Documentation Agent” means Bank of America, N.A. and Credit Suisse, as
Co-Documentation Agents under this Agreement.

 

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

 

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

 

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

 

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

 

(A)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED (X) EACH COLLATERAL
DOCUMENT REQUIRED TO BE DELIVERED ON THE CLOSING DATE PURSUANT TO SECTION
4.01(A)(III) OR PURSUANT TO SECTION 6.11 AT SUCH TIME, AND (Y) THE INTERCREDITOR
AGREEMENT, IN EACH CASE DULY EXECUTED BY EACH LOAN PARTY THERETO;

 

(B)           ALL OBLIGATIONS SHALL HAVE BEEN UNCONDITIONALLY GUARANTEED BY THE
BORROWER (IN THE CASE OF OBLIGATIONS UNDER CLAUSE (Y) OF THE FIRST SENTENCE OF
THE DEFINITION THEREOF), EACH RESTRICTED SUBSIDIARY THAT IS A DOMESTIC
SUBSIDIARY AND NOT AN EXCLUDED SUBSIDIARY AND, AFTER THE FORMATION THEREOF,
HOLDCO;

 

(C)           ALL GUARANTEES ISSUED OR TO BE ISSUED IN RESPECT OF THE SENIOR
SUBORDINATED NOTES AND THE SUBORDINATED DISCOUNT NOTES SHALL BE SUBORDINATED TO
THE GUARANTIES TO THE SAME EXTENT THAT THE SENIOR SUBORDINATED NOTES OR THE
SUBORDINATED DISCOUNT NOTES, AS THE CASE MAY BE, ARE SUBORDINATED TO THE
OBLIGATIONS;

 

(D)           THE OBLIGATIONS AND THE GUARANTIES SHALL HAVE BEEN SECURED BY A
FIRST PRIORITY SECURITY INTEREST (SUBJECT TO THE TERMS OF THE INTERCREDITOR
AGREEMENT) IN ALL EQUITY INTERESTS (OTHER THAN EQUITY INTERESTS OF UNRESTRICTED
SUBSIDIARIES AND ANY EQUITY INTEREST OF ANY RESTRICTED SUBSIDIARY PLEDGED TO
SECURE INDEBTEDNESS PERMITTED UNDER SECTION 7.03(B)(XIX)) OF EACH WHOLLY OWNED
SUBSIDIARY DIRECTLY OWNED BY ANY GUARANTOR; PROVIDED THAT PLEDGES OF VOTING
EQUITY INTERESTS OF EACH FOREIGN SUBSIDIARY (INCLUDING EACH FOREIGN SUBSIDIARY
HELD BY A CANADIAN SUBSIDIARY GUARANTOR) SHALL BE LIMITED TO 65% OF THE TOTAL
COMBINED VOTING POWER OF ALL EQUITY INTERESTS OF SUCH FOREIGN SUBSIDIARY AT ANY
TIME; PROVIDED FURTHER THAT IN THE CASE OF CANADIAN SUBSIDIARY GUARANTOR THAT
OWNS EQUITY INTERESTS IN A FOREIGN SUBSIDIARY, THE PLEDGE OF VOTING EQUITY
INTERESTS OF SUCH CANADIAN SUBSIDIARY GUARANTOR SHALL BE LIMITED TO 65% OF THE
TOTAL COMBINED VOTING POWER OF ALL EQUITY INTERESTS OF SUCH CANADIAN SUBSIDIARY
GUARANTOR (OR, IF SUCH CANADIAN SUBSIDIARY GUARANTOR IS AN UNLIMITED LIABILITY
COMPANY, SUCH LESSER PERCENTAGE AS IS ACCEPTABLE TO THE COLLATERAL AGENT);

 

(E)           EXCEPT TO THE EXTENT OTHERWISE PERMITTED HEREUNDER OR UNDER ANY
COLLATERAL DOCUMENT, THE OBLIGATIONS AND THE GUARANTIES SHALL HAVE BEEN SECURED
BY A SECURITY INTEREST IN, AND MORTGAGES ON, SUBSTANTIALLY ALL TANGIBLE AND
INTANGIBLE ASSETS OF THE BORROWER AND EACH OTHER GUARANTOR (INCLUDING ACCOUNTS,
INVENTORY, EQUIPMENT, INVESTMENT PROPERTY, CONTRACT RIGHTS, INTELLECTUAL
PROPERTY, OTHER GENERAL INTANGIBLES, OWNED REAL PROPERTY AND PROCEEDS OF THE
FOREGOING), IN EACH CASE, WITH THE PRIORITY REQUIRED BY THE COLLATERAL DOCUMENTS
AND THE INTERCREDITOR AGREEMENT; PROVIDED THAT SECURITY INTERESTS IN REAL
PROPERTY SHALL BE LIMITED TO THE MORTGAGED PROPERTIES;

 

(F)            NONE OF THE COLLATERAL SHALL BE SUBJECT TO ANY LIENS OTHER THAN
LIENS PERMITTED BY SECTION 7.04; AND

 

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(G)           THE COLLATERAL AGENT SHALL HAVE RECEIVED (I) COUNTERPARTS OF A
MORTGAGE WITH RESPECT TO EACH OWNED PROPERTY REQUIRED TO BE DELIVERED PURSUANT
TO SECTION 6.11 (THE “MORTGAGED PROPERTIES”) DULY EXECUTED AND DELIVERED BY THE
RECORD OWNER OF SUCH PROPERTY, (II) A POLICY OR POLICIES OF TITLE INSURANCE
ISSUED BY A NATIONALLY RECOGNIZED TITLE INSURANCE COMPANY INSURING THE LIEN OF
EACH SUCH MORTGAGE AS A VALID FIRST PRIORITY LIEN ON THE PROPERTY DESCRIBED
THEREIN (SUBJECT TO THE APPLICABLE PROVISIONS OF THE INTERCREDITOR AGREEMENT),
FREE OF ANY OTHER LIENS EXCEPT AS EXPRESSLY PERMITTED BY SECTION 7.04, TOGETHER
WITH SUCH ENDORSEMENTS, COINSURANCE AND REINSURANCE AS THE ADMINISTRATIVE AGENT
MAY REASONABLY REQUEST, (III) SUCH EXISTING SURVEYS, EXISTING ABSTRACTS,
EXISTING APPRAISALS AND OTHER DOCUMENTS AS THE ADMINISTRATIVE AGENT MAY
REASONABLY REQUEST WITH RESPECT TO ANY SUCH MORTGAGED PROPERTY AND (IV) TO THE
EXTENT REQUIRED BY APPLICABLE LAW, FLOOD CERTIFICATES COVERING EACH MORTGAGED
PROPERTY IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COLLATERAL AGENT,
CERTIFIED TO THE COLLATERAL AGENT IN ITS CAPACITY AS SUCH AND CERTIFYING WHETHER
OR NOT SUCH MORTGAGED PROPERTY IS LOCATED IN A FLOOD HAZARD ZONE BY REFERENCE TO
THE APPLICABLE FEMA MAP.

 

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

 

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

 

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

 

“Commitment” means, as to each Lender, its obligation to make a Loan to the
Borrower pursuant to Section 2.01 in an aggregate principal amount not to exceed
the amount set forth opposite such Lender’s name on Schedule 2.01 under the
caption “Commitment” or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as

 

14

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applicable, as such amount may be adjusted from time to time in accordance with
this Agreement.  The initial aggregate amount of the Commitments is
$2,400,000,000.

 

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

 

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

 

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

 

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

 

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

 

(A)           CONSOLIDATED INTEREST EXPENSE OF SUCH PERSON AND ITS RESTRICTED
SUBSIDIARIES FOR SUCH PERIOD, TO THE EXTENT SUCH EXPENSE WAS DEDUCTED (AND NOT
ADDED BACK) IN COMPUTING CONSOLIDATED NET INCOME (INCLUDING (I) AMORTIZATION OF
ORIGINAL ISSUE DISCOUNT RESULTING FROM THE ISSUANCE OF INDEBTEDNESS AT LESS THAN
PAR, (II) ALL COMMISSIONS, DISCOUNTS AND OTHER FEES AND CHARGES OWED WITH
RESPECT TO LETTERS OF CREDIT OR BANKERS ACCEPTANCES, (III) NON-CASH INTEREST
PAYMENTS (BUT EXCLUDING ANY NON CASH INTEREST EXPENSE ATTRIBUTABLE TO THE
MOVEMENT IN THE MARK TO MARKET VALUATION OF HEDGING OBLIGATIONS OR OTHER
DERIVATIVE INSTRUMENTS PURSUANT TO GAAP), (IV) THE INTEREST COMPONENT OF
CAPITALIZED LEASE OBLIGATIONS, AND (V) NET PAYMENTS, IF ANY, MADE (LESS NET
PAYMENTS, IF ANY, RECEIVED) PURSUANT TO INTEREST RATE HEDGING OBLIGATIONS WITH
RESPECT TO INDEBTEDNESS, AND EXCLUDING (V) PENALTIES AND INTEREST RELATED TO
TAXES, (W) ANY ADDITIONAL INTEREST WITH RESPECT TO THE NEW NOTES, (X)
AMORTIZATION OF DEFERRED FINANCING FEES, DEBT ISSUANCE COSTS, DISCOUNTED
LIABILITIES, COMMISSIONS, FEES AND EXPENSES, (Y) ANY EXPENSING OF BRIDGE,
COMMITMENT AND OTHER FINANCING FEES AND (Z) COMMISSIONS, DISCOUNTS, YIELD AND
OTHER FEES AND CHARGES (INCLUDING ANY INTEREST EXPENSE) RELATED TO ANY
RECEIVABLES FACILITY); PLUS

 

(B)           CONSOLIDATED CAPITALIZED INTEREST OF SUCH PERSON AND ITS
RESTRICTED SUBSIDIARIES FOR SUCH PERIOD, WHETHER PAID OR ACCRUED; LESS

 

(C)           INTEREST INCOME FOR SUCH PERIOD.

 

For purposes of this definition, interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably determined by such
Person to be the rate of interest implicit in such Capitalized Lease Obligation
in accordance with GAAP.  For purposes of determining Consolidated Interest
Expense for any period ending prior to the first anniversary of the Closing
Date, Consolidated Interest Expense shall be $92.5 million for the fiscal
quarter ended January 28, 2006, $91.4 million for the fiscal quarter ended April
29, 2006 and $92.5

 

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million for the fiscal quarter ended July 29, 2006; provided that the foregoing
amounts shall be subject to pro forma adjustment as contemplated by the
definition of “Fixed Charge Coverage Ratio” for relevant Specified Transactions
occurring after the Closing Date.

 

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

 

(A)           ANY AFTER-TAX EFFECT OF EXTRAORDINARY, NON–RECURRING OR UNUSUAL
GAINS OR LOSSES (LESS ALL FEES AND EXPENSES RELATING THERETO) OR EXPENSES,
TRANSACTION EXPENSES TO THE EXTENT INCURRED ON OR PRIOR TO DECEMBER 31, 2007,
SEVERANCE, RELOCATION COSTS, COSTS RELATED TO THE PERFECT STORE INITIATIVE,
HYBRID DISTRIBUTION NETWORK COSTS, PUBLIC COMPANY COSTS, INTEGRATION COSTS,
PRE-OPENING, OPENING, CONSOLIDATION AND CLOSING COSTS FOR FACILITIES (INCLUDING
STORES), SIGNING, RETENTION OR COMPLETION BONUSES, TRANSITION COSTS, COSTS
INCURRED IN CONNECTION WITH ACQUISITIONS AFTER THE CLOSING DATE, RESTRUCTURING
COSTS, SPECIFIED LEGAL EXPENSES AND CURTAILMENTS OR MODIFICATIONS TO PENSION AND
POST–RETIREMENT EMPLOYEE BENEFIT PLANS SHALL BE EXCLUDED,

 

(B)           THE NET INCOME FOR SUCH PERIOD SHALL NOT INCLUDE THE CUMULATIVE
EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLES DURING SUCH PERIOD,

 

(C)           ANY NET AFTER-TAX GAINS OR LOSSES ON DISPOSAL OF DISPOSED,
ABANDONED OR DISCONTINUED OPERATIONS SHALL BE EXCLUDED,

 

(D)           ANY AFTER–TAX EFFECT OF GAINS OR LOSSES (LESS ALL FEES AND
EXPENSES RELATING THERETO) ATTRIBUTABLE TO ASSET DISPOSITIONS OTHER THAN IN THE
ORDINARY COURSE OF BUSINESS, AS DETERMINED IN GOOD FAITH BY THE BORROWER, SHALL
BE EXCLUDED,

 

(E)           THE NET INCOME FOR SUCH PERIOD OF ANY PERSON THAT IS NOT A
SUBSIDIARY, OR IS AN UNRESTRICTED SUBSIDIARY, OR THAT IS ACCOUNTED FOR BY THE
EQUITY METHOD OF ACCOUNTING, SHALL BE EXCLUDED; PROVIDED THAT CONSOLIDATED NET
INCOME OF THE BORROWER SHALL BE INCREASED BY THE AMOUNT OF DIVIDENDS OR
DISTRIBUTIONS OR OTHER PAYMENTS THAT ARE ACTUALLY PAID IN CASH (OR TO THE EXTENT
CONVERTED INTO CASH) TO THE REFERENT PERSON OR A RESTRICTED SUBSIDIARY THEREOF
IN RESPECT OF SUCH PERIOD BY SUCH PERSON,

 

(F)            [RESERVED],

 

(G)           EFFECTS OF ADJUSTMENTS (INCLUDING THE EFFECTS OF SUCH ADJUSTMENTS
PUSHED DOWN TO THE BORROWER AND ITS RESTRICTED SUBSIDIARIES) IN THE MERCHANDISE
INVENTORY, PROPERTY AND EQUIPMENT, INTANGIBLE ASSETS, GOODWILL, DEFERRED REVENUE
AND DEBT LINE ITEMS IN SUCH PERSON’S CONSOLIDATED FINANCIAL STATEMENTS PURSUANT
TO GAAP RESULTING FROM THE APPLICATION OF PURCHASE ACCOUNTING IN RELATION TO THE
TRANSACTION OR ANY CONSUMMATED ACQUISITION OR THE AMORTIZATION OR WRITE-OFF OF
ANY AMOUNTS THEREOF, NET OF TAXES, SHALL BE EXCLUDED,

 

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(H)           ANY AFTER–TAX EFFECT OF INCOME (LOSS) FROM THE EARLY
EXTINGUISHMENT OR CONVERSION OF INDEBTEDNESS OR HEDGING OBLIGATIONS OR OTHER
DERIVATIVE INSTRUMENTS SHALL BE EXCLUDED,

 

(I)            ANY IMPAIRMENT CHARGE OR ASSET WRITE-OFF OR WRITE-DOWN, IN EACH
CASE, PURSUANT TO GAAP AND THE AMORTIZATION OF INTANGIBLES ARISING PURSUANT TO
GAAP SHALL BE EXCLUDED,

 

(J)            ANY NON-CASH COMPENSATION CHARGE OR EXPENSE INCLUDING ANY SUCH
CHARGE OR EXPENSE ARISING FROM THE GRANT OF STOCK APPRECIATION OR SIMILAR
RIGHTS, STOCK OPTIONS, RESTRICTED STOCK OR OTHER EQUITY-INCENTIVE PROGRAMS SHALL
BE EXCLUDED,

 

(K)           ANY FEES AND EXPENSES INCURRED DURING SUCH PERIOD, OR ANY
AMORTIZATION THEREOF FOR SUCH PERIOD, IN CONNECTION WITH ANY ACQUISITION,
INVESTMENT, ASSET SALE, ISSUANCE OR REPAYMENT OF INDEBTEDNESS, ISSUANCE OF
EQUITY INTERESTS, REFINANCING TRANSACTION OR AMENDMENT OR MODIFICATION OF ANY
DEBT INSTRUMENT (IN EACH CASE, INCLUDING ANY SUCH TRANSACTION CONSUMMATED PRIOR
TO THE CLOSING DATE AND ANY SUCH TRANSACTION UNDERTAKEN BUT NOT COMPLETED) AND
ANY CHARGES OR NON-RECURRING MERGER COSTS INCURRED DURING SUCH PERIOD AS A
RESULT OF ANY SUCH TRANSACTION SHALL BE EXCLUDED,

 

(L)            ACCRUALS AND RESERVES THAT ARE ESTABLISHED WITHIN TWELVE MONTHS
AFTER THE CLOSING DATE THAT ARE SO REQUIRED TO BE ESTABLISHED AS A RESULT OF THE
TRANSACTION IN ACCORDANCE WITH GAAP SHALL BE EXCLUDED,

 

(M)          ANY NET GAIN OR LOSS RESULTING FROM CURRENCY TRANSLATION GAINS OR
LOSSES RELATED TO CURRENCY REMEASUREMENTS OF INDEBTEDNESS (INCLUDING ANY NET
LOSS OR GAIN RESULTING FROM HEDGE AGREEMENTS FOR CURRENCY EXCHANGE RISK) AND ANY
FOREIGN CURRENCY TRANSLATION GAINS OR LOSSES SHALL BE EXCLUDED, AND

 

(N)           ANY UNREALIZED NET GAINS AND LOSSES RESULTING FROM HEDGING
OBLIGATIONS AND THE APPLICATION OF STATEMENT OF FINANCIAL ACCOUNTING STANDARDS
NO. 133 SHALL BE EXCLUDED.

 

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

 

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

 

17

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Subsidiary, in each case only to the extent such amounts increase the amount of
Restricted Payments permitted pursuant to Section 7.02(a)(iii)(D).

 

“Consolidated Secured Debt Ratio” means, as of any date of determination, the
ratio of (a) Consolidated Total Indebtedness of the Borrower and its Restricted
Subsidiaries that is secured by Liens as at the last day of the Relevant
Reference Period to (b) the Borrower’s EBITDA for the Relevant Reference Period,
in each case with such pro forma adjustments to Consolidated Total Indebtedness
(other than Indebtedness under a revolving credit facility) and EBITDA as are
appropriate and consistent with the pro forma adjustment provisions set forth in
the definition of “Fixed Charge Coverage Ratio”; provided that (x) in the event
that any Indebtedness under a revolving credit facility is incurred after the
last day of the Relevant Reference Period ended prior to such date of
determination to finance an Acquisition, an Investment or any other Restricted
Payment (which incurrence shall be notified to the Administrative Agent as
required by Section 6.02(h)), (i) each Individual Monthly Balance for a fiscal
month included in such Relevant Reference Period and ended prior to the date of
the respective incurrence of such Indebtedness shall be increased by the
aggregate principal amount of all such Indebtedness incurred to finance such
Acquisition, Investment or Restricted Payment, as the case may be, (ii) the
Average Monthly Balance included in the determination of Consolidated Total
Indebtedness as at the last day of such Relevant Reference Period shall be
calculated using each such Individual Monthly Balance as so increased, and (iii)
Consolidated Total Indebtedness as at the last day of such Relevant Reference
Period shall be recalculated to give pro forma effect to the adjustments
contemplated by preceding clauses (i) and (ii), and (y) in the event that any
Indebtedness under a revolving credit facility is repaid after the last day of
the Relevant Reference Period ended prior to such date of determination with the
net cash proceeds of a Material Disposition (and is notified to the
Administrative Agent pursuant to a certificate delivered pursuant to Section
6.02(h)), (i) each Individual Monthly Balance for a fiscal month included in
such Relevant Reference Period and ended prior to the date of the respective
repayment of such Indebtedness shall be decreased by the aggregate principal
amount of all such Indebtedness so repaid with the net cash proceeds of such
Material Disposition, (ii) the Average Monthly Balance included in the
determination of Consolidated Total Indebtedness as at the last day of such
Relevant Reference Period shall be calculated using each such Individual Monthly
Balance as so decreased, and (iii) Consolidated Total Indebtedness as at the
last day of such Relevant Reference Period shall be recalculated to give pro
forma effect to the adjustments contemplated by preceding clauses (i) and (ii)
(it being understood that a notice delivered in good faith by a Responsible
Officer of the Borrower pursuant to Section 6.02(h), and any judgment made in
good faith by a Responsible Officer of the Borrower that no notice is required
to be delivered pursuant to the terms of Section 6.02(h) in connection with a
given incurrence or repayment of Indebtedness under a revolving credit facility
(e.g., because proceeds of a revolving credit facility are not then being
applied to finance an Acquisition, Investment or other Restricted Payment),
shall be conclusive for purposes of any determination of an increase or decrease
of the Average Monthly Balance pursuant to this proviso).

 

“Consolidated Total Indebtedness” means, as at any date of determination, an
amount equal to the remainder of (i) the sum of (a) the aggregate amount of all
outstanding Indebtedness of the Borrower and its Restricted Subsidiaries on a
consolidated basis consisting of Indebtedness for borrowed money, Obligations in
respect of Capitalized Lease Obligations and debt obligations evidenced by
promissory notes, bonds, debentures, letters of credit, bankers’

 

18

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acceptances and similar instruments (and excluding, for the avoidance of doubt,
(x) any undrawn letters of credit and bankers’ acceptances and reimbursement
obligations in respect of commercial and trade letters of credit and (y) all
obligations relating to Receivables Facilities), (b) the aggregate amount of all
outstanding Disqualified Stock of the Borrower and all Preferred Stock of its
Restricted Subsidiaries on a consolidated basis, with the amount of such
Disqualified Stock and Preferred Stock equal to the greater of their respective
voluntary or involuntary liquidation preferences and maximum fixed repurchase
prices, in each case determined on a consolidated basis in accordance with GAAP,
and (c) any Contingent Obligations of the Borrower and its Restricted
Subsidiaries in respect of the obligations described in clauses (a) and (b)
above, less (ii) the aggregate amount of Unrestricted cash and Cash Equivalents
included on the consolidated balance sheet of the Borrower and any Restricted
Subsidiaries as of such date; provided that Indebtedness of the Borrower and its
Restricted Subsidiaries under any revolving credit facility as at any date of
determination included in the calculation of Consolidated Total Indebtedness
shall be determined using the Average Monthly Balance of such Indebtedness for
the Relevant Reference Period (or, in the case of any determination of the
Consolidated Total Leverage Ratio (other than as used in the definitions of
“Applicable Rate” and “Required Percentage”), the Alternative Average Monthly
Balance of such Indebtedness for the Relevant Reference Period).  For purposes
hereof, the “maximum fixed repurchase price” of any Disqualified Stock or
Preferred Stock that does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Stock or Preferred Stock as if
such Disqualified Stock or Preferred Stock were purchased on any date on which
Consolidated Total Indebtedness shall be required to be determined pursuant to
this Agreement, and if such price is based upon, or measured by, the fair market
value of such Disqualified Stock or Preferred Stock, such fair market value
shall be determined reasonably and in good faith by the Borrower.

 

“Consolidated Total Leverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated Total Indebtedness of the Borrower and its Restricted
Subsidiaries as at the last day of the Relevant Reference Period to (b) the
Borrower’s EBITDA for the Relevant Reference Period, in each case with such pro
forma adjustments to Consolidated Total Indebtedness (other than a calculation
thereof pursuant to the definitions of “Applicable Rate” and “Required
Percentage”) and EBITDA as are appropriate and consistent with the pro forma
adjustment provisions set forth in the definition of “Fixed Charge Coverage
Ratio”.

 

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

 

“Contingent Obligations” means, with respect to any Person, any obligation of
such Person guaranteeing any leases, dividends or other obligations that do not
constitute Indebtedness (“primary obligations”) of any other Person (the
“primary obligor”) in any

 

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

 

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

 

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

 

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

 

“Cumulative Retained Excess Cash Flow Amount” shall mean, at any date, an amount
equal to the sum of the Retained Percentage of Excess Cash Flow (which may not
be less than zero for any Excess Cash Flow Period) for all Excess Cash Flow
Periods ending after the Closing Date and prior to such date.

 

“Customs Broker Agreement” means an agreement in substantially the form attached
as Exhibit B to the ABL Credit Agreement (as in effect on the Closing Date)
among a Loan Party, a customs broker or other carrier, and the Collateral Agent,
in which the customs broker or other carrier acknowledges that it has control
over and holds the documents evidencing ownership of the subject inventory or
other property for the benefit of the Collateral Agent, and agrees, upon notice
from the Collateral Agent (which notice shall be delivered only upon the
occurrence and during the continuance of an Event of Default), to hold and
dispose of the subject inventory and other property solely as directed by the
Collateral Agent.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Designated Preferred Stock” means Preferred Stock of the Borrower or any parent
company thereof (in each case other than Disqualified Stock) that is issued for
cash (other than to a Restricted Subsidiary or an employee stock ownership plan
or trust established by the Borrower or any of its Subsidiaries) and is so
designated as Designated Preferred Stock, pursuant to an Officer’s Certificate
executed by the principal financial officer of the Borrower or the applicable
parent company thereof, as the case may be, on the issuance date thereof, the
cash proceeds of which are excluded from the calculation set forth in Section
7.02(a)(iii).

 

“Disqualified Stock” means, with respect to any Person, any Capital Stock of
such Person which, by its terms, or by the terms of any security into which it
is convertible or for which it is putable or exchangeable, or upon the happening
of any event, (a) matures or is mandatorily redeemable (other than solely as a
result of a change of control or asset sale, so long as any rights of the
holders thereof upon the occurrence of a change of control or asset sale event
shall be subject to the prior repayment in full of the Loans and all other
Obligations that are accrued and payable) pursuant to a sinking fund obligation
or otherwise, or is redeemable at the option of the holder thereof (other than
solely as a result of a change of control or asset sale, so long as any rights
of the holders thereof upon the occurrence of a change of control or asset sale
event shall be subject to the prior repayment in full of the Loans and all other
Obligations that are accrued and payable), in whole or in part, or (b) provides
for the scheduled payments of dividends in cash, in each case prior to the date
91 days after the earlier of the Maturity Date or the date Loans are no longer
outstanding; provided, however, that if such Capital Stock is issued to any plan
for the benefit of employees of the Borrower or its Subsidiaries or by any such
plan

 

21

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to such employees, such Capital Stock shall not constitute Disqualified Stock
solely because it may be required to be repurchased by the Borrower or its
Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

 

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

 

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

 

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

 

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

 

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

 

(A)           INCREASED (WITHOUT DUPLICATION) BY:

 

(I)            PROVISION FOR TAXES BASED ON INCOME OR PROFITS OR CAPITAL,
INCLUDING, WITHOUT LIMITATION, STATE, FRANCHISE AND SIMILAR TAXES (SUCH AS THE
PENNSYLVANIA CAPITAL TAX AND TEXAS MARGIN TAX) AND FOREIGN WITHHOLDING TAXES OF
SUCH PERSON PAID OR ACCRUED DURING SUCH PERIOD DEDUCTED (AND NOT ADDED BACK) IN
COMPUTING CONSOLIDATED NET INCOME; PLUS

 

(II)           FIXED CHARGES OF SUCH PERSON FOR SUCH PERIOD PLUS BANK FEES AND
COSTS OF SURETY BONDS IN CONNECTION WITH FINANCING ACTIVITIES, PLUS AMOUNTS
EXCLUDED FROM CONSOLIDATED INTEREST EXPENSE AS SET FORTH IN CLAUSES (V), (W),
(X), (Y) AND (Z) IN THE DEFINITION THEREOF, TO THE EXTENT THE SAME WERE DEDUCTED
(AND NOT ADDED BACK) IN CALCULATING SUCH CONSOLIDATED NET INCOME; PLUS

 

(III)          CONSOLIDATED DEPRECIATION AND AMORTIZATION EXPENSE OF SUCH PERSON
FOR SUCH PERIOD TO THE EXTENT THE SAME WAS DEDUCTED (AND NOT ADDED BACK) IN
COMPUTING CONSOLIDATED NET INCOME; PLUS

 

(IV)          ANY EXPENSES OR CHARGES (OTHER THAN DEPRECIATION OR AMORTIZATION
EXPENSE) RELATED TO ANY EQUITY OFFERING, PERMITTED INVESTMENT, ACQUISITION,
DISPOSITION, RECAPITALIZATION OR THE INCURRENCE OF INDEBTEDNESS PERMITTED TO BE
INCURRED BY THIS AGREEMENT (INCLUDING A REFINANCING THEREOF) (WHETHER OR NOT
SUCCESSFUL), INCLUDING (A) SUCH FEES, EXPENSES OR CHARGES RELATED TO THE
OFFERING OF THE NEW NOTES, THIS AGREEMENT AND THE ABL CREDIT AGREEMENT AND (B)
ANY AMENDMENT OR OTHER MODIFICATION OF THE NEW NOTES, THIS AGREEMENT AND THE ABL
CREDIT AGREEMENT IN EACH CASE, DEDUCTED (AND NOT ADDED BACK) IN COMPUTING
CONSOLIDATED NET INCOME; PLUS

 

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(V)           THE AMOUNT OF ANY RESTRUCTURING CHARGE OR RESERVE DEDUCTED (AND
NOT ADDED BACK) IN SUCH PERIOD IN COMPUTING CONSOLIDATED NET INCOME; PLUS

 

(VI)          ANY OTHER NON CASH CHARGES, INCLUDING (V) ANY WRITE OFFS OR WRITE
DOWNS, (W) EQUITY-BASED AWARDS COMPENSATION EXPENSE, (X) LOSSES ON SALES,
DISPOSALS OR ABANDONMENT OF, OR ANY IMPAIRMENT CHARGE OR ASSET WRITE OFF RELATED
TO, INTANGIBLE ASSETS, LONG-LIVED ASSETS AND INVESTMENTS IN DEBT AND EQUITY
SECURITIES, (Y) ALL LOSSES FROM INVESTMENTS RECORDED USING THE EQUITY METHOD,
AND (Z) OTHER NON-CASH CHARGES, NON-CASH EXPENSES OR NON-CASH LOSSES, IN EACH
CASE REDUCING CONSOLIDATED NET INCOME FOR SUCH PERIOD (PROVIDED THAT IF ANY SUCH
NON-CASH CHARGES REPRESENT AN ACCRUAL OR RESERVE FOR POTENTIAL CASH ITEMS IN ANY
FUTURE PERIOD, THE CASH PAYMENT IN RESPECT THEREOF IN SUCH FUTURE PERIOD SHALL
BE SUBTRACTED FROM EBITDA TO SUCH EXTENT, AND EXCLUDING AMORTIZATION OF A
PREPAID CASH ITEM THAT WAS PAID IN A PRIOR PERIOD); PLUS

 

(VII)         THE AMOUNT OF ANY MINORITY INTEREST EXPENSE CONSISTING OF
SUBSIDIARY INCOME ATTRIBUTABLE TO MINORITY EQUITY INTERESTS OF THIRD PARTIES IN
ANY NON-WHOLLY OWNED SUBSIDIARY DEDUCTED (AND NOT ADDED BACK) IN SUCH PERIOD IN
CALCULATING CONSOLIDATED NET INCOME; PLUS

 

(VIII)        THE AMOUNT OF MANAGEMENT, MONITORING, CONSULTING AND ADVISORY FEES
(INCLUDING TERMINATION FEES) AND RELATED INDEMNITIES AND EXPENSES PAID OR
ACCRUED IN SUCH PERIOD TO THE INVESTORS TO THE EXTENT OTHERWISE PERMITTED UNDER
SECTION 7.07 AND TO THE EXTENT DEDUCTED (AND NOT ADDED BACK) IN SUCH PERIOD IN
COMPUTING CONSOLIDATED NET INCOME; PLUS

 

(IX)           THE AMOUNT OF NET COST SAVINGS PROJECTED BY THE BORROWER IN GOOD
FAITH TO BE REALIZED AS A RESULT OF SPECIFIED ACTIONS TAKEN DURING SUCH PERIOD
(CALCULATED ON A PRO FORMA BASIS AS THOUGH SUCH COST SAVINGS HAD BEEN REALIZED
ON THE FIRST DAY OF SUCH PERIOD), NET OF THE AMOUNT OF ACTUAL BENEFITS REALIZED
DURING SUCH PERIOD FROM SUCH ACTIONS; PROVIDED THAT (X) SUCH COST SAVINGS ARE
REASONABLY IDENTIFIABLE AND FACTUALLY SUPPORTABLE, (Y) SUCH ACTIONS ARE TAKEN
WITHIN 36 MONTHS AFTER THE CLOSING DATE AND (Z) THE AGGREGATE AMOUNT OF COST
SAVINGS ADDED PURSUANT TO THIS CLAUSE (IX) SHALL NOT EXCEED $25,000,000 FOR ANY
FOUR CONSECUTIVE QUARTER PERIOD (WHICH ADJUSTMENTS MAY BE INCREMENTAL TO PRO
FORMA ADJUSTMENTS MADE PURSUANT TO THE DEFINITION OF “FIXED CHARGE COVERAGE
RATIO”); PLUS

 

(X)            THE AMOUNT OF LOSS ON SALE OF RECEIVABLES AND RELATED ASSETS TO
THE RECEIVABLES SUBSIDIARY IN CONNECTION WITH A RECEIVABLES FACILITY; PLUS

 

(XI)           ANY COSTS OR EXPENSE INCURRED BY THE BORROWER OR A RESTRICTED
SUBSIDIARY PURSUANT TO ANY MANAGEMENT EQUITY PLAN OR STOCK OPTION PLAN OR ANY
OTHER MANAGEMENT OR EMPLOYEE BENEFIT PLAN OR AGREEMENT OR ANY STOCK SUBSCRIPTION
OR SHAREHOLDER AGREEMENT, TO THE EXTENT THAT SUCH COST OR EXPENSES ARE FUNDED
WITH CASH PROCEEDS CONTRIBUTED TO THE CAPITAL OF THE BORROWER OR NET CASH
PROCEEDS OF AN ISSUANCE OF EQUITY INTERESTS OF THE BORROWER (OTHER THAN

 

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DISQUALIFIED STOCK) SOLELY TO THE EXTENT THAT SUCH NET CASH PROCEEDS ARE
EXCLUDED FROM THE CALCULATION SET FORTH IN SECTION 7.02(A)(III); PLUS

 

(XII)          ANY NET LOSS FROM DISPOSED OR DISCONTINUED OPERATIONS; PLUS

 

(XIII)         CASH RECEIPTS (OR ANY NETTING ARRANGEMENTS RESULTING IN REDUCED
CASH EXPENDITURES) NOT REPRESENTING EBITDA OR NET INCOME IN ANY PERIOD TO THE
EXTENT NON-CASH GAINS RELATING TO SUCH INCOME WERE DEDUCTED IN THE CALCULATION
OF EBITDA PURSUANT TO CLAUSE (B) BELOW FOR ANY PREVIOUS PERIOD AND NOT ADDED
BACK; AND

 

(B)           DECREASED (WITHOUT DUPLICATION) BY:  (I) NON–CASH GAINS INCREASING
CONSOLIDATED NET INCOME OF SUCH PERSON FOR SUCH PERIOD, EXCLUDING ANY NON-CASH
GAINS TO THE EXTENT THEY REPRESENT THE REVERSAL OF AN ACCRUAL OR RESERVE FOR A
POTENTIAL CASH ITEM THAT REDUCED EBITDA IN ANY PRIOR PERIOD AND ANY NON-CASH
GAINS WITH RESPECT TO CASH ACTUALLY RECEIVED IN A PRIOR PERIOD SO LONG AS SUCH
CASH DID NOT INCREASE EBITDA IN SUCH PRIOR PERIOD, PLUS

 

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

 

(C)           INCREASED OR DECREASED BY (WITHOUT DUPLICATION), AS APPLICABLE,
ANY ADJUSTMENTS RESULTING FROM THE APPLICATION OF FASB INTERPRETATION NO. 45
(GUARANTEES).

 

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

 

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

 

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

 

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

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any

 

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Hazardous Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

 

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

 

“Equity Contributions” means the contribution of cash in an aggregate amount of
not less than $1,630,000,000 to the MergerCos as common equity and/or preferred
equity having terms reasonably satisfactory to the Arrangers.

 

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

 

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

 

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

 

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

 

“ERISA Event” means, in the case of a Plan or Multiemployer Plan subject to
ERISA, (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal
by any Loan Party or any ERISA Affiliate from a Pension Plan subject to Section
4063 of ERISA during a plan year in which it was a substantial employer (as
defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by any Loan Party or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Pension Plan
amendment as a termination under Sections 4041 or 4041A of ERISA, or the
commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; (f) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA
Affiliate or (g) the failure of any Pension Plan to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA.

 

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

 

“Eurocurrency Rate” means (a) the offered quotation to first-class banks in the
New York interbank Eurodollar market by the Administrative Agent for Dollar
deposits of amounts in immediately available funds comparable to the outstanding
principal amount of the Eurocurrency Rate Loan of the Administrative Agent (in
its capacity as a Lender) (or, if the Administrative Agent is not a Lender with
respect thereto, taking the average principal amount of the Eurocurrency Rate
Loans then being made by the various Lenders pursuant thereto)) with maturities
comparable to the Interest Period applicable to such Eurocurrency Rate Loan
commencing two Business Days thereafter as of 10:00 A.M. (New York City time) on
the applicable date of determination, divided (and rounded upward to the nearest
1/16 of 1%) by (b) a percentage equal to 100% minus the then stated maximum rate
of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves required by applicable law)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency funding or liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D).

 

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

 

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

 

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

 

(A)           THE SUM, WITHOUT DUPLICATION, OF:

 

(I)            CONSOLIDATED NET INCOME FOR SUCH PERIOD,

 

(II)           AN AMOUNT EQUAL TO THE AMOUNT OF ALL NON-CASH CHARGES INCURRED
DURING SUCH PERIOD, TO THE EXTENT DEDUCTED IN ARRIVING AT SUCH CONSOLIDATED NET
INCOME,

 

(III)          DECREASES IN CONSOLIDATED WORKING CAPITAL AND LONG-TERM ACCOUNT
RECEIVABLES FOR SUCH PERIOD (OTHER THAN ANY SUCH DECREASES ARISING FROM
ACQUISITIONS BY THE BORROWER AND THE RESTRICTED SUBSIDIARIES COMPLETED DURING
SUCH PERIOD), AND

 

(IV)          AN AMOUNT EQUAL TO THE AGGREGATE NET NON-CASH LOSS ON THE SALE,
LEASE, TRANSFER OR OTHER DISPOSITION (EACH, A “DISPOSITION”) OF ASSETS BY THE
BORROWER AND ITS RESTRICTED SUBSIDIARIES DURING SUCH PERIOD (OTHER THAN
DISPOSITIONS IN THE ORDINARY COURSE OF BUSINESS) TO THE EXTENT DEDUCTED IN
ARRIVING AT SUCH CONSOLIDATED NET INCOME; OVER

 

(B)           THE SUM, WITHOUT DUPLICATION, OF:

 

(I)            AN AMOUNT EQUAL TO THE AMOUNT OF ALL NON-CASH CREDITS INCLUDED IN
ARRIVING AT SUCH CONSOLIDATED NET INCOME AND CASH CHARGES ADDED BACK TO

 

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CONSOLIDATED NET INCOME PURSUANT TO CLAUSES (A) THROUGH (N) OF THE DEFINITION
THEREOF,

 

(II)           WITHOUT DUPLICATION OF AMOUNTS DEDUCTED PURSUANT TO CLAUSE (XI)
BELOW IN PRIOR FISCAL YEARS, THE AMOUNT OF CAPITAL EXPENDITURES MADE IN CASH
DURING SUCH PERIOD, EXCEPT TO THE EXTENT THAT SUCH CAPITAL EXPENDITURES WERE
FINANCED WITH THE PROCEEDS OF INDEBTEDNESS OF THE BORROWER OR THE RESTRICTED
SUBSIDIARIES,

 

(III)          THE AGGREGATE AMOUNT OF ALL PRINCIPAL PAYMENTS OF INDEBTEDNESS OF
THE BORROWER AND THE RESTRICTED SUBSIDIARIES (INCLUDING (A) THE PRINCIPAL
COMPONENT OF PAYMENTS IN RESPECT OF CAPITALIZED LEASE OBLIGATIONS AND (B) THE
AMOUNT OF ANY MANDATORY PREPAYMENT OF LOANS PURSUANT TO SECTION 2.05(C) WITH THE
PROCEEDS OF AN ASSET SALE, TO THE EXTENT SUCH ASSET SALE RESULTED IN AN INCREASE
TO CONSOLIDATED NET INCOME AND NOT IN EXCESS OF THE AMOUNT OF SUCH INCREASE, BUT
EXCLUDING ALL OTHER PREPAYMENTS OF LOANS) MADE DURING SUCH PERIOD (OTHER THAN IN
RESPECT OF ANY REVOLVING CREDIT FACILITY TO THE EXTENT THERE IS NOT AN
EQUIVALENT PERMANENT REDUCTION IN COMMITMENTS THEREUNDER), EXCEPT TO THE EXTENT
FINANCED WITH THE PROCEEDS OF OTHER INDEBTEDNESS OF THE BORROWER OR THE
RESTRICTED SUBSIDIARIES,

 

(IV)          AN AMOUNT EQUAL TO THE AGGREGATE NET NON-CASH GAIN ON THE
DISPOSITION OF ASSETS BY THE BORROWER AND THE RESTRICTED SUBSIDIARIES DURING
SUCH PERIOD (OTHER THAN DISPOSITIONS IN THE ORDINARY COURSE OF BUSINESS) TO THE
EXTENT INCLUDED IN ARRIVING AT SUCH CONSOLIDATED NET INCOME,

 

(V)           INCREASES IN CONSOLIDATED WORKING CAPITAL AND LONG-TERM ACCOUNT
RECEIVABLES FOR SUCH PERIOD (OTHER THAN ANY SUCH INCREASES ARISING FROM
ACQUISITIONS BY THE BORROWER AND THE RESTRICTED SUBSIDIARIES DURING SUCH
PERIOD),

 

(VI)          CASH PAYMENTS BY THE BORROWER AND THE RESTRICTED SUBSIDIARIES
DURING SUCH PERIOD IN RESPECT OF LONG-TERM LIABILITIES OF THE BORROWER AND THE
RESTRICTED SUBSIDIARIES OTHER THAN INDEBTEDNESS,

 

(VII)         [RESERVED],

 

(VIII)        THE AMOUNT OF RESTRICTED PAYMENTS PAID DURING SUCH PERIOD PURSUANT
TO SECTION 7.02(B)(XI), TO THE EXTENT SUCH RESTRICTED PAYMENTS WERE FINANCED
WITH INTERNALLY GENERATED CASH FLOW OF THE BORROWER AND THE RESTRICTED
SUBSIDIARIES,

 

(IX)           THE AGGREGATE AMOUNT OF EXPENDITURES ACTUALLY MADE BY THE
BORROWER AND THE RESTRICTED SUBSIDIARIES IN CASH DURING SUCH PERIOD (INCLUDING
EXPENDITURES FOR THE PAYMENT OF FINANCING FEES), TO THE EXTENT THAT SUCH
EXPENDITURES ARE NOT EXPENSED DURING SUCH PERIOD,

 

(X)            THE AGGREGATE AMOUNT OF ANY PREMIUM, MAKE-WHOLE OR PENALTY
PAYMENTS ACTUALLY PAID IN CASH BY THE BORROWER AND THE RESTRICTED SUBSIDIARIES

 

27

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DURING SUCH PERIOD THAT ARE REQUIRED TO BE MADE IN CONNECTION WITH ANY
PREPAYMENT OF INDEBTEDNESS,

 

(XI)           WITHOUT DUPLICATION OF AMOUNTS DEDUCTED FROM EXCESS CASH FLOW IN
PRIOR PERIODS, THE AGGREGATE CONSIDERATION (TO THE EXTENT TO BE FUNDED BY
INTERNALLY GENERATED CASH) REQUIRED TO BE PAID IN CASH BY THE BORROWER OR ANY OF
THE RESTRICTED SUBSIDIARIES PURSUANT TO BINDING CONTRACTS (THE “CONTRACT
CONSIDERATION”) ENTERED INTO PRIOR TO OR DURING SUCH PERIOD RELATING TO
ACQUISITIONS OR CAPITAL EXPENDITURES TO BE CONSUMMATED OR MADE DURING THE PERIOD
OF FOUR CONSECUTIVE FISCAL QUARTERS OF THE BORROWER FOLLOWING THE END OF SUCH
PERIOD, PROVIDED THAT TO THE EXTENT THE AGGREGATE AMOUNT OF INTERNALLY GENERATED
CASH ACTUALLY UTILIZED TO FINANCE SUCH ACQUISITIONS OR CAPITAL EXPENDITURES
DURING SUCH PERIOD OF FOUR CONSECUTIVE FISCAL QUARTERS IS LESS THAN THE CONTRACT
CONSIDERATION, THE AMOUNT OF SUCH SHORTFALL SHALL BE ADDED TO THE CALCULATION OF
EXCESS CASH FLOW AT THE END OF SUCH PERIOD OF FOUR CONSECUTIVE FISCAL QUARTERS,
AND

 

(XII)          THE AMOUNT OF CASH TAXES PAID IN SUCH PERIOD, TO THE EXTENT THEY
EXCEED THE AMOUNT OF TAX EXPENSE DEDUCTED IN DETERMINING CONSOLIDATED NET INCOME
FOR SUCH PERIOD.

 

“Excess Cash Flow Period” shall mean each fiscal year of the Borrower,
commencing with the fiscal year of the Borrower ending on February 2, 2008.

 

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

 

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

 

“Excluded Contribution” means net cash proceeds, marketable securities or
Qualified Proceeds received by the Borrower from (a) contributions to its common
equity capital, and (b) the sale (other than to a Subsidiary of the Borrower or
to any management equity plan or stock option plan or any other management or
employee benefit plan or agreement of the Borrower) of Capital Stock (other than
Disqualified Stock and Designated Preferred Stock) of the Borrower, in each case
designated as Excluded Contributions pursuant to an Officer’s Certificate
executed by the principal financial officer of the Borrower on the date such
capital contributions are made or the date such Equity Interests are sold, as
the case may be, which are excluded from the calculation set forth in
Section 7.02(a)(iii) provided that the term “Excluded Contribution” shall not
include the net cash proceeds from any Permitted Cure Issuance.

 

“Excluded Subsidiary” means (a) any Subsidiary that is not a Wholly-Owned
Subsidiary, (b) any Receivables Subsidiary, (c) each Subsidiary listed on
Schedule 1.01E hereto, (d) any Subsidiary that is prohibited by applicable Law
from guaranteeing the Obligations, (e) any Domestic Subsidiary that is a
Subsidiary of a Foreign Subsidiary, (f) any Restricted Subsidiary acquired
pursuant to an Acquisition permitted hereunder financed with Secured
Indebtedness incurred pursuant to Section 7.03(b)(xix) and each Restricted
Subsidiary thereof that guarantees such Indebtedness; provided that each such
Restricted Subsidiary shall cease to

 

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

 

“Existing Credit Agreement” means that certain Credit Agreement, dated as of,
November 18, 2005, among the Borrower, the lenders referred to therein, and Bank
of America, N.A. as Administrative Agent.

 

“Fair Market Value” means, with respect to any asset or liability, the fair
market value of such asset or liability as determined by the Borrower in good
faith; provided that if the fair market value is equal to or exceeds $100.0
million, such determination shall be made by the Board of Directors of the
Borrower.

 

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

 

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

 

For purposes of making the computation referred to above, Investments,
acquisitions, dispositions, amalgamations, mergers, and consolidations (as
determined in accordance with GAAP) that have been made by the Borrower or any
of its Restricted Subsidiaries during the Relevant Reference Period or
subsequent to such Relevant Reference Period and on or prior to or
simultaneously with the Fixed Charge Coverage Ratio Calculation Date shall be
calculated on a pro forma basis assuming that all such Investments,
acquisitions,

 

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

 

For purposes of this definition, whenever pro forma effect is to be given to an
Investment, acquisition, disposition, amalgamation, merger or consolidation
(including the Transaction) and the amount of income or earnings relating
thereto, the pro forma calculations shall be made in good faith by a responsible
financial or accounting officer of the Borrower (and may include, for the
avoidance of doubt, cost savings and operating expense reductions resulting from
such Investment, acquisition, disposition, amalgamation, merger or consolidation
(including the Transaction) which is being given pro forma effect that have been
or are expected to be realized). If any Indebtedness bears a floating rate of
interest and is being given pro forma effect, the interest on such Indebtedness
shall be calculated as if the rate in effect on the Fixed Charge Coverage Ratio
Calculation Date had been the applicable rate for the Relevant Reference Period
(taking into account any Hedging Obligations applicable to such Indebtedness).
Interest on a Capitalized Lease Obligation shall be deemed to accrue at an
interest rate reasonably determined by a responsible financial or accounting
officer of the Borrower to be the rate of interest implicit in such Capitalized
Lease Obligation in accordance with GAAP. Interest on Indebtedness that
may optionally be determined at an interest rate based upon a factor of a prime
or similar rate, a eurocurrency interbank offered rate, or other rate, shall be
deemed to have been based upon the rate actually chosen, or, if none, then based
upon such optional rate chosen as the Borrower may designate.

 

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

 

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

 

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

 

30

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(excluding items eliminated in consolidation) on any series of Disqualified
Stock during such period.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“incur” has the meaning set forth in Section 7.03.

 

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

 

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

 

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(A)           ANY INDEBTEDNESS (INCLUDING PRINCIPAL AND PREMIUM) OF SUCH PERSON,
WHETHER OR NOT CONTINGENT:

 

(I)            IN RESPECT OF BORROWED MONEY;

 

(II)           EVIDENCED BY BONDS, NOTES, DEBENTURES OR SIMILAR INSTRUMENTS OR
LETTERS OF CREDIT OR BANKERS’ ACCEPTANCES (OR, WITHOUT DUPLICATION,
REIMBURSEMENT AGREEMENTS IN RESPECT THEREOF);

 

(III)          REPRESENTING THE BALANCE DEFERRED AND UNPAID OF THE PURCHASE
PRICE OF ANY PROPERTY OR SERVICES (INCLUDING CAPITALIZED LEASE OBLIGATIONS),
EXCEPT (A) ANY SUCH BALANCE THAT CONSTITUTES AN OBLIGATION IN RESPECT OF A
COMMERCIAL LETTER OF CREDIT, A TRADE PAYABLE OR SIMILAR OBLIGATION TO A TRADE
CREDITOR, IN EACH CASE ACCRUED IN THE ORDINARY COURSE OF BUSINESS AND (B) ANY
EARN-OUT OBLIGATIONS UNTIL SUCH OBLIGATION BECOMES A LIABILITY ON THE BALANCE
SHEET OF SUCH PERSON IN ACCORDANCE WITH GAAP AND IS NOT PAID AFTER BECOMING DUE
AND PAYABLE; OR

 

(IV)          REPRESENTING ANY HEDGING OBLIGATIONS;

 

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

 

(B)           TO THE EXTENT NOT OTHERWISE INCLUDED, ANY OBLIGATION BY SUCH
PERSON TO BE LIABLE FOR, OR TO PAY, AS OBLIGOR, GUARANTOR OR OTHERWISE, ON THE
OBLIGATIONS OF THE TYPE REFERRED TO IN CLAUSE (A) OF A THIRD PERSON (WHETHER OR
NOT SUCH ITEMS WOULD APPEAR UPON THE BALANCE SHEET OF THE SUCH OBLIGOR OR
GUARANTOR), OTHER THAN BY ENDORSEMENT OF NEGOTIABLE INSTRUMENTS FOR COLLECTION
IN THE ORDINARY COURSE OF BUSINESS;

 

(C)           TO THE EXTENT NOT OTHERWISE INCLUDED, THE OBLIGATIONS OF THE TYPE
REFERRED TO IN CLAUSE (A) OF A THIRD PERSON SECURED BY A LIEN ON ANY ASSET OWNED
BY SUCH FIRST PERSON, WHETHER OR NOT SUCH INDEBTEDNESS IS ASSUMED BY SUCH FIRST
PERSON AND WHETHER OR NOT SUCH OBLIGATIONS WOULD APPEAR UPON THE BALANCE SHEET
OF SUCH PERSON; PROVIDED THAT THE AMOUNT OF SUCH INDEBTEDNESS WILL BE THE LESSER
OF THE FAIR MARKET VALUE OF SUCH ASSET AT THE DATE OF DETERMINATION AND THE
AMOUNT OF INDEBTEDNESS SO SECURED;

 

(D)           THE MAXIMUM AMOUNT (AFTER GIVING EFFECT TO ANY PRIOR DRAWINGS OR
REDUCTIONS WHICH MAY HAVE BEEN REIMBURSED) OF ALL LETTERS OF CREDIT (OTHER THAN
COMMERCIAL LETTERS OF CREDIT), BANKERS’ ACCEPTANCES, BANK GUARANTIES, SURETY
BONDS, PERFORMANCE BONDS AND SIMILAR INSTRUMENTS ISSUED OR CREATED BY OR FOR THE
ACCOUNT OF SUCH PERSON; AND

 

(E)           ALL OBLIGATIONS OF SUCH PERSON IN RESPECT OF DISQUALIFIED CAPITAL
STOCK;

 

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

 

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

 

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

 

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

 

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

 

“Information” has the meaning specified in Section 10.08.

 

“Intercompany Note” means the Intercompany Note, substantially in the
form attached as Exhibit J.

 

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

 

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

 

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

 

(A)           ANY INTEREST PERIOD THAT WOULD OTHERWISE END ON A DAY THAT IS NOT
A BUSINESS DAY SHALL BE EXTENDED TO THE NEXT SUCCEEDING BUSINESS DAY UNLESS SUCH
BUSINESS DAY FALLS IN ANOTHER CALENDAR MONTH, IN WHICH CASE SUCH INTEREST PERIOD
SHALL END ON THE NEXT PRECEDING BUSINESS DAY;

 

(B)           ANY INTEREST PERIOD THAT BEGINS ON THE LAST BUSINESS DAY OF A
CALENDAR MONTH (OR ON A DAY FOR WHICH THERE IS NO NUMERICALLY CORRESPONDING DAY
IN THE CALENDAR MONTH AT THE END OF SUCH INTEREST PERIOD) SHALL END ON THE LAST
BUSINESS DAY OF THE CALENDAR MONTH AT THE END OF SUCH INTEREST PERIOD; AND

 

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(C)           NO INTEREST PERIOD SHALL EXTEND BEYOND THE MATURITY DATE.

 

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

 

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

 

“Investments” means, with respect to any Person, all investments by such Person
in other Persons (including Affiliates) in the form of loans (including
guarantees), advances or capital contributions (excluding accounts receivable,
credit card and debit card receivables constituting Cash Equivalents, trade
credit, advances to customers, commission, travel and similar advances to
officers and employees, in each case made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities issued by any other Person and investments that
are required by GAAP to be classified on the balance sheet (excluding the
footnotes) of the Borrower in the same manner as the other investments included
in this definition to the extent such transactions involve the transfer of cash
or other property. For purposes of the definition of “Unrestricted Subsidiary”
and Section 7.02, (a) “Investments” shall include the portion (proportionate to
the Borrower’s equity interest in such Subsidiary) of the fair market value of
the net assets of a Subsidiary of the Borrower at the time that such Subsidiary
is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Borrower shall
be deemed to continue to have a permanent “Investment” in an Unrestricted
Subsidiary in an amount (if positive) equal to (i) the Borrower’s “Investment”
in such Subsidiary at the time of such redesignation less (ii) the portion
(proportionate to the Borrower’s equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time of such
redesignation; and (b) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Borrower.

 

“Investors” means Bain Capital, LLC and The Blackstone Group LP, each of their
respective Affiliates and any investment funds advised or managed by any of the
foregoing, but not including, however, any portfolio companies of any of the
foregoing; provided, that, for purposes of Section 4.01(e) and the definitions
of “EBITDA” and “Sponsor Management Agreement” only, the term “Investors” shall
include Highfields.

 

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

 

“IRS” means the United States Internal Revenue Service.

 

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

 

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

 

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

 

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

 

“Lender” has the meaning specified in the introductory paragraph to this
Agreement and includes their respective successors and assigns as permitted
hereunder, each of which is referred to herein as a “Lender”.

 

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

 

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

 

“Loan” means the making of a term loan by a Lender to a Borrower pursuant to
Section 2.01.

 

“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the
Guaranty, (d) the Intercreditor Agreement, and (e) the Collateral Documents.

 

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

 

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

 

“Material Adverse Change” means any change, effect, event, occurrence or state
of facts that (a) is materially adverse to the business, financial condition or
results of operations

 

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of the Borrower and its Subsidiaries, taken as a whole or (b) prevents or
materially impedes, interferes with, hinders or delays beyond the Outside Date
(as defined in the Recapitalization Agreement) the consummation by the Borrower
of the Recapitalization or the other transactions contemplated by the
Recapitalization Agreement, in each case, other than any change, effect, event,
occurrence or state of facts (i) relating to economic, financial market or
geopolitical conditions in general, (ii) relating to changes in Law or
applicable accounting regulations or principles or interpretations thereof,
(iii) relating to the specialty retail industry generally, to the extent such
change, effect, event, occurrence or state of fact does not materially,
disproportionately impact the Borrower and its Subsidiaries, taken as a whole,
(iv) consisting of any change in the Borrower’s stock price or trading volume,
in and of itself, or any failure, in and of itself, by the Borrower to meet
published revenue or earnings projections (it being understood that the facts or
occurrences giving rise or contributing to such change or failure may be deemed
to constitute, or be taken into account in determining whether there has been or
would reasonably be expected to be, a Material Adverse Effect, and it being
further understood that any such change or failure may be taken into account in
determining whether the facts or occurrences giving rise or contributing to such
change or failure are materially adverse to the business, financial condition or
results of operations of the Borrower and its Subsidiaries, taken as a whole),
(v) relating to any outbreak or escalation of hostilities or war or any act of
terrorism, and (vi) relating to the announcement of the Recapitalization
Agreement and the transactions contemplated hereby and performance of and
compliance with the terms of the Recapitalization Agreement.

 

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

 

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

 

“Maturity Date” means October 31, 2013.

 

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

 

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

 

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

 

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

 

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“Moody’s Applicable Corporate Rating” shall mean the corporate family rating
assigned to the Borrower by Moody’s.

 

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

 

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

 

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

 

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

 

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

 

“Net Proceeds” means:

 

(A)           WITH RESPECT TO ANY ASSET SALE OR CASUALTY EVENT, THE AGGREGATE
CASH PROCEEDS RECEIVED BY THE BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES IN
RESPECT OF SUCH ASSET SALE OR CASUALTY EVENT, INCLUDING ANY CASH RECEIVED UPON
THE SALE OR OTHER DISPOSITION OF ANY DESIGNATED NON-CASH CONSIDERATION RECEIVED
IN RESPECT OF SUCH ASSET SALE OR CASUALTY EVENT, NET OF THE DIRECT COSTS
RELATING TO SUCH ASSET SALE OR CASUALTY EVENT AND THE SALE OR DISPOSITION OF
SUCH DESIGNATED NON-CASH CONSIDERATION, INCLUDING LEGAL, ACCOUNTING AND
INVESTMENT BANKING FEES, AND BROKERAGE AND SALES COMMISSIONS, ANY RELOCATION
EXPENSES INCURRED AS A RESULT THEREOF, TAXES PAID OR PAYABLE AS A RESULT THEREOF
(AFTER TAKING INTO ACCOUNT ANY AVAILABLE TAX CREDITS OR DEDUCTIONS AND ANY TAX
SHARING ARRANGEMENTS), AMOUNTS REQUIRED TO BE APPLIED TO THE REPAYMENT OF
PRINCIPAL, PREMIUM, IF ANY, AND INTEREST ON INDEBTEDNESS THAT IS SECURED BY THE
ASSET SUBJECT TO SUCH ASSET SALE OR CASUALTY EVENT AND THAT IS REQUIRED TO BE
REPAID (AND IS TIMELY REPAID) IN CONNECTION WITH SUCH ASSET SALE OR CASUALTY
EVENT (OTHER THAN AS REQUIRED BY SECTION 2.05(C)) AND ANY DEDUCTION OF
APPROPRIATE AMOUNTS TO BE PROVIDED BY THE BORROWER OR ANY OF ITS RESTRICTED
SUBSIDIARIES AS A RESERVE IN ACCORDANCE WITH GAAP AGAINST ANY LIABILITIES
ASSOCIATED WITH THE ASSET DISPOSED OF IN SUCH TRANSACTION AND RETAINED BY THE
BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES AFTER SUCH SALE OR OTHER
DISPOSITION THEREOF, INCLUDING PENSION AND OTHER POST–EMPLOYMENT BENEFIT
LIABILITIES AND LIABILITIES RELATED TO ENVIRONMENTAL MATTERS OR AGAINST ANY
INDEMNIFICATION OBLIGATIONS ASSOCIATED WITH SUCH TRANSACTION PROVIDED, HOWEVER,
THAT, UPON THE REVERSAL (WITHOUT THE SATISFACTION OF ANY APPLICABLE LIABILITIES
IN CASH IN A CORRESPONDING AMOUNT) OF ANY RESERVE DESCRIBED ABOVE, OR IF SUCH
LIABILITIES HAVE NOT BEEN SATISFIED IN CASH AND SUCH RESERVE IS NOT REVERSED
WITHIN THREE HUNDRED AND

 

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SIXTY FIVE (365) DAYS AFTER SUCH ASSET SALE OR CASUALTY EVENT, “NET PROCEEDS”
SHALL INCLUDE THE AMOUNT OF SUCH RESERVE; AND

 

(B)           WITH RESPECT TO THE INCURRENCE OR ISSUANCE OF ANY INDEBTEDNESS OR
CAPITAL STOCK BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY, THE EXCESS, IF ANY,
OF (I) THE SUM OF THE CASH RECEIVED IN CONNECTION WITH SUCH INCURRENCE OR
ISSUANCE OVER (II) THE INVESTMENT BANKING FEES, UNDERWRITING DISCOUNTS,
COMMISSIONS, COSTS AND OTHER OUT-OF-POCKET EXPENSES AND OTHER CUSTOMARY
EXPENSES, INCURRED BY THE BORROWER OR SUCH RESTRICTED SUBSIDIARY IN CONNECTION
WITH SUCH INCURRENCE OR ISSUANCE.

 

“New Notes” means the Senior Notes, the Senior Subordinated Notes and the
Subordinated Discount Notes.

 

“New Notes Documentation” means the New Notes, and all documents executed and
delivered with respect to the New Notes, including the Senior Notes Indenture,
the Senior Subordinated Notes Indenture and the Subordinated Discount Notes
Indenture.

 

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

 

“Note” means a promissory note of the Borrower payable to any Lender or its
registered assigns, in substantially the form of Exhibit C hereto, evidencing
the aggregate Indebtedness of the Borrower to such Lender resulting from the
Loans made by such Lender.

 

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

 

“NPL” means the National Priorities List under CERCLA.

 

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

 

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

 

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

 

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

 

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

 

“Other Pari Passu Lien Obligations” means (i) any Indebtedness constituting debt
securities incurred pursuant to an indenture with an institutional trustee or
loans incurred in the bank credit market (including institutional investor
participation therein) and (ii) all obligations with respect to such
Indebtedness, in each case incurred in compliance with Section 7.03(b) and not
constituting Subordinated Indebtedness, which Indebtedness and other obligations
are secured on an equal and ratable basis with the Obligations pursuant to
intercreditor arrangements reasonably satisfactory to the Collateral Agent.

 

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

 

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

 

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

 

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

 

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

 

“Pension Event” means (a) the whole or partial withdrawal of a Loan Party or any
Subsidiary from a Pension Plan during a Pension Plan year; or (b) the filing of
a notice of interest to terminate in whole or in part a Pension Plan or the
treatment of a Pension Plan

 

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amendment as a termination or partial termination; or (c) the institution of
proceedings by any Governmental Authority to terminate in whole or in part or
have a trustee appointed to administer a Pension Plan; or (d) any other event or
condition which might constitute grounds for the termination of, winding up or
partial termination or winding up or the appointment of trustee to administer,
any Pension Plan.

 

“Pension Plan” means (a) any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Section 412 of the Code or Section 302 or Title IV of ERISA, or
(b) Pension Plan covered by any other Laws (including the PBA and the ITA) and
is sponsored or maintained by any Loan Party or any ERISA Affiliate or to which
any Loan Party or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five (5) plan years.

 

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

 

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

 

“Permitted Collateral Liens” means:

 

(A)           LIENS SECURING ANY OTHER PARI PASSU LIEN OBLIGATIONS; PROVIDED,
HOWEVER, THAT, AT THE TIME OF INCURRENCE AND AFTER GIVING PRO FORMA EFFECT
THERETO, THE CONSOLIDATED SECURED DEBT RATIO WOULD BE NO GREATER THAN 4.25 TO
1.00 (OR, IF LESS, THE COVENANT LEVEL THEN REQUIRED TO BE MAINTAINED PURSUANT TO
SECTION 7.05);

 

(B)           LIENS EXISTING ON THE CLOSING DATE;

 

(C)           LIENS DESCRIBED IN CLAUSES (A), (B), (C), (D), (E), (F) (BUT ONLY
WITH RESPECT TO SECTION 7.03(B)(IV) REFERRED TO THEREIN), (H), (I), (K), (L) (AS
TO ASSETS OTHER THAN INVENTORY), (M), (N), (P), (R) (BUT ONLY WITH RESPECT TO
CLAUSES (F) (BUT ONLY WITH RESPECT TO SECTION 7.03(B)(IV) REFERRED TO THEREIN),
(G), (H) AND (I) REFERRED TO THEREIN), (S), (U), (V), (W), (X), (Y), (Z), (AA),
(BB), (CC), (DD), (EE), (FF), (GG) (AS TO ASSETS OTHER THAN INVENTORY), (II) (AS
TO ASSETS OTHER THAN INVENTORY), (JJ), (KK) AND (LL) OF THE DEFINITION OF
“PERMITTED LIENS”; AND

 

(D)           LIENS ON THE TL PRIORITY COLLATERAL IN FAVOR OF THE COLLATERAL
AGENT RELATING TO THE COLLATERAL AGENT’S ADMINISTRATIVE EXPENSES WITH RESPECT TO
THE TL PRIORITY COLLATERAL.

 

“Permitted Cure Issuance” has the meaning provided in Section 8.05

 

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

 

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

 

“Permitted Investments” means:

 

(A)           ANY INVESTMENT IN THE BORROWER OR ANY OF ITS RESTRICTED
SUBSIDIARIES;

 

(B)           ANY INVESTMENT IN CASH AND CASH EQUIVALENTS OR INVESTMENT GRADE
SECURITIES;

 

(C)           ANY INVESTMENT BY THE BORROWER OR ANY OF ITS RESTRICTED
SUBSIDIARIES IN A PERSON THAT IS ENGAGED IN A SIMILAR BUSINESS IF AS A RESULT OF
SUCH INVESTMENT:

 

(I)            SUCH PERSON BECOMES A RESTRICTED SUBSIDIARY; OR

 

(II)           SUCH PERSON, IN ONE TRANSACTION OR A SERIES OF RELATED
TRANSACTIONS, IS MERGED, AMALGAMATED OR CONSOLIDATED WITH OR INTO, OR TRANSFERS
OR CONVEYS SUBSTANTIALLY ALL OF ITS ASSETS TO, OR IS LIQUIDATED INTO, THE
BORROWER OR A RESTRICTED SUBSIDIARY,

 

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

 

(D)           ANY INVESTMENT IN SECURITIES OR OTHER ASSETS NOT CONSTITUTING
CASH, CASH EQUIVALENTS OR INVESTMENT GRADE SECURITIES AND RECEIVED IN CONNECTION
WITH AN ASSET SALE MADE PURSUANT TO SECTION 7.01 OR ANY OTHER DISPOSITION OF
ASSETS NOT CONSTITUTING AN ASSET SALE;

 

(E)           ANY INVESTMENT EXISTING ON THE CLOSING DATE AND ANY EXTENSION,
MODIFICATION, REPLACEMENT OR RENEWAL OF ANY SUCH INVESTMENT, BUT ONLY TO THE
EXTENT NOT INVOLVING ADDITIONAL ADVANCES, CONTRIBUTIONS OR OTHER INVESTMENTS OF
CASH OR OTHER ASSETS OR OTHER INCREASES THEREOF OTHER THAN AS A RESULT OF THE
ACCRUAL OR ACCRETION OF INTEREST OR ORIGINAL ISSUE DISCOUNT OR THE ISSUANCE OF
PAY-IN-KIND SECURITIES, IN EACH CASE, PURSUANT TO THE TERMS OF SUCH INVESTMENT
AS IN EFFECT ON THE CLOSING DATE (OR AS SUBSEQUENTLY AMENDED OR OTHERWISE
MODIFIED IN A MANNER NOT DISADVANTAGEOUS TO THE LENDERS IN ANY MATERIAL
RESPECT);

 

(F)            ANY INVESTMENT ACQUIRED BY THE BORROWER OR ANY OF ITS RESTRICTED
SUBSIDIARIES (I) IN EXCHANGE FOR ANY OTHER INVESTMENT OR ACCOUNTS RECEIVABLE
HELD BY THE BORROWER OR ANY SUCH RESTRICTED SUBSIDIARY IN CONNECTION WITH OR AS
A RESULT OF A BANKRUPTCY, WORKOUT, REORGANIZATION OR RECAPITALIZATION OF THE
ISSUER OF SUCH OTHER INVESTMENT OR ACCOUNTS RECEIVABLE, OR (II) AS A RESULT OF A
FORECLOSURE BY THE BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES WITH RESPECT
TO ANY SECURED INVESTMENT OR OTHER TRANSFER OF TITLE WITH RESPECT TO ANY SECURED
INVESTMENT IN DEFAULT;

 

(G)           HEDGING OBLIGATIONS PERMITTED UNDER SECTION 7.03(B)(X);

 

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(H)           ANY INVESTMENT IN A SIMILAR BUSINESS HAVING AN AGGREGATE FAIR
MARKET VALUE, TAKEN TOGETHER WITH ALL OTHER INVESTMENTS MADE PURSUANT TO THIS
CLAUSE (H) THAT ARE AT THAT TIME OUTSTANDING, NOT TO EXCEED $75,000,000 (WITH
THE FAIR MARKET VALUE OF EACH INVESTMENT BEING MEASURED AT THE TIME MADE AND
WITHOUT GIVING EFFECT TO SUBSEQUENT CHANGES IN VALUE);

 

(I)            INVESTMENTS THE PAYMENT FOR WHICH CONSISTS OF EQUITY INTERESTS
(EXCLUSIVE OF DISQUALIFIED STOCK) OF THE BORROWER, OR ANY OF ITS DIRECT OR
INDIRECT PARENT COMPANIES; PROVIDED, HOWEVER, THAT SUCH EQUITY INTERESTS WILL
NOT INCREASE THE AMOUNT AVAILABLE FOR RESTRICTED PAYMENTS UNDER
SECTION 7.02(A)(III);

 

(J)            GUARANTEES OF INDEBTEDNESS OF THE BORROWER OR ANY RESTRICTED
SUBSIDIARY PERMITTED UNDER SECTION 7.03, PERFORMANCE GUARANTEES AND CONTINGENT
OBLIGATIONS IN THE ORDINARY COURSE OF BUSINESS AND THE CREATION OF LIENS ON THE
ASSETS OF THE BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES IN COMPLIANCE WITH
THE COVENANT DESCRIBED IN SECTION 7.04;

 

(K)           ANY TRANSACTION TO THE EXTENT IT CONSTITUTES AN INVESTMENT THAT IS
PERMITTED AND MADE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 7.07(B) (EXCEPT
TRANSACTIONS DESCRIBED IN CLAUSES (II), (V) AND (IX) THEREOF);

 

(L)            INVESTMENTS CONSISTING OF PURCHASES AND ACQUISITIONS OF
INVENTORY, SUPPLIES, MATERIAL OR EQUIPMENT;

 

(M)          ADDITIONAL INVESTMENTS HAVING AN AGGREGATE FAIR MARKET VALUE, TAKEN
TOGETHER WITH ALL OTHER INVESTMENTS MADE PURSUANT TO THIS CLAUSE (M) THAT ARE AT
THAT TIME OUTSTANDING (WITHOUT GIVING EFFECT TO THE SALE OF AN UNRESTRICTED
SUBSIDIARY TO THE EXTENT THE PROCEEDS OF SUCH SALE DO NOT CONSIST OF, OR HAVE
NOT BEEN SUBSEQUENTLY SOLD OR TRANSFERRED FOR CASH OR MARKETABLE SECURITIES),
NOT TO EXCEED $100,000,000 (WITH THE FAIR MARKET VALUE OF EACH INVESTMENT BEING
MEASURED AT THE TIME MADE AND WITHOUT GIVING EFFECT TO SUBSEQUENT CHANGES IN
VALUE); PROVIDED THAT NO INVESTMENT MAY BE MADE IN RELIANCE ON THIS CLAUSE (M)
UNLESS IMMEDIATELY AFTER GIVING PRO FORMA EFFECT TO SUCH INVESTMENT AND ANY
RELATED FINANCING TRANSACTION, THE CONSOLIDATED TOTAL LEVERAGE RATIO IS LESS
THAN 6.00 TO 1.00;

 

(N)           INVESTMENTS RELATING TO A RECEIVABLES SUBSIDIARY THAT, IN THE GOOD
FAITH DETERMINATION OF THE BORROWER ARE NECESSARY OR ADVISABLE TO EFFECT ANY
RECEIVABLES FACILITY;

 

(O)           ADVANCES TO, OR GUARANTEES OF INDEBTEDNESS OF, EMPLOYEES NOT IN
EXCESS OF $15,000,000 OUTSTANDING AT ANY ONE TIME, IN THE AGGREGATE;

 

(P)           LOANS AND ADVANCES TO OFFICERS, DIRECTORS AND EMPLOYEES FOR
BUSINESS-RELATED TRAVEL EXPENSES, MOVING EXPENSES AND OTHER SIMILAR EXPENSES, IN
EACH CASE INCURRED IN THE ORDINARY COURSE OF BUSINESS OR CONSISTENT WITH PAST
PRACTICES OR TO FUND SUCH PERSON’S PURCHASE OF EQUITY INTERESTS OF THE BORROWER
OR ANY DIRECT OR INDIRECT PARENT COMPANY THEREOF; AND

 

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(Q)           INVESTMENTS CONSISTING OF LICENSING OF INTELLECTUAL PROPERTY
PURSUANT TO JOINT MARKETING ARRANGEMENTS WITH OTHER PERSONS.

 

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

 

(A)           PLEDGES, DEPOSITS OR SECURITY BY SUCH PERSON UNDER WORKMEN’S
COMPENSATION LAWS, UNEMPLOYMENT INSURANCE, EMPLOYERS’ HEALTH TAX AND OTHER
SOCIAL SECURITY OR STATUTORY LAWS OR SIMILAR LEGISLATION, OR GOOD FAITH DEPOSITS
IN CONNECTION WITH BIDS, TENDERS, CONTRACTS (OTHER THAN FOR THE PAYMENT OF
INDEBTEDNESS) OR LEASES TO WHICH SUCH PERSON IS A PARTY, OR DEPOSITS TO SECURE
PUBLIC OR STATUTORY OBLIGATIONS OF SUCH PERSON OR DEPOSITS OF CASH OR U.S.
GOVERNMENT BONDS TO SECURE SURETY OR APPEAL BONDS TO WHICH SUCH PERSON IS A
PARTY, OR DEPOSITS AS SECURITY FOR CONTESTED TAXES OR IMPORT DUTIES OR FOR THE
PAYMENT OF RENT OR DEPOSITS, IN EACH CASE INCURRED IN THE ORDINARY COURSE OF
BUSINESS;

 

(B)           LIENS IMPOSED BY LAW, SUCH AS LANDLORDS’, CARRIERS’,
WAREHOUSEMEN’S, MATERIALMEN’S, REPAIRMEN’S AND MECHANICS’ LIENS, IN EACH CASE
FOR SUMS NOT YET OVERDUE FOR A PERIOD OF MORE THAN 30 DAYS OR BEING CONTESTED IN
GOOD FAITH BY APPROPRIATE ACTIONS OR OTHER LIENS ARISING OUT OF JUDGMENTS OR
AWARDS AGAINST SUCH PERSON WITH RESPECT TO WHICH SUCH PERSON SHALL THEN BE
PROCEEDING WITH AN APPEAL OR OTHER PROCEEDINGS FOR REVIEW IF ADEQUATE RESERVES
WITH RESPECT THERETO ARE MAINTAINED ON THE BOOKS OF SUCH PERSON IN ACCORDANCE
WITH GAAP; PROVIDED THAT ANY SUCH LIENS GRANTED IN FAVOR OF LANDLORDS IN THE
PROVIDENCE OF QUEBEC SECURING THE PAYMENT OF RENT SHALL BE CONSENSUAL AND
SUBORDINATED TO THE LIEN OF THE COLLATERAL AGENT;

 

(C)           LIENS FOR TAXES, ASSESSMENTS OR OTHER GOVERNMENTAL CHARGES NOT YET
OVERDUE FOR A PERIOD OF MORE THAN 30 DAYS OR WHICH ARE BEING CONTESTED IN GOOD
FAITH BY APPROPRIATE ACTIONS DILIGENTLY CONDUCTED, IF ADEQUATE RESERVES WITH
RESPECT THERETO ARE MAINTAINED ON THE BOOKS OF SUCH PERSON IN ACCORDANCE WITH
GAAP, OR FOR PROPERTY TAXES ON PROPERTY THAT THE BORROWER OR ONE OF ITS
SUBSIDIARIES HAS DETERMINED TO ABANDON IF THE SOLE RECOURSE FOR SUCH TAX,
ASSESSMENT, CHARGE, LEVY OR CLAIM IS TO SUCH PROPERTY;

 

(D)           LIENS IN FAVOR OF ISSUERS OF PERFORMANCE, SURETY, BID, INDEMNITY,
WARRANTY, RELEASE, APPEAL OR SIMILAR BONDS OR WITH RESPECT TO OTHER REGULATORY
REQUIREMENTS OR LETTERS OF CREDIT OR BANKERS’ ACCEPTANCES ISSUED, AND COMPLETION
GUARANTEES PROVIDED FOR, IN EACH CASE PURSUANT TO THE REQUEST OF AND FOR THE
ACCOUNT OF SUCH PERSON IN THE ORDINARY COURSE OF ITS BUSINESS OR CONSISTENT WITH
PAST PRACTICE PRIOR TO THE CLOSING DATE;

 

(E)           MINOR SURVEY EXCEPTIONS, MINOR ENCUMBRANCES, GROUND LEASES,
EASEMENTS OR RESERVATIONS OF, OR RIGHTS OF OTHERS FOR, LICENSES, RIGHTS–OF–WAY,
SERVITUDES, SEWERS, ELECTRIC LINES, DRAINS, TELEGRAPH AND TELEPHONE AND CABLE
TELEVISION LINES, GAS AND OIL PIPELINES AND OTHER SIMILAR PURPOSES, OR ZONING,
BUILDING CODES OR OTHER RESTRICTIONS (INCLUDING, WITHOUT LIMITATION, MINOR
DEFECTS OR IRREGULARITIES IN TITLE AND SIMILAR ENCUMBRANCES) AS TO THE USE OF
REAL PROPERTIES OR LIENS INCIDENTAL, TO THE CONDUCT OF THE BUSINESS OF SUCH
PERSON OR TO THE OWNERSHIP OF ITS PROPERTIES WHICH WERE NOT INCURRED IN
CONNECTION WITH INDEBTEDNESS AND WHICH DO NOT IN THE AGGREGATE MATERIALLY IMPAIR
THEIR USE IN THE OPERATION OF THE BUSINESS OF SUCH PERSON;

 

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(F)            LIENS SECURING INDEBTEDNESS PERMITTED TO BE INCURRED PURSUANT TO
SECTION 7.03(B)(IV), (XVIII) OR (XIX); PROVIDED THAT LIENS SECURING INDEBTEDNESS
PERMITTED TO BE INCURRED PURSUANT TO SECTION 7.03(B)(XVIII) EXTEND ONLY TO THE
ASSETS OF FOREIGN SUBSIDIARIES AND LIENS SECURING INDEBTEDNESS PERMITTED TO BE
INCURRED PURSUANT TO SECTION 7.03(B)(XIX) ARE SOLELY ON ACQUIRED PROPERTY OR THE
ASSETS OF THE ACQUIRED ENTITY, AS THE CASE MAY BE;

 

(G)           LIENS EXISTING ON THE CLOSING DATE AND SET FORTH IN SCHEDULE 7.04;

 

(H)           LIENS EXISTING ON PROPERTY OR SHARES OF STOCK OF A PERSON AT THE
TIME SUCH PERSON BECOMES A SUBSIDIARY; PROVIDED, HOWEVER, SUCH LIENS ARE NOT
CREATED OR INCURRED IN CONNECTION WITH, OR IN CONTEMPLATION OF, SUCH OTHER
PERSON BECOMING SUCH A SUBSIDIARY; PROVIDED, FURTHER, HOWEVER, THAT SUCH LIENS
MAY NOT EXTEND TO ANY OTHER PROPERTY OWNED BY THE BORROWER OR ANY OF ITS
RESTRICTED SUBSIDIARIES;

 

(I)            LIENS EXISTING ON PROPERTY AT THE TIME THE BORROWER OR A
RESTRICTED SUBSIDIARY ACQUIRED THE PROPERTY, INCLUDING ANY ACQUISITION BY MEANS
OF A MERGER, AMALGAMATION OR CONSOLIDATION WITH OR INTO THE BORROWER OR ANY OF
ITS RESTRICTED SUBSIDIARIES; PROVIDED, HOWEVER, THAT SUCH LIENS ARE NOT CREATED
OR INCURRED IN CONNECTION WITH, OR IN CONTEMPLATION OF, SUCH ACQUISITION,
MERGER, AMALGAMATION OR CONSOLIDATION; PROVIDED, FURTHER, HOWEVER, THAT THE
LIENS MAY NOT EXTEND TO ANY OTHER PROPERTY OWNED BY THE BORROWER OR ANY OF ITS
RESTRICTED SUBSIDIARIES;

 

(J)            LIENS SECURING INDEBTEDNESS OR OTHER OBLIGATIONS OF A RESTRICTED
SUBSIDIARY OWING TO THE BORROWER OR ANOTHER RESTRICTED SUBSIDIARY PERMITTED TO
BE INCURRED IN ACCORDANCE WITH SECTION 7.03;

 

(K)           LIENS SECURING HEDGING OBLIGATIONS SO LONG AS THE RELATED
INDEBTEDNESS IS PERMITTED TO BE INCURRED UNDER THIS AGREEMENT;

 

(L)            LIENS ON SPECIFIC ITEMS OF INVENTORY OR OTHER GOODS AND PROCEEDS
OF ANY PERSON SECURING SUCH PERSON’S OBLIGATIONS IN RESPECT OF BANKERS’
ACCEPTANCES OR LETTERS OF CREDIT ISSUED OR CREATED FOR THE ACCOUNT OF SUCH
PERSON TO FACILITATE THE PURCHASE, SHIPMENT OR STORAGE OF SUCH INVENTORY OR
OTHER GOODS;

 

(M)          LEASES, SUBLEASES, LICENSES OR SUBLICENSES GRANTED TO OTHERS IN THE
ORDINARY COURSE OF BUSINESS WHICH DO NOT MATERIALLY INTERFERE WITH THE ORDINARY
CONDUCT OF THE BUSINESS OF THE BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES
AND DO NOT SECURE ANY INDEBTEDNESS;

 

(N)           LIENS ARISING FROM UNIFORM COMMERCIAL CODE (OR EQUIVALENT
STATUTES) FINANCING STATEMENTS OR PPSA REGISTRATION STATEMENTS OR RECORDATION
FILINGS REGARDING OPERATING LEASES OR CONSIGNMENTS ENTERED INTO BY THE BORROWER
AND ITS RESTRICTED SUBSIDIARIES IN THE ORDINARY COURSE OF BUSINESS;

 

(O)           LIENS IN FAVOR OF THE BORROWER OR ANY SUBSIDIARY GUARANTOR;

 

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(P)           LIENS ON EQUIPMENT OF THE BORROWER OR ANY OF ITS RESTRICTED
SUBSIDIARIES GRANTED IN THE ORDINARY COURSE OF BUSINESS TO THE BORROWER’S
CLIENTS AT WHICH SUCH EQUIPMENT IS LOCATED;

 

(Q)           LIENS ON ACCOUNTS RECEIVABLE AND RELATED ASSETS INCURRED IN
CONNECTION WITH A RECEIVABLES FACILITY;

 

(R)            LIENS TO SECURE ANY REFINANCING, REFUNDING, EXTENSION, RENEWAL OR
REPLACEMENT (OR SUCCESSIVE REFINANCING, REFUNDING, EXTENSIONS, RENEWALS OR
REPLACEMENTS) AS A WHOLE, OR IN PART, OF ANY INDEBTEDNESS SECURED BY ANY LIEN
REFERRED TO IN THE FOREGOING CLAUSES (F), (G), (H) AND (I); PROVIDED, HOWEVER,
THAT (I) SUCH NEW LIEN SHALL BE LIMITED TO ALL OR PART OF THE SAME PROPERTY THAT
SECURED THE ORIGINAL LIEN (PLUS IMPROVEMENTS ON SUCH PROPERTY), AND (II) THE
INDEBTEDNESS SECURED BY SUCH LIEN AT SUCH TIME IS NOT INCREASED TO ANY AMOUNT
GREATER THAN THE SUM OF (A) THE OUTSTANDING PRINCIPAL AMOUNT OR, IF GREATER,
COMMITTED AMOUNT OF THE INDEBTEDNESS DESCRIBED UNDER CLAUSES (F), (G), (H) AND
(I) AT THE TIME THE ORIGINAL LIEN BECAME A PERMITTED LIEN UNDER THIS AGREEMENT,
AND (B) AN AMOUNT NECESSARY TO PAY ANY FEES AND EXPENSES, INCLUDING PREMIUMS,
RELATED TO SUCH REFINANCING, REFUNDING, EXTENSION, RENEWAL OR REPLACEMENT;

 

(S)           DEPOSITS MADE OR OTHER SECURITY PROVIDED TO SECURE LIABILITIES TO
INSURANCE CARRIERS UNDER INSURANCE OR SELF-INSURANCE ARRANGEMENTS IN THE
ORDINARY COURSE OF BUSINESS;

 

(T)            OTHER LIENS SECURING OBLIGATIONS NOT EXCEEDING $50,000,000 AT ANY
ONE TIME OUTSTANDING;

 

(U)           LIENS SECURING JUDGMENTS FOR THE PAYMENT OF MONEY NOT CONSTITUTING
AN EVENT OF DEFAULT UNDER SECTION 8.01(H), SO LONG AS SUCH LIENS ARE ADEQUATELY
BONDED AND ANY APPROPRIATE LEGAL PROCEEDINGS THAT MAY HAVE BEEN DULY INITIATED
FOR THE REVIEW OF SUCH JUDGMENT HAVE NOT BEEN FINALLY TERMINATED OR THE PERIOD
WITHIN WHICH SUCH PROCEEDINGS MAY BE INITIATED HAS NOT EXPIRED;

 

(V)           LIENS IN FAVOR OF CUSTOMS AND REVENUE AUTHORITIES ARISING AS A
MATTER OF LAW TO SECURE PAYMENT OF CUSTOMS DUTIES IN CONNECTION WITH THE
IMPORTATION OF GOODS IN THE ORDINARY COURSE OF BUSINESS;

 

(W)          LIENS (I) OF A COLLECTION BANK ARISING UNDER SECTION 4–210 OF THE
UNIFORM COMMERCIAL CODE ON ITEMS IN THE COURSE OF COLLECTION, (II) ATTACHING TO
COMMODITY TRADING ACCOUNTS OR OTHER COMMODITY BROKERAGE ACCOUNTS INCURRED IN THE
ORDINARY COURSE OF BUSINESS, AND (III) IN FAVOR OF BANKING INSTITUTIONS ARISING
AS A MATTER OF LAW ENCUMBERING DEPOSITS (INCLUDING THE RIGHT OF SET-OFF) AND
WHICH ARE WITHIN THE GENERAL PARAMETERS CUSTOMARY IN THE BANKING INDUSTRY;

 

(X)            LIENS DEEMED TO EXIST IN CONNECTION WITH INVESTMENTS IN
REPURCHASE AGREEMENTS OR OTHER CASH EQUIVALENTS PERMITTED UNDER SECTION 7.03;
PROVIDED THAT SUCH LIENS DO NOT EXTEND TO ANY ASSETS OTHER THAN THOSE THAT ARE
THE SUBJECT OF SUCH REPURCHASE AGREEMENT OR OTHER CASH EQUIVALENT;

 

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(Y)           LIENS ENCUMBERING REASONABLE CUSTOMARY INITIAL DEPOSITS AND MARGIN
DEPOSITS AND SIMILAR LIENS ATTACHING TO COMMODITY TRADING ACCOUNTS OR OTHER
BROKERAGE ACCOUNTS INCURRED IN THE ORDINARY COURSE OF BUSINESS AND NOT FOR
SPECULATIVE PURPOSES;

 

(Z)            LIENS THAT ARE CONTRACTUAL RIGHTS OF SET-OFF (I) RELATING TO THE
ESTABLISHMENT OF DEPOSITORY RELATIONS WITH BANKS NOT GIVEN IN CONNECTION WITH
THE ISSUANCE OF INDEBTEDNESS, (II) RELATING TO POOLED DEPOSIT OR SWEEP ACCOUNTS
OF THE BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES TO PERMIT SATISFACTION OF
OVERDRAFT OR SIMILAR OBLIGATIONS INCURRED IN THE ORDINARY COURSE OF BUSINESS OF
THE BORROWER AND ITS RESTRICTED SUBSIDIARIES OR (III) RELATING TO PURCHASE
ORDERS AND OTHER AGREEMENTS ENTERED INTO WITH CUSTOMERS OF THE BORROWER OR ANY
OF ITS RESTRICTED SUBSIDIARIES IN THE ORDINARY COURSE OF BUSINESS;

 

(AA)         LIENS SECURING THE OBLIGATIONS AND LIENS SECURING CASH MANAGEMENT
SERVICES (AS DEFINED IN THE ABL CREDIT AGREEMENT);

 

(BB)         LIENS SOLELY ON ANY CASH EARNEST MONEY DEPOSITS MADE BY THE
BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES IN CONNECTION WITH ANY LETTER OF
INTENT OR PURCHASE AGREEMENT PERMITTED UNDER THIS AGREEMENT;

 

(CC)         THE RIGHTS RESERVED OR VESTED IN ANY PERSON BY THE TERMS OF ANY
LEASE, LICENSE, FRANCHISE, GRANT OR PERMIT HELD BY THE BORROWER OR ANY OF ITS
RESTRICTED SUBSIDIARIES OR BY A STATUTORY PROVISION, TO TERMINATE ANY SUCH
LEASE, LICENSE, FRANCHISE, GRANT OR PERMIT, OR TO REQUIRE ANNUAL OR PERIODIC
PAYMENTS AS A CONDITION TO THE CONTINUANCE THEREOF;

 

(DD)         RESTRICTIVE COVENANTS AFFECTING THE USE TO WHICH REAL PROPERTY
MAY BE PUT, PROVIDED, HOWEVER, THAT THE COVENANTS ARE COMPLIED WITH;

 

(EE)         SECURITY GIVEN TO A PUBLIC UTILITY OR ANY MUNICIPALITY OR
GOVERNMENTAL AUTHORITY WHEN REQUIRED BY SUCH UTILITY OR AUTHORITY IN CONNECTION
WITH THE OPERATIONS OF THAT PERSON IN THE ORDINARY COURSE OF BUSINESS;

 

(FF)           ZONING BY-LAWS AND OTHER LAND USE RESTRICTIONS, INCLUDING,
WITHOUT LIMITATION, SITE PLAN AGREEMENTS, DEVELOPMENT AGREEMENTS AND CONTRACT
ZONING AGREEMENTS;

 

(GG)         LIENS ARISING OUT OF CONDITIONAL SALE, TITLE RETENTION, CONSIGNMENT
OR SIMILAR ARRANGEMENTS FOR SALE OF GOODS ENTERED INTO BY THE BORROWER OR ANY
RESTRICTED SUBSIDIARY IN THE ORDINARY COURSE OF BUSINESS;

 

(HH)         [RESERVED];

 

(II)           RIGHTS OF A SELLER OF UNPAID GOODS IN RESPECT OF SUCH GOODS AT
COMMON LAW OR UNDER THE BANKRUPTCY AND INSOLVENCY ACT (CANADA) AND OTHER
APPLICABLE LEGISLATION;

 

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(JJ)           THE RESERVATIONS, LIMITATIONS, PROVISOS AND CONDITIONS, IF ANY,
EXPRESSED IN ANY ORIGINAL GRANTS FROM THE CROWN UNDER CANADIAN LAW AND ANY
STATUTORY EXCEPTIONS TO TITLE UNDER CANADIAN LAW;

 

(KK)         CUSTOMARY TRANSFER RESTRICTIONS AND PURCHASE OPTIONS IN JOINT
VENTURE AND SIMILAR AGREEMENTS;

 

(LL)           LIENS CREATED PURSUANT TO THE ABL COLLATERAL DOCUMENTS, SECURING
INDEBTEDNESS INCURRED PURSUANT TO SECTION 7.03(B)(I)(X) IN FAVOR OF THE ABL
COLLATERAL AGENT, SO LONG AS SAME IS AT ALL TIMES SUBJECT TO THE INTERCREDITOR
AGREEMENT; AND

 

(MM)       LIENS INCURRED TO SECURE OBLIGATIONS IN RESPECT OF ANY INDEBTEDNESS
PERMITTED TO BE INCURRED PURSUANT TO SECTION 7.03; PROVIDED THAT, WITH RESPECT
TO LIENS SECURING OBLIGATIONS PERMITTED UNDER THIS CLAUSE (MM), AT THE TIME OF
INCURRENCE AND AFTER GIVING PRO FORMA EFFECT THERETO, THE CONSOLIDATED SECURED
DEBT RATIO WOULD BE NO GREATER THAN 4.50 TO 1.0 (OR, IF LESS, THE COVENANT LEVEL
THEN REQUIRED TO BE MAINTAINED PURSUANT TO SECTION 7.05).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Pro Forma Balance Sheet” has the meaning set forth in Section 5.05(a)(ii).

 

“Pro Forma Compliance” means, at any date of determination, that the Borrower
and its Restricted Subsidiaries shall be in compliance, on a pro forma basis
after giving effect on a pro forma basis to the relevant Specified Transactions
in the manner contemplated by the definition of “Consolidated Secured Debt
Ratio”, with the financial performance covenant set

 

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forth in Section 7.05 recomputed as at the last day of the Relevant Reference
Period, and the Borrower shall have delivered to the Administrative Agent a
certificate of a Responsible Officer of the Borrower to such effect, together
with all relevant financial information. In the event any covenant or provision
of this Agreement requires Pro Forma Compliance with Section 7.05 prior to the
last day of the Test Period ended closest to January 31, 2008, such Pro Forma
Compliance shall be tested using the ratio specified in the table in
Section 7.05 for the Test Period ended closest to January 31, 2008.

 

“Pro Forma Financial Statements” has the meaning set forth in
Section 5.05(a)(ii).

 

“Pro Forma Statements of Operations” has the meaning set forth in
Section 5.05(a)(ii).

 

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

 

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

 

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

 

“Public Company Costs” shall mean costs relating to compliance with the
Sarbanes-Oxley Act of 2002, as amended, and other expenses arising out of or
incidental to the Borrower’s status as a public company, including costs, fees
and expenses (including legal, accounting and other professional fees) relating
to compliance with provisions of the Securities Act of 1933, as amended, as
applicable to companies with equity securities held by the public, the
Securities Exchange Act of 1934, as amended, the rules of national securities
exchange companies with listed equity securities, directors’ compensation, fees
and expense reimbursement; costs of shareholder meetings and reports to
shareholders; directors and officers’ insurance and other executive costs; legal
and other professional fees; and listing fees, in each case incurred or accrued
prior to the Closing Date and that will not continue to be incurred immediately
after the Closing Date.

 

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

 

“Rating Agencies” means Moody’s and S&P or if Moody’s or S&P or both shall not
make a rating on the Loans publicly available, a nationally recognized
statistical rating

 

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agency or agencies, as the case may be, selected by the Borrower which shall be
substituted for Moody’s or S&P or both, as the case may be.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Registration Rights Agreement” means, collectively, the Registration Rights
Agreements related to the Senior Notes, the Senior Subordinated Notes and the
Subordinated Discount Notes, dated as of the Closing Date, among the Borrower,
the Subsidiary Guarantors and the initial purchasers of the respective New Notes
specified therein.

 

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

 

“Related Business Assets” means assets (other than cash or Cash Equivalents)
used or useful in a Similar Business, provided that any assets received by the
Borrower or a Restricted Subsidiary in exchange for assets transferred by the
Borrower or a Restricted

 

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Subsidiary shall not be deemed to be Related Business Assets if they consist of
securities of a Person, unless upon receipt of the securities of such Person,
such Person would become a Restricted Subsidiary.

 

“Relevant Reference Period” means (i) in the case of (x) any determination of
EBITDA and Consolidated Total Indebtedness (and any component definitions used
therein) for purposes of computing quarterly compliance with Section 7.05 and
(y) any determination of the Consolidated Total Leverage Ratio (and the
component definition thereof) as used in the definition of “Applicable Rate”,
the Test Period then most recently ended, (ii) in the case of any determination
of EBITDA and Consolidated Total Indebtedness (and any component definitions
used therein) for purposes of computing the Consolidated Total Leverage Ratio as
used in the definition of “Required Percentage”, the Excess Cash Flow Period
then most recently ended, and (iii) in the case of any determination of (1) the
Fixed Charge Coverage Ratio, (2) the Fixed Charge Coverage Ratio Incurrence
Test, (3) the Consolidated Secured Debt Ratio, (4) the Consolidated Total
Leverage Ratio (other than as used in the definitions of “Applicable Rate” and
“Required Percentage”), or (5) Pro Forma Compliance with Section 7.05 for
purposes of Sections 7.02(a)(ii), 7.02(b)(vi), 7.02(b)(vii) and 7.06(a)(iv) and
the definition of “Unrestricted Subsidiary” (and the component definitions used
in any of the foregoing), the Test Period then most recently ended for which
internal financial statements are available immediately preceding the date on
which the Specified Transaction for which such calculation is being made shall
occur.

 

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

 

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

 

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

 

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

 

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

 

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“Restricted” shall mean, when referring to cash or Cash Equivalents of the
Borrower or any of its Subsidiaries, that such cash or Cash Equivalents
(i) appears (or would be required to appear) as “restricted” on a consolidated
balance sheet of the Borrower or of any such Subsidiary (unless such appearance
is related to the Loan Documents or Liens created thereunder), (ii) are subject
to any Lien in favor of any Person other than the Collateral Agent for the
benefit of the Secured Parties (except for those Liens in favor of the ABL
Collateral Agent for the benefit of the ABL Lenders and Liens securing Other
Pari Passu Lien Obligations) or (iii) are not otherwise generally available for
use by the Borrower or such Subsidiary.

 

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

 

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

 

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

 

“Retained Percentage” shall mean, with respect to any Excess Cash Flow Period,
(a) 100% minus (b) the Required Percentage with respect to such Excess Cash Flow
Period.

 

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

 

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

 

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

 

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

 

“Secured Hedge Agreement” means any Swap Contract permitted under Article 7 that
is entered into by and between any Loan Party or any Restricted Subsidiary and
any Hedge Bank and with respect to which, at or prior to the time that such Swap
Contract is entered into, the Borrower (or another Loan Party) and the Hedge
Bank party thereto (except in the case of the Administrative Agent) shall have
delivered written notice to the Administrative Agent that such Swap Contract has
been entered into and that it constitutes a “Secured Hedge Agreement” entitled
to the benefits of the Collateral Documents and the Intercreditor Agreement.

 

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

 

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

 

“Secured Parties” means, collectively, the Administrative Agent, the Collateral
Agent, the Lenders, the Hedge Banks, the Supplemental Administrative Agent and
each Supplemental Administrative Agent appointed by the Administrative Agent
from time to time pursuant to Section 9.13.

 

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

 

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

 

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

 

“Senior Notes” means $750,000,000 in aggregate principal amount of the
Borrower’s 10% senior unsecured notes due 2014.

 

“Senior Notes Indenture” means the Indenture for the Senior Notes, dated as of
October 31, 2006.

 

“Senior Subordinated Notes” means $400,000,000 in aggregate principal amount of
the Borrower’s 11-3/8% senior subordinated notes due 2016.

 

“Senior Subordinated Notes Indenture” means the Indenture for the Senior
Subordinated Notes, dated as of October 31, 2006.

 

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

 

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

 

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

 

“Specified Legal Expenses” means all attorneys’ and experts’ fees and expenses
and all other costs and expenses paid or payable in connection with
investigating or defending or preparing to investigate or defend any threatened,
pending, completed or future claim, demand, action, suit, proceeding, inquiry or
investigation (whether civil, criminal, administrative or investigative) arising
out of or related to (i) the Borrower’s compensation practices (including option
grants) prior to the Closing Date, (ii) any disclosure or alleged lack of
disclosure on the part of the Borrower or any of its directors or officers
regarding the beneficial ownership of any securities of the Borrower prior to
the Closing Date by any such director or officer (or any trust established for
the benefit of any such director or officer or any family member thereof),
(iii) any transaction prior to the Closing Date involving any securities of the
Borrower alleged to have been engaged in by any such Person, (iv) any alleged
deficiencies in the Borrower’s financial reporting, internal control over
financial reporting or disclosure controls prior to the Closing Date and
procedures relating to any of the foregoing, and (v) any alleged bad faith,
breach of fiduciary duty or other act or omission on the part of any director or
officer of the Borrower relating to any of the foregoing, together in each case
with all damages, losses, liabilities, judgments, fines, penalties and amounts
paid in settlement arising out of or incurred in connection with any of the
foregoing (including all amounts paid to or on behalf of other Persons in
connection with any of the foregoing pursuant to any indemnification agreements,
arrangements or obligations).

 

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

 

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

 

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

 

“Subordinated Discount Notes” means the $469,449,000 aggregate principal amount
at maturity of the Borrower’s 13% Subordinated Discount Notes due 2016 issued on
the Closing Date.

 

“Subordinated Discount Notes Indenture” means the Indenture for the Subordinated
Discount Notes, dated as of October 31, 2006.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International

 

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Swaps and Derivatives Association, Inc., any International Foreign Exchange
Master Agreement, or any other master agreement (any such master agreement,
together with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

 

“Syndication Agent” means JPMorgan Chase Bank, N.A., as Syndication Agent under
this Agreement.

 

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

 

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

 

“Threshold Amount” means $50,000,000.

 

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

 

“Total Assets” means the total assets of the Borrower and its Restricted
Subsidiaries on a consolidated basis, as shown on the most recent balance sheet
of the Borrower or such other Person as may be expressly stated.

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans.

 

“Transaction” means, collectively, (a) the execution, delivery and performance
of the Recapitalization Agreement and all other material documents, instruments
and certificates contemplated by the Recapitalization Agreement and the
consummation of the Recapitalization and the other transactions contemplated
thereby, including the rollover of any Equity Interests in the Borrower, (b) the
execution, delivery and performance by the Loan Parties of the Loan Documents to
which they are a party and the making of the Borrowings hereunder, (c) the
execution, delivery and performance by the Borrower and the Subsidiaries of the
Borrower party thereto of the New Notes Documentation and the issuance of the
New Notes, (d) the execution, delivery and performance of the ABL Credit
Agreement and the other ABL Loan Documents and the making of borrowings
thereunder, (e) the execution, delivery and performance by all parties thereto
of the Intercreditor Agreement, (f) the Debt Prepayment, (g) the consummation of
the Equity Contribution and (h) the payment of the Transaction Expenses.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(I)                                     ANY UNRESTRICTED SUBSIDIARY MUST BE AN
ENTITY OF WHICH THE EQUITY INTERESTS ENTITLED TO CAST AT LEAST A MAJORITY OF THE
VOTES THAT MAY BE CAST BY ALL EQUITY INTERESTS HAVING ORDINARY VOTING POWER FOR
THE ELECTION OF DIRECTORS OR PERSONS PERFORMING A SIMILAR FUNCTION ARE OWNED,
DIRECTLY OR INDIRECTLY, BY THE BORROWER;

 

(II)                                  SUCH DESIGNATION COMPLIES WITH THE
COVENANTS DESCRIBED UNDER SECTION 7.02;

 

(III)                               EACH OF (A) THE SUBSIDIARY TO BE SO
DESIGNATED AND (B) ITS SUBSIDIARIES HAS NOT AT THE TIME OF DESIGNATION, AND DOES
NOT THEREAFTER, CREATE, INCUR, ISSUE, ASSUME, GUARANTEE OR OTHERWISE BECOME
DIRECTLY OR INDIRECTLY LIABLE WITH RESPECT TO ANY INDEBTEDNESS PURSUANT TO WHICH
THE LENDER HAS RECOURSE TO ANY OF THE ASSETS OF THE BORROWER OR ANY RESTRICTED
SUBSIDIARY; AND

 

(IV)                              IMMEDIATELY AFTER GIVING EFFECT TO SUCH
DESIGNATION, (I) NO DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, AND (II) THE
BORROWER IS IN PRO FORMA COMPLIANCE WITH SECTION 7.05 (DETERMINED ON A PRO FORMA
BASIS TAKING INTO ACCOUNT SUCH DESIGNATION).

 

The Borrower may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that, immediately after giving effect to such designation,
(I) no Default shall have occurred and be continuing, (II) either (A) the
Borrower could satisfy the Fixed

 

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Charge Coverage Ratio Incurrence Test, on a pro forma basis taking into account
such designation or (B) immediately after giving pro forma effect to such
designation, as if such designation had occurred at the beginning of the
applicable four-quarter period, the Fixed Charge Coverage Ratio for the Borrower
and its Restricted Subsidiaries would be greater than the Fixed Charge Coverage
Ratio for the Borrower and its Restricted Subsidiaries immediately prior to such
transaction and (III) the Borrower is in Pro Forma Compliance with Section 7.05
(determined on a pro forma basis taking into account such designation).

 

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

 

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

 

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

 

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

 

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

 

(A)                                  THE MEANINGS OF DEFINED TERMS ARE EQUALLY
APPLICABLE TO THE SINGULAR AND PLURAL FORMS OF THE DEFINED TERMS.

 

(B)                                 (I)                                     THE
WORDS “HEREIN”, “HERETO”, “HEREOF” AND “HEREUNDER” AND WORDS OF SIMILAR IMPORT
WHEN USED IN ANY LOAN DOCUMENT SHALL REFER TO SUCH LOAN DOCUMENT AS A WHOLE AND
NOT TO ANY PARTICULAR PROVISION THEREOF.

 

(II)                                  ARTICLE, SECTION, EXHIBIT AND
SCHEDULE REFERENCES ARE TO THE LOAN DOCUMENT IN WHICH SUCH REFERENCE APPEARS.

 

(III)                               THE TERM “INCLUDING” IS BY WAY OF EXAMPLE
AND NOT LIMITATION.

 

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(IV)                              THE TERM “DOCUMENTS” INCLUDES ANY AND ALL
INSTRUMENTS, DOCUMENTS, AGREEMENTS, CERTIFICATES, NOTICES, REPORTS, FINANCIAL
STATEMENTS AND OTHER WRITINGS, HOWEVER EVIDENCED, WHETHER IN PHYSICAL OR
ELECTRONIC FORM.

 

(C)                                  IN THE COMPUTATION OF PERIODS OF TIME FROM
A SPECIFIED DATE TO A LATER SPECIFIED DATE, THE WORD “FROM” MEANS “FROM AND
INCLUDING”; THE WORDS “TO” AND “UNTIL” EACH MEAN “TO BUT EXCLUDING”; AND THE
WORD “THROUGH” MEANS “TO AND INCLUDING”.

 

(D)                                 SECTION HEADINGS HEREIN AND IN THE OTHER
LOAN DOCUMENTS ARE INCLUDED FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT
AFFECT THE INTERPRETATION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

 

(E)                                  FOR PURPOSES OF ANY COLLATERAL LOCATED IN
THE PROVINCE OF QUEBEC OR CHARGED BY ANY DEED OF HYPOTHEC (OR ANY OTHER LOAN
DOCUMENT) AND FOR ALL OTHER PURPOSES PURSUANT TO WHICH THE INTERPRETATION OR
CONSTRUCTION OF A LOAN DOCUMENT MAY BE SUBJECT TO THE LAWS OF THE PROVINCE OF
QUEBEC OR A COURT OR TRIBUNAL EXERCISING JURISDICTION IN THE PROVINCE OF QUÉBEC,
(Q) “PERSONAL PROPERTY” SHALL BE DEEMED TO INCLUDE “MOVABLE PROPERTY”, (R) “REAL
PROPERTY” SHALL BE DEEMED TO INCLUDE “IMMOVABLE PROPERTY”, (S) “TANGIBLE
PROPERTY” SHALL BE DEEMED TO INCLUDE “CORPOREAL PROPERTY”, (T) “INTANGIBLE
PROPERTY” SHALL BE DEEMED TO INCLUDE “INCORPOREAL PROPERTY”, (U) “SECURITY
INTEREST” AND “MORTGAGE” SHALL BE DEEMED TO INCLUDE A “HYPOTHEC”, (V) ALL
REFERENCES TO FILING, REGISTERING OR RECORDING UNDER THE UCC OR THE PPSA SHALL
BE DEEMED TO INCLUDE PUBLICATION UNDER THE CIVIL CODE OF QUÉBEC, (W) ALL
REFERENCES TO “PERFECTION” OF OR “PERFECTED” LIENS SHALL BE DEEMED TO INCLUDE A
REFERENCE TO THE “OPPOSABILITY” OF SUCH LIENS TO THIRD PARTIES, (X) ANY “RIGHT
OF OFFSET”, “RIGHT OF SETOFF” OR SIMILAR EXPRESSION SHALL BE DEEMED TO INCLUDE A
“RIGHT OF COMPENSATION”, (Y) “GOODS” SHALL BE DEEMED TO INCLUDE “CORPOREAL
MOVABLE PROPERTY” OTHER THAN CHATTEL PAPER, DOCUMENTS OF TITLE, INSTRUMENTS,
MONEY AND SECURITIES, AND (Z) AN “AGENT” SHALL BE DEEMED TO INCLUDE A
“MANDATARY”.

 

SECTION 1.03. Accounting Terms . (a)  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP, except as otherwise specifically prescribed herein.

 

(b)                                 Notwithstanding anything to the contrary
herein, for purposes of determining compliance with any test or covenant
contained in this Agreement with respect to any period during which any
Specified Transaction occurs, the Consolidated Secured Debt Ratio, the
Consolidated Total Leverage Ratio, Fixed Charge Coverage Ratio and compliance
with Section 7.05 shall be calculated with respect to such period and such
Specified Transaction in a manner consistent with the pro forma adjustments
contemplated by the respective definition of Consolidated Secured Debt Ratio,
the Consolidated Total Leverage Ratio, Fixed Charge Coverage Ratio or
Section 7.05, as the case may be.

 

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

 

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

 

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

 

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SECTION 1.06. Times of Day. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).

 

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

 

SECTION 1.08. Currency Equivalents Generally. Any amount specified in this
Agreement (other than in Articles 2, 9 and 10) or any of the other Loan
Documents to be in Dollars shall also include the equivalent of such amount in
any currency other than Dollars, such equivalent amount to be determined at the
rate of exchange quoted by the Reuters World Currency Page for the applicable
currency at 11:00 a.m. (London time) on such day (or, in the event such rate
does not appear on any Reuters World Currency Page, by reference to such other
publicly available service for displaying exchange rates as may be agreed upon
by the Administrative Agent and the Borrower, or, in the absence of such
agreement, such rate shall instead be the arithmetic average of the spot rates
of exchange of the Administrative Agent in the market where its foreign currency
exchange operations in respect of such currency are then being conducted, at or
about 10:00 a.m. (New York City time) on such date for the purchase of Dollars
for delivery two Business Days later). For purposes of determining compliance
with Section 7.05 and the Consolidated Secured Debt Ratio, the equivalent in
Dollars of any Indebtedness denominated in a currency other than Dollars will
reflect the currency translation effects, determined in accordance with GAAP, of
Swap Contracts for currency exchange risks with respect to the applicable
currency in effect on the date of determination of the Dollar equivalent of such
other Indebtedness.

 

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

 

ARTICLE II

 

THE COMMITMENTS AND CREDIT EXTENSIONS

 

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

 

SECTION 2.02. Borrowings, Conversions and Continuations of Loans. (a)  Each
Borrowing, each conversion of Loans from one Type to the other, and each
continuation of Eurocurrency Rate Loans shall be made upon the Borrower’s
irrevocable notice to the Administrative Agent, which may be given by telephone.
Each such notice must be received by the Administrative Agent not later than
12:30 p.m. (New York, New York time) (i) three (3)

 

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Business Days prior to the requested date of any Borrowing or continuation of
Eurocurrency Rate Loans or any conversion of Base Rate Loans to Eurocurrency
Rate Loans, and (ii) one (1) Business Day before the requested date of any
Borrowing of Base Rate Loans or conversion of any Eurocurrency Rate Loans to
Base Rate Loans. Each telephonic notice by the Borrower pursuant to this
Section 2.02(a) must be confirmed promptly by delivery to the Administrative
Agent of a written Committed Loan Notice, appropriately completed and signed by
a Responsible Officer of the Borrower. Each Borrowing of, conversion to or
continuation of Eurocurrency Rate Loans shall be in a principal amount of
$2,500,000 or a whole multiple of $500,000 in excess thereof. Each Borrowing of
or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof. Each Committed Loan Notice
(whether telephonic or written) shall specify (i) whether the Borrower is
requesting a Borrowing a conversion of Loans from one Type to the other, or a
continuation of Eurocurrency Rate Loans, (ii) the requested date of the
Borrowing, conversion or continuation, as the case may be (which shall be a
Business Day), (iii) the principal amount of Loans to be borrowed, converted or
continued, (iv) the Type of Loans to be borrowed or to which existing Loans are
to be converted, and (v) if applicable, the duration of the Interest Period with
respect thereto. If the Borrower fails to specify a Type of Loan in a Committed
Loan Notice or fails to give a timely notice requesting a conversion or
continuation, then the applicable Loans shall be made as, or converted to, Base
Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective
as of the last day of the Interest Period then in effect with respect to the
applicable Eurocurrency Rate Loans. If the Borrower requests a Borrowing of,
conversion to, or continuation of Eurocurrency Rate Loans in any such Committed
Loan Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one (1) month.

 

(B)                                 FOLLOWING RECEIPT OF A COMMITTED LOAN
NOTICE, THE ADMINISTRATIVE AGENT SHALL PROMPTLY NOTIFY EACH LENDER OF THE AMOUNT
OF ITS PRO RATA SHARE OF THE LOANS, AND IF NO TIMELY NOTICE OF A CONVERSION OR
CONTINUATION IS PROVIDED BY THE BORROWER, THE ADMINISTRATIVE AGENT SHALL NOTIFY
EACH LENDER OF THE DETAILS OF ANY AUTOMATIC CONVERSION TO BASE RATE LOANS OR
CONTINUATION DESCRIBED IN SECTION 2.02(A). IN THE CASE OF EACH BORROWING, EACH
LENDER SHALL MAKE THE AMOUNT OF ITS LOAN AVAILABLE TO THE ADMINISTRATIVE AGENT
IN SAME DAY FUNDS AT THE ADMINISTRATIVE AGENT’S OFFICE NOT LATER THAN 1:00 P.M.
ON THE BUSINESS DAY SPECIFIED IN THE APPLICABLE COMMITTED LOAN NOTICE. UPON
SATISFACTION OF THE APPLICABLE CONDITIONS SET FORTH IN SECTION 4.01, THE
ADMINISTRATIVE AGENT SHALL MAKE ALL FUNDS SO RECEIVED AVAILABLE TO THE BORROWER
IN LIKE FUNDS AS RECEIVED BY THE ADMINISTRATIVE AGENT EITHER BY (I) CREDITING
THE ACCOUNT OF THE BORROWER ON THE BOOKS OF DBNY WITH THE AMOUNT OF SUCH FUNDS
OR (II) WIRE TRANSFER OF SUCH FUNDS, IN EACH CASE IN ACCORDANCE WITH
INSTRUCTIONS PROVIDED TO (AND REASONABLY ACCEPTABLE TO) THE ADMINISTRATIVE AGENT
BY THE BORROWER.

 

(C)                                  EXCEPT AS OTHERWISE PROVIDED HEREIN, A
EUROCURRENCY RATE LOAN MAY BE CONTINUED OR CONVERTED ONLY ON THE LAST DAY OF AN
INTEREST PERIOD FOR SUCH EUROCURRENCY RATE LOAN UNLESS THE BORROWER PAYS THE
AMOUNT DUE, IF ANY, UNDER SECTION 3.05 IN CONNECTION THEREWITH. DURING THE
EXISTENCE OF AN EVENT OF DEFAULT, THE ADMINISTRATIVE AGENT OR THE REQUIRED
LENDERS MAY REQUIRE THAT NO LOANS MAY BE CONVERTED TO OR CONTINUED AS
EUROCURRENCY RATE LOANS.

 

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(D)                                 THE ADMINISTRATIVE AGENT SHALL PROMPTLY
NOTIFY THE BORROWER AND THE LENDERS OF THE INTEREST RATE APPLICABLE TO ANY
INTEREST PERIOD FOR EUROCURRENCY RATE LOANS UPON DETERMINATION OF SUCH INTEREST
RATE. THE DETERMINATION OF THE EUROCURRENCY RATE BY THE ADMINISTRATIVE AGENT
SHALL BE CONCLUSIVE IN THE ABSENCE OF MANIFEST ERROR. AT ANY TIME THAT BASE RATE
LOANS ARE OUTSTANDING, THE ADMINISTRATIVE AGENT SHALL NOTIFY THE BORROWER AND
THE LENDERS OF ANY CHANGE IN DBNY’S PRIME RATE USED IN DETERMINING THE BASE RATE
PROMPTLY FOLLOWING THE PUBLIC ANNOUNCEMENT OF SUCH CHANGE.

 

(E)                                  AFTER GIVING EFFECT TO ALL BORROWINGS, ALL
CONVERSIONS OF LOANS FROM ONE TYPE TO THE OTHER, AND ALL CONTINUATIONS OF LOANS
AS THE SAME TYPE, THERE SHALL NOT BE MORE THAN FIVE (5) INTEREST PERIODS IN
EFFECT.

 

(F)                                    THE FAILURE OF ANY LENDER TO MAKE THE
LOAN TO BE MADE BY IT AS PART OF ANY BORROWING SHALL NOT RELIEVE ANY OTHER
LENDER OF ITS OBLIGATION, IF ANY, HEREUNDER TO MAKE ITS LOAN ON THE DATE OF SUCH
BORROWING, BUT NO LENDER SHALL BE RESPONSIBLE FOR THE FAILURE OF ANY OTHER
LENDER TO MAKE THE LOAN TO BE MADE BY SUCH OTHER LENDER ON THE DATE OF ANY
BORROWING.

 

SECTION 2.03. [Reserved].

 

SECTION 2.04. [Reserved].

 

SECTION 2.05. Prepayments. (a)  Optional. (i)  The Borrower may, upon notice to
the Administrative Agent, at any time or from time to time voluntarily prepay
Loans in whole or in part without premium or penalty; provided that (1) such
notice must be received by the Administrative Agent not later than 12:30 p.m.
(New York, New York time) (A) three (3) Business Days prior to any date of
prepayment of Eurocurrency Rate Loans and (B) one (1) Business Day prior to any
date of prepayment of Base Rate Loans; (2) any prepayment of Eurocurrency Rate
Loans shall be in a principal amount of $2,500,000 or a whole multiple of
$500,000 in excess thereof; and (3) any prepayment of Base Rate Loans shall be
in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof or, in each case, if less, the entire principal amount thereof then
outstanding. Each such notice shall specify the date and amount of such
prepayment, the Type(s) of Loans to be prepaid and the manner in which such
prepayment shall be applied to scheduled repayments of Loans required pursuant
to Section 2.07; provided that in the event such notice fails to specify the
manner in which the respective prepayment shall be applied to scheduled
repayments of Loans required pursuant to Section 2.07, such prepayment of Loans
shall be applied in direct order of maturity to scheduled repayments required
pursuant to Section 2.07. The Administrative Agent will promptly notify each
Lender of its receipt of each such notice, and of the amount of such Lender’s
Pro Rata Share of such prepayment. If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein. Any prepayment of
a Eurocurrency Rate Loan shall be accompanied by all accrued interest thereon,
together with any additional amounts required pursuant to Section 3.05. Each
prepayment of the Loans pursuant to this Section 2.05(a) shall be paid to the
Lenders in accordance with their respective Pro Rata Shares.

 

(ii)                                  Notwithstanding anything to the contrary
contained in this Agreement, the Borrower may rescind any notice of prepayment
under Section 2.05(a)(i) if such prepayment

 

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would have resulted from a refinancing of all of the outstanding Loans, which
refinancing shall not be consummated or shall otherwise be delayed.

 

(B)                                 MANDATORY. (I)  WITHIN FIVE (5) BUSINESS
DAYS AFTER FINANCIAL STATEMENTS HAVE BEEN DELIVERED PURSUANT TO
SECTION 6.01(A) AND THE RELATED COMPLIANCE CERTIFICATE HAS BEEN DELIVERED
PURSUANT TO SECTION 6.02(B), THE BORROWER SHALL CAUSE TO BE PREPAID AN AGGREGATE
PRINCIPAL AMOUNT OF LOANS IN AN AMOUNT EQUAL TO (A) THE REQUIRED PERCENTAGE OF
EXCESS CASH FLOW, IF ANY, FOR THE EXCESS CASH FLOW PERIOD COVERED BY SUCH
FINANCIAL STATEMENTS MINUS (B) THE AGGREGATE AMOUNT OF ALL VOLUNTARY PREPAYMENTS
OF LOANS DURING SUCH EXCESS CASH FLOW PERIOD TO THE EXTENT SUCH PREPAYMENTS ARE
NOT FUNDED WITH THE PROCEEDS OF INDEBTEDNESS.

 

(II)                                  IF THE BORROWER OR ANY RESTRICTED
SUBSIDIARY INCURS OR ISSUES ANY INDEBTEDNESS NOT EXPRESSLY PERMITTED TO BE
INCURRED OR ISSUED PURSUANT TO SECTION 7.03, THE BORROWER SHALL CAUSE TO BE
PREPAID AN AGGREGATE PRINCIPAL AMOUNT OF LOANS IN AN AMOUNT EQUAL TO 100% OF ALL
NET PROCEEDS RECEIVED THEREFROM ON OR PRIOR TO THE DATE WHICH IS FIVE
(5) BUSINESS DAYS AFTER THE RECEIPT OF SUCH NET PROCEEDS.

 

(III)                               EACH PREPAYMENT OF LOANS PURSUANT TO THIS
SECTION 2.05(B) SHALL BE APPLIED IN DIRECT ORDER OF MATURITY TO SCHEDULED
REPAYMENTS OF LOANS REQUIRED PURSUANT TO SECTION 2.07 AND EACH SUCH PREPAYMENT
SHALL BE PAID TO THE LENDERS IN ACCORDANCE WITH THEIR RESPECTIVE PRO RATA
SHARES.

 

(IV)                              THE BORROWER SHALL NOTIFY THE ADMINISTRATIVE
AGENT IN WRITING OF ANY MANDATORY PREPAYMENT OF LOANS REQUIRED TO BE MADE
PURSUANT TO CLAUSES (I) AND (II) OF THIS SECTION 2.05(B) AT LEAST THREE
(3) BUSINESS DAYS PRIOR TO THE DATE OF SUCH PREPAYMENT. EACH SUCH NOTICE SHALL
SPECIFY THE DATE OF SUCH PREPAYMENT AND PROVIDE A REASONABLY DETAILED
CALCULATION OF THE AMOUNT OF SUCH PREPAYMENT. THE ADMINISTRATIVE AGENT WILL
PROMPTLY NOTIFY EACH LENDER OF THE CONTENTS OF THE BORROWER’S PREPAYMENT NOTICE
AND OF SUCH LENDER’S PRO RATA SHARE OF THE PREPAYMENT.

 

(C)                                  ASSET SALE/CASUALTY EVENT OFFER TO
PURCHASE. (I)  WITHIN 450 DAYS AFTER THE RECEIPT OF ANY NET PROCEEDS OF ANY
ASSET SALE OR CASUALTY EVENT, THE BORROWER OR THE APPLICABLE RESTRICTED
SUBSIDIARY, AT ITS OPTION, MAY APPLY CASH IN AN AMOUNT EQUAL TO THE NET PROCEEDS
FROM SUCH ASSET SALE OR CASUALTY EVENT (A) (I) IF THE ASSETS SUBJECT TO THE
RESPECTIVE ASSET SALE OR CASUALTY EVENT CONSTITUTED TL PRIORITY COLLATERAL (X)
TO MAKE AN OFFER TO THE LENDERS TO PREPAY LOANS IN ACCORDANCE WITH THE
PROCEDURES SET FORTH BELOW FOR AN ASSET SALE/CASUALTY EVENT OFFER, OR (Y) TO
MAKE AN OFFER TO PURCHASE, PREPAY OR PERMANENTLY REDUCE OTHER PARI PASSU LIEN
OBLIGATIONS INCURRED AFTER THE CLOSING DATE SECURED BY A PERMITTED COLLATERAL
LIEN; PROVIDED, HOWEVER, THAT IN CONNECTION WITH ANY PREPAYMENT, REPAYMENT OR
PURCHASE OF INDEBTEDNESS PURSUANT TO CLAUSE (I)(Y), (1) THE BORROWER OR SUCH
RESTRICTED SUBSIDIARY SHALL PERMANENTLY RETIRE SUCH INDEBTEDNESS AND, IN THE
CASE OF OBLIGATIONS UNDER REVOLVING CREDIT FACILITIES OR OTHER SIMILAR
INDEBTEDNESS, SHALL CORRESPONDINGLY PERMANENTLY REDUCE COMMITMENTS WITH RESPECT
THERETO (OTHER THAN OBLIGATIONS OWED TO THE BORROWER OR A RESTRICTED SUBSIDIARY)
AND (2) THE BORROWER OR SUCH RESTRICTED SUBSIDIARY WILL EQUALLY AND RATABLY
REDUCE THE AMOUNT OF INDEBTEDNESS OUTSTANDING UNDER THIS AGREEMENT BY, AT ITS
OPTION, PREPAYING LOANS IN ACCORDANCE WITH SECTION 2.05(A) OR MAKING AN OFFER TO
ALL LENDERS TO PREPAY THEIR LOANS IN ACCORDANCE WITH THE  PROCEDURES SET FORTH
BELOW FOR AN ASSET SALE/CASUALTY EVENT

 

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OFFER, OR (II) IF THE ASSETS SUBJECT TO THE RESPECTIVE ASSET SALE OR CASUALTY
EVENT CONSTITUTED ABL PRIORITY COLLATERAL, TO REPAY OUTSTANDING ABL LOANS AS,
AND TO THE EXTENT, REQUIRED BY ANY “CASH SWEEP” PROVISIONS IN THE ABL CREDIT
AGREEMENT, OR (B) SO LONG AS NO EVENT OF DEFAULT THEN EXISTS, TO ACQUIRE
ADDITIONAL ASSETS; PROVIDED, HOWEVER, THAT, IF THE ASSETS SUBJECT TO THE
RESPECTIVE ASSET SALE OR CASUALTY EVENT CONSTITUTED TL PRIORITY COLLATERAL, ANY
SUCH ADDITIONAL ASSETS SO ACQUIRED SHALL CONSTITUTE TL PRIORITY COLLATERAL AND
CONCURRENTLY WITH THEIR ACQUISITION SHALL BE ADDED TO THE COLLATERAL SECURING
THE SECURED OBLIGATIONS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.11 AND
THE COLLATERAL DOCUMENTS, AND PROVIDED, FURTHER, THAT TO THE EXTENT SUCH
ADDITIONAL ASSETS CONSTITUTE THE CAPITAL STOCK OF ANY PERSON THAT IS REQUIRED TO
BECOME A GUARANTOR PURSUANT TO THE COLLATERAL AND GUARANTEE REQUIREMENT AND
SECTION 6.11, THE ASSETS OF SUCH PERSON THAT MAY BE USED OR USEFUL IN A SIMILAR
BUSINESS ARE, IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.11 AND THE
COLLATERAL DOCUMENTS, CONCURRENTLY WITH THE ACQUISITION ADDED TO THE COLLATERAL
SECURING THE SECURED OBLIGATIONS. NOTWITHSTANDING THE FOREGOING, IF DURING SUCH
450-DAY PERIOD THE BORROWER OR A RESTRICTED SUBSIDIARY ENTERS INTO A DEFINITIVE
BINDING AGREEMENT COMMITTING IT TO APPLY SUCH NET PROCEEDS OF ANY ASSET SALE OR
CASUALTY EVENT TO ACQUIRE ADDITIONAL ASSETS PURSUANT TO CLAUSE (B) OF THIS
SECTION 2.05(C), THEN, SO LONG AS NO EVENT OF DEFAULT THEN EXISTS, SUCH 450-DAY
PERIOD WILL BE EXTENDED WITH RESPECT TO THE AMOUNT OF NET PROCEEDS SO COMMITTED
UNTIL SUCH NET PROCEEDS ARE REQUIRED TO BE APPLIED IN ACCORDANCE WITH SUCH
AGREEMENT (BUT SUCH EXTENSION WILL IN NO EVENT BE FOR A PERIOD LONGER THAN 180
DAYS) (OR, IF EARLIER, THE DATE OF TERMINATION OF SUCH AGREEMENT).

 

(II)                                  ANY NET PROCEEDS FROM THE ASSET SALE OR
THE CASUALTY EVENT, AS THE CASE MAY BE, THAT ARE NOT INVESTED OR APPLIED AS
PROVIDED AND WITHIN THE TIME PERIOD SET FORTH IN SECTION 2.05(C)(I) WILL BE
DEEMED TO CONSTITUTE “EXCESS PROCEEDS”. WHEN THE AGGREGATE AMOUNT OF EXCESS
PROCEEDS EXCEEDS $50,000,000, THE BORROWER SHALL (X) MAKE AN OFFER WITHIN TEN
(10) BUSINESS DAYS AFTER THE DATE THAT EXCESS PROCEEDS EXCEED $50,000,000 TO ALL
LENDERS IN ACCORDANCE WITH THE PROCEDURES SET FORTH BELOW FOR AN ASSET
SALE/CASUALTY EVENT OFFER, TO PREPAY THE MAXIMUM AGGREGATE PRINCIPAL AMOUNT OF
LOANS THAT IS AN INTEGRAL MULTIPLE OF $1,000 THAT MAY BE PURCHASED OUT OF THE
EXCESS PROCEEDS AT A PREPAYMENT PRICE IN CASH EQUAL TO 100% OF THE PRINCIPAL
AMOUNT THEREOF, PLUS ACCRUED AND UNPAID INTEREST TO THE DATE OF PREPAYMENT IN
ACCORDANCE WITH THE TERMS CONTEMPLATED IN THIS SECTION 2.05(C); AND (Y) PREPAY
ALL THE LOANS OF LENDERS PROPERLY ACCEPTING SUCH OFFER OF PREPAYMENT IN
ACCORDANCE WITH SUCH ASSET SALE/CASUALTY EVENT OFFER (SUBJECT TO THE PRORATION
PROVISIONS SET FORTH IN PARAGRAPH (V) OF THIS SECTION 2.05(C)). THE BORROWER
MAY SATISFY THE FOREGOING OBLIGATIONS WITH RESPECT TO ANY NET PROCEEDS FROM AN
ASSET SALE OR A CASUALTY EVENT, AS THE CASE MAY BE, BY MAKING AN ASSET
SALE/CASUALTY EVENT OFFER WITH RESPECT TO SUCH NET PROCEEDS PRIOR TO THE
EXPIRATION OF THE RELEVANT 450-DAY PERIOD OR WITH RESPECT TO EXCESS PROCEEDS OF
$50,000,000 OR LESS.

 

(III)                               AN “ASSET SALE/CASUALTY EVENT OFFER” MEANS A
NOTICE DELIVERED TO THE ADMINISTRATIVE AGENT (WHICH WILL PROMPTLY FURNISH SUCH
NOTICE TO THE LENDERS) STATING:

 

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

 

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

 

(IV)                              ON THE PREPAYMENT DATE, THE BORROWER (SUBJECT
TO THE PRORATION PROVISIONS SET FORTH IN PARAGRAPH (V) OF THIS SECTION 2.05(C))
SHALL PREPAY THE LOANS OF ALL LENDERS WHO ACCEPT THE ASSET SALE/CASUALTY EVENT
OFFER AT A PURCHASE PRICE IN CASH EQUAL TO 100% OF THE PRINCIPAL AMOUNT THEREOF,
PLUS ACCRUED AND UNPAID INTEREST TO THE DATE OF PREPAYMENT. IF AT THE TIME OF
ANY PREPAYMENT PURSUANT TO THIS SECTION 2.05(C) THERE SHALL BE OUTSTANDING
BORROWINGS OF DIFFERENT TYPES OR EUROCURRENCY RATE LOANS WITH DIFFERENT INTEREST
PERIODS, AND IF SOME BUT NOT ALL LENDERS SHALL HAVE ACCEPTED SUCH ASSET
SALE/CASUALTY EVENT OFFER, THEN THE AGGREGATE AMOUNT OF SUCH PREPAYMENT SHALL BE
ALLOCATED RATABLY TO EACH OUTSTANDING BORROWING THAT COMPRISES THE LOANS OF THE
ACCEPTING LENDERS. ALL PREPAYMENTS OF LOANS UNDER THIS SECTION 2.05(C) SHALL BE
SUBJECT TO SECTION 2.05(D).

 

(V)                                 TO THE EXTENT THAT THE AGGREGATE AMOUNT OF
THE LOANS ACCEPTED PURSUANT TO AN ASSET SALE/CASUALTY EVENT OFFER IS LESS THAN
THE EXCESS PROCEEDS, THE BORROWER MAY USE ANY REMAINING EXCESS PROCEEDS FOR
GENERAL CORPORATE PURPOSES, SUBJECT TO THE TERMS OF THIS AGREEMENT. IF THE
AGGREGATE PRINCIPAL AMOUNT OF THE LOANS ACCEPTED IN AN ASSET SALE/CASUALTY EVENT
OFFER EXCEEDS THE AMOUNT OF EXCESS PROCEEDS, THE PREPAYMENT SHALL BE APPLIED
AGAINST SUCH LOANS ON A PRO RATA BASIS BASED ON THE PRINCIPAL AMOUNT OF THE
LOANS TENDERED FOR ACCEPTANCE. UPON COMPLETION OF ANY SUCH ASSET SALE/CASUALTY
EVENT OFFER, THE AMOUNT OF EXCESS PROCEEDS RELATED TO SUCH ASSET SALE/CASUALTY
EVENT OFFER SHALL BE RESET TO ZERO (REGARDLESS OF WHETHER OR NOT THERE ARE ANY
REMAINING EXCESS PROCEEDS UPON SUCH COMPLETION).

 

(VI)                              PENDING THE FINAL APPLICATION OF ANY NET
PROCEEDS PURSUANT TO THIS SECTION 2.05(C), THE BORROWER OR THE APPLICABLE
RESTRICTED SUBSIDIARY MAY APPLY SUCH NET PROCEEDS TEMPORARILY TO REDUCE
INDEBTEDNESS OUTSTANDING UNDER A REVOLVING CREDIT FACILITY OR OTHERWISE INVEST
SUCH NET PROCEEDS IN ANY MANNER NOT PROHIBITED BY THIS AGREEMENT.

 

(VII)                           EACH PREPAYMENT OF LOANS PURSUANT TO THIS
SECTION 2.05(C) SHALL BE APPLIED IN DIRECT ORDER OF MATURITY TO SCHEDULED
REPAYMENTS OF LOANS REQUIRED PURSUANT TO SECTION 2.07.

 

(D)                                 FUNDING LOSSES, ETC. ALL PREPAYMENTS UNDER
THIS SECTION 2.05 SHALL BE MADE TOGETHER WITH, IN THE CASE OF ANY SUCH
PREPAYMENT OF A EUROCURRENCY RATE LOAN ON A DATE PRIOR TO THE LAST DAY OF AN
INTEREST PERIOD THEREFOR, ANY AMOUNTS OWING IN RESPECT OF SUCH EUROCURRENCY RATE
LOAN PURSUANT TO SECTION 3.05. NOTWITHSTANDING ANY OF THE OTHER PROVISIONS OF
SECTION 2.05, SO LONG AS NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING, IF ANY PREPAYMENT OF EUROCURRENCY RATE LOANS IS REQUIRED TO BE MADE
UNDER THIS SECTION 2.05, PRIOR TO THE LAST DAY OF THE INTEREST PERIOD THEREFOR,
IN LIEU OF MAKING ANY PAYMENT PURSUANT TO THIS SECTION 2.05 IN RESPECT OF ANY
SUCH EUROCURRENCY RATE LOAN PRIOR TO THE LAST DAY OF THE INTEREST PERIOD
THEREFOR, THE BORROWER MAY, IN ITS SOLE DISCRETION, DEPOSIT THE AMOUNT OF ANY
SUCH PREPAYMENT OTHERWISE REQUIRED TO BE MADE THEREUNDER INTO A CASH COLLATERAL
ACCOUNT UNTIL THE LAST DAY OF SUCH INTEREST PERIOD, AT WHICH TIME THE
ADMINISTRATIVE AGENT SHALL BE AUTHORIZED (WITHOUT ANY FURTHER ACTION BY OR
NOTICE TO OR FROM THE BORROWER OR ANY OTHER LOAN PARTY) TO APPLY SUCH AMOUNT TO
THE PREPAYMENT OF SUCH LOANS IN ACCORDANCE WITH THIS SECTION 2.05. UPON THE
OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT, THE
ADMINISTRATIVE AGENT

 

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SHALL ALSO BE AUTHORIZED (WITHOUT ANY FURTHER ACTION BY OR NOTICE TO OR FROM THE
BORROWER OR ANY OTHER LOAN PARTY) TO APPLY SUCH AMOUNT TO THE PREPAYMENT OF THE
OUTSTANDING LOANS IN ACCORDANCE WITH THE RELEVANT PROVISIONS OF THIS
SECTION 2.05.

 

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

 

SECTION 2.07. Amortization of Loans. The Borrower shall repay to the
Administrative Agent for the ratable account of the Lenders (i) on the last
Business Day of each April, July, October and January, commencing with the last
Business Day of January, 2007, an aggregate principal amount equal to 0.25% of
the aggregate principal amount of all Loans outstanding on the Closing Date
(which payments shall be reduced as a result of the application of prepayments
in accordance with the order of priority set forth in Section 2.05) and (ii) on
the Maturity Date, the aggregate principal amount of all Loans outstanding on
such date.

 

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

 

(B)                                 THE BORROWER SHALL PAY INTEREST ON PAST DUE
AMOUNTS HEREUNDER AT A FLUCTUATING INTEREST RATE PER ANNUM AT ALL TIMES EQUAL TO
THE DEFAULT RATE TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS. ACCRUED AND
UNPAID INTEREST ON PAST DUE AMOUNTS (INCLUDING INTEREST ON PAST DUE INTEREST)
SHALL BE DUE AND PAYABLE UPON DEMAND.

 

(C)                                  INTEREST ON EACH LOAN SHALL BE DUE AND
PAYABLE IN ARREARS ON EACH INTEREST PAYMENT DATE APPLICABLE THERETO AND AT SUCH
OTHER TIMES AS MAY BE SPECIFIED HEREIN. INTEREST HEREUNDER SHALL BE DUE AND
PAYABLE IN ACCORDANCE WITH THE TERMS HEREOF BEFORE AND AFTER JUDGMENT, AND
BEFORE AND AFTER THE COMMENCEMENT OF ANY PROCEEDING UNDER ANY DEBTOR RELIEF LAW.

 

(D)                                 ALL COMPUTATIONS OF INTEREST HEREUNDER SHALL
BE MADE IN ACCORDANCE WITH SECTION 2.10.

 

SECTION 2.09. Fees. The Borrower shall pay to the Agents such fees as shall have
been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever (except as expressly agreed between the Borrower and
the applicable Agent).

 

SECTION 2.10. Computation of Interest and Fees. All computations of interest for
Base Rate Loans when the Base Rate is determined by DBNY’s “prime rate” shall be
made on the basis of a year of three hundred and sixty-five (365) days or three
hundred and sixty-six (366) days, as applicable, and actual days elapsed. All
other computations of fees and interest shall be made on the basis of a three
hundred and sixty (360) day year and actual days elapsed. Interest shall accrue
on each Loan for the day on which the Loan is made, and shall not accrue on

 

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a Loan, or any portion thereof, for the day on which the Loan or such portion is
paid; provided that any Loan that is repaid on the same day on which it is made
shall, subject to Section 2.12(a), bear interest for one (1) day. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.

 

SECTION 2.11. Evidence of Indebtedness. (a)  The Loans made by each Lender shall
be evidenced by one or more accounts or records maintained by such Lender and
evidenced by one or more entries in the Register maintained by the
Administrative Agent, acting solely for purposes of Treasury Regulation
Section 5f.103-1(c), as agent for the Borrower, in each case in the ordinary
course of business. The accounts or records maintained by the Administrative
Agent and each Lender shall be prima facie evidence absent manifest error of the
amount of the Loans made by the Lenders to the Borrower and the interest and
payments thereon. Any failure to so record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Borrower hereunder to
pay any amount owing with respect to the Obligations. In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error. Upon the request of any Lender made through the Administrative
Agent, the Borrower shall execute and deliver to such Lender (through the
Administrative Agent) a Note payable to such Lender, which shall evidence such
Lender’s Loans in addition to such accounts or records. Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable), amount
and maturity of its Loans and payments with respect thereto.

 

(B)                                 ENTRIES MADE IN GOOD FAITH BY THE
ADMINISTRATIVE AGENT IN THE REGISTER PURSUANT TO SECTION 2.11(A), AND BY EACH
LENDER IN ITS ACCOUNT OR ACCOUNTS PURSUANT TO SECTIONS 2.11(A), SHALL BE PRIMA
FACIE EVIDENCE OF THE AMOUNT OF PRINCIPAL AND INTEREST DUE AND PAYABLE OR TO
BECOME DUE AND PAYABLE FROM THE BORROWER TO, IN THE CASE OF THE REGISTER, EACH
LENDER AND, IN THE CASE OF SUCH ACCOUNT OR ACCOUNTS, SUCH LENDER, UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, ABSENT MANIFEST ERROR; PROVIDED THAT THE
FAILURE OF THE ADMINISTRATIVE AGENT OR SUCH LENDER TO MAKE AN ENTRY, OR ANY
FINDING THAT AN ENTRY IS INCORRECT, IN THE REGISTER OR SUCH ACCOUNT OR ACCOUNTS
SHALL NOT LIMIT OR OTHERWISE AFFECT THE OBLIGATIONS OF THE BORROWER UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

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

 

(B)                                 IF ANY PAYMENT TO BE MADE BY THE BORROWER
SHALL COME DUE ON A DAY OTHER THAN A BUSINESS DAY, PAYMENT SHALL BE MADE ON THE
NEXT FOLLOWING BUSINESS DAY, AND SUCH

 

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EXTENSION OF TIME SHALL BE REFLECTED IN COMPUTING INTEREST OR FEES, AS THE CASE
MAY BE; PROVIDED THAT, IF SUCH EXTENSION WOULD CAUSE PAYMENT OF INTEREST ON OR
PRINCIPAL OF EUROCURRENCY RATE LOANS TO BE MADE IN THE NEXT SUCCEEDING CALENDAR
MONTH, SUCH PAYMENT SHALL BE MADE ON THE IMMEDIATELY PRECEDING BUSINESS DAY.

 

(C)                                  UNLESS THE BORROWER OR ANY LENDER HAS
NOTIFIED THE ADMINISTRATIVE AGENT, PRIOR TO THE DATE ANY PAYMENT IS REQUIRED TO
BE MADE BY IT TO THE ADMINISTRATIVE AGENT HEREUNDER, THAT THE BORROWER OR SUCH
LENDER, AS THE CASE MAY BE, WILL NOT MAKE SUCH PAYMENT, THE ADMINISTRATIVE AGENT
MAY ASSUME THAT THE BORROWER OR SUCH LENDER, AS THE CASE MAY BE, HAS TIMELY MADE
SUCH PAYMENT AND MAY (BUT SHALL NOT BE SO REQUIRED TO), IN RELIANCE THEREON,
MAKE AVAILABLE A CORRESPONDING AMOUNT TO THE PERSON ENTITLED THERETO. IF AND TO
THE EXTENT THAT SUCH PAYMENT WAS NOT IN FACT MADE TO THE ADMINISTRATIVE AGENT IN
SAME DAY FUNDS, THEN:

 

(I)                                     IF THE BORROWER FAILED TO MAKE SUCH
PAYMENT, EACH LENDER SHALL FORTHWITH ON DEMAND REPAY TO THE ADMINISTRATIVE AGENT
THE PORTION OF SUCH ASSUMED PAYMENT THAT WAS MADE AVAILABLE TO SUCH LENDER IN
SAME DAY FUNDS, TOGETHER WITH INTEREST THEREON IN RESPECT OF EACH DAY FROM AND
INCLUDING THE DATE SUCH AMOUNT WAS MADE AVAILABLE BY THE ADMINISTRATIVE AGENT TO
SUCH LENDER TO THE DATE SUCH AMOUNT IS REPAID TO THE ADMINISTRATIVE AGENT IN
SAME DAY FUNDS AT THE FEDERAL FUNDS RATE FROM TIME TO TIME IN EFFECT; AND

 

(II)                                  IF ANY LENDER FAILED TO MAKE SUCH PAYMENT,
SUCH LENDER SHALL FORTHWITH ON DEMAND PAY TO THE ADMINISTRATIVE AGENT THE AMOUNT
THEREOF IN SAME DAY FUNDS, TOGETHER WITH INTEREST THEREON FOR THE PERIOD FROM
THE DATE SUCH AMOUNT WAS MADE AVAILABLE BY THE ADMINISTRATIVE AGENT TO THE
BORROWER TO THE DATE SUCH AMOUNT IS RECOVERED BY THE ADMINISTRATIVE AGENT (THE
“COMPENSATION PERIOD”) AT A RATE PER ANNUM EQUAL TO THE FEDERAL FUNDS RATE FROM
TIME TO TIME IN EFFECT. WHEN SUCH LENDER MAKES PAYMENT TO THE ADMINISTRATIVE
AGENT (TOGETHER WITH ALL ACCRUED INTEREST THEREON), THEN SUCH PAYMENT AMOUNT
(EXCLUDING THE AMOUNT OF ANY INTEREST WHICH MAY HAVE ACCRUED AND BEEN PAID IN
RESPECT OF SUCH LATE PAYMENT) SHALL CONSTITUTE SUCH LENDER’S LOAN INCLUDED IN
THE APPLICABLE BORROWING. IF SUCH LENDER DOES NOT PAY SUCH AMOUNT FORTHWITH UPON
THE ADMINISTRATIVE AGENT’S DEMAND THEREFOR, THE ADMINISTRATIVE AGENT MAY MAKE A
DEMAND THEREFOR UPON THE BORROWER, AND THE BORROWER SHALL PAY SUCH AMOUNT TO THE
ADMINISTRATIVE AGENT, TOGETHER WITH INTEREST THEREON FOR THE COMPENSATION PERIOD
AT A RATE PER ANNUM EQUAL TO THE RATE OF INTEREST APPLICABLE TO THE APPLICABLE
BORROWING. NOTHING HEREIN SHALL BE DEEMED TO RELIEVE ANY LENDER FROM ITS
OBLIGATION TO FULFILL ITS COMMITMENT OR TO PREJUDICE ANY RIGHTS WHICH THE
ADMINISTRATIVE AGENT OR THE BORROWER MAY HAVE AGAINST ANY LENDER AS A RESULT OF
ANY DEFAULT BY SUCH LENDER HEREUNDER.

 

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

 

(D)                                 IF ANY LENDER MAKES AVAILABLE TO THE
ADMINISTRATIVE AGENT FUNDS FOR ANY LOAN TO BE MADE BY SUCH LENDER AS PROVIDED IN
THE FOREGOING PROVISIONS OF THIS ARTICLE 2, AND SUCH FUNDS ARE NOT MADE
AVAILABLE TO THE BORROWER BY THE ADMINISTRATIVE AGENT BECAUSE THE CONDITIONS TO
THE APPLICABLE BORROWING SET FORTH IN ARTICLE 4 ARE NOT SATISFIED OR WAIVED IN

 

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ACCORDANCE WITH THE TERMS HEREOF, THE ADMINISTRATIVE AGENT SHALL RETURN SUCH
FUNDS (IN LIKE FUNDS AS RECEIVED FROM SUCH LENDER) TO SUCH LENDER, WITHOUT
INTEREST.

 

(E)                                  THE OBLIGATIONS OF THE LENDERS HEREUNDER TO
MAKE LOANS ARE SEVERAL AND NOT JOINT. THE FAILURE OF ANY LENDER TO MAKE ANY LOAN
ON ANY DATE REQUIRED HEREUNDER SHALL NOT RELIEVE ANY OTHER LENDER OF ITS
CORRESPONDING OBLIGATION TO DO SO ON SUCH DATE, AND NO LENDER SHALL BE
RESPONSIBLE FOR THE FAILURE OF ANY OTHER LENDER TO SO MAKE ITS LOAN.

 

(F)                                    NOTHING HEREIN SHALL BE DEEMED TO
OBLIGATE ANY LENDER TO OBTAIN THE FUNDS FOR ANY LOAN IN ANY PARTICULAR PLACE OR
MANNER OR TO CONSTITUTE A REPRESENTATION BY ANY LENDER THAT IT HAS OBTAINED OR
WILL OBTAIN THE FUNDS FOR ANY LOAN IN ANY PARTICULAR PLACE OR MANNER.

 

(G)                                 WHENEVER ANY PAYMENT RECEIVED BY THE
ADMINISTRATIVE AGENT UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS IS
INSUFFICIENT TO PAY IN FULL ALL AMOUNTS DUE AND PAYABLE TO THE ADMINISTRATIVE
AGENT AND THE LENDERS UNDER OR IN RESPECT OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS ON ANY DATE, SUCH PAYMENT SHALL BE DISTRIBUTED BY THE ADMINISTRATIVE
AGENT AND APPLIED BY THE ADMINISTRATIVE AGENT AND THE LENDERS IN THE ORDER OF
PRIORITY SET FORTH IN SECTION 8.04. IF THE ADMINISTRATIVE AGENT RECEIVES FUNDS
FOR APPLICATION TO THE OBLIGATIONS OF THE LOAN PARTIES UNDER OR IN RESPECT OF
THE LOAN DOCUMENTS UNDER CIRCUMSTANCES FOR WHICH THE LOAN DOCUMENTS DO NOT
SPECIFY THE MANNER IN WHICH SUCH FUNDS ARE TO BE APPLIED, THE ADMINISTRATIVE
AGENT MAY, BUT SHALL NOT BE OBLIGATED TO, ELECT TO DISTRIBUTE SUCH FUNDS TO EACH
OF THE LENDERS IN ACCORDANCE WITH SUCH LENDER’S PRO RATA SHARE OF THE
OUTSTANDING AMOUNT OF ALL LOANS OUTSTANDING AT SUCH TIME, IN REPAYMENT OR
PREPAYMENT OF SUCH OF THE OUTSTANDING LOANS OR OTHER OBLIGATIONS THEN OWING TO
SUCH LENDER.

 

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

 

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that purchases a participation pursuant to this Section 2.13 shall from and
after such purchase have the right to give all notices, requests, demands,
directions and other communications under this Agreement with respect to the
portion of the Obligations purchased to the same extent as though the purchasing
Lender were the original owner of the Obligations purchased.

 

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

 

(B)                                 NOTWITHSTANDING ANY PROVISION HEREIN TO THE
CONTRARY, IN NO EVENT WILL THE AGGREGATE “INTEREST” (AS DEFINED IN SECTION 347
OF THE CRIMINAL CODE (CANADA)) PAYABLE BY A CANADIAN LOAN PARTY UNDER ANY LOAN
DOCUMENT EXCEED THE MAXIMUM EFFECTIVE ANNUAL RATE OF INTEREST ON THE “CREDIT
ADVANCED” (AS DEFINED IN THAT SECTION 347) PERMITTED UNDER THAT SECTION AND, IF
ANY PAYMENT, COLLECTION OR DEMAND PURSUANT TO SUCH LOAN DOCUMENT IN RESPECT OF
“INTEREST” (AS DEFINED IN THAT SECTION 347) IS DETERMINED TO BE CONTRARY TO THE
PROVISIONS OF SUCH SECTION 347, SUCH PAYMENT, COLLECTION OR DEMAND WILL BE
DEEMED TO HAVE BEEN MADE BY MUTUAL MISTAKE OF SUCH CANADIAN LOAN PARTY, THE
ADMINISTRATIVE AGENT AND THE APPLICABLE LENDER OR LENDERS AND THE AMOUNT OF SUCH
PAYMENT OR COLLECTION WILL BE REFUNDED TO SUCH CANADIAN LOAN PARTY ONLY TO THE
EXTENT OF THE AMOUNT WHICH IS GREATER THAN THE MAXIMUM EFFECTIVE ANNUAL RATE
PERMITTED BY SUCH LAWS. FOR PURPOSES OF DETERMINING COMPLIANCE WITH SUCH
SECTION 347, THE EFFECTIVE ANNUAL RATE OF INTEREST WILL BE DETERMINED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACTUARIAL PRACTICES AND PRINCIPLES OVER THE
TERM OF THIS AGREEMENT AND, IN THE EVENT OF DISPUTE, A CERTIFICATE OF A FELLOW
OF THE CANADIAN INSTITUTE OF ACTUARIES APPOINTED BY THE ADMINISTRATIVE AGENT
WILL BE PRIMA FACIE EVIDENCE FOR THE PURPOSES OF SUCH DETERMINATION.

 

(C)                                  FOR THE PURPOSES OF THE INTEREST ACT
(CANADA), TO THE EXTENT APPLICABLE, THE PRINCIPLE OF DEEMED REINVESTMENT OF
INTEREST WILL NOT APPLY TO ANY INTEREST CALCULATION UNDER THE LOAN DOCUMENTS,
AND THE RATES OF INTEREST STIPULATED IN THIS AGREEMENT ARE INTENDED TO BE
NOMINAL RATES AND NOT EFFECTIVE RATES OR YIELDS.

 

ARTICLE III

 

TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY

 

SECTION 3.01. Taxes. (a)  Except as provided in this Section 3.01, any and all
payments by the Loan Parties to or for the account of any Agent or any Lender
under any Loan Document shall be made free and clear of and without deduction or
withholding for any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and all
liabilities (including additions to tax, penalties and interest) with respect
thereto, excluding, in the case of each Agent and each Lender, taxes imposed on
or measured by its net income or net profits (including branch profits), and
franchise (and similar) taxes imposed on it in lieu of net income taxes, by the
jurisdiction (or any political subdivision thereof) under the Laws of which such
Agent or such Lender, as the case may be, is organized or maintains a

 

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Lending Office, and all liabilities (including additions to tax, penalties and
interest) with respect thereto (all such non-excluded taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and
liabilities with respect thereto being hereinafter referred to as “Taxes”). If
any Loan Party shall be required by any Laws to deduct or withhold any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to any
Agent or any Lender, (i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section 3.01),
each of such Agent and such Lender receives an amount equal to the sum it would
have received had no such deductions and withholdings been made, (ii) such Loan
Party shall make such deductions and withholdings, (iii) such Loan Party shall
pay the full amount deducted and withheld to the relevant taxation authority or
other authority in accordance with applicable Laws, and (iv) within thirty (30)
days after the date of such payment (or, if receipts or evidence are not
available within thirty (30) days, as soon as reasonably possible thereafter),
such Loan Party shall furnish to such Agent or Lender (as the case may be) the
original or a certified copy of a receipt evidencing payment thereof to the
extent such a receipt is issued therefor, or other written proof of payment
thereof that is reasonably satisfactory to the Administrative Agent. If any Loan
Party fails to pay any Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to any Agent or any Lender the required receipts or
other required documentary evidence, such Loan Party shall indemnify such Agent
and such Lender for any incremental taxes, interest or penalties that may become
payable by such Agent or such Lender arising out of such failure.

 

(B)                                 IN ADDITION, EACH LOAN PARTY AGREES TO PAY
ANY AND ALL PRESENT OR FUTURE STAMP, COURT OR DOCUMENTARY TAXES AND ANY OTHER
EXCISE, PROPERTY, INTANGIBLE OR MORTGAGE RECORDING TAXES OR CHARGES OR SIMILAR
LEVIES WHICH ARISE FROM ANY PAYMENT MADE UNDER ANY LOAN DOCUMENT OR FROM THE
EXECUTION, DELIVERY, PERFORMANCE, ENFORCEMENT OR REGISTRATION OF, OR OTHERWISE
WITH RESPECT TO, ANY LOAN DOCUMENT OTHER THAN, FOR THE AVOIDANCE OF DOUBT, ANY
EXCLUDED TAXES OR OTHER SIMILAR EXCLUDED AMOUNTS DESCRIBED IN
SECTION 3.01(A) ABOVE (HEREINAFTER REFERRED TO AS “OTHER TAXES”).

 

(C)                                  EACH LOAN PARTY AGREES TO INDEMNIFY EACH
AGENT AND EACH LENDER FOR (I) THE FULL AMOUNT OF TAXES AND OTHER TAXES
(INCLUDING ANY TAXES OR OTHER TAXES IMPOSED OR ASSERTED BY ANY JURISDICTION ON
AMOUNTS PAYABLE UNDER THIS SECTION 3.01) PAID BY SUCH AGENT AND SUCH LENDER AND
(II) ANY LIABILITY (INCLUDING ADDITIONS TO TAX, PENALTIES, INTEREST AND
EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO, IN EACH CASE WHETHER OR NOT
SUCH TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY IMPOSED OR ASSERTED BY THE
RELEVANT GOVERNMENTAL AUTHORITY; PROVIDED SUCH AGENT OR LENDER, AS THE CASE
MAY BE, PROVIDES SUCH LOAN PARTY WITH A WRITTEN STATEMENT THEREOF SETTING FORTH
IN REASONABLE DETAIL THE BASIS AND CALCULATION OF SUCH AMOUNTS. PAYMENT UNDER
THIS SECTION 3.01(C) SHALL BE MADE WITHIN THIRTY (30) DAYS AFTER THE DATE SUCH
LENDER OR SUCH AGENT MAKES A DEMAND THEREFOR. THE OBLIGATIONS OF THE LOAN
PARTIES UNDER THIS SECTION 3.01(C) SHALL BE JOINT AND SEVERAL. NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THIS AGREEMENT, THE OBLIGATIONS OF THE LOAN PARTIES
UNDER THIS SECTION 3.01(C) SHALL SURVIVE THE PAYMENT IN FULL OF PRINCIPAL,
INTEREST, FEES AND ANY OTHER AMOUNTS PAYABLE HEREUNDER AND THE TERMINATION OF
THIS AGREEMENT.

 

(D)                                 NO LOAN PARTY SHALL BE REQUIRED PURSUANT TO
THIS SECTION 3.01 TO PAY ANY ADDITIONAL AMOUNT TO, OR TO INDEMNIFY, ANY LENDER
OR AGENT, AS THE CASE MAY BE, TO THE EXTENT THAT

 

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SUCH LENDER OR SUCH AGENT BECOMES SUBJECT TO TAXES SUBSEQUENT TO THE CLOSING
DATE (OR, IF LATER, THE DATE SUCH LENDER OR AGENT BECOMES A PARTY TO THIS
AGREEMENT) AS A RESULT OF A CHANGE IN THE PLACE OF ORGANIZATION OF SUCH LENDER
OR AGENT OR A CHANGE IN THE LENDING OFFICE OF SUCH LENDER, EXCEPT TO THE EXTENT
THAT ANY SUCH CHANGE IS REQUESTED OR REQUIRED IN WRITING BY THE BORROWER (AND
PROVIDED THAT NOTHING IN THIS CLAUSE (D) SHALL BE CONSTRUED AS RELIEVING THE
BORROWER FROM ANY OBLIGATION TO MAKE SUCH PAYMENTS OR INDEMNIFICATION IN THE
EVENT OF A CHANGE IN LENDING OFFICE OR PLACE OF ORGANIZATION THAT PRECEDES A
CHANGE IN LAW TO THE EXTENT SUCH TAXES RESULT FROM A CHANGE IN LAW).

 

(E)                                  IF AT THE DATE OF THE ASSIGNMENT AND
ASSUMPTION PURSUANT TO WHICH A LENDER BECOMES A PARTY TO THIS AGREEMENT, THE
LENDER ASSIGNOR WAS ENTITLED TO PAYMENTS UNDER CLAUSE (A) OF THIS SECTION 3.01
IN RESPECT OF WITHHOLDING TAX WITH RESPECT TO INTEREST PAID AT SUCH DATE, THEN,
TO SUCH EXTENT, THE TERM TAXES SHALL INCLUDE (IN ADDITION TO WITHHOLDING TAXES
THAT MAY BE IMPOSED IN THE FUTURE OR OTHER AMOUNTS OTHERWISE INCLUDABLE IN
TAXES) WITHHOLDING TAX, IF ANY, APPLICABLE WITH RESPECT TO THE LENDER ASSIGNEE
ON SUCH DATE.

 

(F)                                    IF ANY LENDER OR AGENT DETERMINES, IN ITS
REASONABLE DISCRETION, THAT IT HAS RECEIVED A REFUND IN RESPECT OF ANY TAXES OR
OTHER TAXES AS TO WHICH INDEMNIFICATION OR ADDITIONAL AMOUNTS HAVE BEEN PAID TO
IT BY ANY LOAN PARTY PURSUANT TO THIS SECTION 3.01, IT SHALL PROMPTLY REMIT SUCH
REFUND (BUT ONLY TO THE EXTENT OF INDEMNITY PAYMENTS MADE, OR ADDITIONAL AMOUNTS
PAID, BY SUCH LOAN PARTY UNDER THIS SECTION 3.01 WITH RESPECT TO THE TAXES OR
OTHER TAXES GIVING RISE TO SUCH REFUND PLUS ANY INTEREST INCLUDED IN SUCH REFUND
BY THE RELEVANT TAXING AUTHORITY ATTRIBUTABLE THERETO) TO SUCH LOAN PARTY, NET
OF ALL OUT-OF-POCKET EXPENSES OF THE LENDER OR AGENT, AS THE CASE MAY BE AND
WITHOUT INTEREST (OTHER THAN ANY INTEREST PAID BY THE RELEVANT TAXING AUTHORITY
WITH RESPECT TO SUCH REFUND); PROVIDED THAT SUCH LOAN PARTY, UPON THE REQUEST OF
THE LENDER OR AGENT, AS THE CASE MAY BE, AGREES PROMPTLY TO RETURN SUCH REFUND
TO SUCH PARTY IN THE EVENT SUCH PARTY IS REQUIRED TO REPAY SUCH REFUND TO THE
RELEVANT TAXING AUTHORITY. SUCH LENDER OR AGENT, AS THE CASE MAY BE, SHALL, AT
SUCH LOAN PARTY’S REQUEST, PROVIDE SUCH LOAN PARTY WITH A COPY OF ANY NOTICE OF
ASSESSMENT OR OTHER EVIDENCE OF THE REQUIREMENT TO REPAY SUCH REFUND RECEIVED
FROM THE RELEVANT TAXING AUTHORITY (PROVIDED THAT SUCH LENDER OR AGENT
MAY DELETE ANY INFORMATION THEREIN THAT SUCH LENDER OR AGENT DEEMS
CONFIDENTIAL). NOTHING HEREIN CONTAINED SHALL INTERFERE WITH THE RIGHT OF A
LENDER OR AGENT TO ARRANGE ITS TAX AFFAIRS IN WHATEVER MANNER IT THINKS FIT NOR
OBLIGE ANY LENDER OR AGENT TO CLAIM ANY TAX REFUND OR TO MAKE AVAILABLE ITS TAX
RETURNS OR DISCLOSE ANY INFORMATION RELATING TO ITS TAX AFFAIRS OR ANY
COMPUTATIONS IN RESPECT THEREOF OR REQUIRE ANY LENDER OR AGENT TO DO ANYTHING
THAT WOULD PREJUDICE ITS ABILITY TO BENEFIT FROM ANY OTHER REFUNDS, CREDITS,
RELIEFS, REMISSIONS OR REPAYMENTS TO WHICH IT MAY BE ENTITLED.

 

(G)                                 EACH LENDER AGREES THAT, UPON THE OCCURRENCE
OF ANY EVENT GIVING RISE TO THE OPERATION OF SECTION 3.01(A) OR (C) WITH RESPECT
TO SUCH LENDER IT WILL, IF REQUESTED BY THE BORROWER, USE COMMERCIALLY
REASONABLE EFFORTS (SUBJECT TO SUCH LENDER’S OVERALL INTERNAL POLICIES OF
GENERAL APPLICATION AND LEGAL AND REGULATORY RESTRICTIONS) TO DESIGNATE ANOTHER
LENDING OFFICE FOR ANY LOAN AFFECTED BY SUCH EVENT; PROVIDED THAT SUCH EFFORTS
ARE MADE ON TERMS THAT, IN THE SOLE JUDGMENT OF SUCH LENDER, CAUSE SUCH LENDER
AND ITS LENDING OFFICE(S) TO SUFFER NO ECONOMIC, LEGAL OR REGULATORY
DISADVANTAGE, AND PROVIDED FURTHER, THAT NOTHING IN THIS SECTION 3.01(G) SHALL
AFFECT OR POSTPONE ANY OF THE OBLIGATIONS OF ANY LOAN PARTY OR THE RIGHTS OF
SUCH LENDER PURSUANT TO SECTION 3.01(A) OR (C).

 

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(H)                                 IN ADDITION TO THE PROVISIONS OF
SECTION 3.01(A), IN RESPECT OF AMOUNTS PAID OR CREDITED BY A LOAN PARTY THAT IS
RESIDENT IN CANADA FOR PURPOSES OF THE ITA TO OR FOR THE BENEFIT OF A LENDER OR
AGENT THAT IS AN “AUTHORIZED FOREIGN BANK” FOR PURPOSES OF THE ITA, THE
OBLIGATIONS UNDER SECTION 3.01 TO PAY AN ADDITIONAL AMOUNT SHALL APPLY WHERE THE
PARTICULAR LENDER OR AGENT IS LIABLE FOR TAXES UNDER PART XIII OF THE ITA IN
RESPECT OF SUCH PAYMENT, EVEN IF SUCH LOAN PARTY IS NOT REQUIRED UNDER THE ITA
TO DEDUCT OR WITHHOLD AN AMOUNT IN RESPECT OF INDEMNIFIED TAXES ON SUCH PAYMENT
AND SECTION 3.01 SHALL APPLY, MUTATIS MUTANDIS, AS IF SUCH LOAN PARTY WAS
REQUIRED TO DEDUCT OR WITHHOLD AN AMOUNT IN RESPECT OF SUCH TAXES.

 

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

 

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

 

SECTION 3.04. Increased Cost and Reduced Return; Capital Adequacy; Reserves on
Eurocurrency Rate Loans. (a)  If any Lender determines that as a result of the
introduction of or any change in or in the interpretation of any Law, in each
case after the date hereof, or such Lender’s compliance therewith, there shall
be any increase in the cost to such

 

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Lender of agreeing to make or making, funding or maintaining Eurocurrency Rate
Loans, or a reduction in the amount received or receivable by such Lender in
connection with any of the foregoing (excluding for purposes of this
Section 3.04(a) any such increased costs or reduction in amount resulting from
(i) Taxes or Other Taxes (as to which Section 3.01 shall govern), (ii) changes
in taxation of overall net income or overall gross income (including branch
profits), and franchise (and similar) taxes imposed in lieu of net income taxes,
by the United States or any foreign jurisdiction or any political subdivision of
either thereof under the Laws of which such Lender is organized or maintains a
Lending Office and (iii) reserve requirements contemplated by Section 3.04(c)),
then from time to time within fifteen (15) days after demand by such Lender
setting forth in reasonable detail such increased costs (with a copy of such
demand to the Administrative Agent given in accordance with Section 3.06), the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction.

 

(B)                                 IF ANY LENDER DETERMINES THAT THE
INTRODUCTION OF ANY LAW REGARDING CAPITAL ADEQUACY OR ANY CHANGE THEREIN OR IN
THE INTERPRETATION THEREOF, IN EACH CASE AFTER THE DATE HEREOF, OR COMPLIANCE BY
SUCH LENDER (OR ITS LENDING OFFICE) THEREWITH, HAS THE EFFECT OF REDUCING THE
RATE OF RETURN ON THE CAPITAL OF SUCH LENDER OR ANY CORPORATION CONTROLLING SUCH
LENDER AS A CONSEQUENCE OF SUCH LENDER’S OBLIGATIONS HEREUNDER (TAKING INTO
CONSIDERATION ITS POLICIES WITH RESPECT TO CAPITAL ADEQUACY AND SUCH LENDER’S
DESIRED RETURN ON CAPITAL), THEN FROM TIME TO TIME UPON DEMAND OF SUCH LENDER
SETTING FORTH IN REASONABLE DETAIL THE CHARGE AND THE CALCULATION OF SUCH
REDUCED RATE OF RETURN (WITH A COPY OF SUCH DEMAND TO THE ADMINISTRATIVE AGENT
GIVEN IN ACCORDANCE WITH SECTION 3.06), THE BORROWER SHALL PAY TO SUCH LENDER
SUCH ADDITIONAL AMOUNTS AS WILL COMPENSATE SUCH LENDER FOR SUCH REDUCTION WITHIN
FIFTEEN (15) DAYS AFTER RECEIPT OF SUCH DEMAND.

 

(C)                                  THE BORROWER SHALL PAY TO EACH LENDER,
(I) AS LONG AS SUCH LENDER SHALL BE REQUIRED TO MAINTAIN RESERVES WITH RESPECT
TO LIABILITIES OR ASSETS CONSISTING OF OR INCLUDING EUROCURRENCY FUNDS OR
DEPOSITS, ADDITIONAL INTEREST ON THE UNPAID PRINCIPAL AMOUNT OF EACH
EUROCURRENCY RATE LOAN EQUAL TO THE ACTUAL COSTS OF SUCH RESERVES ALLOCATED TO
SUCH LOAN BY SUCH LENDER (AS DETERMINED BY SUCH LENDER IN GOOD FAITH, WHICH
DETERMINATION SHALL BE CONCLUSIVE IN THE ABSENCE OF MANIFEST ERROR), AND (II) AS
LONG AS SUCH LENDER SHALL BE REQUIRED TO COMPLY WITH ANY RESERVE RATIO
REQUIREMENT OR ANALOGOUS REQUIREMENT OF ANY OTHER CENTRAL BANKING OR FINANCIAL
REGULATORY AUTHORITY IMPOSED IN RESPECT OF THE MAINTENANCE OF THE COMMITMENTS OR
THE FUNDING OF THE EUROCURRENCY RATE LOANS, SUCH ADDITIONAL COSTS (EXPRESSED AS
A PERCENTAGE PER ANNUM AND ROUNDED UPWARDS, IF NECESSARY, TO THE NEAREST FIVE
DECIMAL PLACES) EQUAL TO THE ACTUAL COSTS ALLOCATED TO SUCH COMMITMENT OR LOAN
BY SUCH LENDER (AS DETERMINED BY SUCH LENDER IN GOOD FAITH, WHICH DETERMINATION
SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR) WHICH IN EACH CASE SHALL BE DUE AND
PAYABLE ON EACH DATE ON WHICH INTEREST IS PAYABLE ON SUCH LOAN, PROVIDED THE
BORROWER SHALL HAVE RECEIVED AT LEAST FIFTEEN (15) DAYS’ PRIOR NOTICE (WITH A
COPY TO THE ADMINISTRATIVE AGENT) OF SUCH ADDITIONAL INTEREST OR COST FROM SUCH
LENDER. IF A LENDER FAILS TO GIVE NOTICE FIFTEEN (15) DAYS PRIOR TO THE RELEVANT
INTEREST PAYMENT DATE, SUCH ADDITIONAL INTEREST OR COST SHALL BE DUE AND PAYABLE
FIFTEEN (15) DAYS FROM RECEIPT OF SUCH NOTICE. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED ABOVE IN THIS CLAUSE (C), THE BORROWER SHALL NOT BE OBLIGATED
TO PAY ANY ADDITIONAL AMOUNTS PURSUANT TO THIS CLAUSE (C) TO THE EXTENT SUCH
AMOUNTS ARE ALREADY INCLUDED IN THE CALCULATION OF THE EUROCURRENCY RATE
PURSUANT TO CLAUSE (B) OF THE DEFINITION THEREOF.

 

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(D)                                 FAILURE OR DELAY ON THE PART OF ANY LENDER
TO DEMAND COMPENSATION PURSUANT TO THIS SECTION 3.04 SHALL NOT CONSTITUTE A
WAIVER OF SUCH LENDER’S RIGHT TO DEMAND SUCH COMPENSATION, PROVIDED THAT THE
BORROWER SHALL NOT BE REQUIRED TO COMPENSATE A LENDER PURSUANT TO
SECTION 3.04(A), (B) OR (C) FOR ANY SUCH INCREASED COST OR REDUCTION INCURRED
MORE THAN ONE HUNDRED AND EIGHTY (180) DAYS PRIOR TO THE DATE THAT SUCH LENDER
DEMANDS, OR NOTIFIES THE BORROWER OF ITS INTENTION TO DEMAND, COMPENSATION
THEREFOR, PROVIDED FURTHER, THAT, IF THE CIRCUMSTANCE GIVING RISE TO SUCH
INCREASED COST OR REDUCTION IS RETROACTIVE, THEN SUCH 180-DAY PERIOD REFERRED TO
ABOVE SHALL BE EXTENDED TO INCLUDE THE PERIOD OF RETROACTIVE EFFECT THEREOF.

 

(E)                                  IF ANY LENDER REQUESTS COMPENSATION UNDER
THIS SECTION 3.04, THEN SUCH LENDER WILL, IF REQUESTED BY THE BORROWER, USE
COMMERCIALLY REASONABLE EFFORTS TO DESIGNATE ANOTHER LENDING OFFICE FOR ANY LOAN
AFFECTED BY SUCH EVENT; PROVIDED THAT SUCH EFFORTS ARE MADE ON TERMS THAT, IN
THE REASONABLE JUDGMENT OF SUCH LENDER, CAUSE SUCH LENDER AND ITS LENDING
OFFICE(S) TO SUFFER NO MATERIAL ECONOMIC, LEGAL OR REGULATORY DISADVANTAGE, AND
PROVIDED FURTHER, THAT NOTHING IN THIS SECTION 3.04(E) SHALL AFFECT OR POSTPONE
ANY OF THE OBLIGATIONS OF THE BORROWER OR THE RIGHTS OF SUCH LENDER PURSUANT TO
SECTION 3.04(A), (B), (C) OR (D).

 

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

 

(A)                                  ANY CONTINUATION, CONVERSION, PAYMENT OR
PREPAYMENT OF ANY LOAN OTHER THAN A BASE RATE LOAN PRIOR TO THE LAST DAY OF THE
INTEREST PERIOD FOR SUCH LOAN; OR

 

(B)                                 ANY FAILURE BY THE BORROWER (FOR A REASON
OTHER THAN THE FAILURE OF SUCH LENDER TO MAKE A LOAN) TO PREPAY, BORROW,
CONTINUE OR CONVERT ANY LOAN OTHER THAN A BASE RATE LOAN ON THE DATE OR IN THE
AMOUNT NOTIFIED BY THE BORROWER;

 

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

 

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

 

SECTION 3.06. Matters Applicable to All Requests for Compensation. (a)  Any
Agent or any Lender claiming compensation under this Article 3 shall deliver a
certificate to the Borrower setting forth the additional amount or amounts to be
paid to it hereunder which shall be conclusive in the absence of manifest error.
In determining such amount, such Agent or such Lender may use any reasonable
averaging and attribution methods.

 

(B)                                 WITH RESPECT TO ANY LENDER’S CLAIM FOR
COMPENSATION UNDER SECTION 3.01, 3.02, 3.03 OR 3.04, THE BORROWER SHALL NOT BE
REQUIRED TO COMPENSATE SUCH LENDER FOR ANY AMOUNT INCURRED MORE THAN ONE HUNDRED
AND EIGHTY (180) DAYS PRIOR TO THE DATE THAT SUCH LENDER NOTIFIES

 

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THE BORROWER OF THE EVENT THAT GIVES RISE TO SUCH CLAIM; PROVIDED THAT, IF THE
CIRCUMSTANCE GIVING RISE TO SUCH CLAIM IS RETROACTIVE, THEN SUCH 180-DAY PERIOD
REFERRED TO ABOVE SHALL BE EXTENDED TO INCLUDE THE PERIOD OF RETROACTIVE EFFECT
THEREOF. IF ANY LENDER REQUESTS COMPENSATION BY THE BORROWER UNDER SECTION 3.04,
THE BORROWER MAY, BY NOTICE TO SUCH LENDER (WITH A COPY TO THE ADMINISTRATIVE
AGENT), SUSPEND THE OBLIGATION OF SUCH LENDER TO MAKE OR CONTINUE FROM ONE
INTEREST PERIOD TO ANOTHER EUROCURRENCY RATE LOANS, OR TO CONVERT BASE RATE
LOANS INTO EUROCURRENCY RATE LOANS, UNTIL THE EVENT OR CONDITION GIVING RISE TO
SUCH REQUEST CEASES TO BE IN EFFECT (IN WHICH CASE THE PROVISIONS OF
SECTION 3.06(C) SHALL BE APPLICABLE); PROVIDED THAT SUCH SUSPENSION SHALL NOT
AFFECT THE RIGHT OF SUCH LENDER TO RECEIVE THE COMPENSATION SO REQUESTED.

 

(C)                                  IF THE OBLIGATION OF ANY LENDER TO MAKE OR
CONTINUE FROM ONE INTEREST PERIOD TO ANOTHER ANY EUROCURRENCY RATE LOAN, OR TO
CONVERT BASE RATE LOANS INTO EUROCURRENCY RATE LOANS SHALL BE SUSPENDED PURSUANT
TO SECTION 3.06(C) HEREOF, SUCH LENDER’S EUROCURRENCY RATE LOANS SHALL BE
AUTOMATICALLY CONVERTED INTO BASE RATE LOANS ON THE LAST DAY(S) OF THE THEN
CURRENT INTEREST PERIOD(S) FOR SUCH EUROCURRENCY RATE LOANS (OR, IN THE CASE OF
AN IMMEDIATE CONVERSION REQUIRED BY SECTION 3.02, ON SUCH EARLIER DATE AS
REQUIRED BY LAW) AND, UNLESS AND UNTIL SUCH LENDER GIVES NOTICE AS PROVIDED
BELOW THAT THE CIRCUMSTANCES SPECIFIED IN SECTION 3.01, 3.02, 3.03 OR 3.04
HEREOF THAT GAVE RISE TO SUCH CONVERSION NO LONGER EXIST:

 

(I)                                     TO THE EXTENT THAT SUCH LENDER’S
EUROCURRENCY RATE LOANS HAVE BEEN SO CONVERTED, ALL PAYMENTS AND PREPAYMENTS OF
PRINCIPAL THAT WOULD OTHERWISE BE APPLIED TO SUCH LENDER’S EUROCURRENCY RATE
LOANS SHALL BE APPLIED INSTEAD TO ITS BASE RATE LOANS; AND

 

(II)                                  ALL LOANS THAT WOULD OTHERWISE BE MADE OR
CONTINUED FROM ONE INTEREST PERIOD TO ANOTHER BY SUCH LENDER AS EUROCURRENCY
RATE LOANS SHALL BE MADE OR CONTINUED INSTEAD AS BASE RATE LOANS, AND ALL BASE
RATE LOANS OF SUCH LENDER THAT WOULD OTHERWISE BE CONVERTED INTO EUROCURRENCY
RATE LOANS SHALL REMAIN AS BASE RATE LOANS.

 

(D)                                 IF ANY LENDER GIVES NOTICE TO THE BORROWER
(WITH A COPY TO THE ADMINISTRATIVE AGENT) THAT THE CIRCUMSTANCES SPECIFIED IN
SECTION 3.01, 3.02, 3.03 OR 3.04 HEREOF THAT GAVE RISE TO THE CONVERSION OF SUCH
LENDER’S EUROCURRENCY RATE LOANS PURSUANT TO THIS SECTION 3.06 NO LONGER EXIST
(WHICH SUCH LENDER AGREES TO DO PROMPTLY UPON SUCH CIRCUMSTANCES CEASING TO
EXIST) AT A TIME WHEN EUROCURRENCY RATE LOANS MADE BY OTHER LENDERS ARE
OUTSTANDING, SUCH LENDER’S BASE RATE LOANS SHALL BE AUTOMATICALLY CONVERTED, ON
THE FIRST DAY(S) OF THE NEXT SUCCEEDING INTEREST PERIOD(S) FOR SUCH OUTSTANDING
EUROCURRENCY RATE LOANS, TO THE EXTENT NECESSARY SO THAT, AFTER GIVING EFFECT
THERETO, ALL LOANS HELD BY THE LENDERS HOLDING EUROCURRENCY RATE LOANS AND BY
SUCH LENDER ARE HELD PRO RATA (AS TO PRINCIPAL AMOUNTS, INTEREST RATE BASIS, AND
INTEREST PERIODS) IN ACCORDANCE WITH THEIR RESPECTIVE COMMITMENTS.

 

SECTION 3.07. Replacement of Lenders under Certain Circumstances. (a)  If at any
time (i) the Borrower becomes obligated to pay additional amounts or indemnity
payments described in Section 3.01 or 3.04 as a result of any condition
described in such Sections or any Lender ceases to make Eurocurrency Rate Loans
as a result of any condition described in Section 3.02 or Section 3.04, (ii) any
Lender becomes a Defaulting Lender or (iii) any Lender becomes a Non-Consenting
Lender, then the Borrower may, on ten (10) Business Days’ prior written notice
to the Administrative Agent and such Lender, replace such Lender by causing such
Lender to

 

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(and such Lender shall be obligated to) assign pursuant to
Section 10.07(b) (with the assignment fee to be paid by the Borrower in such
instance) all of its rights and obligations under this Agreement to one or more
Eligible Assignees; provided that neither the Administrative Agent nor any
Lender shall have any obligation to the Borrower to find a replacement Lender or
other such Person; provided further, that (A) in the case of any such assignment
resulting from a claim for compensation under Section 3.04 or payments required
to be made pursuant to Section 3.01, such assignment will result in a reduction
in such compensation or payments and (B) in the case of any such assignment
resulting from a Lender becoming a Non-Consenting Lender, the applicable
Eligible Assignees shall have agreed to the applicable departure, waiver or
amendment of the Loan Documents; and provided further, that a Non-Consenting
Lender may not be replaced unless all Non-Consenting Lenders in respect of the
applicable departure, waiver or amendment are replaced in accordance with the
provisions of this Section at the same time.

 

(B)                                 ANY LENDER BEING REPLACED PURSUANT TO
SECTION 3.07(A) ABOVE SHALL (I) EXECUTE AND DELIVER AN ASSIGNMENT AND ASSUMPTION
WITH RESPECT TO SUCH LENDER’S COMMITMENT AND OUTSTANDING LOANS, AND (II) DELIVER
ANY NOTES EVIDENCING SUCH LOANS TO THE BORROWER OR ADMINISTRATIVE AGENT.
PURSUANT TO SUCH ASSIGNMENT AND ASSUMPTION, (A) THE ASSIGNEE LENDER SHALL
ACQUIRE ALL OR A PORTION, AS THE CASE MAY BE, OF THE ASSIGNING LENDER’S
COMMITMENT AND OUTSTANDING LOANS, (B) ALL OBLIGATIONS OF THE BORROWER OWING TO
THE ASSIGNING LENDER RELATING TO THE LOANS SO ASSIGNED SHALL BE PAID IN FULL BY
THE ASSIGNEE LENDER TO SUCH ASSIGNING LENDER CONCURRENTLY WITH SUCH ASSIGNMENT
AND ASSUMPTION AND (C) UPON SUCH PAYMENT AND, IF SO REQUESTED BY THE ASSIGNEE
LENDER, DELIVERY TO THE ASSIGNEE LENDER OF THE APPROPRIATE NOTE OR NOTES
EXECUTED BY THE BORROWER, THE ASSIGNEE LENDER SHALL BECOME A LENDER HEREUNDER
AND THE ASSIGNING LENDER SHALL CEASE TO CONSTITUTE A LENDER HEREUNDER WITH
RESPECT TO SUCH ASSIGNED LOANS AND COMMITMENTS, EXCEPT WITH RESPECT TO
INDEMNIFICATION PROVISIONS UNDER THIS AGREEMENT, WHICH SHALL SURVIVE AS TO SUCH
ASSIGNING LENDER.

 

(C)                                  IN THE EVENT THAT (I) THE BORROWER OR THE
ADMINISTRATIVE AGENT HAS REQUESTED THAT THE LENDERS CONSENT TO A DEPARTURE OR
WAIVER OF ANY PROVISIONS OF THE LOAN DOCUMENTS OR AGREE TO ANY AMENDMENT
THERETO, (II) THE CONSENT, WAIVER OR AMENDMENT IN QUESTION REQUIRES THE
AGREEMENT OF ALL AFFECTED LENDERS OR ALL LENDERS IN ACCORDANCE WITH THE TERMS OF
SECTION 10.01 AND (III) THE REQUIRED LENDERS HAVE AGREED TO SUCH CONSENT, WAIVER
OR AMENDMENT, THEN ANY LENDER WHO DOES NOT AGREE TO SUCH CONSENT, WAIVER OR
AMENDMENT SHALL BE DEEMED A “NON-CONSENTING LENDER”.

 

SECTION 3.08. Survival. All of the Borrower’s obligations under this Article 3
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.

 

ARTICLE IV

 

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

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

 

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(A)                                  THE ADMINISTRATIVE AGENT’S RECEIPT OF THE
FOLLOWING, EACH OF WHICH SHALL BE ORIGINALS OR FACSIMILES (FOLLOWED PROMPTLY BY
ORIGINALS) UNLESS OTHERWISE SPECIFIED, EACH PROPERLY EXECUTED BY A RESPONSIBLE
OFFICER OF THE SIGNING LOAN PARTY, EACH IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT AND ITS LEGAL COUNSEL:

 

(I)                                     EXECUTED COUNTERPARTS OF THIS AGREEMENT,
EACH GUARANTY AND THE INTERCREDITOR AGREEMENT;

 

(II)                                  A NOTE EXECUTED BY THE BORROWER IN FAVOR
OF EACH LENDER THAT HAS REQUESTED A NOTE AT LEAST TWO BUSINESS DAYS IN ADVANCE
OF THE CLOSING DATE;

 

(III)                               EACH COLLATERAL DOCUMENT SET FORTH ON
SCHEDULE 1.01B, DULY EXECUTED BY EACH LOAN PARTY THERETO, TOGETHER WITH:

 

(A)                              certificates, if any, representing the Pledged
Equity referred to therein accompanied by undated stock powers executed in blank
and instruments evidencing the Pledged Debt indorsed in blank, and

 

(B)                                evidence that all other actions, recordings
and filings that the Administrative Agent may deem reasonably necessary to
satisfy the Collateral and Guarantee Requirement shall have been taken,
completed or otherwise provided for in a manner reasonably satisfactory to the
Administrative Agent;

 

(IV)                              SUCH CERTIFICATES OF RESOLUTIONS OR OTHER
ACTION, INCUMBENCY CERTIFICATES AND/OR OTHER CERTIFICATES OF RESPONSIBLE
OFFICERS OF EACH LOAN PARTY AS THE ADMINISTRATIVE AGENT MAY REASONABLY REQUIRE
EVIDENCING THE IDENTITY, AUTHORITY AND CAPACITY OF EACH RESPONSIBLE OFFICER
THEREOF AUTHORIZED TO ACT AS A RESPONSIBLE OFFICER IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH SUCH LOAN PARTY IS A PARTY OR IS
TO BE A PARTY ON THE CLOSING DATE;

 

(V)                                 OPINION FROM ROPES & GRAY LLP, COUNSEL TO
THE LOAN PARTIES SUBSTANTIALLY IN THE FORM OF EXHIBIT I;

 

(VI)                              A CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER
OF THE BORROWER CERTIFYING THAT THERE HAS BEEN NO CHANGE, EFFECT, EVENT OR
OCCURRENCE SINCE JANUARY 28, 2006, THAT HAS HAD OR COULD REASONABLY BE EXPECTED
TO RESULT IN A MATERIAL ADVERSE CHANGE;

 

(VII)                           A CERTIFICATE ATTESTING TO THE SOLVENCY OF THE
LOAN PARTIES (TAKEN AS A WHOLE) AFTER GIVING EFFECT TO THE TRANSACTION, FROM THE
CHIEF FINANCIAL OFFICER OF THE BORROWER;

 

(VIII)                        EVIDENCE THAT ALL INSURANCE (INCLUDING TITLE
INSURANCE) REQUIRED TO BE MAINTAINED PURSUANT TO THE LOAN DOCUMENTS HAS BEEN
OBTAINED AND IS IN EFFECT AND THAT THE ADMINISTRATIVE AGENT HAS BEEN NAMED AS
LOSS PAYEE UNDER EACH INSURANCE POLICY WITH RESPECT TO SUCH INSURANCE AS TO
WHICH THE ADMINISTRATIVE AGENT SHALL HAVE REASONABLY REQUESTED TO BE SO NAMED;
AND

 

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(IX)                                CERTIFIED COPIES OF THE RECAPITALIZATION
AGREEMENT AND THE ABL CREDIT AGREEMENT, IN EACH CASE DULY EXECUTED BY THE
PARTIES THERETO, TOGETHER WITH ALL MATERIAL AGREEMENTS, INSTRUMENTS AND OTHER
DOCUMENTS DELIVERED IN CONNECTION THEREWITH AS THE ADMINISTRATIVE AGENT SHALL
REASONABLY REQUEST, EACH INCLUDING CERTIFICATION BY A RESPONSIBLE OFFICER OF THE
BORROWER THAT SUCH DOCUMENTS ARE IN FULL FORCE AND EFFECT AS OF THE CLOSING
DATE.

 

(B)                                 ALL FEES AND EXPENSES REQUIRED TO BE PAID
HEREUNDER AND INVOICED BEFORE THE CLOSING DATE SHALL HAVE BEEN PAID IN FULL IN
CASH.

 

(C)                                  PRIOR TO OR SIMULTANEOUSLY WITH THE INITIAL
BORROWING, (I) THE EQUITY CONTRIBUTIONS SHALL HAVE BEEN FUNDED IN FULL IN CASH;
AND (II) THE RECAPITALIZATION SHALL BE CONSUMMATED IN ACCORDANCE WITH THE TERMS
OF THE RECAPITALIZATION AGREEMENT (WHICH SHALL NOT HAVE BEEN AMENDED, MODIFIED
OR WAIVED PRIOR TO THE CLOSING DATE IN A MANNER MATERIAL AND ADVERSE TO THE
INTERESTS OF THE LENDERS WITHOUT THE PRIOR WRITTEN CONSENT OF THE ARRANGERS).

 

(D)                                 PRIOR TO OR SIMULTANEOUSLY WITH THE INITIAL
BORROWING OF LOANS, THE BORROWER SHALL HAVE RECEIVED (I) AT LEAST $1,400,000,000
IN GROSS CASH PROCEEDS FROM THE ISSUANCE OF THE NEW NOTES AND (II) AT LEAST
$400,000,000 IN GROSS CASH PROCEEDS FROM THE ABL LOANS MADE PURSUANT TO THE ABL
CREDIT AGREEMENT.

 

(E)                                  PRIOR TO OR SIMULTANEOUSLY WITH THE INITIAL
BORROWING OF LOANS, THE BORROWER SHALL HAVE TERMINATED THE EXISTING CREDIT
AGREEMENT AND TAKEN ALL OTHER NECESSARY ACTIONS SUCH THAT, AFTER GIVING EFFECT
TO THE TRANSACTION, (I) THE BORROWER AND ITS SUBSIDIARIES SHALL HAVE OUTSTANDING
NO INDEBTEDNESS OR PREFERRED EQUITY INTERESTS OTHER THAN (A) THE LOANS, (B) THE
NEW NOTES, (C) ABL LOANS OUTSTANDING UNDER THE ABL CREDIT AGREEMENT,
(D) INDEBTEDNESS LISTED ON SCHEDULE 7.03, AND (E) INDEBTEDNESS BETWEEN LOAN
PARTIES AND (II) THE BORROWER SHALL HAVE OUTSTANDING NO EQUITY INTERESTS (OR
SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR EQUITY INTERESTS OR RIGHTS OR
OPTIONS TO ACQUIRE EQUITY INTERESTS) OTHER THAN COMMON STOCK OWNED BY THE
INVESTORS OR MEMBERS OF MANAGEMENT OF THE BORROWER AND OTHER CO-INVESTORS
REASONABLY ACCEPTABLE TO THE ARRANGERS.

 

(F)                                    THE ARRANGERS AND THE LENDERS SHALL HAVE
RECEIVED (I) THE AUDITED FINANCIAL STATEMENTS AND THE AUDIT REPORT FOR SUCH
FINANCIAL STATEMENTS (WHICH SHALL NOT BE SUBJECT TO ANY QUALIFICATION) AND
(II) UNAUDITED CONSOLIDATED BALANCE SHEETS AND RELATED STATEMENTS OF INCOME,
STOCKHOLDERS’ EQUITY AND CASH FLOWS OF THE BORROWER AND ITS SUBSIDIARIES FOR
(A) EACH SUBSEQUENT FISCAL QUARTER ENDED AT LEAST FORTY-FIVE (45) DAYS BEFORE
THE CLOSING DATE AND (B) TO THE EXTENT REASONABLY AVAILABLE AND, IN ANY EVENT,
EXCLUDING FOOTNOTES, EACH FISCAL MONTH AFTER THE MOST RECENT FISCAL PERIOD FOR
WHICH FINANCIAL STATEMENTS WERE RECEIVED BY THE ARRANGERS AND THE LENDERS AS
DESCRIBED ABOVE AND ENDED AT LEAST THIRTY (30) DAYS BEFORE THE CLOSING DATE
(COLLECTIVELY, THE “UNAUDITED FINANCIAL STATEMENTS”), WHICH FINANCIAL STATEMENTS
DESCRIBED IN CLAUSES (I) AND (II)(A) SHALL BE PREPARED IN ACCORDANCE WITH GAAP.

 

(G)                                 ON OR PRIOR TO THE DATE OF THE BORROWING OF
LOANS, EACH LOAN PARTY AND EACH OTHER SUBSIDIARY OF THE BORROWER WHICH IS AN
OBLIGEE OR OBLIGOR WITH RESPECT TO ANY INTERCOMPANY INDEBTEDNESS SHALL HAVE DULY
AUTHORIZED, EXECUTED AND DELIVERED THE INTERCOMPANY NOTE, AND THE INTERCOMPANY
NOTE SHALL BE IN FULL FORCE AND EFFECT.

 

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(H)                                 THE ARRANGERS AND THE LENDERS SHALL HAVE
RECEIVED THE PRO FORMA FINANCIAL STATEMENTS.

 

(I)                                     THE ARRANGERS AND THE LENDERS SHALL HAVE
RECEIVED A CERTIFICATE FROM A RESPONSIBLE OFFICER OF THE BORROWER TO THE EFFECT
THAT THOSE REPRESENTATIONS AND WARRANTIES OF THE BORROWER AND EACH OTHER LOAN
PARTY CONTAINED IN ARTICLE V (EXCEPT REPRESENTATIONS CONTAINED IN SECTIONS
5.01(D) AND (E), 5.02(B) AND (C), 5.03, 5.05, 5.06, 5.07, 5.08, 5.09, 5.10,
5.11, 5.12, 5.14, 5.15, 5.16 AND 5.18) ARE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS ON AND AS OF THE DATE OF THE INITIAL BORROWING OF THE LOANS; PROVIDED
THAT, TO THE EXTENT THAT SUCH REPRESENTATIONS AND WARRANTIES DESCRIBED IN THIS
CLAUSE (I) SPECIFICALLY REFER TO AN EARLIER DATE, THEY SHALL BE TRUE AND CORRECT
IN ALL MATERIAL RESPECTS AS OF SUCH EARLIER DATE; PROVIDED FURTHER, THAT, ANY
REPRESENTATION AND WARRANTY DESCRIBED IN THIS CLAUSE (I) THAT IS QUALIFIED AS TO
“MATERIALITY,” “MATERIAL ADVERSE EFFECT”, OR SIMILAR LANGUAGE SHALL BE TRUE AND
CORRECT IN ALL RESPECTS ON SUCH RESPECTIVE DATES.

 

(J)                                     NO DEFAULT SHALL EXIST, OR WOULD RESULT
FROM THE PROPOSED INITIAL BORROWING OF LOANS OR FROM THE APPLICATION OF THE
PROCEEDS THEREFROM.

 

(K)                                  THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED A COMMITTED LOAN NOTICE IN ACCORDANCE WITH THE REQUIREMENTS HEREOF.

 

The Committed Loan Notice delivered on the Closing Date by the Borrower shall be
deemed to be a representation and warranty that the conditions specified in
Sections 4.01(i) and (j) have been satisfied on and as of the date of the
initial Borrowing of Loans.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

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

 

SECTION 5.01. Existence, Qualification and Power; Compliance with Laws. Each
Loan Party and each of its Subsidiaries (a) is a Person duly organized or
formed, validly existing and in good standing under the Laws of the jurisdiction
of its incorporation or organization, (b) has all requisite power and authority
to (i) own or lease its assets and carry on its business and (ii) execute,
deliver and perform its obligations under the Loan Documents to which it is a
party, (c) is duly qualified and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, (d) is in compliance with
all Laws, orders, writs, injunctions and orders and (e) has all requisite
governmental licenses, authorizations, consents and approvals to operate its
business as currently conducted; except in each case referred to in clause (c),
(d) or (e), to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect.

 

SECTION 5.02. Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is a
party, and the consummation of the Transaction, are within such Loan Party’s
corporate or other powers, have been duly authorized by all necessary corporate
or other organizational action, and do not and will not (a) contravene the terms
of any of such Person’s Organization Documents; (b) conflict with or result in
any breach or contravention of, or the creation of any Lien under (other

 

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than as permitted by Section 7.01), or require any payment to be made under
(i) (x) any New Notes Documentation and any other indenture, mortgage, deed of
trust or loan agreement evidencing Indebtedness in an aggregate principal amount
in excess of the Threshold Amount or (y) any other Contractual Obligation to
which such Person is a party or affecting such Person or the properties of such
Person or any of its Subsidiaries or (ii) any material order, injunction, writ
or decree of any Governmental Authority or any arbitral award to which such
Person or its property is subject; or (c) violate any material Law; except with
respect to any conflict, breach or contravention or payment (but not creation of
Liens) referred to in clause (b)(i), to the extent that such conflict, breach,
contravention or payment could not reasonably be expected to have a Material
Adverse Effect.

 

SECTION 5.03. Governmental Authorization; Other Consents. No material approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in
connection with (a) the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document, or for the
consummation of the Transaction, (b) the grant by any Loan Party of the Liens
granted by it pursuant to the Collateral Documents, (c) the perfection or
maintenance of the Liens created under the Collateral Documents (including the
priority thereof) or (d) the exercise by the Administrative Agent or any Lender
of its rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Collateral Documents, except for (i) filings
necessary to perfect the Liens on the Collateral granted by the Loan Parties in
favor of the Secured Parties, (ii) the approvals, consents, exemptions,
authorizations, actions, notices and filings which have been duly obtained,
taken, given or made and are in full force and effect and (iii) those approvals,
consents, exemptions, authorizations or other actions, notices or filings, the
failure of which to obtain or make could not reasonably be expected to have a
Material Adverse Effect.

 

SECTION 5.04. Binding Effect. This Agreement and each other Loan Document has
been duly executed and delivered by each Loan Party that is party thereto. This
Agreement and each other Loan Document constitutes, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, except as such enforceability may be
limited by Debtor Relief Laws and by general principles of equity.

 

SECTION 5.05. Financial Statements; No Material Adverse Effect.  (a)  (i) The
Audited Financial Statements and the Unaudited Financial Statements fairly
present in all material respects the financial position of the Borrower and its
Subsidiaries as of the dates thereof and their results of operations for the
period covered thereby in accordance with GAAP consistently applied throughout
the periods covered thereby, except as otherwise expressly noted therein or in
Schedule 5.05 hereto. During the period from January 28, 2006 to and including
the Closing Date, there has been (i) no sale, transfer or other disposition by
the Borrower or any of its Subsidiaries of any material part of the business or
property of the Borrower or any of its Subsidiaries, taken as a whole and
(ii) no purchase or other acquisition by the Borrower or any of its Subsidiaries
of any business or property (including any Equity Interests of any other Person)
material in relation to the consolidated financial condition of the Borrower and
its Subsidiaries, in each case, which is not reflected in the foregoing
financial statements or in the notes thereto or has not otherwise been disclosed
in writing to the Lenders prior to the Closing Date.

 

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(II)                                  THE UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED BALANCE SHEET OF THE BORROWER AND ITS SUBSIDIARIES AS AT JULY 29,
2006 (INCLUDING THE NOTES THERETO) (THE “PRO FORMA BALANCE SHEET”) AND THE
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (THE “PRO
FORMA STATEMENTS OF OPERATIONS”) OF THE BORROWER AND ITS SUBSIDIARIES FOR THE
MOST RECENT FISCAL YEAR, THE SIX MONTHS ENDED JULY 29, 2006 AND THE 12-MONTH
PERIOD ENDING ON JULY 29, 2006 (TOGETHER WITH THE PRO FORMA BALANCE SHEET, THE
“PRO FORMA FINANCIAL STATEMENTS”), COPIES OF WHICH HAVE HERETOFORE BEEN
FURNISHED TO THE ADMINISTRATIVE AGENT, HAVE BEEN PREPARED GIVING EFFECT (AS IF
SUCH EVENTS HAD OCCURRED ON JULY 29,2006 WITH RESPECT TO THE PRO FORMA BALANCE
SHEET OR ON JANUARY 30, 2005 WITH RESPECT TO THE PRO FORMA STATEMENTS OF
OPERATIONS) TO THE TRANSACTION. THE PRO FORMA FINANCIAL STATEMENTS HAVE BEEN
PREPARED IN GOOD FAITH, BASED ON ASSUMPTIONS BELIEVED BY THE BORROWER TO BE
REASONABLE AS OF THE DATE OF DELIVERY THEREOF, AND PRESENT FAIRLY IN ALL
MATERIAL RESPECTS THE PRO FORMA FINANCIAL POSITION OF THE BORROWER AND ITS
SUBSIDIARIES AS AT JULY 29, 2006 AND THEIR PRO FORMA RESULTS OF OPERATIONS FOR
THE PERIODS COVERED THEREBY, ASSUMING THAT THE EVENTS SPECIFIED IN THE PRECEDING
SENTENCE HAD ACTUALLY OCCURRED ON JULY 29, 2006 WITH RESPECT TO THE PRO FORMA
BALANCE SHEET OR ON JANUARY 30, 2005 WITH RESPECT TO THE PRO FORMA STATEMENTS OF
OPERATIONS.

 

(III)                               SINCE THE CLOSING DATE, THERE HAS BEEN NO
EVENT OR CIRCUMSTANCE, EITHER INDIVIDUALLY OR IN THE AGGREGATE, THAT HAS HAD OR
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(IV)                              THE FORECASTS OF CONSOLIDATED BALANCE SHEETS,
INCOME STATEMENTS AND CASH FLOW STATEMENTS OF THE BORROWER AND ITS SUBSIDIARIES
FOR EACH FISCAL YEAR ENDING AFTER THE CLOSING DATE UNTIL THE SEVENTH ANNIVERSARY
OF THE CLOSING DATE, COPIES OF WHICH HAVE BEEN FURNISHED TO THE ADMINISTRATIVE
AGENT PRIOR TO THE CLOSING DATE IN A FORM REASONABLY SATISFACTORY TO IT, HAVE
BEEN PREPARED IN GOOD FAITH ON THE BASIS OF THE ASSUMPTIONS STATED THEREIN,
WHICH ASSUMPTIONS WERE BELIEVED TO BE REASONABLE AT THE TIME OF PREPARATION OF
SUCH FORECASTS, IT BEING UNDERSTOOD THAT ACTUAL RESULTS MAY VARY FROM SUCH
FORECASTS AND THAT SUCH VARIATIONS MAY BE MATERIAL.

 

(V)                                 AS OF THE CLOSING DATE, NEITHER THE BORROWER
NOR ANY SUBSIDIARY HAS ANY INDEBTEDNESS OR OTHER OBLIGATIONS OR LIABILITIES,
DIRECT OR CONTINGENT (OTHER THAN (I) SUCH LIABILITIES AS ARE SET FORTH IN THE
FINANCIAL STATEMENTS DESCRIBED IN CLAUSE (A) OF THIS SECTION 5.05,
(II) OBLIGATIONS ARISING UNDER THIS AGREEMENT, THE ABL LOAN DOCUMENTS AND THE
NEW NOTES DOCUMENTATION AND (III) LIABILITIES INCURRED IN THE ORDINARY COURSE OF
BUSINESS) THAT, EITHER INDIVIDUALLY OR IN THE AGGREGATE, HAVE HAD OR COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

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

 

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

 

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

 

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

 

(B)                                 EXCEPT AS COULD NOT REASONABLY BE EXPECTED
TO HAVE, INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL ADVERSE EFFECT, (I) NONE
OF THE PROPERTIES CURRENTLY OR FORMERLY OWNED, LEASED OR OPERATED BY ANY LOAN
PARTY OR ANY OF ITS SUBSIDIARIES IS LISTED OR PROPOSED FOR LISTING ON THE NPL OR
ON THE CERCLIS OR ANY ANALOGOUS FOREIGN, STATE, PROVINCIAL OR LOCAL LIST OR IS
ADJACENT TO ANY SUCH PROPERTY; (II) TO THE KNOWLEDGE OF THE LOAN PARTIES OR ANY
OF THEIR RESTRICTED SUBSIDIARIES, THERE ARE NO AND NEVER HAVE BEEN ANY
UNDERGROUND OR ABOVEGROUND STORAGE TANKS OR ANY SURFACE IMPOUNDMENTS, SEPTIC
TANKS, PITS, SUMPS OR LAGOONS IN WHICH HAZARDOUS MATERIALS ARE BEING OR HAVE
BEEN TREATED, STORED OR DISPOSED OF ON ANY PROPERTY CURRENTLY OWNED, LEASED OR
OPERATED BY ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES OR, TO ITS KNOWLEDGE, ON
ANY PROPERTY FORMERLY OWNED OR OPERATED BY ANY LOAN PARTY OR ANY OF ITS
SUBSIDIARIES; (III) TO THE KNOWLEDGE OF THE LOAN PARTIES OR ANY OF THEIR
RESTRICTED SUBSIDIARIES, THERE IS NO ASBESTOS OR ASBESTOS-CONTAINING MATERIAL ON
ANY PROPERTY CURRENTLY OWNED OR OPERATED BY ANY LOAN PARTY OR ANY OF ITS
SUBSIDIARIES; AND (IV) HAZARDOUS MATERIALS HAVE NOT BEEN RELEASED, DISCHARGED OR
DISPOSED OF BY ANY PERSON ON ANY PROPERTY CURRENTLY OR FORMERLY OWNED, LEASED OR
OPERATED BY ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES AND HAZARDOUS MATERIALS
HAVE NOT OTHERWISE BEEN RELEASED, DISCHARGED OR DISPOSED OF BY ANY OF THE LOAN
PARTIES AND THEIR SUBSIDIARIES AT ANY OTHER LOCATION.

 

(C)                                  THE PROPERTIES OWNED, LEASED OR OPERATED BY
THE BORROWER AND THE SUBSIDIARIES DO NOT CONTAIN ANY HAZARDOUS MATERIALS IN
AMOUNTS OR CONCENTRATIONS WHICH (I) CONSTITUTE, OR CONSTITUTED A VIOLATION OF,
(II) REQUIRE REMEDIAL ACTION UNDER, OR (III) COULD GIVE RISE TO LIABILITY UNDER,
ENVIRONMENTAL LAWS, WHICH VIOLATIONS, REMEDIAL ACTIONS AND LIABILITIES,
INDIVIDUALLY OR IN THE AGGREGATE, COULD REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT.

 

(D)                                 NEITHER THE BORROWER NOR ANY OF ITS
SUBSIDIARIES IS UNDERTAKING, AND HAS NOT COMPLETED, EITHER INDIVIDUALLY OR
TOGETHER WITH OTHER POTENTIALLY RESPONSIBLE PARTIES, ANY INVESTIGATION OR
ASSESSMENT OR REMEDIAL OR RESPONSE ACTION RELATING TO ANY ACTUAL OR THREATENED
RELEASE, DISCHARGE OR DISPOSAL OF HAZARDOUS MATERIALS AT ANY SITE, LOCATION OR
OPERATION, EITHER VOLUNTARILY OR PURSUANT TO THE ORDER OF ANY GOVERNMENTAL
AUTHORITY OR THE REQUIREMENTS OF ANY ENVIRONMENTAL LAW EXCEPT FOR SUCH
INVESTIGATION OR ASSESSMENT OR REMEDIAL OR RESPONSE ACTION THAT, INDIVIDUALLY OR
IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL
ADVERSE EFFECT.

 

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(E)                                  ALL HAZARDOUS MATERIALS GENERATED, USED,
TREATED, HANDLED OR STORED AT, OR TRANSPORTED TO OR FROM, ANY PROPERTY CURRENTLY
OR FORMERLY OWNED OR OPERATED BY ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES HAVE
BEEN DISPOSED OF IN A MANNER NOT REASONABLY EXPECTED TO RESULT, INDIVIDUALLY OR
IN THE AGGREGATE, IN A MATERIAL ADVERSE EFFECT.

 

(F)                                    EXCEPT AS WOULD NOT REASONABLY BE
EXPECTED TO RESULT, INDIVIDUALLY OR IN THE AGGREGATE, IN A MATERIAL ADVERSE
EFFECT, NONE OF THE LOAN PARTIES AND THEIR SUBSIDIARIES HAS CONTRACTUALLY
ASSUMED ANY LIABILITY OR OBLIGATION UNDER OR RELATING TO ANY ENVIRONMENTAL LAW.

 

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

 

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

 

(B)                                 NO ERISA EVENT HAS OCCURRED DURING THE FIVE
YEAR PERIOD PRIOR TO THE DATE ON WHICH THIS REPRESENTATION IS MADE OR DEEMED
MADE WITH RESPECT TO ANY PENSION PLAN; (II) NO PENSION PLAN HAS AN “ACCUMULATED
FUNDING DEFICIENCY” (AS DEFINED IN SECTION 412 OF THE CODE), WHETHER OR NOT
WAIVED; (III) NEITHER ANY LOAN PARTY NOR ANY ERISA AFFILIATE HAS INCURRED, OR
REASONABLY EXPECTS TO INCUR, ANY LIABILITY UNDER TITLE IV OF ERISA WITH RESPECT
TO ANY PENSION PLAN (OTHER THAN PREMIUMS DUE AND NOT DELINQUENT UNDER
SECTION 4007 OF ERISA); (IV) NEITHER ANY LOAN PARTY NOR ANY ERISA AFFILIATE HAS
INCURRED, OR REASONABLY EXPECTS TO INCUR, ANY LIABILITY (AND NO EVENT HAS
OCCURRED WHICH, WITH THE GIVING OF NOTICE UNDER SECTION 4219 OF ERISA, WOULD
RESULT IN SUCH LIABILITY) UNDER SECTIONS 4201 OR 4243 OF ERISA WITH RESPECT TO A
MULTIEMPLOYER PLAN; AND (V) NEITHER ANY LOAN PARTY NOR ANY ERISA AFFILIATE HAS
ENGAGED IN A TRANSACTION THAT COULD BE SUBJECT TO SECTIONS 4069 OR 4212(C) OF
ERISA, EXCEPT, WITH RESPECT TO EACH OF THE FOREGOING CLAUSES OF THIS
SECTION 5.11(B), AS COULD NOT REASONABLY BE EXPECTED, INDIVIDUALLY OR IN THE
AGGREGATE, TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

(C)                                  EACH CANADIAN SUBSIDIARY IS IN COMPLIANCE
WITH THE REQUIREMENTS OF THE PBA AND OTHER FEDERAL, PROVINCIAL OR STATE LAWS
WITH RESPECT TO EACH PENSION PLAN, EXCEPT WHERE THE FAILURE TO SO COMPLY WOULD
NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT. NO FACT OR
SITUATION THAT MAY REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT
EXISTS IN CONNECTION WITH ANY PENSION PLAN. NO CANADIAN SUBSIDIARY HAS ANY
MATERIAL WITHDRAWAL LIABILITY IN CONNECTION WITH A PENSION PLAN. NO PENSION
EVENT HAS OCCURRED WHICH COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL
ADVERSE EFFECT. NO LIEN HAS ARISEN, CHOATE OR INCHOATE, IN RESPECT OF A CANADIAN
SUBSIDIARY OR ITS PROPERTY IN CONNECTION WITH ANY PENSION PLAN (SAVE FOR
CONTRIBUTION AMOUNTS NOT YET DUE).

 

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

 

SECTION 5.13. Margin Regulations; Investment Company Act.   (i)    The Borrower
is not engaged nor will it engage, principally or as one of its important
activities, in the business of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the FRB), or extending credit for the purpose
of purchasing or carrying margin stock, and no proceeds of any Borrowings will
be used for the purpose of purchasing or carrying margin stock (other than
pursuant to, or in connection with, the Recapitalization) or any other purpose
that violates Regulation U. The value of the margin stock (within the meaning of
Regulation U) owned by the Borrower and its Subsidiaries at any time the
extensions of credit hereunder constitute “purpose” credit (within the meaning
of Regulation U) does not exceed 25% of the value of the assets of the Borrower
and its Subsidiaries taken as a whole.

 

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

 

SECTION 5.14. Disclosure. No report, financial statement, certificate or other
written information furnished by or on behalf of any Loan Party to any Agent or
any Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or any other Loan Document
(as modified or supplemented by other information so furnished) when taken as a
whole contains any material misstatement of fact or omits to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not materially misleading; provided that, with
respect to projected financial information and pro forma financial information,
the Borrower represents only that such information was prepared in good faith
based upon assumptions believed by the Borrower to be reasonable at the time of
preparation; it being understood that such projections may vary from actual
results and that such variances may be material.

 

SECTION 5.15. Intellectual Property; Licenses, Etc. Each of the Loan Parties and
their Subsidiaries own, license or possess the right to use, all of the
trademarks, service marks, trade names, domain names, copyrights, patents,
patent rights, licenses, technology, software, know-how database rights, rights
of privacy and publicity and other intellectual property rights (collectively,
“IP Rights”) that are reasonably necessary for the operation of their respective
businesses as currently conducted, and, without conflict with the rights of any
Person, except to the extent such failure to own, license or possess or such
conflicts, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. The operation of the businesses of
any Loan Party or Subsidiary as currently conducted does not

 

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infringe upon, misuse, misappropriate or violate any rights held by any Person
except for such infringements, misuses, misappropriations or violations,
individually or in the aggregate, which could not reasonably be expected to have
a Material Adverse Effect. No claim or litigation regarding any IP Rights, is
pending or, to the knowledge of the Borrower, threatened against any Loan Party
or Subsidiary, which, either individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.

 

SECTION 5.16. Solvency.  On the Closing Date after giving effect to the
Transaction, the Loan Parties, on a consolidated basis, are Solvent.

 

SECTION 5.17. Subordination of Junior Financing. The Obligations are “Senior
Debt”, “Senior Indebtedness”, “Guarantor Senior Debt” or “Senior Secured
Financing” (or any comparable term) under, and as defined in, each of the Senior
Subordinated Notes Indenture and the Subordinated Discount Notes Indenture and
under any other Junior Financing Documentation. The Obligations are “Designated
Senior Indebtedness” under and as defined in each of the Senior Subordinated
Notes Indenture and the Subordinated Discount Notes Indenture.

 

SECTION 5.18. Labor Matters. Except as, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect:  (a) there are no strikes or
other labor disputes against any of the Borrower or its Subsidiaries pending or,
to the knowledge of the Borrower, threatened; (b) hours worked by and payment
made to employees of each of the Borrower or its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Laws dealing
with such matters; and (c) all payments due from any of the Borrower or its
Subsidiaries on account of employee health and welfare insurance have been paid
or accrued as a liability on the books of the relevant party.

 

ARTICLE VI

 

AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder which is accrued and payable shall remain unpaid or
unsatisfied (other than contingent indemnity obligations with respect to then
unasserted claims), the Borrower shall, and shall (except in the case of the
covenants set forth in Sections 6.01, 6.02 and 6.03) cause each Restricted
Subsidiary (and, in the case of Sections 6.04 and 6.08 only, each Unrestricted
Subsidiary) to:

 

SECTION 6.01. Financial Statements. Deliver to the Administrative Agent for
prompt further distribution to each Lender:

 

(A)                                  AS SOON AS AVAILABLE, BUT IN ANY EVENT
WITHIN NINETY (90) DAYS AFTER THE END OF EACH FISCAL YEAR OF THE BORROWER
BEGINNING WITH THE 2007 FISCAL YEAR, A CONSOLIDATED BALANCE SHEET OF THE
BORROWER AND ITS SUBSIDIARIES AS AT THE END OF SUCH FISCAL YEAR, AND THE RELATED
CONSOLIDATED STATEMENTS OF INCOME OR OPERATIONS, STOCKHOLDERS’ EQUITY AND CASH
FLOWS FOR SUCH FISCAL YEAR, SETTING FORTH IN EACH CASE IN COMPARATIVE FORM THE
FIGURES FOR THE PREVIOUS FISCAL YEAR, ALL IN REASONABLE DETAIL AND PREPARED IN
ACCORDANCE WITH

 

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GAAP, AUDITED AND ACCOMPANIED BY A REPORT AND OPINION OF ERNST & YOUNG, LLP OR
ANY OTHER INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF NATIONALLY RECOGNIZED
STANDING, WHICH REPORT AND OPINION SHALL BE PREPARED IN ACCORDANCE WITH
GENERALLY ACCEPTED AUDITING STANDARDS AND SHALL NOT BE SUBJECT TO ANY “GOING
CONCERN” OR LIKE QUALIFICATION OR EXCEPTION OR ANY QUALIFICATION OR EXCEPTION AS
TO THE SCOPE OF SUCH AUDIT;

 

(B)                                 AS SOON AS AVAILABLE, BUT IN ANY EVENT
WITHIN FORTY-FIVE (45) DAYS AFTER THE END OF EACH OF THE FIRST THREE (3) FISCAL
QUARTERS OF EACH FISCAL YEAR OF THE BORROWER, A CONSOLIDATED BALANCE SHEET OF
THE BORROWER AND ITS SUBSIDIARIES AS AT THE END OF SUCH FISCAL QUARTER, AND THE
RELATED (I) CONSOLIDATED STATEMENTS OF INCOME OR OPERATIONS FOR SUCH FISCAL
QUARTER AND FOR THE PORTION OF THE FISCAL YEAR THEN ENDED AND (II) CONSOLIDATED
STATEMENTS OF CASH FLOWS FOR THE PORTION OF THE FISCAL YEAR THEN ENDED, SETTING
FORTH IN EACH CASE IN COMPARATIVE FORM THE FIGURES FOR THE CORRESPONDING FISCAL
QUARTER OF THE PREVIOUS FISCAL YEAR AND THE CORRESPONDING PORTION OF THE
PREVIOUS FISCAL YEAR, ALL IN REASONABLE DETAIL AND CERTIFIED BY A RESPONSIBLE
OFFICER OF THE BORROWER AS FAIRLY PRESENTING IN ALL MATERIAL RESPECTS THE
FINANCIAL POSITION, RESULTS OF OPERATIONS, STOCKHOLDERS’ EQUITY AND CASH FLOWS
OF THE BORROWER AND ITS SUBSIDIARIES IN ACCORDANCE WITH GAAP, SUBJECT ONLY TO
NORMAL YEAR-END ADJUSTMENTS AND THE ABSENCE OF FOOTNOTES;

 

(C)                                  AS SOON AS AVAILABLE, AND IN ANY EVENT NO
LATER THAN NINETY (90) DAYS AFTER THE END OF EACH FISCAL YEAR OF THE BORROWER, A
DETAILED CONSOLIDATED BUDGET FOR THE FOLLOWING FISCAL YEAR (INCLUDING A
PROJECTED CONSOLIDATED BALANCE SHEET OF THE BORROWER AND ITS SUBSIDIARIES AS OF
THE END OF THE FOLLOWING FISCAL YEAR, THE RELATED CONSOLIDATED STATEMENTS OF
PROJECTED CASH FLOW AND PROJECTED INCOME AND A SUMMARY OF THE MATERIAL
UNDERLYING ASSUMPTIONS APPLICABLE THERETO), AND, AS SOON AS AVAILABLE,
SIGNIFICANT REVISIONS, IF ANY, OF SUCH BUDGET AND PROJECTIONS WITH RESPECT TO
SUCH FISCAL YEAR (COLLECTIVELY, THE “PROJECTIONS”), WHICH PROJECTIONS SHALL IN
EACH CASE BE ACCOMPANIED BY A CERTIFICATE OF A RESPONSIBLE OFFICER STATING THAT
SUCH PROJECTIONS ARE BASED ON ESTIMATES, INFORMATION AND ASSUMPTIONS BELIEVED BY
THE BORROWER TO BE REASONABLE AND THAT SUCH RESPONSIBLE OFFICER HAS NO REASON TO
BELIEVE THAT SUCH PROJECTIONS ARE INCORRECT OR MISLEADING IN ANY MATERIAL
RESPECT; AND

 

(D)                                 SIMULTANEOUSLY WITH THE DELIVERY OF EACH SET
OF CONSOLIDATED FINANCIAL STATEMENTS REFERRED TO IN SECTIONS 6.01(A) AND
6.01(B) ABOVE, THE RELATED CONSOLIDATING FINANCIAL STATEMENTS REFLECTING THE
ADJUSTMENTS NECESSARY TO ELIMINATE THE ACCOUNTS OF UNRESTRICTED SUBSIDIARIES (IF
ANY) FROM SUCH CONSOLIDATED FINANCIAL STATEMENTS.

 

Notwithstanding the foregoing, the obligations in paragraphs (a) and (b) of this
Section 6.01 may be satisfied with respect to financial information of the
Borrower and the Restricted Subsidiaries by furnishing (A) the applicable
financial statements of any direct or indirect parent of the Borrower or (B) the
Borrower’s (or any direct or indirect parent thereof) Form 10-K or 10-Q, as
applicable, filed with the SEC; provided that with respect to each of clauses
(A) and (B), (i) to the extent such information relates to a direct or indirect
parent of the Borrower, such information is accompanied by consolidating
information that explains in reasonable detail the differences between the
information relating to such parent of the Borrower, on the one hand, and the
information relating to the Borrower and the Restricted Subsidiaries on a
stand-alone basis, on the other hand and (ii) to the extent such information is
in lieu of information required

 

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to be provided under Section 6.01(a), such materials are accompanied by a report
and opinion of Ernst & Young, LLP or any other independent registered public
accounting firm of nationally recognized standing, which report and opinion
shall be prepared in accordance with generally accepted auditing standards and
shall not be subject to any “going concern” or like qualification or exception
or any qualification or exception as to the scope of such audit.

 

SECTION 6.02. Certificates; Other Information. Deliver to the Administrative
Agent for prompt further distribution to each Lender:

 

(A)                                  NO LATER THAN FIVE (5) DAYS AFTER THE
DELIVERY OF THE FINANCIAL STATEMENTS REFERRED TO IN SECTION 6.01(A), A
CERTIFICATE OF ITS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM CERTIFYING SUCH
FINANCIAL STATEMENTS AND STATING THAT IN MAKING THE EXAMINATION NECESSARY
THEREFOR NO KNOWLEDGE WAS OBTAINED OF ANY EVENT OF DEFAULT UNDER SECTION 7.05
OR, IF ANY SUCH EVENT OF DEFAULT SHALL EXIST, STATING THE NATURE AND STATUS OF
SUCH EVENT (WHICH CERTIFICATE MAY BE LIMITED TO THE EXTENT REQUIRED BY
ACCOUNTING RULES OR GUIDELINES);

 

(B)                                 NO LATER THAN FIVE (5) DAYS AFTER THE
DELIVERY OF THE FINANCIAL STATEMENTS REFERRED TO IN SECTION 6.01(A) AND (B), A
DULY COMPLETED COMPLIANCE CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER OF THE
BORROWER, AND IF SUCH COMPLIANCE CERTIFICATE DEMONSTRATES AN EVENT OF DEFAULT OF
ANY COVENANT UNDER SECTION 7.05, ANY OF THE INVESTORS MAY DELIVER, TOGETHER WITH
SUCH COMPLIANCE CERTIFICATE, NOTICE OF THEIR INTENT TO CURE (A “NOTICE OF INTENT
TO CURE”) SUCH EVENT OF DEFAULT PURSUANT TO SECTION 8.05; PROVIDED THAT THE
DELIVERY OF A NOTICE OF INTENT TO CURE SHALL IN NO WAY AFFECT OR ALTER THE
OCCURRENCE, EXISTENCE OR CONTINUATION OF ANY SUCH EVENT OF DEFAULT OR THE
RIGHTS, BENEFITS POWERS AND REMEDIES OF THE ADMINISTRATIVE AGENT AND THE LENDERS
UNDER ANY LOAN DOCUMENT;

 

(C)                                  PROMPTLY AFTER THE SAME ARE PUBLICLY
AVAILABLE, COPIES OF ALL ANNUAL, REGULAR, PERIODIC AND SPECIAL REPORTS AND
REGISTRATION STATEMENTS WHICH THE BORROWER FILES WITH THE SEC OR WITH ANY
GOVERNMENTAL AUTHORITY THAT MAY BE SUBSTITUTED THEREFOR (OTHER THAN AMENDMENTS
TO ANY REGISTRATION STATEMENT (TO THE EXTENT SUCH REGISTRATION STATEMENT, IN THE
FORM IT BECAME EFFECTIVE, IS DELIVERED), EXHIBITS TO ANY REGISTRATION STATEMENT
AND, IF APPLICABLE, ANY REGISTRATION STATEMENT ON FORM S-8) AND IN ANY CASE NOT
OTHERWISE REQUIRED TO BE DELIVERED TO THE ADMINISTRATIVE AGENT PURSUANT HERETO;

 

(D)                                 PROMPTLY AFTER THE FURNISHING THEREOF,
COPIES OF ANY MATERIAL REQUESTS OR MATERIAL NOTICES RECEIVED BY ANY LOAN PARTY
(OTHER THAN IN THE ORDINARY COURSE OF BUSINESS) OR MATERIAL STATEMENTS OR
MATERIAL REPORTS FURNISHED TO ANY HOLDER OF DEBT SECURITIES OF ANY LOAN PARTY OR
OF ANY OF ITS RESTRICTED SUBSIDIARIES PURSUANT TO THE TERMS OF ANY NEW NOTES
DOCUMENTATION OR ANY OTHER INDEBTEDNESS IN A PRINCIPAL AMOUNT GREATER THAN THE
THRESHOLD AMOUNT (BUT EXCLUDING MATERIAL STATEMENTS OR MATERIAL REPORTS RELATING
TO THE “BORROWING BASE” OR THE DETERMINATION THEREOF (INCLUDING APPRAISALS AND
COLLATERAL AUDITS) FURNISHED TO ANY ABL LENDER) AND NOT OTHERWISE REQUIRED TO BE
FURNISHED TO THE LENDERS PURSUANT TO ANY OTHER CLAUSE OF THIS SECTION 6.02;

 

(E)                                  TOGETHER WITH THE DELIVERY OF EACH
COMPLIANCE CERTIFICATE PURSUANT TO SECTION 6.02(B), (I) A REPORT SETTING FORTH
THE INFORMATION REQUIRED BY SECTION 3.03(C) OF

 

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THE SECURITY AGREEMENT OR CONFIRMING THAT THERE HAS BEEN NO CHANGE IN SUCH
INFORMATION SINCE THE CLOSING DATE OR THE DATE OF THE LAST SUCH REPORT, (II) A
DESCRIPTION OF EACH EVENT, CONDITION OR CIRCUMSTANCE DURING THE LAST FISCAL
QUARTER COVERED BY SUCH COMPLIANCE CERTIFICATE REQUIRING A MANDATORY PREPAYMENT
OR OFFER TO PURCHASE UNDER SECTION 2.05(B) OR (C) AND (III) A LIST OF EACH
SUBSIDIARY THAT IDENTIFIES EACH SUBSIDIARY AS A RESTRICTED SUBSIDIARY OR AN
UNRESTRICTED SUBSIDIARY AS OF THE DATE OF DELIVERY OF SUCH COMPLIANCE
CERTIFICATE;

 

(F)                                    PROMPTLY, A COPY OF ANY FINAL “MANAGEMENT
LETTER” RECEIVED FROM THE BORROWER’S INDEPENDENT PUBLIC ACCOUNTANTS TO THE
EXTENT SUCH INDEPENDENT PUBLIC ACCOUNTANTS HAVE CONSENTED TO THE DELIVERY OF
SUCH MANAGEMENT LETTER TO THE ADMINISTRATIVE AGENT UPON THE REQUEST OF THE
BORROWER;

 

(G)                                 PROMPTLY FOLLOWING THE ADMINISTRATIVE
AGENT’S REQUEST THEREFOR, ALL DOCUMENTATION AND OTHER INFORMATION THAT THE
ADMINISTRATIVE AGENT REASONABLY REQUESTS ON ITS BEHALF OR ON BEHALF OF ANY
LENDER IN ORDER TO COMPLY WITH ITS ONGOING OBLIGATIONS UNDER APPLICABLE “KNOW
YOUR CUSTOMER” AND ANTI-MONEY LAUNDERING RULES AND REGULATIONS, INCLUDING THE
ACT;

 

(H)                                 (X) ON THE DATE OF ANY INCURRENCE OF
INDEBTEDNESS UNDER A REVOLVING CREDIT FACILITY TO FINANCE AN ACQUISITION, AN
INVESTMENT OR ANY OTHER RESTRICTED PAYMENT, A CERTIFICATE FROM A RESPONSIBLE
OFFICER CERTIFYING AS TO THE AGGREGATE PRINCIPAL AMOUNT OF SUCH INDEBTEDNESS SO
INCURRED AND THE DATE OF SUCH INCURRENCE AND (Y) ON THE DATE OF ANY REPAYMENT OF
INDEBTEDNESS UNDER A REVOLVING CREDIT FACILITY WITH THE NET PROCEEDS OF A
MATERIAL DISPOSITION, A CERTIFICATE FROM A RESPONSIBLE OFFICER CERTIFYING AS TO
THE AGGREGATE PRINCIPAL AMOUNT OF SUCH INDEBTEDNESS SO REPAID AND THE DATE OF
SUCH REPAYMENT; AND

 

(I)                                     PROMPTLY, SUCH ADDITIONAL INFORMATION
REGARDING THE BUSINESS, LEGAL, FINANCIAL OR CORPORATE AFFAIRS OF ANY LOAN PARTY
OR ANY SUBSIDIARY, OR COMPLIANCE WITH THE TERMS OF THE LOAN DOCUMENTS, AS THE
ADMINISTRATIVE AGENT OR ANY LENDER THROUGH THE ADMINISTRATIVE AGENT MAY FROM
TIME TO TIME REASONABLY REQUEST.

 

Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address listed on Schedule 10.02; or
(ii) on which such documents are posted on the Borrower’s behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); provided that: 
(i) upon written request by the Administrative Agent, the Borrower shall deliver
paper copies of such documents to the Administrative Agent for further
distribution to each Lender until a written request to cease delivering paper
copies is given by the Administrative Agent and (ii) the Borrower shall notify
(which may be by facsimile or electronic mail) the Administrative Agent of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.

 

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Notwithstanding anything contained herein, in every instance the Borrower shall
be required to provide paper copies of the Compliance Certificates required by
Section 6.02(b) to the Administrative Agent. Each Lender shall be solely
responsible for timely accessing posted documents or requesting delivery of
paper copies of such documents from the Administrative Agent and maintaining its
copies of such documents.

 

SECTION 6.03. Notices. (a) Promptly after obtaining knowledge thereof, notify
the Administrative Agent of:

 

(I)                                     THE OCCURRENCE OF ANY DEFAULT;

 

(II)                                  ANY LOSS, DAMAGE, OR DESTRUCTION TO THE
COLLATERAL IN THE AMOUNT OF $10,000,000 OR MORE, WHETHER OR NOT COVERED BY
INSURANCE; AND

 

(III)                               ANY MATTER THAT HAS RESULTED OR COULD
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT, INCLUDING ARISING
OUT OF OR RESULTING FROM (A) BREACH OR NON-PERFORMANCE OF, OR ANY DEFAULT OR
EVENT OF DEFAULT UNDER, A CONTRACTUAL OBLIGATION OF ANY LOAN PARTY OR ANY
SUBSIDIARY, (B) ANY DISPUTE, LITIGATION, INVESTIGATION, PROCEEDING OR SUSPENSION
BETWEEN ANY LOAN PARTY OR ANY SUBSIDIARY AND ANY GOVERNMENTAL AUTHORITY, (C) THE
COMMENCEMENT OF, OR ANY MATERIAL DEVELOPMENT IN, ANY LITIGATION OR PROCEEDING
AFFECTING ANY LOAN PARTY OR ANY SUBSIDIARY, INCLUDING PURSUANT TO ANY APPLICABLE
ENVIRONMENTAL LAWS OR IN RESPECT OF IP RIGHTS OR THE ASSERTION OR OCCURRENCE OF
ANY NONCOMPLIANCE BY ANY LOAN PARTY OR AS ANY OF ITS SUBSIDIARIES WITH, OR
LIABILITY UNDER, ANY ENVIRONMENTAL LAW OR ENVIRONMENTAL PERMIT, OR (D) THE
OCCURRENCE OF ANY ERISA EVENT OR ANY PENSION EVENT;

 

(B)                                 FURNISH CONTEMPORANEOUSLY TO THE
ADMINISTRATIVE AGENT, A COPY OF ANY NOTICE SENT TO THE ADMINISTRATIVE AGENT OR
COLLATERAL AGENT UNDER SECTIONS 5.02(D), (G) AND 5.03 OF THE ABL CREDIT
AGREEMENT, IF SUCH NOTICE IS NOT REQUIRED TO BE DELIVERED HEREUNDER.

 

Each notice pursuant to this Section shall be accompanied by a written statement
of a Responsible Officer of the Borrower (x) that such notice is being delivered
pursuant to Section 6.03(a)(i), (ii) or (iii) or 6.03(b) (as applicable) and (y)
setting forth details of the occurrence referred to therein and stating what
action the Borrower has taken and proposes to take with respect thereto.

 

SECTION 6.04. Payment of Obligations. Pay, discharge or otherwise satisfy as the
same shall become due and payable, all its material obligations and liabilities
in respect of material taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property;
provided that neither the Borrower nor any of the Restricted Subsidiaries shall
be required to pay any such taxes, assessments, governmental charges or levies
that are being contested in good faith and by proper actions if it has
maintained adequate reserves with respect thereto in accordance with GAAP.

 

SECTION 6.05. Preservation of Existence, Etc. (a) Preserve, renew and maintain
in full force and effect its legal existence under the Laws of the jurisdiction
of its organization except in a transaction permitted by Section 7.01 or 7.06
and (b) take all reasonable action to maintain all rights, privileges (including
its good standing), permits, licenses and franchises

 

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necessary or desirable in the normal conduct of its business, except (i) to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect or (ii) pursuant to a transaction permitted by Section 7.01 or
7.06.

 

SECTION 6.06. Maintenance of Properties. Except if the failure to do so could
not reasonably be expected to have a Material Adverse Effect, (a) maintain,
preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order, repair and condition,
ordinary wear and tear excepted and casualty or condemnation excepted, and
(b) make all necessary renewals, replacements, modifications, improvements,
upgrades, extensions and additions thereof or thereto in accordance with prudent
industry practice.

 

SECTION 6.07. Maintenance of Insurance. (a)  Maintain with financially sound and
reputable insurance companies, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts (after giving effect to any self-insurance reasonable and customary for
similarly situated Persons engaged in the same or similar businesses as the
Borrower and the Restricted Subsidiaries) as are customarily carried under
similar circumstances by such other Persons. The Loan Parties shall furnish to
the Administrative Agent, upon written request, full information as to the
insurance carried.

 

(B)                                 FIRE AND EXTENDED COVERAGE POLICIES
MAINTAINED WITH RESPECT TO ANY COLLATERAL SHALL BE ENDORSED OR OTHERWISE AMENDED
TO INCLUDE (I) A NON-CONTRIBUTING MORTGAGE CLAUSE (REGARDING IMPROVEMENTS TO
REAL PROPERTY) AND A LENDERS’ LOSS PAYABLE CLAUSE (REGARDING PERSONAL PROPERTY),
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT, WHICH
ENDORSEMENTS OR AMENDMENTS SHALL PROVIDE THAT THE INSURER SHALL PAY ALL PROCEEDS
OTHERWISE PAYABLE TO THE LOAN PARTIES UNDER THE POLICIES DIRECTLY TO THE
ADMINISTRATIVE AGENT, (II) A PROVISION TO THE EFFECT THAT NONE OF THE LOAN
PARTIES, SECURED PARTIES (IN THEIR CAPACITY AS SUCH), OR ANY OTHER AFFILIATE OF
A LOAN PARTY SHALL BE A CO-INSURER (THE FOREGOING NOT BEING DEEMED TO LIMIT THE
AMOUNT OF SELF-INSURED RETENTION OR DEDUCTIBLES UNDER SUCH POLICIES, WHICH
SELF-INSURED RETENTION OR DEDUCTIBLES SHALL BE CONSISTENT WITH BUSINESS
PRACTICES IN EFFECT ON THE CLOSING DATE OR AS OTHERWISE DETERMINED BY THE
RESPONSIBLE OFFICERS OF THE LOAN PARTIES ACTING REASONABLY IN THEIR BUSINESS
JUDGMENT), AND (III) SUCH OTHER PROVISIONS AS THE ADMINISTRATIVE AGENT
MAY REASONABLY REQUIRE FROM TIME TO TIME TO PROTECT THE INTERESTS OF THE SECURED
PARTIES. COMMERCIAL GENERAL LIABILITY POLICIES SHALL BE ENDORSED TO NAME THE
ADMINISTRATIVE AGENT AS AN ADDITIONAL INSURED. EACH ENDORSEMENT TO SUCH CASUALTY
OR LIABILITY POLICY REFERRED TO IN THIS SECTION 6.07(B) SHALL ALSO PROVIDE THAT
IT SHALL NOT BE CANCELED, MODIFIED IN ANY MANNER THAT WOULD CAUSE THIS
SECTION 6.07 TO BE VIOLATED, OR NOT RENEWED (I) BY REASON OF NONPAYMENT OF
PREMIUM EXCEPT UPON NOT LESS THAN TEN (10) DAYS’ PRIOR WRITTEN NOTICE THEREOF BY
THE INSURER TO THE ADMINISTRATIVE AGENT (GIVING THE ADMINISTRATIVE AGENT THE
RIGHT TO CURE DEFAULTS IN THE PAYMENT OF PREMIUMS) OR (II) FOR ANY OTHER REASON
EXCEPT UPON NOT LESS THAN THIRTY (30) DAYS’ PRIOR WRITTEN NOTICE THEREOF BY THE
INSURER TO THE ADMINISTRATIVE AGENT. THE BORROWER SHALL DELIVER TO THE
ADMINISTRATIVE AGENT, PRIOR TO THE CANCELLATION, MODIFICATION OR NON-RENEWAL OF
ANY SUCH POLICY OF INSURANCE, A COPY OF A RENEWAL OR REPLACEMENT POLICY (OR
OTHER EVIDENCE OF RENEWAL OF A POLICY PREVIOUSLY DELIVERED TO THE ADMINISTRATIVE
AGENT, INCLUDING AN INSURANCE BINDER) TOGETHER WITH EVIDENCE SATISFACTORY TO THE
ADMINISTRATIVE AGENT OF PAYMENT OF THE PREMIUM THEREFOR.

 

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(C)                                  THE AGENTS ACKNOWLEDGE THAT THE INSURANCE
POLICIES DESCRIBED ON SCHEDULE 6.07 ARE SATISFACTORY TO THEM AS OF THE CLOSING
DATE AND ARE IN COMPLIANCE WITH THE PROVISIONS OF THIS SECTION 6.07.

 

SECTION 6.08. Compliance with Laws. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except if the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.09. Books and Records.   Maintain proper books of record and account,
in which entries that are full, true and correct in all material respects and
permit financial statements to be prepared in conformity with GAAP consistently
applied shall be made of all material financial transactions and matters
involving the assets and business of the Borrower or such Subsidiary, as the
case may be.

 

SECTION 6.10. Inspection Rights.   Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect any
of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and (subject to customary
access agreements) independent public accountants all at the reasonable expense
of the Borrower and at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Borrower; provided that, excluding any such visits and inspections during the
continuation of an Event of Default, only the Administrative Agent on behalf of
the Lenders may exercise rights of the Administrative Agent and the Lenders
under this Section 6.10 and the Administrative Agent shall not exercise such
rights more often than two (2) times during any calendar year absent the
existence of an Event of Default and only one (1) such time shall be at the
Borrower’s expense; provided further, that when an Event of Default exists, the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and upon reasonable advance
notice. The Administrative Agent and the Lenders shall give the Borrower the
opportunity to participate in any discussions with the Borrower’s independent
public accountants.

 

SECTION 6.11. Covenant to Guarantee Obligations and Give Security. At the
Borrower’s expense, take all action necessary or reasonably requested by the
Administrative Agent to ensure that the Collateral and Guarantee Requirement
continues to be satisfied, including:

 

(A)                                  (X) UPON THE FORMATION OR ACQUISITION OF
ANY NEW DIRECT OR INDIRECT WHOLLY OWNED SUBSIDIARY THAT IS A DOMESTIC SUBSIDIARY
(IN EACH CASE, OTHER THAN AN UNRESTRICTED SUBSIDIARY OR AN EXCLUDED SUBSIDIARY)
BY ANY LOAN PARTY OR THE DESIGNATION OF ANY “UNRESTRICTED SUBSIDIARY” AS A
RESTRICTED SUBSIDIARY IN ACCORDANCE WITH THE DEFINITION OF “UNRESTRICTED
SUBSIDIARY”, TO THE EXTENT SUCH SUBSIDIARY IS (OR WILL BECOME) A DOMESTIC
SUBSIDIARY AND A WHOLLY-OWNED SUBSIDIARY (OTHER THAN AN EXCLUDED SUBSIDIARY) OR
(Y) THE FORMATION OF HOLDCO:

 

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(I)                                     IN THE CASE OF ANY SUCH RESTRICTED
SUBSIDIARY THAT IS REQUIRED (OR HAS ELECTED) TO BECOME A SUBSIDIARY GUARANTOR
UNDER THE COLLATERAL AND GUARANTY REQUIREMENT, WITHIN THIRTY (30) DAYS AFTER
SUCH FORMATION, ACQUISITION OR DESIGNATION OR SUCH LONGER PERIOD AS THE
ADMINISTRATIVE AGENT MAY AGREE IN ITS DISCRETION:

 

(A)  cause each such Restricted Subsidiary that is required (or has elected) to
become a Subsidiary Guarantor under the Collateral and Guarantee Requirement to
furnish to the Administrative Agent a description of the real properties owned
by such Restricted Subsidiary that have a Fair Market Value in excess of
$5,000,000 in detail reasonably satisfactory to the Administrative Agent;

 

(B)  cause (x) each such Restricted Subsidiary that is required (or has elected)
to become a Subsidiary Guarantor pursuant to the Collateral and Guarantee
Requirement to duly execute and deliver to the Administrative Agent or the
Collateral Agent (as appropriate) Guaranty Supplements, Mortgages with respect
to the owned real properties which are identified to the Administrative Agent
pursuant to Section 6.11(a)(i)(A), Security Agreement Supplements, a
counterpart of the Intercompany Note, a counterpart of the Intercreditor
Agreement and other guaranties, security agreements and documents (including,
with respect to such Mortgages, the documents listed in Section 6.13(b)), as
reasonably requested by and in form and substance reasonably satisfactory to the
Administrative Agent (consistent, where applicable, with the Mortgages, Security
Agreement, Canadian Security Agreement, relevant Guaranty and other security
agreements in effect on the Closing Date), in each case granting Liens required
by the Collateral and Guarantee Requirement and (y) each direct or indirect
parent of each such Restricted Subsidiary that is required (or has elected) to
be a Subsidiary Guarantor pursuant to the Collateral and Guarantee Requirement
to duly execute and deliver to the Administrative Agent such Security Agreement
Supplements and other security agreements as reasonably requested by and in
form and substance reasonably satisfactory to the Administrative Agent
(consistent, where applicable, with the Security Agreements and Canadian
Security Agreement as in effect on the Closing Date), in each case granting
Liens required by the Collateral and Guarantee Requirement;

 

(C)  (x) cause each such Restricted Subsidiary that is required (or has elected)
to become a Subsidiary Guarantor pursuant to the Collateral and Guarantee
Requirement to deliver any and all certificates representing Equity Interests
(to the extent certificated) that are required to be pledged pursuant to the
Collateral and Guarantee Requirement, accompanied by undated stock powers or
other appropriate instruments of transfer executed in blank and instruments
evidencing the intercompany Indebtedness held by such Restricted Subsidiary and
required to be pledged pursuant to the Collateral Documents, indorsed in blank
to the Collateral Agent and (y) cause each direct or indirect parent of such
Restricted Subsidiary that is required (or has elected) to be a Subsidiary
Guarantor pursuant to the Collateral and Guarantee Requirement to deliver any
and all certificates representing the outstanding Equity Interests (to the
extent certificated) of such

 

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Restricted Subsidiary that are required to be pledged pursuant to the Collateral
and Guarantee Requirement, accompanied by undated stock powers or other
appropriate instruments of transfer executed in blank and instruments evidencing
the intercompany Indebtedness issued by such Restricted Subsidiary and required
to be pledged in accordance with the Collateral Documents, indorsed in blank to
the Collateral Agent; and

 

(D)  take and cause such Restricted Subsidiary and each direct or indirect
parent of such Restricted Subsidiary that is required (or has elected) to become
a Subsidiary Guarantor pursuant to the Collateral and Guaranty Requirement to
take whatever action (including the recording of Mortgages, the filing of
Uniform Commercial Code financing statements or PPSA registration statements or
recordations and delivery of stock and membership interest certificates) may be
necessary in the reasonable opinion of the Administrative Agent to vest in the
Administrative Agent (or in any representative of the Administrative Agent
designated by it) valid Liens required by the Collateral and Guarantee
Requirement, enforceable against all third parties in accordance with their
terms, except as such enforceability may be limited by Debtor Relief Laws and by
general principles of equity,

 

(II)                                  IN THE CASE OF HOLDCO, WITHIN THIRTY (30)
DAYS AFTER SUCH FORMATION, CAUSE HOLDCO TO ENTER INTO THE HOLDCO GUARANTY AND
CAUSE HOLDCO TO TAKE ALL SUCH ACTIONS CONTEMPLATED BY SUBCLAUSES (A), (B),
(C) AND (D) OF SECTION 6.11(A)(I) ABOVE AS IF HOLDCO WERE A “RESTRICTED
SUBSIDIARY” AND A “DIRECT OR INDIRECT PARENT OF A RESTRICTED SUBSIDIARY”,

 

(III)                               WITHIN THIRTY (30) DAYS AFTER THE REQUEST
THEREFOR BY THE ADMINISTRATIVE AGENT, DELIVER TO THE ADMINISTRATIVE AGENT A
SIGNED COPY OF AN OPINION, ADDRESSED TO THE ADMINISTRATIVE AGENT AND THE OTHER
SECURED PARTIES, OF COUNSEL FOR THE LOAN PARTIES REASONABLY ACCEPTABLE TO THE
ADMINISTRATIVE AGENT AS TO SUCH MATTERS SET FORTH IN THIS SECTION 6.11(A) AS THE
ADMINISTRATIVE AGENT MAY REASONABLY REQUEST, AND

 

(IV)                              AS PROMPTLY AS PRACTICABLE AFTER THE REQUEST
THEREFOR BY THE ADMINISTRATIVE AGENT, DELIVER TO THE ADMINISTRATIVE AGENT ANY
EXISTING TITLE REPORTS, SURVEYS OR ENVIRONMENTAL ASSESSMENT REPORTS WITH RESPECT
TO EACH PARCEL OF REAL PROPERTY THAT IS OWNED BY SUCH RESTRICTED SUBSIDIARY AND
HAS A FAIR MARKET VALUE IN EXCESS OF $5,000,000.

 

(B)                                 AFTER THE CLOSING DATE, CONCURRENTLY WITH
(X) THE ACQUISITION OF ANY MATERIAL PERSONAL PROPERTY BY ANY LOAN PARTY OR (Y)
THE ACQUISITION OF ANY OWNED REAL PROPERTY BY ANY LOAN PARTY WITH A FAIR MARKET
VALUE IN EXCESS OF $5,000,000 IF SUCH PERSONAL PROPERTY OR OWNED REAL PROPERTY
SHALL NOT ALREADY BE SUBJECT TO A PERFECTED LIEN PURSUANT TO THE COLLATERAL AND
GUARANTEE REQUIREMENT, THE BORROWER SHALL GIVE NOTICE THEREOF TO THE
ADMINISTRATIVE AGENT AND PROMPTLY THEREAFTER SHALL CAUSE SUCH ASSETS TO BE
SUBJECTED TO A LIEN TO THE EXTENT REQUIRED BY THE COLLATERAL AND GUARANTEE
REQUIREMENT AND WILL TAKE, OR CAUSE THE RELEVANT LOAN PARTY TO TAKE, SUCH
ACTIONS AS SHALL BE NECESSARY OR REASONABLY REQUESTED BY THE ADMINISTRATIVE
AGENT TO GRANT

 

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AND PERFECT OR RECORD SUCH LIEN, INCLUDING, AS APPLICABLE, THE ACTIONS REFERRED
TO IN SECTION 6.13(B) WITH RESPECT TO REAL PROPERTY.

 

(C)                                  IF, AT ANY TIME AND FROM TIME TO TIME AFTER
THE CLOSING DATE, ANY DOMESTIC SUBSIDIARY CEASES TO CONSTITUTE AN IMMATERIAL
SUBSIDIARY IN ACCORDANCE WITH THE DEFINITION OF “IMMATERIAL SUBSIDIARY”, THEN
THE BORROWER SHALL CAUSE SUCH SUBSIDIARY TO BECOME AN ADDITIONAL LOAN PARTY AND
TAKE ALL THE ACTIONS CONTEMPLATED BY SECTION 6.11(A) AS IF SUCH SUBSIDIARY WERE
A NEWLY-FORMED DOMESTIC SUBSIDIARY OF THE BORROWER.

 

(D)                                 IF, AT ANY TIME AFTER THE CLOSING DATE, ANY
RESTRICTED SUBSIDIARY BECOMES AN OBLIGEE OR OBLIGOR OF ANY INTERCOMPANY
INDEBTEDNESS, THEN THE BORROWER SHALL CAUSE SUCH RESTRICTED SUBSIDIARY TO
AUTHORIZE, EXECUTE AND DELIVER A COUNTERPART OF THE INTERCOMPANY NOTE.

 

(E)                                  (I) USE COMMERCIALLY REASONABLE EFFORTS TO
OBTAIN A COLLATERAL ACCESS AGREEMENT FROM ANY PERSON FROM WHOM A LOAN PARTY
ENTERS INTO A LEASE AFTER THE CLOSING DATE FOR A WAREHOUSE OR DISTRIBUTION
CENTER PRIOR TO ENTERING INTO SUCH LEASE, TO THE EXTENT REQUIRED BY THE ABL
COLLATERAL AGENT PURSUANT TO THE TERMS OF ABL CREDIT AGREEMENT, AND (II) USE
COMMERCIALLY REASONABLE EFFORTS TO CAUSE EACH OF ITS CUSTOMS BROKERS TO DELIVER
AN AGREEMENT (INCLUDING, WITHOUT LIMITATION, A CUSTOMS BROKER AGREEMENT) TO THE
COLLATERAL AGENT COVERING SUCH MATTERS AND IN SUCH FORM AS THE COLLATERAL AGENT
MAY REASONABLY REQUIRE, TO THE EXTENT REQUIRED BY THE ABL COLLATERAL AGENT
PURSUANT TO THE TERMS OF THE ABL CREDIT AGREEMENT.

 

SECTION 6.12. Compliance with Environmental Laws. Except, in each case, to the
extent that the failure to do so could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, comply, and take
all reasonable actions to cause all lessees and other Persons operating or
occupying its properties to comply with all applicable Environmental Laws and
Environmental Permits; obtain and renew all Environmental Permits necessary for
its operations and properties; and, in each case to the extent required by
Environmental Laws, conduct any investigation, study, sampling and testing, and
undertake any cleanup, removal, remedial or other action necessary to remove and
clean up all Hazardous Materials from any of its properties, in accordance with
the requirements of all Environmental Laws.

 

SECTION 6.13. Further Assurances and Post-Closing Conditions. (a)  Promptly upon
reasonable request by the Administrative Agent (i) correct any material defect
or error that may be discovered in the execution, acknowledgment, filing or
recordation of any Collateral Document or other document or instrument relating
to any Collateral, and (ii) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such further
acts, deeds, certificates, assurances and other instruments as the
Administrative Agent may reasonably request from time to time in order to carry
out more effectively the purposes of the Collateral Documents.

 

(B)                     IN THE CASE OF ANY REAL PROPERTY REFERRED TO IN
SECTION 6.11(A)(I)(A) OR 6.11(B), PROVIDE THE ADMINISTRATIVE AGENT WITH
MORTGAGES WITH RESPECT TO SUCH OWNED REAL PROPERTY WITHIN THIRTY (30) DAYS OF
THE ACQUISITION OF SUCH REAL PROPERTY, IN EACH CASE TOGETHER WITH:

 

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(I)                                     EVIDENCE THAT COUNTERPARTS OF THE
MORTGAGES HAVE BEEN DULY EXECUTED, ACKNOWLEDGED AND DELIVERED AND ARE IN
FORM SUITABLE FOR FILING OR RECORDING IN ALL FILING OR RECORDING OFFICES THAT
THE ADMINISTRATIVE AGENT MAY DEEM REASONABLY NECESSARY OR DESIRABLE IN ORDER TO
CREATE A VALID AND SUBSISTING PERFECTED LIEN ON THE PROPERTY AND/OR RIGHTS
DESCRIBED THEREIN IN FAVOR OF THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT
(AS APPROPRIATE) FOR THE BENEFIT OF THE SECURED PARTIES AND THAT ALL FILING AND
RECORDING TAXES AND FEES HAVE BEEN PAID OR OTHERWISE PROVIDED FOR IN A MANNER
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT;

 

(II)                                  FULLY PAID AMERICAN LAND TITLE ASSOCIATION
LENDER’S EXTENDED COVERAGE TITLE INSURANCE POLICIES OR THE EQUIVALENT OR OTHER
FORM AVAILABLE IN EACH APPLICABLE JURISDICTION (THE “MORTGAGE POLICIES”) IN
FORM AND SUBSTANCE, WITH ENDORSEMENTS AND IN AMOUNT, REASONABLY ACCEPTABLE TO
THE ADMINISTRATIVE AGENT (NOT TO EXCEED THE VALUE OF THE REAL PROPERTIES COVERED
THEREBY), ISSUED, COINSURED AND REINSURED BY TITLE INSURERS REASONABLY
ACCEPTABLE TO THE ADMINISTRATIVE AGENT, INSURING THE MORTGAGES TO BE VALID
SUBSISTING LIENS ON THE PROPERTY DESCRIBED THEREIN, FREE AND CLEAR OF ALL
DEFECTS AND ENCUMBRANCES, SUBJECT TO LIENS PERMITTED BY SECTION 7.04, AND
PROVIDING FOR SUCH OTHER AFFIRMATIVE INSURANCE (INCLUDING ENDORSEMENTS FOR
FUTURE ADVANCES UNDER THE LOAN DOCUMENTS) AND SUCH COINSURANCE AND DIRECT ACCESS
REINSURANCE AS THE ADMINISTRATIVE AGENT MAY REASONABLY REQUEST;

 

(III)                               OPINIONS OF LOCAL COUNSEL FOR THE LOAN
PARTIES IN STATES IN WHICH SUCH REAL PROPERTIES ARE LOCATED, WITH RESPECT TO THE
ENFORCEABILITY AND PERFECTION OF THE MORTGAGES AND ANY RELATED FIXTURE FILINGS
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT;

 

(IV)                              TO THE EXTENT REQUIRED BY APPLICABLE LAW,
FLOOD CERTIFICATES COVERING EACH MORTGAGED PROPERTY IN FORM AND SUBSTANCE
REASONABLY ACCEPTABLE TO THE COLLATERAL AGENT, CERTIFIED TO THE COLLATERAL AGENT
IN ITS CAPACITY AS SUCH AND CERTIFYING WHETHER OR NOT EACH SUCH MORTGAGED
PROPERTY IS LOCATED IN A FLOOD HAZARD ZONE BY REFERENCE TO THE APPLICABLE FEMA
MAP; AND

 

(V)                                 SUCH OTHER EVIDENCE THAT ALL OTHER ACTIONS
THAT THE ADMINISTRATIVE AGENT MAY REASONABLY DEEM NECESSARY OR DESIRABLE IN
ORDER TO CREATE VALID AND SUBSISTING LIENS ON THE PROPERTY DESCRIBED IN THE
MORTGAGES HAVE BEEN TAKEN.

 

SECTION 6.14. Corporate Separateness.   (a)    Satisfy, and cause each of its
Restricted Subsidiaries and Unrestricted Subsidiaries to satisfy, customary
corporate and other formalities, including, as applicable, the holding of
regular Board of Directors’ meetings or action by directors without a meeting
and the maintenance of corporate offices and records.

 

(B)                                 ENSURE THAT (I) NO BANK ACCOUNT OF ANY
UNRESTRICTED SUBSIDIARY SHALL BE COMMINGLED WITH ANY BANK ACCOUNT OF THE
BORROWER OR ANY OF THE BORROWER’S RESTRICTED SUBSIDIARIES, AND (II) ANY
FINANCIAL STATEMENTS DISTRIBUTED TO ANY CREDITORS OF ANY UNRESTRICTED SUBSIDIARY
SHALL CLEARLY ESTABLISH OR INDICATE THE CORPORATE SEPARATENESS OF SUCH
UNRESTRICTED SUBSIDIARY FROM THE BORROWER AND THE BORROWER’S RESTRICTED
SUBSIDIARIES.

 

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SECTION 6.15. Pension Plans. Each Loan Party shall cause each of its Pension
Plans to be duly qualified and administered in all respects in compliance with,
as applicable, the PBA and all Laws (including regulations, orders and
directives), and the terms of the Pension Plans and any agreements relating
thereto, except for such non-compliance as would not reasonably be expected to
have a Material Adverse Effect. Each Loan Party and each of its Subsidiaries
shall ensure that it, except where failure to do so would not reasonably be
expected to have a Material Adverse Effect (a) has no Unfunded Pension Liability
in respect of any Pension Plan, including any Pension Plan to be established and
administered by it or them; and (b) does not engage in a prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Pension
Plan that could reasonably be expected to result in liability.

 

ARTICLE VII

 

NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder which is accrued and payable shall remain unpaid or
unsatisfied (other than contingent indemnity obligations with respect to then
unasserted claims):

 

SECTION 7.01. Asset Sales. The Borrower shall not, and shall not permit any of
its Restricted Subsidiaries to consummate an Asset Sale, unless:

 

(A)                                  THE BORROWER OR SUCH RESTRICTED SUBSIDIARY,
AS THE CASE MAY BE, RECEIVES CONSIDERATION AT THE TIME OF SUCH ASSET SALE AT
LEAST EQUAL TO THE FAIR MARKET VALUE OF THE ASSETS SOLD OR OTHERWISE DISPOSED
OF; AND

 

(B)                                 EXCEPT IN THE CASE OF A PERMITTED ASSET
SWAP, AT LEAST 75% OF THE CONSIDERATION THEREFOR RECEIVED BY THE BORROWER OR
SUCH RESTRICTED SUBSIDIARY, AS THE CASE MAY BE, IS IN THE FORM OF CASH
EQUIVALENTS; PROVIDED THAT THE AMOUNT OF (I) ANY LIABILITIES (AS SHOWN ON THE
BORROWER’S OR SUCH RESTRICTED SUBSIDIARY’S MOST RECENT BALANCE SHEET OR IN THE
FOOTNOTES THERETO) OF THE BORROWER OR SUCH RESTRICTED SUBSIDIARY, OTHER THAN
LIABILITIES THAT ARE BY THEIR TERMS SUBORDINATED TO THE OBLIGATIONS, THAT ARE
ASSUMED BY THE TRANSFEREE OF ANY SUCH ASSETS AND FOR WHICH THE BORROWER AND ALL
OF ITS RESTRICTED SUBSIDIARIES HAVE BEEN VALIDLY RELEASED BY ALL CREDITORS IN
WRITING, (II) ANY SECURITIES RECEIVED BY THE BORROWER OR SUCH RESTRICTED
SUBSIDIARY FROM SUCH TRANSFEREE THAT ARE CONVERTED BY THE BORROWER OR SUCH
RESTRICTED SUBSIDIARY INTO CASH EQUIVALENTS (TO THE EXTENT OF THE CASH
EQUIVALENTS RECEIVED) WITHIN 180 DAYS FOLLOWING THE CLOSING OF SUCH ASSET SALE,
AND (III) ANY DESIGNATED NON-CASH CONSIDERATION RECEIVED BY THE BORROWER OR SUCH
RESTRICTED SUBSIDIARY IN SUCH ASSET SALE HAVING AN AGGREGATE FAIR MARKET VALUE,
TAKEN TOGETHER WITH ALL OTHER DESIGNATED NON-CASH CONSIDERATION RECEIVED
PURSUANT TO THIS CLAUSE (III) THAT IS AT THAT TIME OUTSTANDING, NOT TO EXCEED
7.5% OF TOTAL ASSETS AT THE TIME OF THE RECEIPT OF SUCH DESIGNATED NON-CASH
CONSIDERATION, WITH THE FAIR MARKET VALUE OF EACH ITEM OF DESIGNATED NON-CASH
CONSIDERATION BEING MEASURED AT THE TIME RECEIVED AND WITHOUT GIVING EFFECT TO
SUBSEQUENT CHANGES IN VALUE, SHALL BE DEEMED TO BE CASH EQUIVALENTS FOR PURPOSES
OF THIS PROVISION AND FOR NO OTHER PURPOSE; AND

 

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(C)                                  AN AMOUNT EQUAL TO 100% OF THE NET PROCEEDS
OF SUCH ASSET SALE ARE APPLIED IN ACCORDANCE WITH THE REQUIREMENTS OF (AND TO
THE EXTENT REQUIRED BY) SECTION 2.05(C).

 

SECTION 7.02. Limitation on Restricted Payments. (a)  The Borrower shall not,
nor shall permit any of its Restricted Subsidiaries to, directly or indirectly,
(w) declare or pay any dividend or make any payment having the effect thereof or
any distribution on account of the Borrower’s, or any Restricted Subsidiary’s,
Equity Interests, including any dividend or distribution payable in connection
with any merger or consolidation other than (A) dividends or distributions by
the Borrower payable solely in Equity Interests (other than Disqualified Stock)
of the Borrower or (B) dividends or distributions by a Restricted Subsidiary so
long as, in the case of any dividend or distribution payable on or in respect of
any class or series of securities issued by a Restricted Subsidiary other than a
Wholly-Owned Subsidiary, the Borrower or a Restricted Subsidiary receives at
least its pro rata share of such dividend or distribution in accordance with its
Equity Interests in such class or series of securities, (x) purchase, redeem,
defease or otherwise acquire or retire for value any Equity Interests of the
Borrower or any direct or indirect parent of the Borrower, including in
connection with any merger, amalgamation or consolidation, (y) make any
principal payment on, or redeem, repurchase, defease or otherwise acquire or
retire for value, in each case prior to any scheduled repayment, sinking fund
payment or maturity, any Subordinated Indebtedness, other than: 
(A) Indebtedness permitted under Section 7.03(b)(vii) or (viii), except to the
extent prohibited by the subordination provisions contained in any Intercompany
Note or (B) the purchase, repurchase or other acquisition of Subordinated
Indebtedness purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year of the
date of purchase, repurchase or acquisition, or (z) make any Restricted
Investment (all such payments and other actions set forth in clauses (w) through
(z) above being collectively referred to as “Restricted Payments”), unless at
the time of such Restricted Payment:

 

(I)                                     NO DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING OR WOULD OCCUR AS A CONSEQUENCE THEREOF;

 

(II)                                  IMMEDIATELY AFTER GIVING EFFECT TO SUCH
TRANSACTION ON A PRO FORMA BASIS, (X) THE BORROWER COULD SATISFY THE FIXED
CHARGE COVERAGE RATIO INCURRENCE TEST AND (Y) THE BORROWER IS IN PRO FORMA
COMPLIANCE WITH SECTION 7.05; AND

 

(III)                               SUCH RESTRICTED PAYMENT, TOGETHER WITH THE
AGGREGATE AMOUNT OF ALL OTHER RESTRICTED PAYMENTS MADE BY THE BORROWER AND ITS
RESTRICTED SUBSIDIARIES AFTER THE CLOSING DATE (INCLUDING RESTRICTED PAYMENTS
PERMITTED BY SECTIONS 7.02(B)(I), 7.02(B)(VI)(C), (IX) AND (XIV), BUT EXCLUDING
ALL OTHER RESTRICTED PAYMENTS PERMITTED BY SECTION 7.02(B)), IS LESS THAN THE
SUM OF (WITHOUT DUPLICATION):

 

(A)                              if, immediately after giving effect to such
Restricted Payment and any related financing transaction on a pro forma basis,
the Consolidated Total Leverage Ratio is less than 6.00 to 1.00, the Cumulative
Retained Excess Cash Flow Amount at such time; plus

 

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(B)                                100% of the aggregate net cash proceeds and
the Fair Market Value, as determined in good faith by the Borrower, of
marketable securities or other property received by the Borrower since
immediately after the Closing Date (other than net cash proceeds to the extent
such net cash proceeds have been used to incur Indebtedness, Disqualified Stock
or Preferred Stock pursuant to Section 7.03(b)(xii)(A)) from the issue or sale
of:

 

(I)  (1) Equity Interests of the Borrower, including Treasury Capital Stock, but
excluding cash proceeds and the Fair Market Value of marketable securities or
other property received from the sale of:

 

(x)                                   Equity Interests to members of management,
directors or consultants of the Borrower, any direct or indirect parent company
of the Borrower and the Borrower’s Subsidiaries after the Closing Date to the
extent such amounts have been applied to Restricted Payments made in accordance
with Section 7.02(b)(iv); and

 

(y)                                 Designated Preferred Stock; and

 

(2)                                  to the extent such net cash proceeds are
actually contributed to the Borrower, Equity Interests of the Borrower’s direct
or indirect parent companies (excluding contributions of the proceeds from the
sale of Designated Preferred Stock of such companies or contributions to the
extent such amounts have been applied to Restricted Payments made in accordance
with Section 7.02(b)(iv)); or

 

(II)                                debt securities of the Borrower that have
been converted into or exchanged for Equity Interests of the Borrower;

 

provided, however, that this clause (B) shall not include the proceeds from (V)
a Permitted Cure Issuance, (W) Refunding Capital Stock (as defined below), (X)
Equity Interests or convertible debt securities of the Borrower sold to a
Restricted Subsidiary, (Y) Disqualified Stock or debt securities that have been
converted into Disqualified Stock or (Z) Excluded Contributions; plus

 

(C)                                100% of the aggregate amount of cash and the
Fair Market Value of marketable securities or other property contributed to the
capital of the Borrower following the Closing Date (other than (x) cash
contributed to the Borrower pursuant to a Permitted Cure Issuance, (y) by a
Restricted Subsidiary and (z) from any Excluded Contributions); plus

 

(D)                               100% of the aggregate amount received in cash
and the Fair Market Value of marketable securities or other property received by
means of:

 

(I)                                    the sale or other disposition (other than
to the Borrower or a Restricted Subsidiary) of Restricted Investments made by
the Borrower or its Restricted Subsidiaries and repurchases and redemptions of
such

 

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Restricted Investments from the Borrower or its Restricted Subsidiaries and
repayments of loans or advances, and releases of guarantees, which constitute
Restricted Investments by the Borrower or its Restricted Subsidiaries, in each
case after the Closing Date; or

 

(II)                                the sale (other than to the Borrower or a
Restricted Subsidiary) of the stock of an Unrestricted Subsidiary or a
distribution from an Unrestricted Subsidiary (other than in each case to the
extent the Investment in such Unrestricted Subsidiary was made by the Borrower
or a Restricted Subsidiary pursuant to Section 7.02(b)(vii) or to the extent
such Investment constituted a Permitted Investment) or a dividend from an
Unrestricted Subsidiary after the Closing Date; plus

 

(E)                                 in the case of the redesignation of an
Unrestricted Subsidiary as a Restricted Subsidiary or the merger, amalgamation
or consolidation of an Unrestricted Subsidiary into the Borrower or a Restricted
Subsidiary or the transfer of all or substantially all of the assets of an
Unrestricted Subsidiary to the Borrower or a Restricted Subsidiary after the
Closing Date, the Fair Market Value of the Investment in such Unrestricted
Subsidiary (or the assets transferred), or if such Fair Market Value may exceed
$125,000,000, as determined in writing by an Independent Financial Advisor, at
the time of the redesignation of such Unrestricted Subsidiary as a Restricted
Subsidiary or at the time of such merger, amalgamation, consolidation or
transfer of assets to the extent the Investment in such Unrestricted Subsidiary
was made by the Borrower or a Restricted Subsidiary pursuant to
Section 7.02(b)(vii) or to the extent such Investment constituted a Permitted
Investment.

 

(B)                                 THE PROVISIONS OF SECTION 7.02(A) WILL NOT
PROHIBIT:

 

(I)                                     THE PAYMENT OF ANY DIVIDEND WITHIN 60
DAYS AFTER THE DATE OF DECLARATION THEREOF, IF AT THE DATE OF DECLARATION SUCH
PAYMENT WOULD HAVE COMPLIED WITH THE PROVISIONS OF THIS AGREEMENT;

 

(II)                                  (A) THE REDEMPTION, REPURCHASE, RETIREMENT
OR OTHER ACQUISITION OF ANY EQUITY INTERESTS (“TREASURY CAPITAL STOCK”) OF THE
BORROWER OR ANY EQUITY INTERESTS OF ANY DIRECT OR INDIRECT PARENT COMPANY OF THE
BORROWER OR ANY SUBORDINATED INDEBTEDNESS OF THE BORROWER OR A RESTRICTED
SUBSIDIARY, IN EXCHANGE FOR, OR OUT OF THE PROCEEDS OF, THE SUBSTANTIALLY
CONCURRENT SALE OR ISSUANCE (OTHER THAN TO A RESTRICTED SUBSIDIARY) OF, EQUITY
INTERESTS OF THE BORROWER OR ANY DIRECT OR INDIRECT PARENT COMPANY OF THE
BORROWER TO THE EXTENT CONTRIBUTED TO THE BORROWER (IN EACH CASE, OTHER THAN ANY
DISQUALIFIED STOCK) (“REFUNDING CAPITAL STOCK”), (B) THE DECLARATION AND PAYMENT
OF DIVIDENDS ON TREASURY CAPITAL STOCK OUT OF THE PROCEEDS OF THE SUBSTANTIALLY
CONCURRENT SALE OR ISSUANCE (OTHER THAN TO A SUBSIDIARY OF THE BORROWER OR TO AN
EMPLOYEE STOCK OWNERSHIP PLAN OR ANY TRUST ESTABLISHED BY THE BORROWER OR ANY OF
ITS SUBSIDIARIES) OF REFUNDING CAPITAL STOCK, AND (C) IF IMMEDIATELY PRIOR TO
THE RETIREMENT OF TREASURY CAPITAL STOCK, THE DECLARATION AND PAYMENT OF
DIVIDENDS THEREON WAS

 

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PERMITTED UNDER SUB-CLAUSE (VI) OF THIS SECTION 7.02(B), THE DECLARATION AND
PAYMENT OF DIVIDENDS ON THE REFUNDING CAPITAL STOCK (OTHER THAN REFUNDING
CAPITAL STOCK THE PROCEEDS OF WHICH WERE USED TO REDEEM, REPURCHASE, RETIRE OR
OTHERWISE ACQUIRE ANY EQUITY INTERESTS OF ANY DIRECT OR INDIRECT PARENT COMPANY
OF THE BORROWER) IN AN AGGREGATE AMOUNT PER YEAR NO GREATER THAN THE AGGREGATE
AMOUNT OF DIVIDENDS PER ANNUM THAT WERE DECLARABLE AND PAYABLE ON SUCH TREASURY
CAPITAL STOCK IMMEDIATELY PRIOR TO SUCH RETIREMENT;

 

(III)                               THE REDEMPTION, REPURCHASE OR OTHER
ACQUISITION OR RETIREMENT OF SUBORDINATED INDEBTEDNESS OF THE BORROWER OR A
SUBSIDIARY GUARANTOR MADE BY EXCHANGE FOR, OR OUT OF THE PROCEEDS OF THE
SUBSTANTIALLY CONCURRENT SALE OF, NEW INDEBTEDNESS OF THE BORROWER OR A
SUBSIDIARY GUARANTOR, AS THE CASE MAY BE, WHICH IS INCURRED IN COMPLIANCE WITH
SECTION 7.03 SO LONG AS (A) THE PRINCIPAL AMOUNT (OR ACCRETED VALUE, IF
APPLICABLE) OF SUCH NEW INDEBTEDNESS DOES NOT EXCEED THE PRINCIPAL AMOUNT OF (OR
ACCRETED VALUE, IF APPLICABLE), PLUS ANY ACCRUED AND UNPAID INTEREST ON, THE
SUBORDINATED INDEBTEDNESS BEING SO REDEEMED, REPURCHASED, EXCHANGED, ACQUIRED OR
RETIRED FOR VALUE, PLUS THE AMOUNT OF ANY PREMIUM REQUIRED TO BE PAID UNDER THE
TERMS OF THE INSTRUMENT GOVERNING THE SUBORDINATED INDEBTEDNESS BEING SO
REDEEMED, REPURCHASED, EXCHANGED, ACQUIRED OR RETIRED AND ANY REASONABLE FEES
AND EXPENSES INCURRED IN CONNECTION WITH SUCH REDEMPTION, REPURCHASE, EXCHANGE,
ACQUISITION OR RETIREMENT AND THE ISSUANCE OF SUCH NEW INDEBTEDNESS, (B) SUCH
NEW INDEBTEDNESS IS SUBORDINATED TO THE OBLIGATIONS AT LEAST TO THE SAME EXTENT
AS SUCH SUBORDINATED INDEBTEDNESS SO REPURCHASED, EXCHANGED, REDEEMED, ACQUIRED
OR RETIRED FOR VALUE, (C) SUCH NEW INDEBTEDNESS HAS A FINAL SCHEDULED MATURITY
DATE EQUAL TO OR LATER THAN THE FINAL SCHEDULED MATURITY DATE OF THE
SUBORDINATED INDEBTEDNESS BEING SO REDEEMED, REPURCHASED, EXCHANGED, ACQUIRED OR
RETIRED, AND (D) SUCH NEW INDEBTEDNESS HAS A WEIGHTED AVERAGE LIFE TO MATURITY
EQUAL TO OR GREATER THAN THE REMAINING WEIGHTED AVERAGE LIFE TO MATURITY OF THE
SUBORDINATED INDEBTEDNESS BEING SO REDEEMED, REPURCHASED, EXCHANGED, ACQUIRED OR
RETIRED;

 

(IV)                              A RESTRICTED PAYMENT TO PAY FOR THE
REPURCHASE, RETIREMENT OR OTHER ACQUISITION OR RETIREMENT FOR VALUE OF EQUITY
INTERESTS (OTHER THAN DISQUALIFIED STOCK) OF THE BORROWER OR ANY OF ITS DIRECT
OR INDIRECT PARENT COMPANIES HELD BY ANY FUTURE, PRESENT OR FORMER EMPLOYEE,
DIRECTOR OR CONSULTANT OF THE BORROWER, ANY OF ITS SUBSIDIARIES OR ANY OF ITS
DIRECT OR INDIRECT PARENT COMPANIES, OR ANY OF THEIR RESPECTIVE ESTATES, SPOUSES
OR FORMER SPOUSES, PURSUANT TO ANY MANAGEMENT EQUITY PLAN OR STOCK OPTION PLAN
OR ANY OTHER MANAGEMENT OR EMPLOYEE BENEFIT PLAN OR AGREEMENT (INCLUDING, FOR
THE AVOIDANCE OF DOUBT, ANY PRINCIPAL AND INTEREST PAYABLE ON ANY NOTES ISSUED
BY THE BORROWER OR ANY DIRECT OR INDIRECT PARENT COMPANY IN CONNECTION WITH ANY
SUCH REPURCHASE, RETIREMENT OR OTHER ACQUISITION OR RETIREMENT); PROVIDED,
HOWEVER, THAT THE AGGREGATE RESTRICTED PAYMENTS MADE UNDER THIS CLAUSE (IV) DO
NOT EXCEED IN ANY CALENDAR YEAR $15,000,000 (WHICH SHALL INCREASE TO $30,000,000
SUBSEQUENT TO THE CONSUMMATION OF AN UNDERWRITTEN PUBLIC EQUITY OFFERING BY THE
BORROWER OR ANY DIRECT OR INDIRECT PARENT COMPANY OF THE BORROWER) WITH UNUSED
AMOUNTS IN ANY CALENDAR YEAR BEING CARRIED OVER TO SUCCEEDING CALENDAR YEARS
SUBJECT TO A

 

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MAXIMUM (WITHOUT GIVING EFFECT TO THE FOLLOWING PROVISO) OF $30,000,000 IN ANY
CALENDAR YEAR (WHICH SHALL INCREASE TO $60,000,000 SUBSEQUENT TO THE
CONSUMMATION OF AN UNDERWRITTEN PUBLIC EQUITY OFFERING BY THE BORROWER OR ANY
DIRECT OR INDIRECT PARENT COMPANY OF THE BORROWER); PROVIDED FURTHER, THAT SUCH
AMOUNT IN ANY CALENDAR YEAR MAY BE INCREASED BY AN AMOUNT NOT TO EXCEED (A) THE
CASH PROCEEDS FROM THE SALE OF EQUITY INTERESTS (OTHER THAN DISQUALIFIED STOCK)
OF THE BORROWER AND, TO THE EXTENT CONTRIBUTED TO THE BORROWER, EQUITY INTERESTS
OF ANY OF THE BORROWER’S DIRECT OR INDIRECT PARENT COMPANIES, IN EACH CASE TO
MEMBERS OF MANAGEMENT, DIRECTORS OR CONSULTANTS OF THE BORROWER, ANY OF ITS
SUBSIDIARIES OR ANY OF ITS DIRECT OR INDIRECT PARENT COMPANIES THAT OCCURS AFTER
THE CLOSING DATE, TO THE EXTENT THE CASH PROCEEDS FROM THE SALE OF SUCH EQUITY
INTERESTS HAVE NOT OTHERWISE BEEN APPLIED TO THE PAYMENT OF RESTRICTED PAYMENTS
BY VIRTUE OF SECTION 7.02(B)(III), PLUS, IN RESPECT OF ANY SALE OF EQUITY
INTERESTS IN CONNECTION WITH AN EXERCISE OF STOCK OPTIONS, AN AMOUNT EQUAL TO
THE AMOUNT REQUIRED TO BE WITHHELD BY THE BORROWER OR ANY OF ITS DIRECT OR
INDIRECT PARENT COMPANIES IN CONNECTION WITH SUCH EXERCISE UNDER APPLICABLE LAW
TO THE EXTENT SUCH AMOUNT IS REPAID TO THE BORROWER OR ITS DIRECT OR INDIRECT
PARENT COMPANY, AS APPLICABLE, CONSTITUTED A RESTRICTED PAYMENT AND HAS NOT
OTHERWISE BEEN APPLIED TO THE PAYMENT OF RESTRICTED PAYMENTS BY VIRTUE OF
SECTION 7.02(B)(III), PLUS (B) THE CASH PROCEEDS OF KEY MAN LIFE INSURANCE
POLICIES RECEIVED BY THE BORROWER OR ITS RESTRICTED SUBSIDIARIES AFTER THE
CLOSING DATE, LESS (C) THE AMOUNT OF ANY RESTRICTED PAYMENTS PREVIOUSLY MADE
WITH THE CASH PROCEEDS DESCRIBED IN CLAUSES (A) AND (B) OF THIS CLAUSE (IV); AND
PROVIDED FURTHER, THAT CANCELLATION OF INDEBTEDNESS OWING TO THE BORROWER FROM
EMPLOYEES, DIRECTORS OR CONSULTANTS OF THE BORROWER, ANY OF THE BORROWER’S
DIRECT OR INDIRECT PARENT COMPANIES OR ANY OF THE BORROWER’S RESTRICTED
SUBSIDIARIES IN CONNECTION WITH A REPURCHASE OF EQUITY INTERESTS OF THE BORROWER
OR ANY OF ITS DIRECT OR INDIRECT PARENT COMPANIES WILL NOT BE DEEMED TO
CONSTITUTE A RESTRICTED PAYMENT FOR PURPOSES OF THIS SECTION 7.02 OR ANY OTHER
PROVISION OF THIS AGREEMENT;

 

(V)                                 THE DECLARATION AND PAYMENT OF DIVIDENDS TO
HOLDERS OF ANY CLASS OR SERIES OF DISQUALIFIED STOCK OF THE BORROWER OR ANY OF
ITS RESTRICTED SUBSIDIARIES ISSUED IN ACCORDANCE WITH SECTION 7.03 TO THE EXTENT
SUCH DIVIDENDS ARE INCLUDED IN THE DEFINITION OF “FIXED CHARGES”;

 

(VI)                              (A) THE DECLARATION AND PAYMENT OF DIVIDENDS
TO HOLDERS OF ANY CLASS OR SERIES OF DESIGNATED PREFERRED STOCK (OTHER THAN
DISQUALIFIED STOCK) ISSUED BY THE BORROWER AFTER THE CLOSING DATE, (B) THE
DECLARATION AND PAYMENT OF DIVIDENDS TO A DIRECT OR INDIRECT PARENT COMPANY OF
THE BORROWER, THE PROCEEDS OF WHICH WILL BE USED TO FUND THE PAYMENT OF
DIVIDENDS TO HOLDERS OF ANY CLASS OR SERIES OF DESIGNATED PREFERRED STOCK (OTHER
THAN DISQUALIFIED STOCK) OF SUCH PARENT COMPANY ISSUED AFTER THE CLOSING DATE,
PROVIDED THAT THE AMOUNT OF DIVIDENDS PAID PURSUANT TO THIS CLAUSE (B) SHALL NOT
EXCEED THE AGGREGATE AMOUNT OF CASH ACTUALLY CONTRIBUTED TO THE BORROWER FROM
THE SALE OF SUCH DESIGNATED PREFERRED STOCK, OR (C) THE DECLARATION AND PAYMENT
OF DIVIDENDS ON REFUNDING CAPITAL STOCK THAT IS PREFERRED STOCK IN EXCESS OF THE
DIVIDENDS DECLARABLE AND PAYABLE THEREON PURSUANT TO SECTION 7.02(B)(II);
PROVIDED, HOWEVER, IN THE CASE OF

 

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EACH OF SECTIONS 7.02(B)(VI)(A), (B) AND (C), THAT FOR THE MOST RECENTLY ENDED
FOUR FULL FISCAL QUARTERS FOR WHICH INTERNAL FINANCIAL STATEMENTS ARE AVAILABLE
IMMEDIATELY PRECEDING THE DATE OF ISSUANCE OF SUCH DESIGNATED PREFERRED STOCK OR
THE DECLARATION OF SUCH DIVIDENDS ON REFUNDING CAPITAL STOCK THAT IS PREFERRED
STOCK, AFTER GIVING EFFECT TO SUCH ISSUANCE OR DECLARATION ON A PRO FORMA BASIS,
(X) THE BORROWER AND ITS RESTRICTED SUBSIDIARIES ON A CONSOLIDATED BASIS WOULD
HAVE HAD A FIXED CHARGE COVERAGE RATIO OF AT LEAST 2.00 TO 1.00 AND (Y) THE
BORROWER IS IN PRO FORMA COMPLIANCE WITH SECTION 7.05;

 

(VII)                           INVESTMENTS IN UNRESTRICTED SUBSIDIARIES HAVING
AN AGGREGATE FAIR MARKET VALUE, TAKEN TOGETHER WITH ALL OTHER INVESTMENTS MADE
PURSUANT TO THIS CLAUSE (VII) THAT ARE AT THE TIME OUTSTANDING, WITHOUT GIVING
EFFECT TO THE SALE OF AN UNRESTRICTED SUBSIDIARY TO THE EXTENT THE PROCEEDS OF
SUCH SALE DO NOT CONSIST OF, OR HAVE NOT BEEN SUBSEQUENTLY SOLD OR TRANSFERRED
FOR, CASH OR MARKETABLE SECURITIES, NOT TO EXCEED $75,000,000 (WITH THE FAIR
MARKET VALUE OF EACH INVESTMENT BEING MEASURED AT THE TIME MADE AND WITHOUT
GIVING EFFECT TO SUBSEQUENT CHANGES IN VALUE); PROVIDED THAT IMMEDIATELY AFTER
GIVING EFFECT TO SUCH INVESTMENT, (I) NO DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING, (II) THE BORROWER IS IN PRO FORMA COMPLIANCE WITH SECTION 7.05
(DETERMINED ON A PRO FORMA BASIS TAKING INTO ACCOUNT SUCH INVESTMENT) AND (III) 
THE CONSOLIDATED TOTAL LEVERAGE RATIO IS LESS THAN 6.00 TO 1.00 (DETERMINED ON A
PRO FORMA BASIS AFTER GIVING EFFECT TO SUCH INVESTMENT);

 

(VIII)                        REPURCHASES OF EQUITY INTERESTS DEEMED TO OCCUR
UPON EXERCISE OF STOCK OPTIONS OR WARRANTS IF SUCH EQUITY INTERESTS REPRESENT A
PORTION OF THE EXERCISE PRICE OF SUCH OPTIONS OR WARRANTS;

 

(IX)                                THE DECLARATION AND PAYMENT OF DIVIDENDS ON
THE BORROWER’S COMMON STOCK (OR THE PAYMENT OF DIVIDENDS TO ANY DIRECT OR
INDIRECT PARENT ENTITY TO FUND A PAYMENT OF DIVIDENDS ON SUCH ENTITY’S COMMON
STOCK), FOLLOWING THE FIRST PUBLIC OFFERING OF THE BORROWER’S COMMON STOCK OR
THE COMMON STOCK OF ANY OF ITS DIRECT OR INDIRECT PARENT COMPANIES AFTER THE
CLOSING DATE, OF UP TO 6% PER ANNUM OF THE NET CASH PROCEEDS RECEIVED BY OR
CONTRIBUTED TO THE BORROWER IN OR FROM ANY PUBLIC OFFERING, OTHER THAN PUBLIC
OFFERINGS WITH RESPECT TO THE BORROWER’S COMMON STOCK REGISTERED ON FORM S-8 AND
OTHER THAN ANY PUBLIC SALE CONSTITUTING AN EXCLUDED CONTRIBUTION;

 

(X)                                   RESTRICTED PAYMENTS THAT ARE MADE WITH
EXCLUDED CONTRIBUTIONS;

 

(XI)                                OTHER RESTRICTED PAYMENTS IN AN AGGREGATE
AMOUNT TAKEN TOGETHER WITH ALL OTHER RESTRICTED PAYMENTS MADE PURSUANT TO THIS
CLAUSE (XI) THAT ARE AT THE TIME OUTSTANDING, WITHOUT GIVING EFFECT TO THE SALE
OF AN INVESTMENT TO THE EXTENT THE PROCEEDS OF SUCH SALE DO NOT CONSIST OF, OR
HAVE NOT BEEN SUBSEQUENTLY SOLD OR TRANSFERRED FOR, CASH OR MARKETABLE
SECURITIES, NOT TO EXCEED $75,000,000 (WITH THE FAIR MARKET VALUE OF EACH
INVESTMENT BEING MEASURED AT THE TIME MADE AND WITHOUT GIVING EFFECT TO
SUBSEQUENT CHANGES IN VALUE); PROVIDED THAT IMMEDIATELY

 

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AFTER GIVING PRO FORMA EFFECT TO SUCH RESTRICTED PAYMENT AND ANY RELATED
FINANCING TRANSACTION, THE CONSOLIDATED TOTAL LEVERAGE RATIO IS LESS THAN 6.00
TO 1.00;

 

(XII)                             DISTRIBUTIONS OR PAYMENTS OF RECEIVABLES FEES;

 

(XIII)                          ANY RESTRICTED PAYMENT USED TO FUND THE
TRANSACTION AND THE FEES AND EXPENSES RELATED THERETO OR OWED TO AFFILIATES, IN
EACH CASE WITH RESPECT TO ANY RESTRICTED PAYMENT TO OR OWED TO AN AFFILIATE TO
THE EXTENT PERMITTED BY THE COVENANT DESCRIBED UNDER SECTION 7.07;

 

(XIV)                         THE REPURCHASE, REDEMPTION OR OTHER ACQUISITION OR
RETIREMENT FOR VALUE OF ANY SUBORDINATED INDEBTEDNESS PURSUANT TO A “CHANGE OF
CONTROL” OFFER TO PURCHASE OR PROVISIONS SIMILAR TO THOSE DESCRIBED UNDER
SECTION 2.05(C); PROVIDED THAT, PRIOR TO SUCH REPURCHASE, REDEMPTION OR OTHER
ACQUISITION, THE BORROWER (OR A THIRD PARTY TO THE EXTENT PERMITTED BY THIS
AGREEMENT) SHALL HAVE (X) IN THE CASE OF A “CHANGE OF CONTROL”, REPAID IN FULL
ALL THEN OUTSTANDING LOANS OR (Y) IN THE CASE OF AN ASSET SALE, MADE AN ASSET
SALE/CASUALTY EVENT OFFER WITH RESPECT TO THE OUTSTANDING LOANS AND REPAID ALL
SUCH LOANS VALIDLY TENDERED FOR PREPAYMENT AND NOT WITHDRAWN IN CONNECTION WITH
SUCH ASSET SALE/CASUALTY EVENT OFFER;

 

(XV)                            THE DECLARATION AND PAYMENT OF DIVIDENDS OR
DISTRIBUTIONS BY THE BORROWER TO, OR THE MAKING OF LOANS TO, ANY DIRECT OR
INDIRECT PARENT COMPANY IN AMOUNTS REQUIRED FOR ANY DIRECT OR INDIRECT PARENT
COMPANIES TO PAY, IN EACH CASE WITHOUT DUPLICATION,

 

(A)  franchise taxes and other fees, taxes and expenses required to maintain
their corporate existence;

 

(B)  federal, state, provincial and local income taxes, to the extent such
income taxes are attributable to the income of the Borrower and its Restricted
Subsidiaries and, to the extent of the amount actually received from its
Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent
attributable to the income of such Unrestricted Subsidiaries; provided that in
each case the amount of such payments in any fiscal year does not exceed the
excess (if any) of (I) the amount that the Borrower and its Restricted
Subsidiaries would be required to pay in respect of federal, state provincial,
municipal and local income taxes for such fiscal year were the Borrower, its
Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent
described above) to pay such taxes separately from any such parent company over
(II) the aggregate federal, state, provincial, municipal and local income taxes
paid by the Borrower and its Restricted Subsidiaries;

 

(C)  customary salary, bonus and other benefits payable to officers and
employees of any direct or indirect parent company of the Borrower to the extent
such salaries, bonuses and other benefits are attributable to the ownership or
operation of the Borrower and its Restricted Subsidiaries;

 

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(D)  general corporate operating and overhead costs and expenses of any direct
or indirect parent company of the Borrower to the extent such costs and expenses
are attributable to the ownership or operation of the Borrower and its
Restricted Subsidiaries; and

 

(E)  fees and expenses other than to Affiliates of the Borrower related to any
unsuccessful equity or debt offering of such parent company;

 

(XVI)                         THE DISTRIBUTION, BY DIVIDEND OR OTHERWISE, OF
SHARES OF CAPITAL STOCK OF, OR INDEBTEDNESS OWED TO THE BORROWER OR A RESTRICTED
SUBSIDIARY BY, UNRESTRICTED SUBSIDIARIES (OTHER THAN UNRESTRICTED SUBSIDIARIES,
THE PRIMARY ASSETS OF WHICH ARE CASH EQUIVALENTS);

 

(XVII)                      CASH PAYMENTS IN LIEU OF THE ISSUANCE OF FRACTIONAL
SHARES IN CONNECTION WITH THE EXERCISE OF WARRANTS, OPTIONS OR OTHER SECURITIES
CONVERTIBLE INTO OR EXCHANGEABLE FOR CAPITAL STOCK OF THE BORROWER OR ANY DIRECT
OR INDIRECT PARENT COMPANY OF THE BORROWER; PROVIDED, THAT ANY SUCH CASH PAYMENT
SHALL NOT BE FOR THE PURPOSE OF EVADING THE LIMITATION OF THIS COVENANT;

 

(XVIII)                   THE PAYMENT OF DIVIDENDS AND OTHER DISTRIBUTIONS IN AN
AMOUNT EQUAL TO ANY REDUCTION IN TAXES ACTUALLY REALIZED BY THE BORROWER AND ITS
RESTRICTED SUBSIDIARIES IN THE FORM OF REFUNDS OR CREDITS OR FROM DEDUCTIONS
WHEN APPLIED TO OFFSET INCOME OR GAIN AS A DIRECT RESULT OF (I) TRANSACTION FEES
AND EXPENSES, (II) COMMITMENT AND OTHER FINANCING FEES OR (III) SEVERANCE,
CHANGE IN CONTROL AND OTHER COMPENSATION EXPENSE INCURRED IN CONNECTION WITH THE
EXERCISE, REPURCHASE, ROLLOVER OR PAYOUT OF STOCK OPTIONS OR BONUSES, IN EACH
CASE IN CONNECTION WITH THE TRANSACTION; AND

 

(XIX)                           MANDATORY REDEMPTIONS OF SUBORDINATED DISCOUNT
NOTES (AND ANY EXCHANGE NOTES ISSUED IN RESPECT THEREOF) PURSUANT TO THE
SUBORDINATED DISCOUNT NOTES INDENTURE DUE TO THE EXISTENCE OF AN AHYDO AMOUNT
(AS DEFINED IN THE  SUBORDINATED DISCOUNT NOTES INDENTURE);

 

provided, however, that at the time of, and after giving effect to, any
Restricted Payment permitted under Sections 7.02(b)(xi), (xvi), (xviii) and
(xix), no Default shall have occurred and be continuing or would occur as a
consequence thereof.

 

(C)                                  THE BORROWER SHALL NOT PERMIT ANY
UNRESTRICTED SUBSIDIARY TO BECOME A RESTRICTED SUBSIDIARY EXCEPT PURSUANT TO THE
PENULTIMATE SENTENCE OF THE DEFINITION OF “UNRESTRICTED SUBSIDIARY”. FOR
PURPOSES OF DESIGNATING ANY RESTRICTED SUBSIDIARY AS AN UNRESTRICTED SUBSIDIARY,
ALL OUTSTANDING INVESTMENTS BY THE BORROWER AND THE RESTRICTED SUBSIDIARIES
(EXCEPT TO THE EXTENT REPAID) IN THE SUBSIDIARY SO DESIGNATED SHALL BE DEEMED TO
BE INVESTMENTS IN AN AMOUNT DETERMINED AS SET FORTH IN THE LAST SENTENCE OF THE
DEFINITION OF “INVESTMENT”. SUCH DESIGNATION SHALL BE PERMITTED ONLY IF A
RESTRICTED PAYMENT IN SUCH AMOUNT WOULD BE PERMITTED AT SUCH TIME, WHETHER
PURSUANT TO SECTION 7.02(A) OR UNDER

 

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SECTIONS 7.02(B)(VII), (X), (XI) OR (XVI), OR PURSUANT TO THE DEFINITION OF
“PERMITTED INVESTMENTS,” AND IF SUCH SUBSIDIARY OTHERWISE MEETS THE DEFINITION
OF AN “UNRESTRICTED SUBSIDIARY”.

 

SECTION 7.03. LIMITATION ON INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
DISQUALIFIED STOCK AND PREFERRED STOCK. (A)  THE BORROWER WILL NOT, AND WILL NOT
PERMIT ANY OF ITS RESTRICTED SUBSIDIARIES TO, DIRECTLY OR INDIRECTLY, CREATE,
INCUR, ISSUE, ASSUME, GUARANTEE OR OTHERWISE BECOME DIRECTLY OR INDIRECTLY
LIABLE, CONTINGENTLY OR OTHERWISE (COLLECTIVELY, “INCUR” AND COLLECTIVELY, AN
“INCURRENCE”) WITH RESPECT TO ANY INDEBTEDNESS (INCLUDING ACQUIRED INDEBTEDNESS)
AND THE BORROWER WILL NOT ISSUE ANY SHARES OF DISQUALIFIED STOCK AND WILL NOT
PERMIT ANY RESTRICTED SUBSIDIARY TO ISSUE ANY SHARES OF DISQUALIFIED STOCK OR
PREFERRED STOCK.

 

(B)                                 THE LIMITATIONS SET FORTH IN
SECTION 7.03(A) SHALL NOT APPLY TO ANY OF THE FOLLOWING ITEMS (COLLECTIVELY,
“PERMITTED DEBT”):

 

(I)                                     (X) INDEBTEDNESS INCURRED PURSUANT TO
THE ABL LOAN DOCUMENTS BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY; PROVIDED
THAT IMMEDIATELY AFTER GIVING EFFECT TO ANY SUCH INCURRENCE, THE AGGREGATE
PRINCIPAL AMOUNT OF ALL INDEBTEDNESS INCURRED UNDER THIS CLAUSE (X) AND THEN
OUTSTANDING DOES NOT EXCEED THE GREATER OF (A) $1,200,000,000 LESS UP TO
$150,000,000 IN THE AGGREGATE OF ALL PRINCIPAL PAYMENTS WITH RESPECT TO SUCH
INDEBTEDNESS MADE FOLLOWING THE CLOSING DATE PURSUANT TO
SECTION 2.05(C)(I) (PROVIDED THAT COMMITMENTS ARE CORRESPONDINGLY REDUCED IN
CONNECTION THEREWITH) LESS THE AGGREGATE PRINCIPAL AMOUNT OF OUTSTANDING
OBLIGATIONS UNDER OR IN RESPECT OF RECEIVABLES FACILITIES AND (B) (I) 90.0% OF
THE ELIGIBLE CREDIT CARD AND DEBIT CARD RECEIVABLES OF THE BORROWER AND ITS
RESTRICTED SUBSIDIARIES PLUS (II) 90% OF THE NET APPRAISED ORDERLY LIQUIDATION
VALUE OF THE ELIGIBLE INVENTORY OF THE BORROWER AND ITS RESTRICTED SUBSIDIARIES
AND (Y) INDEBTEDNESS INCURRED PURSUANT TO THE LOAN DOCUMENTS BY THE BORROWER OR
ANY RESTRICTED SUBSIDIARY;

 

(II)                                  THE INCURRENCE BY THE BORROWER OR ANY
SUBSIDIARY GUARANTOR OF INDEBTEDNESS REPRESENTED BY (A) THE SENIOR NOTES ISSUED
ON THE CLOSING DATE (INCLUDING ANY GUARANTEES THEREOF) AND THE EXCHANGE NOTES
AND RELATED GUARANTEES TO BE ISSUED IN EXCHANGE FOR THE SENIOR NOTES PURSUANT TO
THE REGISTRATION RIGHTS AGREEMENT (OTHER THAN ANY ADDITIONAL NOTES (AS DEFINED
IN THE SENIOR NOTES INDENTURE)), (B) THE SENIOR SUBORDINATED NOTES ISSUED ON THE
CLOSING DATE (INCLUDING ANY GUARANTEES THEREOF) AND THE EXCHANGE NOTES AND
RELATED GUARANTEES TO BE ISSUED IN EXCHANGE FOR THE SENIOR SUBORDINATED NOTES
PURSUANT TO THE REGISTRATION RIGHTS AGREEMENT (OTHER THAN ANY ADDITIONAL NOTES
(AS DEFINED IN THE SENIOR SUBORDINATED NOTES INDENTURE)) AND (C) THE
SUBORDINATED DISCOUNT NOTES ISSUED ON THE CLOSING DATE (INCLUDING ANY GUARANTEES
THEREOF) AND THE EXCHANGE NOTES AND RELATED GUARANTEES TO BE ISSUED IN EXCHANGE
FOR THE SUBORDINATED DISCOUNT NOTES PURSUANT TO THE REGISTRATION RIGHTS
AGREEMENT (OTHER THAN ANY ADDITIONAL NOTES (AS DEFINED IN THE SUBORDINATED
DISCOUNT NOTES INDENTURE));

 

(III)                               INDEBTEDNESS EXISTING ON THE CLOSING DATE
AND SET FORTH IN SCHEDULE 7.03 (OTHER THAN INDEBTEDNESS DESCRIBED IN CLAUSES
(I) AND (II) ABOVE OF THIS SECTION 7.03);

 

(IV)                              (X) INDEBTEDNESS (INCLUDING CAPITALIZED LEASE
OBLIGATIONS) INCURRED, OR DISQUALIFIED STOCK AND PREFERRED STOCK ISSUED, BY THE
BORROWER OR ANY OF ITS RESTRICTED

 

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SUBSIDIARIES, TO FINANCE THE PURCHASE, LEASE OR IMPROVEMENT OF PROPERTY (REAL OR
PERSONAL) OR EQUIPMENT THAT IS USED OR USEFUL IN A SIMILAR BUSINESS, WHETHER
THROUGH THE DIRECT PURCHASE OF ASSETS OR THE CAPITAL STOCK OF ANY PERSON OWNING
SUCH ASSETS AND (Y) ANY INDEBTEDNESS INCURRED OR DISQUALIFIED STOCK OR PREFERRED
STOCK ISSUED TO REFUND, REFINANCE OR REPLACE ANY OTHER INDEBTEDNESS INCURRED OR
DISQUALIFIED STOCK OR PREFERRED STOCK ISSUED PURSUANT TO THIS CLAUSE (IV);
PROVIDED THAT THE AGGREGATE AMOUNT OF INDEBTEDNESS INCURRED AND DISQUALIFIED
STOCK AND PREFERRED STOCK ISSUED PURSUANT TO CLAUSES (X) AND (Y) OF THIS CLAUSE
(IV) DOES NOT EXCEED $125,000,000 AT ANY ONE TIME OUTSTANDING;

 

(V)                                 INDEBTEDNESS INCURRED BY THE BORROWER OR ANY
OF ITS RESTRICTED SUBSIDIARIES CONSTITUTING REIMBURSEMENT OBLIGATIONS WITH
RESPECT TO LETTERS OF CREDIT ISSUED IN THE ORDINARY COURSE OF BUSINESS,
INCLUDING LETTERS OF CREDIT IN RESPECT OF WORKERS’ COMPENSATION CLAIMS, HEALTH,
DISABILITY OR OTHER EMPLOYEE BENEFITS OR PROPERTY, CASUALTY OR LIABILITY
INSURANCE OR SELF-INSURANCE, OR OTHER INDEBTEDNESS WITH RESPECT TO REIMBURSEMENT
TYPE OBLIGATIONS REGARDING WORKERS’ COMPENSATION CLAIMS; PROVIDED, HOWEVER, THAT
UPON THE DRAWING OF SUCH LETTERS OF CREDIT OR THE INCURRENCE OF SUCH
INDEBTEDNESS, SUCH OBLIGATIONS ARE REIMBURSED WITHIN 30 DAYS FOLLOWING SUCH
DRAWING OR INCURRENCE;

 

(VI)                              INDEBTEDNESS ARISING FROM AGREEMENTS OF THE
BORROWER OR ITS RESTRICTED SUBSIDIARIES PROVIDING FOR INDEMNIFICATION,
ADJUSTMENT OF PURCHASE PRICE OR SIMILAR OBLIGATIONS, IN EACH CASE, INCURRED OR
ASSUMED IN CONNECTION WITH THE DISPOSITION OF ANY BUSINESS, ASSETS OR A
SUBSIDIARY, OTHER THAN GUARANTEES OF INDEBTEDNESS INCURRED BY ANY PERSON
ACQUIRING ALL OR ANY PORTION OF SUCH BUSINESS, ASSETS OR A SUBSIDIARY FOR THE
PURPOSE OF FINANCING SUCH ACQUISITION; PROVIDED, HOWEVER, THAT

 

(A)  such Indebtedness is not reflected on the balance sheet of the Borrower or
any of its Restricted Subsidiaries prepared in accordance with GAAP (contingent
obligations referred to in a footnote to financial statements and not otherwise
reflected on the balance sheet will not be deemed to be reflected on such
balance sheet for purposes of this clause (vi)(A)); and

 

(B)  the maximum assumable liability in respect of all such Indebtedness shall
at no time exceed the gross proceeds including non-cash proceeds (the Fair
Market Value of such non-cash proceeds being measured at the time received and
without giving effect to any subsequent changes in value) actually received by
the Borrower and its Restricted Subsidiaries in connection with such
disposition;

 

(VII)                           INDEBTEDNESS OF THE BORROWER TO A RESTRICTED
SUBSIDIARY; PROVIDED THAT ANY SUCH INDEBTEDNESS OWING TO A RESTRICTED SUBSIDIARY
THAT IS NOT A SUBSIDIARY GUARANTOR IS EXPRESSLY SUBORDINATED IN RIGHT OF PAYMENT
TO THE OBLIGATIONS; PROVIDED FURTHER, THAT ANY SUBSEQUENT ISSUANCE OR TRANSFER
OF ANY CAPITAL STOCK OR ANY OTHER EVENT WHICH RESULTS IN ANY RESTRICTED
SUBSIDIARY CEASING TO BE A RESTRICTED SUBSIDIARY OR ANY OTHER SUBSEQUENT
TRANSFER OF ANY SUCH INDEBTEDNESS (EXCEPT TO THE BORROWER OR ANOTHER RESTRICTED
SUBSIDIARY OR ANY PLEDGE OF SUCH INDEBTEDNESS CONSTITUTING A PERMITTED LIEN)
SHALL BE

 

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DEEMED, IN EACH CASE, TO BE AN INCURRENCE OF SUCH INDEBTEDNESS NOT PERMITTED BY
THIS CLAUSE (VII);

 

(VIII)                        INDEBTEDNESS OF A RESTRICTED SUBSIDIARY TO THE
BORROWER OR ANOTHER RESTRICTED SUBSIDIARY; PROVIDED THAT IF A SUBSIDIARY
GUARANTOR INCURS SUCH INDEBTEDNESS TO A RESTRICTED SUBSIDIARY THAT IS NOT A
SUBSIDIARY GUARANTOR, SUCH INDEBTEDNESS IS EXPRESSLY SUBORDINATED IN RIGHT OF
PAYMENT TO THE OBLIGATIONS OF SUCH SUBSIDIARY GUARANTOR UNDER ITS GUARANTY;
PROVIDED FURTHER, THAT ANY SUBSEQUENT ISSUANCE OR TRANSFER OF ANY CAPITAL STOCK
OR ANY OTHER EVENT WHICH RESULTS IN ANY SUCH RESTRICTED SUBSIDIARY CEASING TO BE
A RESTRICTED SUBSIDIARY OR ANY SUBSEQUENT TRANSFER OF ANY SUCH INDEBTEDNESS
(EXCEPT TO THE BORROWER OR ANOTHER RESTRICTED SUBSIDIARY OR ANY PLEDGE OF SUCH
INDEBTEDNESS CONSTITUTING A PERMITTED LIEN) SHALL BE DEEMED, IN EACH CASE, TO BE
AN INCURRENCE OF SUCH INDEBTEDNESS NOT PERMITTED BY THIS CLAUSE (VIII);

 

(IX)                                SHARES OF PREFERRED STOCK OF A RESTRICTED
SUBSIDIARY ISSUED TO THE BORROWER OR ANOTHER RESTRICTED SUBSIDIARY, PROVIDED
THAT ANY SUBSEQUENT ISSUANCE OR TRANSFER OF ANY CAPITAL STOCK OR ANY OTHER EVENT
WHICH RESULTS IN ANY SUCH RESTRICTED SUBSIDIARY CEASING TO BE A RESTRICTED
SUBSIDIARY OR ANY OTHER SUBSEQUENT TRANSFER OF ANY SUCH SHARES OF PREFERRED
STOCK (EXCEPT TO THE BORROWER OR ANOTHER OF ITS RESTRICTED SUBSIDIARIES OR ANY
PLEDGE OF SUCH CAPITAL STOCK CONSTITUTING A PERMITTED LIEN) SHALL BE DEEMED IN
EACH CASE TO BE AN ISSUANCE OF SUCH SHARES OF PREFERRED STOCK NOT PERMITTED BY
THIS CLAUSE (IX);

 

(X)                                   (X) HEDGING OBLIGATIONS (EXCLUDING HEDGING
OBLIGATIONS ENTERED INTO FOR SPECULATIVE PURPOSES) FOR THE PURPOSE OF LIMITING
INTEREST RATE RISK, EXCHANGE RATE RISK OR COMMODITY PRICING RISK AND (Y)
INDEBTEDNESS IN RESPECT OF CASH MANAGEMENT SERVICES PROVIDED BY ANY LENDER OR
ANY ABL LENDER OR ANY AFFILIATE OF ANY SUCH LENDER (OR ANY PERSON THAT WAS A
LENDER, AN ABL LENDER OR AN AFFILIATE OF ANY SUCH LENDER AT THE TIME THE
APPLICABLE AGREEMENT PURSUANT TO WHICH SUCH CASH MANAGEMENT SERVICES ARE
PROVIDED WAS ENTERED INTO);

 

(XI)                                OBLIGATIONS IN RESPECT OF PERFORMANCE, BID,
APPEAL AND SURETY BONDS AND PERFORMANCE AND COMPLETION GUARANTEES OR OBLIGATIONS
IN RESPECT OF LETTERS OF CREDIT RELATED THERETO PROVIDED BY THE BORROWER OR ANY
OF ITS RESTRICTED SUBSIDIARIES IN THE ORDINARY COURSE OF BUSINESS;

 

(XII)                             INDEBTEDNESS OR DISQUALIFIED STOCK OF THE
BORROWER AND INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED STOCK OF THE BORROWER
OR ANY RESTRICTED SUBSIDIARY NOT OTHERWISE PERMITTED HEREUNDER IN AN AGGREGATE
PRINCIPAL AMOUNT OR LIQUIDATION PREFERENCE, WHICH WHEN AGGREGATED WITH THE
PRINCIPAL AMOUNT AND LIQUIDATION PREFERENCE OF ALL OTHER INDEBTEDNESS,
DISQUALIFIED STOCK AND PREFERRED STOCK THEN OUTSTANDING AND INCURRED PURSUANT TO
THIS CLAUSE (XII), DOES NOT AT ANY ONE TIME OUTSTANDING EXCEED $125,000,000;

 

(XIII)                          THE INCURRENCE BY THE BORROWER OR ANY RESTRICTED
SUBSIDIARY OF INDEBTEDNESS OR ISSUANCE BY THE BORROWER OR ANY RESTRICTED
SUBSIDIARY OF DISQUALIFIED STOCK OR PREFERRED STOCK WHICH SERVES TO REFUND OR
REFINANCE ANY INDEBTEDNESS INCURRED

 

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OR DISQUALIFIED STOCK OR PREFERRED STOCK ISSUED AS PERMITTED UNDER SECTIONS
7.03(B)(II) AND (III) ABOVE, THIS CLAUSE (XIII) AND SECTION 7.03(B)(XIV) BELOW
OR ANY INDEBTEDNESS INCURRED OR DISQUALIFIED STOCK OR PREFERRED STOCK ISSUED TO
SO REFUND OR REFINANCE SUCH INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED STOCK
INCLUDING ADDITIONAL INDEBTEDNESS INCURRED OR DISQUALIFIED STOCK OR PREFERRED
STOCK ISSUED TO PAY PREMIUMS (INCLUDING TENDER PREMIUMS), DEFEASANCE COSTS AND
FEES IN CONNECTION THEREWITH (THE “REFINANCING INDEBTEDNESS”) PRIOR TO ITS
RESPECTIVE MATURITY; PROVIDED, HOWEVER, THAT SUCH REFINANCING INDEBTEDNESS
(A) HAS A WEIGHTED AVERAGE LIFE TO MATURITY AT THE TIME SUCH REFINANCING
INDEBTEDNESS IS INCURRED WHICH IS NOT LESS THAN THE REMAINING WEIGHTED AVERAGE
LIFE TO MATURITY OF THE INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED STOCK
BEING REFUNDED OR REFINANCED, (B) TO THE EXTENT SUCH REFINANCING INDEBTEDNESS
REFINANCES (I) INDEBTEDNESS SUBORDINATED OR PARI PASSU TO THE OBLIGATIONS OR THE
GUARANTY OF ANY SUBSIDIARY GUARANTOR, SUCH REFINANCING INDEBTEDNESS IS
SUBORDINATED OR PARI PASSU TO THE OBLIGATIONS OR SUCH GUARANTY, AS THE CASE
MAY BE, AT LEAST TO THE SAME EXTENT AS THE INDEBTEDNESS BEING REFINANCED OR
REFUNDED OR (II) DISQUALIFIED STOCK OR PREFERRED STOCK, SUCH REFINANCING
INDEBTEDNESS MUST BE DISQUALIFIED STOCK OR PREFERRED STOCK, RESPECTIVELY, AND
(C) SHALL NOT INCLUDE (I) INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED STOCK OF
A SUBSIDIARY OF THE BORROWER THAT IS NOT A SUBSIDIARY GUARANTOR THAT REFINANCES
INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED STOCK OF THE BORROWER, (II)
INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED STOCK OF A SUBSIDIARY OF THE
BORROWER THAT IS NOT A SUBSIDIARY GUARANTOR THAT REFINANCES INDEBTEDNESS,
DISQUALIFIED STOCK OR PREFERRED STOCK OF A SUBSIDIARY GUARANTOR, OR (III)
INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED STOCK OF THE BORROWER OR A
RESTRICTED SUBSIDIARY THAT REFINANCES INDEBTEDNESS, DISQUALIFIED STOCK OR
PREFERRED STOCK OF AN UNRESTRICTED SUBSIDIARY, AND PROVIDED FURTHER, THAT
SUBCLAUSE (A) OF THIS CLAUSE (XIII) WILL NOT APPLY TO ANY REFUNDING OR
REFINANCING OF ANY INDEBTEDNESS OUTSTANDING UNDER THE ABL CREDIT AGREEMENT;

 

(XIV)                         INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED
STOCK OF (X) THE BORROWER OR A RESTRICTED SUBSIDIARY INCURRED OR ISSUED TO
FINANCE AN ACQUISITION OR (Y) PERSONS THAT ARE ACQUIRED BY THE BORROWER OR ANY
RESTRICTED SUBSIDIARY OR MERGED INTO OR AMALGAMATED OR CONSOLIDATED WITH THE
BORROWER OR A RESTRICTED SUBSIDIARY IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT; PROVIDED THAT AFTER GIVING EFFECT TO SUCH ACQUISITION, MERGER,
AMALGAMATION OR CONSOLIDATION, EITHER (A) THE BORROWER COULD SATISFY THE FIXED
CHARGE COVERAGE RATIO INCURRENCE TEST, OR (B) THE FIXED CHARGE COVERAGE RATIO OF
THE BORROWER AND ITS RESTRICTED SUBSIDIARIES IS GREATER THAN IMMEDIATELY PRIOR
TO SUCH ACQUISITION, MERGER, AMALGAMATION OR CONSOLIDATION;

 

(XV)                            INDEBTEDNESS ARISING FROM THE HONORING BY A BANK
OR OTHER FINANCIAL INSTITUTION OF A CHECK, DRAFT OR SIMILAR INSTRUMENT DRAWN
AGAINST INSUFFICIENT FUNDS IN THE ORDINARY COURSE OF BUSINESS; PROVIDED THAT
SUCH INDEBTEDNESS IS EXTINGUISHED WITHIN FIVE BUSINESS DAYS OF ITS INCURRENCE;

 

(XVI)                         INDEBTEDNESS OF THE BORROWER OR ANY OF ITS
RESTRICTED SUBSIDIARIES SUPPORTED BY A LETTER OF CREDIT ISSUED PURSUANT TO THE
ABL CREDIT AGREEMENT, IN A PRINCIPAL AMOUNT NOT IN EXCESS OF THE STATED AMOUNT
OF SUCH LETTER OF CREDIT;

 

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(XVII)                      (A) ANY GUARANTEE BY THE BORROWER OR A RESTRICTED
SUBSIDIARY OF INDEBTEDNESS OR OTHER OBLIGATIONS OF ANY RESTRICTED SUBSIDIARY, SO
LONG AS THE INCURRENCE OF SUCH INDEBTEDNESS BY SUCH RESTRICTED SUBSIDIARY IS
PERMITTED UNDER THE TERMS OF THIS AGREEMENT OR (B) ANY GUARANTEE BY A RESTRICTED
SUBSIDIARY OF INDEBTEDNESS OF THE BORROWER PERMITTED TO BE INCURRED UNDER THE
TERMS OF THIS AGREEMENT; PROVIDED THAT SUCH GUARANTEE IS INCURRED IN ACCORDANCE
WITH SECTION 7.09;

 

(XVIII)                   INDEBTEDNESS OF FOREIGN SUBSIDIARIES OF THE BORROWER
INCURRED NOT TO EXCEED, TOGETHER WITH ANY OTHER INDEBTEDNESS INCURRED UNDER THIS
CLAUSE (XVIII), AT ANY TIME OUTSTANDING THE GREATER OF (X) $75,000,000 AND (Y)
10.0% OF TOTAL ASSETS OF FOREIGN SUBSIDIARIES;

 

(XIX)                           INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED
STOCK OF A RESTRICTED SUBSIDIARY INCURRED OR ISSUED TO FINANCE OR ASSUMED IN
CONNECTION WITH AN ACQUISITION, AND (B) INDEBTEDNESS INCURRED TO REFUND,
REFINANCE OR REPLACE ANY OTHER INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED
STOCK PERMITTED UNDER THIS CLAUSE (XIX), IN EACH CASE IN AN AGGREGATE PRINCIPAL
AMOUNT NOT TO EXCEED, TOGETHER WITH ALL OTHER INDEBTEDNESS, DISQUALIFIED STOCK
AND/OR PREFERRED STOCK ISSUED UNDER THIS CLAUSE (XIX), $100,000,000 IN THE
AGGREGATE AT ANY ONE TIME OUTSTANDING; PROVIDED THAT ANY INDEBTEDNESS INCURRED
PURSUANT TO PRECEDING CLAUSE (B) SHALL SATISFY THE REQUIREMENTS OF “REFINANCING
INDEBTEDNESS” SET FORTH IN THE PROVISO APPEARING IN SECTION 7.03(B)(XIII) TO THE
SAME EXTENT AS IF SUCH PROVISO WERE SET FORTH IN ITS ENTIRETY IN THIS CLAUSE
(XIX);

 

(XX)                              INDEBTEDNESS OF THE BORROWER OR ANY OF ITS
RESTRICTED SUBSIDIARIES CONSISTING OF (X) THE FINANCING OF INSURANCE PREMIUMS OR
(Y) TAKE-OR-PAY OBLIGATIONS CONTAINED IN SUPPLY ARRANGEMENTS IN EACH CASE,
INCURRED IN THE ORDINARY COURSE OF BUSINESS; AND

 

(XXI)                           INDEBTEDNESS CONSISTING OF INDEBTEDNESS ISSUED
BY THE BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES TO CURRENT OR FORMER
OFFICERS, DIRECTORS, EMPLOYEES AND CONSULTANTS THEREOF, THEIR RESPECTIVE
ESTATES, SPOUSES OR FORMER SPOUSES, IN EACH CASE TO FINANCE THE PURCHASE OR
REDEMPTION OF EQUITY INTERESTS OF THE BORROWER OR ANY DIRECT OR INDIRECT PARENT
COMPANY OF THE BORROWER TO THE EXTENT DESCRIBED IN SECTION 7.02(B)(IV).

 

(C)                                  FOR PURPOSES OF DETERMINING COMPLIANCE WITH
THIS COVENANT:

 

(I)                                     IN THE EVENT THAT AN ITEM OF
INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED STOCK (OR ANY PORTION THEREOF)
MEETS THE CRITERIA OF MORE THAN ONE OF THE CATEGORIES OF PERMITTED INDEBTEDNESS,
DISQUALIFIED STOCK OR PREFERRED STOCK DESCRIBED IN SECTIONS 7.03(B)(I) THROUGH
(XXI) ABOVE, THE BORROWER, IN ITS SOLE DISCRETION, WILL CLASSIFY OR RECLASSIFY
SUCH ITEM OF INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED STOCK (OR ANY PORTION
THEREOF) AND WILL ONLY BE REQUIRED TO INCLUDE THE AMOUNT AND TYPE OF SUCH
INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED STOCK IN ONE OF THE ABOVE CLAUSES;
PROVIDED THAT ALL INDEBTEDNESS OUTSTANDING UNDER THE ABL LOAN DOCUMENTS AND THE
LOAN DOCUMENTS ON THE CLOSING DATE WILL AT ALL TIMES BE DEEMED TO BE OUTSTANDING
IN RELIANCE ON SECTION 7.03(B)(I); AND

 

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(II)                                  AT THE TIME OF INCURRENCE, THE BORROWER
WILL BE ENTITLED TO DIVIDE AND CLASSIFY AN ITEM OF INDEBTEDNESS IN MORE THAN ONE
OF THE TYPES OF INDEBTEDNESS DESCRIBED IN SECTION 7.03(B) ABOVE.

 

(D)                                 THE ACCRUAL OF INTEREST, THE ACCRETION OF
ACCRETED VALUE AND THE PAYMENT OF INTEREST IN THE FORM OF ADDITIONAL
INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED STOCK WILL NOT BE DEEMED TO BE AN
INCURRENCE OF INDEBTEDNESS, DISQUALIFIED STOCK OR PREFERRED STOCK FOR PURPOSES
OF THIS SECTION 7.03.

 

(E)                                  FOR PURPOSES OF DETERMINING COMPLIANCE WITH
ANY DOLLAR-DENOMINATED RESTRICTION ON THE INCURRENCE OF INDEBTEDNESS, THE
DOLLAR-EQUIVALENT PRINCIPAL AMOUNT OF INDEBTEDNESS DENOMINATED IN A FOREIGN
CURRENCY SHALL BE CALCULATED BASED ON THE RELEVANT CURRENCY EXCHANGE RATE IN
EFFECT ON THE DATE SUCH INDEBTEDNESS WAS INCURRED, IN THE CASE OF TERM DEBT, OR
FIRST COMMITTED, IN THE CASE OF REVOLVING CREDIT DEBT; PROVIDED THAT IF SUCH
INDEBTEDNESS IS INCURRED TO REFINANCE OTHER INDEBTEDNESS DENOMINATED IN A
FOREIGN CURRENCY, AND SUCH REFINANCING WOULD CAUSE THE APPLICABLE
DOLLAR-DENOMINATED RESTRICTION TO BE EXCEEDED IF CALCULATED AT THE RELEVANT
CURRENCY EXCHANGE RATE IN EFFECT ON THE DATE OF SUCH REFINANCING, SUCH
DOLLAR-DENOMINATED RESTRICTION SHALL BE DEEMED NOT TO HAVE BEEN EXCEEDED SO LONG
AS THE PRINCIPAL AMOUNT OF SUCH REFINANCING INDEBTEDNESS DOES NOT EXCEED THE
PRINCIPAL AMOUNT OF SUCH INDEBTEDNESS BEING REFINANCED.

 

(F)                                    THE PRINCIPAL AMOUNT OF ANY INDEBTEDNESS
INCURRED TO REFINANCE OTHER INDEBTEDNESS, IF INCURRED IN A DIFFERENT CURRENCY
FROM THE INDEBTEDNESS BEING REFINANCED, SHALL BE CALCULATED BASED ON THE
CURRENCY EXCHANGE RATE APPLICABLE TO THE CURRENCIES IN WHICH SUCH RESPECTIVE
INDEBTEDNESS IS DENOMINATED THAT IS IN EFFECT ON THE DATE OF SUCH REFINANCING.

 

SECTION 7.04. Liens. The Borrower will not, and will not permit any Subsidiary
Guarantor to, directly or indirectly, create, incur, assume or suffer to exist
any Lien on any asset or property of the Borrower or any Subsidiary Guarantor
now owned or hereafter acquired, or any income or profits therefrom, or assign
or convey any right to receive income therefrom, except:

 

(A)                                  IN THE CASE OF THE TL PRIORITY COLLATERAL,
ANY PERMITTED COLLATERAL LIEN;

 

(B)                                 IN THE CASE OF THE ABL PRIORITY COLLATERAL
OR ANY OTHER ASSET OR PROPERTY, ANY PERMITTED LIEN.

 

SECTION 7.05. Consolidated Secured Debt Ratio. Permit the ratio of (a) the
Consolidated Total Indebtedness of the Borrower and its Restricted Subsidiaries
that is secured by Liens as at the last day of any Test Period set forth below
to (b) the Borrower’s EBITDA for such Test Period, in each case with such pro
forma adjustments to EBITDA as are appropriate and consistent with the pro forma
adjustment provisions set forth in the definition of Fixed Charge Coverage
Ratio, to be greater than the ratio set forth below opposite such Relevant
Reference Period below:

 

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Calendar Year
Ended

 

Test Period
Ended Closest to
January 31

 

Test Period
Ended Closest to
April 30

 

Test Period
Ended Closest to
July 31

 

Test Period
Ended Closest to
October 31

 

2008

 

5.95:1.00

 

5.95:1.00

 

5.95:1.00

 

5.95:1.00

 

2009

 

5.95:1.00

 

5.50:1.00

 

5.50:1.00

 

5.50:1.00

 

2010

 

5.50:1.00

 

5.00:1.00

 

5.00:1.00

 

5.00:1.00

 

2011

 

5.00:1.00

 

4.50:1.00

 

4.50:1.00

 

4.50:1.00

 

2012

 

4.50:1.00

 

4.00:1.00

 

4.00:1.00

 

4.00:1.00

 

2013

 

4.00:1.00

 

4.00:1.00

 

4.00:1.00

 

4.00:1.00

 

 

SECTION 7.06. MERGER, AMALGAMATION, CONSOLIDATION OR SALE OF ALL OR
SUBSTANTIALLY ALL ASSETS. (A)  THE BORROWER MAY NOT CONSOLIDATE, MERGE OR
AMALGAMATE WITH OR INTO OR WIND UP INTO (WHETHER OR NOT THE BORROWER IS THE
SURVIVING CORPORATION), OR SELL, ASSIGN, TRANSFER, LEASE, CONVEY OR OTHERWISE
DISPOSE OF ALL OR SUBSTANTIALLY ALL OF ITS PROPERTIES OR ASSETS, IN ONE OR MORE
RELATED TRANSACTIONS, TO ANY PERSON UNLESS:

 

(I)                                     THE BORROWER IS THE SURVIVING
CORPORATION OR THE PERSON FORMED BY OR SURVIVING ANY SUCH CONSOLIDATION OR
MERGER (IF OTHER THAN THE BORROWER) OR TO WHICH SUCH SALE, ASSIGNMENT, TRANSFER,
LEASE, CONVEYANCE OR OTHER DISPOSITION WILL HAVE BEEN MADE IS A CORPORATION
ORGANIZED OR EXISTING UNDER THE LAWS OF THE JURISDICTION OF ORGANIZATION OF THE
BORROWER OR THE LAWS OF THE UNITED STATES, ANY STATE THEREOF OR THE DISTRICT OF
COLUMBIA (OR ANY TERRITORY THEREOF) (THE BORROWER OR SUCH PERSON, AS THE CASE
MAY BE, BEING HEREIN CALLED THE “SUCCESSOR BORROWER”);

 

(II)                                  THE SUCCESSOR BORROWER, IF OTHER THAN THE
BORROWER, EXPRESSLY ASSUMES ALL THE OBLIGATIONS OF THE BORROWER UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS PURSUANT TO SUPPLEMENTS TO THE LOAN
DOCUMENTS OR OTHER DOCUMENTS OR INSTRUMENTS, IN EACH CASE IN A FORM REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT;

 

(III)                               IMMEDIATELY AFTER SUCH TRANSACTION, NO
DEFAULT EXISTS;

 

(IV)                              IMMEDIATELY AFTER GIVING PRO FORMA EFFECT TO
SUCH TRANSACTION AND ANY RELATED FINANCING TRANSACTIONS, AS IF SUCH TRANSACTIONS
HAD OCCURRED AT THE BEGINNING OF THE APPLICABLE FOUR-QUARTER PERIOD, (A) EITHER
(1) THE SUCCESSOR BORROWER COULD SATISFY THE FIXED CHARGE COVERAGE RATIO
INCURRENCE TEST OR (2) THE FIXED CHARGE COVERAGE RATIO FOR THE SUCCESSOR
BORROWER WOULD BE GREATER THAN THE FIXED CHARGE COVERAGE RATIO FOR THE BORROWER
AND ITS RESTRICTED SUBSIDIARIES IMMEDIATELY PRIOR TO SUCH TRANSACTION AND
(B) THE SUCCESSOR BORROWER IS IN PRO FORMA COMPLIANCE WITH SECTION 7.05;

 

(V)                                 EACH RESTRICTED SUBSIDIARY THAT IS A
SUBSIDIARY GUARANTOR, UNLESS IT IS THE OTHER PARTY TO THE TRANSACTIONS DESCRIBED
ABOVE, IN WHICH CASE SECTION 7.06(C)(I)(B) SHALL APPLY, SHALL HAVE BY SUPPLEMENT
TO THE LOAN DOCUMENTS CONFIRMED THAT ITS GUARANTY SHALL APPLY TO SUCH PERSON’S
OBLIGATIONS UNDER THE LOAN DOCUMENTS AND THE LOANS; AND

 

(VI)                              THE BORROWER SHALL HAVE DELIVERED TO THE
ADMINISTRATIVE AGENT AN OFFICER’S CERTIFICATE AND AN OPINION OF COUNSEL, EACH
STATING THAT SUCH CONSOLIDATION,

 

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MERGER OR TRANSFER AND SUCH SUPPLEMENTS TO THE LOAN DOCUMENTS, IF ANY, COMPLY
WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

(B)                                 THE SUCCESSOR BORROWER WILL SUCCEED TO, AND
BE SUBSTITUTED FOR THE BORROWER, AS THE CASE MAY BE, UNDER THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS. THE FOREGOING CLAUSES (III), (IV), (V) AND (VI) OF
SECTION 7.06(A) SHALL NOT APPLY TO THE MERGER CONTEMPLATED BY THE
RECAPITALIZATION AGREEMENT. NOTWITHSTANDING SECTION 7.06(A)(III) AND (IV),
(I) ANY RESTRICTED SUBSIDIARY MAY CONSOLIDATE WITH OR MERGE INTO OR TRANSFER ALL
OR PART OF ITS PROPERTIES AND ASSETS TO THE BORROWER, AND (II) THE BORROWER
MAY MERGE WITH AN AFFILIATE OF THE BORROWER, AS THE CASE MAY BE, SOLELY FOR THE
PURPOSE OF REINCORPORATING THE BORROWER IN A STATE OF THE UNITED STATES, SO LONG
AS THE AMOUNT OF INDEBTEDNESS OF THE BORROWER AND ITS RESTRICTED SUBSIDIARIES IS
NOT INCREASED THEREBY.

 

(C)                                  NO GUARANTOR WILL, AND THE BORROWER WILL
NOT PERMIT ANY GUARANTOR (OTHER THAN THE BORROWER) TO, CONSOLIDATE, MERGE OR
AMALGAMATE WITH OR INTO OR WIND UP INTO (WHETHER OR NOT THE BORROWER OR A
GUARANTOR IS THE SURVIVING CORPORATION), OR SELL, ASSIGN, TRANSFER, LEASE,
CONVEY OR OTHERWISE DISPOSE OF ALL OR SUBSTANTIALLY ALL OF ITS PROPERTIES OR
ASSETS, IN ONE OR MORE RELATED TRANSACTIONS, TO ANY PERSON UNLESS:

 

(I)                                     (A)  SUCH GUARANTOR IS THE SURVIVING
CORPORATION OR THE PERSON FORMED BY OR SURVIVING ANY SUCH CONSOLIDATION OR
MERGER (IF OTHER THAN SUCH GUARANTOR) OR TO WHICH SUCH SALE, ASSIGNMENT,
TRANSFER, LEASE, CONVEYANCE OR OTHER DISPOSITION WILL HAVE BEEN MADE IS A
CORPORATION ORGANIZED OR EXISTING UNDER THE LAWS OF THE JURISDICTION OF
ORGANIZATION OF SUCH GUARANTOR, AS THE CASE MAY BE, OR THE LAWS OF THE UNITED
STATES, ANY STATE THEREOF OR THE DISTRICT OF COLUMBIA OR ANY TERRITORY THEREOF
OR, IN THE CASE OF A CANADIAN SUBSIDIARY GUARANTOR, A PROVINCE OR TERRITORY OF
CANADA (SUCH GUARANTOR OR SUCH PERSON, AS THE CASE MAY BE, BEING HEREIN CALLED
THE “SUCCESSOR GUARANTOR”);

 

(B)  the Successor Guarantor, if other than such Guarantor, expressly assumes
all the obligations of such Guarantor under the Guaranty and the other Loan
Documents pursuant to a joinder agreement and/or supplements to the Loan
Documents or other documents or instruments, in each case in a form reasonably
satisfactory to the Administrative Agent;

 

(C)  immediately after such transaction, no Default exists;

 

(D)  the Borrower shall have delivered to the Administrative Agent an Officer’s
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such joinder agreement, supplements and/or other
documents or instruments, if any, comply with this Agreement and the other Loan
Documents; and

 

(E)  if a consolidation, merger or amalgamation includes any Canadian Subsidiary
and such Canadian Subsidiary is not the surviving entity, such transaction shall
be on terms conditions reasonably satisfactory to the Administrative Agent
(whose consent shall not be unreasonably withheld); or

 

(II)                                  THE TRANSACTION IS MADE IN COMPLIANCE WITH
SECTION 7.01.

 

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(D)                                 IN THE CASE OF SECTION 7.06(C)(I), THE
SUCCESSOR GUARANTOR WILL SUCCEED TO, AND BE SUBSTITUTED FOR, SUCH GUARANTOR
UNDER SUCH GUARANTOR’S GUARANTY AND THE OTHER LOAN DOCUMENTS. NOTWITHSTANDING
THE FOREGOING, ANY SUBSIDIARY GUARANTOR MAY MERGE OR AMALGAMATE INTO OR WITH OR
WIND UP INTO OR TRANSFER ALL OR PART OF ITS PROPERTIES AND ASSETS TO ANOTHER
SUBSIDIARY GUARANTOR OR THE BORROWER.

 

SECTION 7.07. TRANSACTIONS WITH AFFILIATES. (A)  THE BORROWER WILL NOT, AND WILL
NOT PERMIT ANY OF ITS RESTRICTED SUBSIDIARIES TO, MAKE ANY PAYMENT TO, OR SELL,
LEASE, TRANSFER OR OTHERWISE DISPOSE OF ANY OF ITS PROPERTIES OR ASSETS TO, OR
PURCHASE ANY PROPERTY OR ASSETS FROM, OR ENTER INTO OR MAKE OR AMEND ANY
TRANSACTION, CONTRACT, AGREEMENT, UNDERSTANDING, LOAN, ADVANCE OR GUARANTEE
WITH, OR FOR THE BENEFIT OF, ANY AFFILIATE OF THE BORROWER (EACH OF THE
FOREGOING, AN “AFFILIATE TRANSACTION”) INVOLVING AGGREGATE PAYMENTS OR
CONSIDERATION IN EXCESS OF $10,000,000, UNLESS:  (I) SUCH AFFILIATE TRANSACTION
IS ON TERMS THAT ARE NOT MATERIALLY LESS FAVORABLE TO THE BORROWER OR ITS
RELEVANT RESTRICTED SUBSIDIARY THAN THOSE THAT WOULD HAVE BEEN OBTAINED IN A
COMPARABLE TRANSACTION BY THE BORROWER OR SUCH RESTRICTED SUBSIDIARY WITH AN
UNRELATED PERSON ON AN ARM’S-LENGTH BASIS, AND (II) THE BORROWER DELIVERS TO THE
ADMINISTRATIVE AGENT WITH RESPECT TO ANY AFFILIATE TRANSACTION OR SERIES OF
RELATED AFFILIATE TRANSACTIONS INVOLVING AGGREGATE PAYMENTS OR CONSIDERATION IN
EXCESS OF $30,000,000, A RESOLUTION ADOPTED BY THE MAJORITY OF THE BOARD OF
DIRECTORS OF THE BORROWER APPROVING SUCH AFFILIATE TRANSACTION AND SET FORTH IN
AN OFFICER’S CERTIFICATE CERTIFYING THAT SUCH AFFILIATE TRANSACTION COMPLIES
WITH CLAUSE (I) ABOVE.

 

(B)                                 THE LIMITATIONS SET FORTH IN
SECTION 7.07(A) WILL NOT APPLY TO THE FOLLOWING:

 

(I)                                     TRANSACTIONS BETWEEN OR AMONG THE
BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES;

 

(II)                                  RESTRICTED PAYMENTS PERMITTED BY THE
PROVISIONS OF SECTION 7.02 AND INVESTMENTS CONSTITUTING “PERMITTED INVESTMENTS”;

 

(III)                               THE PAYMENT OF MANAGEMENT, CONSULTING,
MONITORING AND ADVISORY FEES AND TERMINATION FEES AND RELATED INDEMNITIES AND
EXPENSES PURSUANT TO THE SPONSOR MANAGEMENT AGREEMENT;

 

(IV)                              THE PAYMENT OF REASONABLE AND CUSTOMARY FEES
AND COMPENSATION PAID TO, AND INDEMNITIES AND REIMBURSEMENTS PROVIDED ON BEHALF
OF, OFFICERS, DIRECTORS, EMPLOYEES OR CONSULTANTS OF BORROWER, ANY OF ITS DIRECT
OR INDIRECT PARENT COMPANIES OR ANY OF ITS RESTRICTED SUBSIDIARIES;

 

(V)                                 TRANSACTIONS IN WHICH THE BORROWER OR ANY OF
ITS RESTRICTED SUBSIDIARIES, AS THE CASE MAY BE, DELIVERS TO THE ADMINISTRATIVE
AGENT A LETTER FROM AN INDEPENDENT FINANCIAL ADVISOR STATING THAT SUCH
TRANSACTION IS FAIR TO THE BORROWER OR SUCH RESTRICTED SUBSIDIARY FROM A
FINANCIAL POINT OF VIEW OR STATING THAT THE TERMS ARE NOT MATERIALLY LESS
FAVORABLE TO THE BORROWER OR ITS RELEVANT RESTRICTED SUBSIDIARY THAN THOSE THAT
WOULD HAVE BEEN OBTAINED IN A COMPARABLE TRANSACTION BY THE BORROWER OR SUCH
RESTRICTED SUBSIDIARY WITH AN UNRELATED PERSON ON AN ARM’S-LENGTH BASIS;

 

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(VI)                              ANY AGREEMENT AS IN EFFECT AS OF THE CLOSING
DATE, OR ANY AMENDMENT THERETO (SO LONG AS ANY SUCH AMENDMENT IS NOT
DISADVANTAGEOUS IN ANY MATERIAL RESPECT TO THE LENDERS WHEN TAKEN AS A WHOLE AS
COMPARED TO THE APPLICABLE AGREEMENT AS IN EFFECT ON THE CLOSING DATE);

 

(VII)                           THE EXISTENCE OF, OR THE PERFORMANCE BY THE
BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES OF ITS OBLIGATIONS UNDER THE
TERMS OF, ANY STOCKHOLDERS AGREEMENT (INCLUDING ANY REGISTRATION RIGHTS
AGREEMENT OR PURCHASE AGREEMENT RELATED THERETO) TO WHICH IT IS A PARTY AS OF
THE CLOSING DATE AND ANY SIMILAR AGREEMENTS WHICH IT MAY ENTER INTO THEREAFTER;
PROVIDED, HOWEVER, THAT THE EXISTENCE OF, OR THE PERFORMANCE BY THE BORROWER OR
ANY OF ITS RESTRICTED SUBSIDIARIES OF OBLIGATIONS UNDER ANY FUTURE AMENDMENT TO
ANY SUCH EXISTING AGREEMENT OR UNDER ANY SIMILAR AGREEMENT ENTERED INTO AFTER
THE CLOSING DATE SHALL ONLY BE PERMITTED BY THIS CLAUSE (VII) TO THE EXTENT THAT
THE TERMS OF ANY SUCH AMENDMENT OR NEW AGREEMENT ARE NOT OTHERWISE
DISADVANTAGEOUS IN ANY MATERIAL RESPECT TO THE LENDERS WHEN TAKEN AS A WHOLE AS
COMPARED TO THE ORIGINAL AGREEMENT IN EFFECT ON THE CLOSING DATE;

 

(VIII)                        THE TRANSACTION AND THE PAYMENT OF ALL FEES AND
EXPENSES RELATED TO THE TRANSACTION, INCLUDING TRANSACTION EXPENSES, IN EACH
CASE AS DISCLOSED IN THE OFFERING MEMORANDUM RELATING TO THE SENIOR NOTES AND
THE SENIOR SUBORDINATED NOTES;

 

(IX)                                TRANSACTIONS WITH CUSTOMERS, CLIENTS,
SUPPLIERS, OR PURCHASERS OR SELLERS OF GOODS OR SERVICES, IN EACH CASE IN THE
ORDINARY COURSE OF BUSINESS AND OTHERWISE IN COMPLIANCE WITH THE TERMS OF THIS
AGREEMENT WHICH ARE FAIR TO THE BORROWER AND ITS RESTRICTED SUBSIDIARIES, IN THE
REASONABLE DETERMINATION OF THE BOARD OF DIRECTORS OF THE BORROWER OR THE SENIOR
MANAGEMENT THEREOF, OR ARE ON TERMS AT LEAST AS FAVORABLE AS WOULD REASONABLY
HAVE BEEN OBTAINED AT SUCH TIME FROM AN UNAFFILIATED PARTY;

 

(X)                                   THE ISSUANCE OF EQUITY INTERESTS (OTHER
THAN DISQUALIFIED STOCK) OF THE BORROWER TO ANY DIRECT OR INDIRECT PARENT OF THE
BORROWER OR TO ANY PERMITTED HOLDER OR TO ANY DIRECTOR, OFFICER, EMPLOYEE OR
CONSULTANT OF THE BORROWER, ANY SUBSIDIARY OR ANY DIRECT OR INDIRECT PARENT OF
THE BORROWER;

 

(XI)                                SALES OF ACCOUNTS RECEIVABLE, OR
PARTICIPATIONS THEREIN, IN CONNECTION WITH ANY RECEIVABLES FACILITY;

 

(XII)                             PAYMENTS BY THE BORROWER OR ANY OF ITS
RESTRICTED SUBSIDIARIES TO ANY OF THE INVESTORS MADE FOR ANY FINANCIAL ADVISORY,
FINANCING, UNDERWRITING OR PLACEMENT SERVICES OR IN RESPECT OF OTHER INVESTMENT
BANKING ACTIVITIES, INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH
ACQUISITIONS OR DIVESTITURES WHICH PAYMENTS ARE APPROVED BY A MAJORITY OF THE
BOARD OF DIRECTORS OF THE BORROWER IN GOOD FAITH OR WHICH ARE OTHERWISE
PERMITTED BY THIS AGREEMENT;

 

(XIII)                          PAYMENTS OR LOANS (OR CANCELLATION OF LOANS) TO
EMPLOYEES OR CONSULTANTS OF THE BORROWER, ANY OF ITS DIRECT OR INDIRECT PARENT
COMPANIES OR ANY OF ITS RESTRICTED SUBSIDIARIES AND EMPLOYMENT AGREEMENTS, STOCK
OPTION PLANS AND OTHER SIMILAR

 

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ARRANGEMENTS WITH SUCH EMPLOYEES OR CONSULTANTS WHICH, IN EACH CASE, ARE
APPROVED BY THE BORROWER IN GOOD FAITH; AND

 

(XIV)                         INVESTMENTS BY THE INVESTORS IN SECURITIES OF THE
BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES, SO LONG AS (A) THE INVESTMENT IS
BEING OFFERED GENERALLY TO OTHER INVESTORS ON THE SAME OR MORE FAVORABLE TERMS
AND (B) THE INVESTMENT CONSTITUTES LESS THAN 5% OF THE PROPOSED OR OUTSTANDING
ISSUE AMOUNT OF SUCH CLASS OF SECURITIES.

 

SECTION 7.08. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. The Borrower will not, and will not permit any of its Restricted
Subsidiaries that are not Subsidiary Guarantors to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or consensual restriction on the ability of any such Restricted
Subsidiary to:

 

(x)                                   (A)  pay dividends or make any other
distributions to the Borrower or any of its Restricted Subsidiaries on its
Capital Stock or with respect to any other interest or participation in, or
measured by, its profits, or (B) pay any Indebtedness owed to the Borrower or
any of its Restricted Subsidiaries;

 

(y)                                 make loans or advances to the Borrower or
any of its Restricted Subsidiaries; or

 

(z)                                   sell, lease or transfer any of its
properties or assets to the Borrower or any of its Restricted Subsidiaries,

 

provided that the foregoing limitations shall not apply (in each case) to such
encumbrances or restrictions existing under or by reason of:

 

(I)                                     CONTRACTUAL ENCUMBRANCES OR RESTRICTIONS
IN EFFECT ON THE CLOSING DATE, INCLUDING PURSUANT TO THE NEW NOTES DOCUMENTATION
AND THE ABL LOAN DOCUMENTS;

 

(II)                                  THE LOAN DOCUMENTS;

 

(III)                               PURCHASE MONEY OBLIGATIONS FOR PROPERTY
ACQUIRED IN THE ORDINARY COURSE OF BUSINESS THAT IMPOSE RESTRICTIONS OF THE
NATURE DESCRIBED IN CLAUSE (Z) OF THIS SECTION 7.08 ABOVE ON THE PROPERTY SO
ACQUIRED;

 

(IV)                              APPLICABLE LAW OR ANY APPLICABLE RULE,
REGULATION OR ORDER;

 

(V)                                 ANY AGREEMENT OR OTHER INSTRUMENT OF A
PERSON ACQUIRED BY THE BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES IN
EXISTENCE AT THE TIME OF SUCH ACQUISITION (BUT NOT CREATED IN CONTEMPLATION
THEREOF), WHICH ENCUMBRANCE OR RESTRICTION IS NOT APPLICABLE TO ANY PERSON, OR
THE PROPERTIES OR ASSETS OF ANY PERSON, OTHER THAN THE PERSON SO ACQUIRED AND
ITS SUBSIDIARIES, OR THE PROPERTY OR ASSETS OF THE PERSON SO ACQUIRED AND ITS
SUBSIDIARIES;

 

(VI)                              CONTRACTS FOR THE SALE OF ASSETS, INCLUDING
CUSTOMARY RESTRICTIONS WITH RESPECT TO A SUBSIDIARY OF THE BORROWER PURSUANT TO
AN AGREEMENT THAT HAS BEEN ENTERED

 

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INTO FOR THE SALE OR DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE CAPITAL
STOCK OR ASSETS OF SUCH SUBSIDIARY;

 

(VII)                           SECURED INDEBTEDNESS OTHERWISE PERMITTED TO BE
INCURRED PURSUANT TO SECTION 7.03 THAT LIMITS THE RIGHT OF THE DEBTOR TO DISPOSE
OF THE ASSETS SECURING SUCH INDEBTEDNESS;

 

(VIII)                        RESTRICTIONS ON CASH OR OTHER DEPOSITS OR NET
WORTH IMPOSED BY CUSTOMERS UNDER CONTRACTS ENTERED INTO IN THE ORDINARY COURSE
OF BUSINESS;

 

(IX)                                OTHER INDEBTEDNESS, DISQUALIFIED STOCK OR
PREFERRED STOCK OF FOREIGN SUBSIDIARIES PERMITTED TO BE INCURRED OR ISSUED
SUBSEQUENT TO THE CLOSING DATE PURSUANT TO THE PROVISIONS OF SECTION 7.03;

 

(X)                                   CUSTOMARY PROVISIONS IN ANY JOINT VENTURE
AGREEMENT AND OTHER SIMILAR AGREEMENT RELATING SOLELY TO SUCH JOINT VENTURE;

 

(XI)                                CUSTOMARY PROVISIONS CONTAINED IN LEASES,
SUBLEASES, LICENSES OR SUBLICENSES AND OTHER AGREEMENTS, IN EACH CASE, ENTERED
INTO IN THE ORDINARY COURSE OF BUSINESS;

 

(XII)                             ANY ENCUMBRANCES OR RESTRICTIONS OF THE TYPE
REFERRED TO IN CLAUSES (X), (Y) AND (Z) OF THIS SECTION 7.08 ABOVE IMPOSED BY
ANY AMENDMENTS, MODIFICATIONS, RESTATEMENTS, RENEWALS, INCREASES, SUPPLEMENTS,
REFUNDINGS, REPLACEMENTS OR REFINANCINGS OF THE CONTRACTS, INSTRUMENTS OR
OBLIGATIONS REFERRED TO IN CLAUSES (I) THROUGH (XI) ABOVE; PROVIDED THAT SUCH
AMENDMENTS, MODIFICATIONS, RESTATEMENTS, RENEWALS, INCREASES, SUPPLEMENTS,
REFUNDINGS, REPLACEMENTS OR REFINANCINGS ARE, IN THE GOOD FAITH JUDGMENT OF THE
BORROWER, NO MORE RESTRICTIVE IN ANY MATERIAL RESPECT WITH RESPECT TO SUCH
ENCUMBRANCES AND OTHER RESTRICTIONS TAKEN AS A WHOLE THAN THOSE PRIOR TO SUCH
AMENDMENT, MODIFICATION, RESTATEMENT, RENEWAL, INCREASE, SUPPLEMENT, REFUNDING,
REPLACEMENT OR REFINANCING;

 

(XIII)                          ANY OTHER AGREEMENT GOVERNING INDEBTEDNESS
ENTERED INTO AFTER THE CLOSING DATE THAT CONTAINS ENCUMBRANCES AND OTHER
RESTRICTIONS THAT ARE, IN THE GOOD FAITH JUDGMENT OF THE BORROWER, NO MORE
RESTRICTIVE IN ANY MATERIAL RESPECT TAKEN AS A WHOLE WITH RESPECT TO ANY
RESTRICTED SUBSIDIARY THAN THOSE ENCUMBRANCES AND OTHER RESTRICTIONS THAT ARE IN
EFFECT ON THE CLOSING DATE WITH RESPECT TO THAT RESTRICTED SUBSIDIARY PURSUANT
TO AGREEMENTS IN EFFECT ON THE CLOSING DATE; AND

 

(XIV)                         RESTRICTIONS CREATED IN CONNECTION WITH ANY
RECEIVABLES FACILITY THAT, IN THE GOOD FAITH DETERMINATION OF THE BORROWER ARE
NECESSARY OR ADVISABLE TO EFFECT SUCH RECEIVABLES FACILITY.

 

SECTION 7.09. Limitation on Guarantees of Indebtedness by Restricted
Subsidiaries. The Borrower will not permit any of its Wholly-Owned Subsidiaries
that are Restricted Subsidiaries (and non-Wholly-Owned Subsidiaries if such
non-Wholly-Owned Subsidiaries guarantee other capital markets debt securities),
other than a Subsidiary Guarantor

 

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or a Foreign Subsidiary, to guarantee the payment of any Indebtedness of the
Borrower or any other Subsidiary Guarantor unless:

 

(A)                                  SUCH RESTRICTED SUBSIDIARY WITHIN 30 DAYS
EXECUTES AND DELIVERS A JOINDER AGREEMENT FOR THE RELEVANT GUARANTY, EXCEPT THAT
WITH RESPECT TO A GUARANTEE OF INDEBTEDNESS OF THE BORROWER OR ANY SUBSIDIARY
GUARANTOR, IF SUCH INDEBTEDNESS IS BY ITS EXPRESS TERMS SUBORDINATED IN RIGHT OF
PAYMENT TO THE OBLIGATIONS (INCLUDING SUCH SUBSIDIARY GUARANTOR’S GUARANTY), ANY
SUCH GUARANTEE BY SUCH RESTRICTED SUBSIDIARY WITH RESPECT TO SUCH INDEBTEDNESS
SHALL BE SUBORDINATED IN RIGHT OF PAYMENT TO THE RELEVANT GUARANTY SUBSTANTIALLY
TO THE SAME EXTENT AS SUCH INDEBTEDNESS IS SUBORDINATED TO THE OBLIGATIONS;

 

(B)                                 SUCH RESTRICTED SUBSIDIARY WAIVES AND WILL
NOT IN ANY MANNER WHATSOEVER CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF, ANY
RIGHTS OF REIMBURSEMENT, INDEMNITY OR SUBROGATION OR ANY OTHER RIGHTS AGAINST
THE BORROWER OR ANY OTHER RESTRICTED SUBSIDIARY AS A RESULT OF ANY PAYMENT BY
SUCH RESTRICTED SUBSIDIARY UNDER ITS GUARANTY; AND

 

(C)                                  SUCH RESTRICTED SUBSIDIARY SHALL DELIVER TO
THE ADMINISTRATIVE AGENT AN OPINION OF COUNSEL TO THE EFFECT THAT:

 

(I)                                     SUCH GUARANTY HAS BEEN DULY EXECUTED AND
AUTHORIZED; AND

 

(II)                                  SUCH GUARANTY CONSTITUTES A VALID, BINDING
AND ENFORCEABLE OBLIGATION OF SUCH RESTRICTED SUBSIDIARY, EXCEPT INSOFAR AS
ENFORCEMENT THEREOF MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY OR SIMILAR LAWS
(INCLUDING, WITHOUT LIMITATION, ALL LAWS RELATING TO FRAUDULENT TRANSFERS) AND
EXCEPT INSOFAR AS ENFORCEMENT THEREOF IS SUBJECT TO GENERAL PRINCIPLES OF
EQUITY;

 

provided that this Section 7.09 shall not be applicable to any guarantee of any
Restricted Subsidiary that existed at the time such Person became a Restricted
Subsidiary and was not incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary.

 

SECTION 7.10. Change in Nature of Business. The Borrower shall not, and shall
not permit any of its Restricted Subsidiaries to, engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and the Restricted Subsidiaries on the date hereof or any business
reasonably related or ancillary thereto or a reasonable extension thereof.

 

SECTION 7.11. [Reserved].

 

SECTION 7.12. Use of Proceeds. The Borrower shall not, and shall not permit any
of its Restricted Subsidiaries to, use the proceeds of any Borrowing, whether
directly or indirectly, in a manner inconsistent with the uses set forth in the
preliminary statements to this Agreement.

 

SECTION 7.13. Accounting Changes. The Borrower shall not, and shall not permit
any of its Restricted Subsidiaries to, make any change in its fiscal year,
fiscal quarter or

 

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fiscal month; provided, however, that the Borrower may, upon written notice to
the Administrative Agent, change its fiscal year, fiscal quarter or fiscal month
to any other fiscal year, fiscal quarter or fiscal month, as the case may be,
reasonably acceptable to the Administrative Agent, in which case, the Borrower
and the Administrative Agent will, and are hereby authorized by the Lenders to,
make any adjustments to this Agreement that are necessary to reflect such change
in fiscal year, fiscal quarter or fiscal month, as the case may be.

 

SECTION 7.14. AMENDMENTS OF INDEBTEDNESS, ETC. (A) WITHOUT THE CONSENT OF THE
REQUIRED LENDERS, THE BORROWER WILL NOT AMEND, MODIFY OR ALTER (I) THE
SUBORDINATION PROVISIONS OF THE SENIOR SUBORDINATED NOTES INDENTURE, THE
SUBORDINATED DISCOUNT NOTES INDENTURE AND ANY OTHER JUNIOR FINANCING
DOCUMENTATION (AND THE COMPONENT DEFINITIONS AS USED THEREIN), OR (II) ANY OTHER
TERM OR CONDITION OF THE SENIOR SUBORDINATED NOTES INDENTURE, THE SUBORDINATED
DISCOUNT NOTES INDENTURE AND ANY OTHER JUNIOR FINANCING DOCUMENTATION, IN THE
CASE OF THIS CLAUSE (II), IN A MANNER MATERIALLY ADVERSE TO THE INTERESTS OF THE
LENDERS.

 

(B)                                 THE BORROWER SHALL NOT, AND SHALL NOT PERMIT
ANY OF ITS RESTRICTED SUBSIDIARIES TO, DESIGNATE ANY INDEBTEDNESS (OR RELATED
INTEREST OBLIGATIONS) AS “DESIGNATED SENIOR INDEBTEDNESS” (AS DEFINED IN EACH OF
THE SENIOR SUBORDINATED NOTES INDENTURE AND THE SUBORDINATED DISCOUNT NOTES
INDENTURE) OR ANY SIMILAR TERM (AS DEFINED IN ANY JUNIOR FINANCING
DOCUMENTATION), IN EACH CASE, EXCEPT FOR OBLIGATIONS OF THE TYPE DESCRIBED IN
CLAUSE (X) OF THE DEFINITION THEREOF AND ABL LOANS (AND RELATED OBLIGATIONS).

 

ARTICLE VIII

 

EVENTS OF DEFAULT AND REMEDIES

 

SECTION 8.01. Events of Default. Any of the following shall constitute an Event
of Default:

 

(A)                                  NON-PAYMENT. THE BORROWER OR ANY OTHER LOAN
PARTY FAILS TO PAY (I) WHEN AND AS REQUIRED TO BE PAID HEREIN, ANY AMOUNT OF
PRINCIPAL OF ANY LOAN, OR (II) WITHIN FIVE (5) BUSINESS DAYS AFTER THE SAME
BECOMES DUE, ANY INTEREST ON ANY LOAN OR ANY OTHER AMOUNT PAYABLE HEREUNDER OR
WITH RESPECT TO ANY OTHER LOAN DOCUMENT; OR

 

(B)                                 SPECIFIC COVENANTS. THE BORROWER FAILS TO
PERFORM OR OBSERVE ANY TERM, COVENANT OR AGREEMENT CONTAINED IN ANY OF SECTIONS
6.03(A) OR 6.05(A) (SOLELY WITH RESPECT TO THE BORROWER) OR ARTICLE 7; PROVIDED,
THAT ANY EVENT OF DEFAULT UNDER SECTION 7.05 IS SUBJECT TO CURE AS CONTEMPLATED
BY SECTION 8.05; OR

 

(C)                                  OTHER DEFAULTS. ANY LOAN PARTY FAILS TO
PERFORM OR OBSERVE ANY OTHER COVENANT OR AGREEMENT (NOT SPECIFIED IN
SECTION 8.01(A) OR (B) ABOVE) CONTAINED IN ANY LOAN DOCUMENT ON ITS PART TO BE
PERFORMED OR OBSERVED AND SUCH FAILURE CONTINUES FOR THIRTY (30) DAYS AFTER
NOTICE THEREOF BY THE ADMINISTRATIVE AGENT TO THE BORROWER; OR

 

(D)                                 REPRESENTATIONS AND WARRANTIES. ANY
REPRESENTATION, WARRANTY, CERTIFICATION OR STATEMENT OF FACT MADE OR DEEMED MADE
BY OR ON BEHALF OF THE BORROWER OR ANY OTHER LOAN PARTY HEREIN, IN ANY OTHER
LOAN DOCUMENT, OR IN ANY DOCUMENT

 

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REQUIRED TO BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH SHALL BE INCORRECT
OR MISLEADING IN ANY MATERIAL RESPECT WHEN MADE OR DEEMED MADE; OR

 

(E)                                  CROSS-DEFAULT. ANY LOAN PARTY OR ANY
RESTRICTED SUBSIDIARY (I) FAILS TO MAKE ANY PAYMENT BEYOND THE APPLICABLE GRACE
PERIOD WITH RESPECT THERETO, IF ANY (WHETHER BY SCHEDULED MATURITY, REQUIRED
PREPAYMENT, ACCELERATION, DEMAND, OR OTHERWISE) IN RESPECT OF ANY INDEBTEDNESS
(OTHER THAN INDEBTEDNESS HEREUNDER) HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT
LESS THAN THE THRESHOLD AMOUNT, OR (II) FAILS TO OBSERVE OR PERFORM ANY OTHER
AGREEMENT OR CONDITION RELATING TO ANY SUCH INDEBTEDNESS, OR ANY OTHER EVENT
OCCURS (OTHER THAN, WITH RESPECT TO INDEBTEDNESS CONSISTING OF SWAP CONTRACTS,
TERMINATION EVENTS OR EQUIVALENT EVENTS PURSUANT TO THE TERMS OF SUCH SWAP
CONTRACTS), THE EFFECT OF WHICH DEFAULT OR OTHER EVENT IS TO CAUSE, OR TO PERMIT
THE HOLDER OR HOLDERS OF SUCH INDEBTEDNESS (OR A TRUSTEE OR AGENT ON BEHALF OF
SUCH HOLDER OR HOLDERS OR BENEFICIARY OR BENEFICIARIES) TO CAUSE, WITH THE
GIVING OF NOTICE IF REQUIRED, SUCH INDEBTEDNESS TO BECOME DUE OR TO BE
REPURCHASED, PREPAID, DEFEASED OR REDEEMED (AUTOMATICALLY OR OTHERWISE), OR AN
OFFER TO REPURCHASE, PREPAY, DEFEASE OR REDEEM SUCH INDEBTEDNESS TO BE MADE,
PRIOR TO ITS STATED MATURITY; PROVIDED THAT, ANY SUCH FAILURE OR THE OCCURRENCE
OF ANY SUCH OTHER EVENT REFERRED TO IN SUB-CLAUSES (I) AND (II) RELATING TO
INDEBTEDNESS UNDER THE ABL CREDIT AGREEMENT SHALL CONSTITUTE AN EVENT OF DEFAULT
UNDER THIS SECTION 8.01(E) ONLY AFTER THE EARLIEST TO OCCUR OF (X) EXPIRATION OF
A 60-DAY PERIOD FOLLOWING THE COMMENCEMENT OF SUCH FAILURE OR THE DATE OF SUCH
OCCURRENCE, (Y) ANY ACCELERATION OF THE ABL OBLIGATIONS (AS DEFINED IN THE
INTERCREDITOR AGREEMENT) OR (Z) THE COMMENCEMENT OF THE EXERCISE OF ANY SECURED
CREDITOR REMEDIES (AS DEFINED IN THE INTERCREDITOR AGREEMENT) BY THE ABL
COLLATERAL AGENT OR ANY ABL LENDER AS A RESULT OF SUCH FAILURE OR OCCURRENCE;
PROVIDED FURTHER, THAT PRECEDING SUB-CLAUSE (II) SHALL NOT APPLY TO SECURED
INDEBTEDNESS THAT BECOMES DUE AS A RESULT OF THE VOLUNTARY SALE OR TRANSFER OF
THE PROPERTY OR ASSETS SECURING SUCH INDEBTEDNESS, IF SUCH SALE OR TRANSFER IS
PERMITTED HEREUNDER AND UNDER THE DOCUMENTS PROVIDING FOR SUCH INDEBTEDNESS; OR

 

(F)                                    INSOLVENCY PROCEEDINGS, ETC. ANY LOAN
PARTY OR ANY OF THE RESTRICTED SUBSIDIARIES INSTITUTES OR CONSENTS TO THE
INSTITUTION OF ANY PROCEEDING UNDER ANY DEBTOR RELIEF LAW (OR ANY CANADIAN
SUBSIDIARY GUARANTOR INSTITUTES OR CONSENTS TO THE INSTITUTION OF ANY PROPOSAL
OR NOTICE OF INTENT TO FILE A PROPOSAL), OR MAKES AN ASSIGNMENT FOR THE BENEFIT
OF CREDITORS; OR APPLIES FOR OR CONSENTS TO THE APPOINTMENT OF ANY RECEIVER,
TRUSTEE, CUSTODIAN, CONSERVATOR, MONITOR, LIQUIDATOR, REHABILITATOR,
ADMINISTRATOR, ADMINISTRATIVE RECEIVER OR SIMILAR OFFICER FOR IT OR FOR ALL OR
ANY MATERIAL PART OF ITS PROPERTY; OR ANY RECEIVER, TRUSTEE, CUSTODIAN,
CONSERVATOR, MONITOR, LIQUIDATOR, REHABILITATOR, ADMINISTRATOR, ADMINISTRATIVE
RECEIVER OR SIMILAR OFFICER IS APPOINTED WITHOUT THE APPLICATION OR CONSENT OF
SUCH PERSON AND THE APPOINTMENT CONTINUES UNDISCHARGED OR UNSTAYED FOR SIXTY
(60) CALENDAR DAYS; OR ANY PROCEEDING UNDER ANY DEBTOR RELIEF LAW RELATING TO
ANY SUCH PERSON OR TO ALL OR ANY MATERIAL PART OF ITS PROPERTY IS INSTITUTED
WITHOUT THE CONSENT OF SUCH PERSON AND CONTINUES UNDISMISSED OR UNSTAYED FOR
SIXTY (60) CALENDAR DAYS, OR AN ORDER FOR RELIEF IS ENTERED IN ANY SUCH
PROCEEDING; OR

 

(G)                                 INABILITY TO PAY DEBTS; ATTACHMENT. (I) ANY
LOAN PARTY OR ANY RESTRICTED SUBSIDIARY BECOMES UNABLE OR ADMITS IN WRITING ITS
INABILITY OR FAILS GENERALLY TO PAY ITS DEBTS IN EXCESS OF THE THRESHOLD AMOUNT
AS THEY BECOME DUE, OR (II) ANY WRIT OR WARRANT

 

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OF ATTACHMENT OR EXECUTION OR SIMILAR PROCESS IS ISSUED OR LEVIED AGAINST ALL OR
ANY MATERIAL PART OF THE PROPERTY OF THE LOAN PARTIES, TAKEN AS A WHOLE, AND IS
NOT RELEASED, VACATED OR FULLY BONDED WITHIN FORTY-FIVE (45) DAYS AFTER ITS
ISSUE OR LEVY; OR

 

(H)                                 JUDGMENTS. THERE IS ENTERED AGAINST ANY LOAN
PARTY OR ANY RESTRICTED SUBSIDIARY A FINAL JUDGMENT OR ORDER FOR THE PAYMENT OF
MONEY IN AN AGGREGATE AMOUNT EXCEEDING THE THRESHOLD AMOUNT (TO THE EXTENT NOT
COVERED BY INDEPENDENT THIRD-PARTY INSURANCE AS TO WHICH THE INSURER HAS BEEN
NOTIFIED OF SUCH JUDGMENT OR ORDER AND HAS NOT DENIED COVERAGE) AND SUCH
JUDGMENT OR ORDER SHALL NOT HAVE BEEN SATISFIED, VACATED, DISCHARGED OR STAYED
OR BONDED PENDING AN APPEAL FOR A PERIOD OF FORTY-FIVE (45) CONSECUTIVE DAYS; OR

 

(I)                                     (A) ERISA. (I) AN ERISA EVENT OCCURS
WITH RESPECT TO A PENSION PLAN OR MULTIEMPLOYER PLAN WHICH HAS RESULTED OR COULD
REASONABLY BE EXPECTED TO RESULT IN LIABILITY OF ANY LOAN PARTY IN AN AGGREGATE
AMOUNT WHICH COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
EFFECT, OR (II) ANY LOAN PARTY OR ANY ERISA AFFILIATE FAILS TO PAY WHEN DUE,
AFTER THE EXPIRATION OF ANY APPLICABLE GRACE PERIOD, ANY INSTALLMENT PAYMENT
WITH RESPECT TO ITS WITHDRAWAL LIABILITY UNDER SECTION 4201 OF ERISA UNDER A
MULTIEMPLOYER PLAN IN AN AGGREGATE AMOUNT WHICH COULD REASONABLY BE EXPECTED TO
RESULT IN A MATERIAL ADVERSE EFFECT; OR

 

(B) Pension Plans. Except as could not reasonably be expected to result in a
Material Adverse Effect, (i) a Pension Event shall occur which, in Collateral
Agent’s determination, constitutes grounds for the termination under any Laws,
of any Pension Plan or (ii) the appointment by the appropriate Governmental
Authority of a trustee for any Pension Plan, or (iii) if any Pension Plan shall
be terminated or any such trustee shall be requested or appointed, or (iv) if a
Loan Party is in default with respect to payments to a Pension Plan resulting
from their complete or partial withdrawal from such Pension Plan or (v) any
event that may reasonably be expected to have a Material Adverse Effect or any
Lien arises (save for contribution amounts not yet due) in connection with any
Pension Plan.

 

(J)                                     INVALIDITY OF LOAN DOCUMENTS. ANY
MATERIAL PROVISION OF ANY LOAN DOCUMENT, AT ANY TIME AFTER ITS EXECUTION AND
DELIVERY AND FOR ANY REASON OTHER THAN AS EXPRESSLY PERMITTED HEREUNDER OR
THEREUNDER (INCLUDING AS A RESULT OF A TRANSACTION PERMITTED UNDER SECTION 7.01
OR 7.06) OR AS A RESULT OF ACTS OR OMISSIONS BY THE ADMINISTRATIVE AGENT OR ANY
LENDER OR THE SATISFACTION IN FULL OF ALL THE OBLIGATIONS, CEASES TO BE IN FULL
FORCE AND EFFECT; OR ANY LOAN PARTY CONTESTS IN WRITING THE VALIDITY OR
ENFORCEABILITY OF ANY PROVISION OF ANY LOAN DOCUMENT OR ANY LIEN CREATED UNDER
ANY LOAN DOCUMENT; OR ANY LOAN PARTY DENIES IN WRITING THAT IT HAS ANY OR
FURTHER LIABILITY OR OBLIGATION UNDER ANY LOAN DOCUMENT (OTHER THAN AS A RESULT
OF REPAYMENT IN FULL OF THE OBLIGATIONS AND TERMINATION OF THE AGGREGATE
COMMITMENTS), OR PURPORTS IN WRITING TO REVOKE OR RESCIND ANY LOAN DOCUMENT; OR

 

(K)                                  COLLATERAL DOCUMENTS. ANY COLLATERAL
DOCUMENT AFTER DELIVERY THEREOF PURSUANT TO SECTION 4.01 OR 6.11 SHALL FOR ANY
REASON (OTHER THAN PURSUANT TO THE TERMS THEREOF, INCLUDING AS A RESULT OF A
TRANSACTION PERMITTED UNDER SECTION 7.01 OR 7.06) CEASE

 

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TO CREATE A VALID AND PERFECTED LIEN, WITH THE PRIORITY REQUIRED BY THE
COLLATERAL DOCUMENTS AND THE INTERCREDITOR AGREEMENT (OR OTHER SECURITY
PURPORTED TO BE CREATED ON THE APPLICABLE COLLATERAL), ON AND SECURITY INTEREST
IN ANY MATERIAL PORTION OF THE COLLATERAL PURPORTED TO BE COVERED THEREBY,
SUBJECT TO LIENS PERMITTED UNDER SECTION 7.04, EXCEPT TO THE EXTENT THAT ANY
SUCH LOSS OF PERFECTION OR PRIORITY RESULTS FROM (I) THE FAILURE OF THE
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT TO MAINTAIN POSSESSION OF
CERTIFICATES OR NOTES ACTUALLY DELIVERED TO IT REPRESENTING SECURITIES OR
INSTRUMENTS PLEDGED UNDER THE COLLATERAL DOCUMENTS, (II) TO FILE
UNIFORM COMMERCIAL CODE OR PPSA CONTINUATION STATEMENTS IN THE APPLICABLE FILING
OFFICES PROPERLY NOTIFIED BY THE RELEVANT LOAN PARTY AND (III) ANY OTHER FAILURE
OF THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT TO MAINTAIN PERFECTION IN
CIRCUMSTANCES WHERE SUCH FAILURE DOES NOT RESULT FROM THE BREACH OR
NON-COMPLIANCE BY A LOAN PARTY WITH THE LOAN DOCUMENTS, AND EXCEPT AS TO
COLLATERAL CONSISTING OF REAL PROPERTY TO THE EXTENT THAT SUCH LOSSES ARE
COVERED BY A LENDER’S TITLE INSURANCE POLICY AND SUCH INSURER HAS NOT DENIED
COVERAGE; OR

 

(L)                                     CHANGE OF CONTROL. A CHANGE OF CONTROL
SHALL OCCUR; OR

 

(M)                               JUNIOR FINANCING DOCUMENTATION. (I) ANY OF THE
OBLIGATIONS OF THE LOAN PARTIES UNDER THE LOAN DOCUMENTS FOR ANY REASON SHALL
CEASE TO BE “SENIOR INDEBTEDNESS” (OR ANY COMPARABLE TERM) OR “SENIOR SECURED
FINANCING” (OR ANY COMPARABLE TERM) UNDER, AND AS DEFINED IN ANY JUNIOR
FINANCING DOCUMENTATION OR (II) THE SUBORDINATION PROVISIONS SET FORTH IN ANY
JUNIOR FINANCING DOCUMENTATION SHALL, IN WHOLE OR IN PART, CEASE TO BE EFFECTIVE
OR CEASE TO BE LEGALLY VALID, BINDING AND ENFORCEABLE AGAINST THE HOLDERS OF ANY
SUBORDINATED INDEBTEDNESS, IF APPLICABLE.

 

SECTION 8.02. Remedies Upon Event of Default. If any Event of Default occurs and
is continuing, the Administrative Agent may and, at the request of the Required
Lenders, shall take any or all of the following actions:

 

(I)                                     DECLARE THE COMMITMENT OF EACH LENDER TO
MAKE LOANS TO BE TERMINATED, WHEREUPON SUCH COMMITMENTS AND OBLIGATION SHALL BE
TERMINATED;

 

(II)                                  DECLARE THE UNPAID PRINCIPAL AMOUNT OF ALL
OUTSTANDING LOANS, ALL INTEREST ACCRUED AND UNPAID THEREON, AND ALL OTHER
AMOUNTS OWING OR PAYABLE HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT TO BE
IMMEDIATELY DUE AND PAYABLE, WITHOUT PRESENTMENT, DEMAND, PROTEST OR OTHER
NOTICE OF ANY KIND, ALL OF WHICH ARE HEREBY EXPRESSLY WAIVED BY THE BORROWER;
AND

 

(III)                               EXERCISE ON BEHALF OF ITSELF AND THE LENDERS
ALL RIGHTS AND REMEDIES AVAILABLE TO IT AND THE LENDERS UNDER THE LOAN DOCUMENTS
OR APPLICABLE LAW, SUBJECT TO THE TERMS OF THE INTERCREDITOR AGREEMENT;

 

provided that upon the occurrence of an Event of Default under
Section 8.01(f) with respect to the Borrower, the obligation of each Lender to
make Loans shall automatically terminate, and the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, in each case without further act of the
Administrative Agent or any Lender.

 

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SECTION 8.03. Exclusion of Immaterial Subsidiaries. Solely for the purpose of
determining whether a Default has occurred under Section 8.01(f) or (g), any
reference in any such clause to any Restricted Subsidiary or Loan Party shall be
deemed not to include any Restricted Subsidiary affected by any event or
circumstances referred to in any such clause that did not, as of the last day of
the most recent completed fiscal quarter of the Borrower, have assets with a
value in excess of 5.0% of the Total Assets of the Borrower and the Restricted
Subsidiaries and did not, as of the four quarter period ending on the last day
of such fiscal quarter, have revenues exceeding 5.0% of the total revenues of
the Borrower and the Restricted Subsidiaries (it being agreed that all
Restricted Subsidiaries affected by any event or circumstance referred to in any
such clause shall be considered together, as a single consolidated Restricted
Subsidiary, for purposes of determining whether the condition specified above is
satisfied).

 

SECTION 8.04. Application of Funds. Subject in all respects to the provisions of
the Intercreditor Agreement, after the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable as set forth in the proviso to Section 8.02), any amounts received on
account of the Obligations shall be applied by the Administrative Agent in the
following order:

 

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (other than principal and interest, but
including Attorney Costs payable under Section 10.04 and amounts payable under
Article III) payable to each of the Administrative Agent and the Collateral
Agent in its capacity as such;

 

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs payable under Section 10.05 and amounts
payable under Article III), ratably among them in proportion to the amounts
described in this clause Second payable to them;

 

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Third payable to them;

 

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and the termination value under Secured Hedge Agreements,
ratably among the Lenders and the other Secured Parties in proportion to the
respective amounts described in this clause Fourth held by them;

 

Fifth, to the payment of all other Obligations of the Loan Parties that are due
and payable to the Administrative Agent and the other Secured Parties on such
date, ratably based upon the respective aggregate amounts of all such
Obligations owing to the Administrative Agent and the other Secured Parties on
such date; and

 

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrower or as otherwise required by Law.

 

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SECTION 8.05. COMPANY’S RIGHT TO CURE. (A) NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN SECTION 8.01, IN THE EVENT OF ANY EVENT OF DEFAULT UNDER
ANY COVENANT SET FORTH IN SECTION 7.05 AND UNTIL THE EXPIRATION OF THE TENTH
(10TH) DAY AFTER THE DATE ON WHICH FINANCIAL STATEMENTS ARE REQUIRED TO BE
DELIVERED WITH RESPECT TO THE APPLICABLE FISCAL QUARTER HEREUNDER, THE BORROWER
MAY ISSUE EQUITY INTERESTS (OTHER THAN DISQUALIFIED STOCK) TO ANY OF THE
INVESTORS (EACH, A “PERMITTED CURE ISSUANCE”) AND APPLY THE AMOUNT OF THE NET
CASH PROCEEDS THEREOF TO INCREASE EBITDA WITH RESPECT TO SUCH APPLICABLE
QUARTER; PROVIDED THAT SUCH NET CASH PROCEEDS (I) ARE ACTUALLY RECEIVED BY THE
BORROWER NO LATER THAN TEN (10) DAYS AFTER THE DATE ON WHICH FINANCIAL
STATEMENTS ARE REQUIRED TO BE DELIVERED WITH RESPECT TO SUCH FISCAL QUARTER
HEREUNDER AND (II) DO NOT EXCEED THE AGGREGATE AMOUNT NECESSARY TO CURE SUCH
EVENT OF DEFAULT UNDER SECTION 7.05 FOR ANY APPLICABLE PERIOD. THE PARTIES
HEREBY ACKNOWLEDGE THAT THIS SECTION 8.05(A) MAY NOT BE RELIED ON FOR PURPOSES
OF CALCULATING ANY FINANCIAL RATIOS OTHER THAN AS APPLICABLE TO SECTION 7.05 AND
SHALL NOT RESULT IN ANY ADJUSTMENT TO ANY AMOUNTS OTHER THAN THE AMOUNT OF THE
EBITDA REFERRED TO IN THE IMMEDIATELY PRECEDING SENTENCE (INCLUDING, WITHOUT
LIMITATION, AS USED IN DETERMINING EBITDA FOR PURPOSES OF COMPUTING THE
CONSOLIDATED TOTAL LEVERAGE RATIO AS USED IN THE DEFINITION OF “APPLICABLE
RATE”).

 

(B)                                 IN EACH PERIOD OF FOUR FISCAL QUARTERS,
THERE SHALL BE AT LEAST TWO (2) FISCAL QUARTERS IN WHICH NO CURE SET FORTH IN
SECTION 8.05(A) IS MADE.

 

ARTICLE IX

 

ADMINISTRATIVE AGENT AND OTHER AGENTS

 

SECTION 9.01. APPOINTMENT AND AUTHORIZATION OF AGENTS. (A)  EACH LENDER HEREBY
IRREVOCABLY APPOINTS, DESIGNATES AND AUTHORIZES THE ADMINISTRATIVE AGENT TO TAKE
SUCH ACTION ON ITS BEHALF UNDER THE PROVISIONS OF THIS AGREEMENT AND EACH OTHER
LOAN DOCUMENT AND TO EXERCISE SUCH POWERS AND PERFORM SUCH DUTIES AS ARE
EXPRESSLY DELEGATED TO IT BY THE TERMS OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, TOGETHER WITH SUCH POWERS AS ARE REASONABLY INCIDENTAL THERETO.
NOTWITHSTANDING ANY PROVISION TO THE CONTRARY CONTAINED ELSEWHERE HEREIN OR IN
ANY OTHER LOAN DOCUMENT, THE ADMINISTRATIVE AGENT SHALL HAVE NO DUTIES OR
RESPONSIBILITIES, EXCEPT THOSE EXPRESSLY SET FORTH HEREIN, NOR SHALL THE
ADMINISTRATIVE AGENT HAVE OR BE DEEMED TO HAVE ANY FIDUCIARY RELATIONSHIP WITH
ANY LENDER OR PARTICIPANT, AND NO IMPLIED COVENANTS, FUNCTIONS,
RESPONSIBILITIES, DUTIES, OBLIGATIONS OR LIABILITIES SHALL BE READ INTO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR OTHERWISE EXIST AGAINST THE
ADMINISTRATIVE AGENT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING SENTENCE,
THE USE OF THE TERM “AGENT” HEREIN AND IN THE OTHER LOAN DOCUMENTS WITH
REFERENCE TO ANY AGENT IS NOT INTENDED TO CONNOTE ANY FIDUCIARY OR OTHER IMPLIED
(OR EXPRESS) OBLIGATIONS ARISING UNDER AGENCY DOCTRINE OF ANY APPLICABLE LAW.
INSTEAD, SUCH TERM IS USED MERELY AS A MATTER OF MARKET CUSTOM, AND IS INTENDED
TO CREATE OR REFLECT ONLY AN ADMINISTRATIVE RELATIONSHIP BETWEEN INDEPENDENT
CONTRACTING PARTIES.

 

(B)                                 THE ADMINISTRATIVE AGENT SHALL ALSO ACT AS
THE “COLLATERAL AGENT” UNDER THE LOAN DOCUMENTS, AND EACH OF THE LENDERS (IN ITS
CAPACITIES AS A LENDER AND A POTENTIAL HEDGE BANK) HEREBY IRREVOCABLY APPOINTS
AND AUTHORIZES THE ADMINISTRATIVE AGENT TO ACT AS THE AGENT OF (AND TO HOLD ANY
SECURITY INTEREST CREATED BY THE COLLATERAL DOCUMENTS FOR AND ON BEHALF OF OR ON
TRUST FOR) SUCH LENDER FOR PURPOSES OF ACQUIRING, HOLDING AND ENFORCING (SUBJECT
TO THE INTERCREDITOR AGREEMENT) ANY AND ALL LIENS ON COLLATERAL GRANTED BY ANY
OF THE LOAN PARTIES TO

 

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SECURE ANY OF THE SECURED OBLIGATIONS, TOGETHER WITH SUCH POWERS AND DISCRETION
AS ARE REASONABLY INCIDENTAL THERETO. IN THIS CONNECTION, THE ADMINISTRATIVE
AGENT, AS “COLLATERAL AGENT” (AND ANY CO-AGENTS, SUB-AGENTS AND
ATTORNEYS-IN-FACT APPOINTED BY THE ADMINISTRATIVE AGENT PURSUANT TO SECTION 9.02
FOR PURPOSES OF HOLDING OR ENFORCING ANY LIEN ON THE COLLATERAL (OR ANY PORTION
THEREOF) GRANTED UNDER THE COLLATERAL DOCUMENTS, OR FOR EXERCISING ANY RIGHTS
AND REMEDIES THEREUNDER AT THE DIRECTION OF THE ADMINISTRATIVE AGENT), SHALL BE
ENTITLED TO THE BENEFITS OF ALL PROVISIONS OF THIS ARTICLE IX (INCLUDING,
SECTION 9.07, AS THOUGH SUCH CO-AGENTS, SUB-AGENTS AND ATTORNEYS-IN-FACT WERE
THE “COLLATERAL AGENT” UNDER THE LOAN DOCUMENTS) AS IF SET FORTH IN FULL HEREIN
WITH RESPECT THERETO.

 

SECTION 9.02. Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document (including for
purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents or of exercising any rights and
remedies thereunder) by or through agents, employees or attorneys-in-fact, such
sub-agents as shall be deemed necessary by the Administrative Agent and shall be
entitled to advice of counsel and other consultants or experts concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agent or sub-agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct (as determined in the final judgment of a court of competent
jurisdiction).

 

SECTION 9.03. Liability of Agents. No Agent-Related Person shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct,
as determined by the final judgment of a court of competent jurisdiction, in
connection with its duties expressly set forth herein), or (b) be responsible in
any manner to any Lender or Participant for any recital, statement,
representation or warranty made by any Loan Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or the perfection or
priority of any Lien or security interest created or purported to be created
under the Collateral Documents, or for any failure of any Loan Party or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
or Participant to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any Loan
Party or any Affiliate thereof.

 

SECTION 9.04. RELIANCE BY AGENTS. (A)  EACH AGENT SHALL BE ENTITLED TO RELY, AND
SHALL BE FULLY PROTECTED IN RELYING, UPON ANY WRITING, COMMUNICATION, SIGNATURE,
RESOLUTION, REPRESENTATION, NOTICE, CONSENT, CERTIFICATE, AFFIDAVIT, LETTER,
TELEGRAM, FACSIMILE, TELEX OR TELEPHONE MESSAGE, ELECTRONIC MAIL MESSAGE,
STATEMENT OR OTHER DOCUMENT OR CONVERSATION BELIEVED BY IT TO BE GENUINE AND
CORRECT AND TO HAVE BEEN SIGNED, SENT OR MADE BY THE PROPER PERSON OR PERSONS,
AND UPON ADVICE AND STATEMENTS OF LEGAL COUNSEL (INCLUDING COUNSEL TO ANY LOAN
PARTY), INDEPENDENT ACCOUNTANTS AND OTHER EXPERTS SELECTED BY SUCH AGENT. EACH
AGENT SHALL BE FULLY JUSTIFIED IN FAILING OR REFUSING TO TAKE ANY ACTION UNDER
ANY LOAN DOCUMENT UNLESS IT SHALL FIRST

 

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RECEIVE SUCH ADVICE OR CONCURRENCE OF THE REQUIRED LENDERS AS IT DEEMS
APPROPRIATE AND, IF IT SO REQUESTS, IT SHALL FIRST BE INDEMNIFIED TO ITS
SATISFACTION BY THE LENDERS AGAINST ANY AND ALL LIABILITY AND EXPENSE WHICH
MAY BE INCURRED BY IT BY REASON OF TAKING OR CONTINUING TO TAKE ANY SUCH ACTION.
EACH AGENT SHALL IN ALL CASES BE FULLY PROTECTED IN ACTING, OR IN REFRAINING
FROM ACTING, UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ACCORDANCE WITH
A REQUEST OR CONSENT OF THE REQUIRED LENDERS (OR SUCH GREATER NUMBER OF LENDERS
AS MAY BE EXPRESSLY REQUIRED HEREBY IN ANY INSTANCE) AND SUCH REQUEST AND ANY
ACTION TAKEN OR FAILURE TO ACT PURSUANT THERETO SHALL BE BINDING UPON ALL THE
LENDERS.

 

(B)                                 FOR PURPOSES OF DETERMINING COMPLIANCE WITH
THE CONDITIONS SPECIFIED IN SECTION 4.01, EACH LENDER THAT HAS SIGNED THIS
AGREEMENT SHALL BE DEEMED TO HAVE CONSENTED TO, APPROVED OR ACCEPTED OR TO BE
SATISFIED WITH, EACH DOCUMENT OR OTHER MATTER REQUIRED THEREUNDER TO BE
CONSENTED TO OR APPROVED BY OR ACCEPTABLE OR SATISFACTORY TO A LENDER UNLESS THE
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED NOTICE FROM SUCH LENDER PRIOR TO THE
PROPOSED CLOSING DATE SPECIFYING ITS OBJECTION THERETO.

 

SECTION 9.05. Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a “notice of default”. The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to any Event of Default as may be directed by the
Required Lenders in accordance with Article 8; provided that unless and until
the Administrative Agent has received any such direction, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default as it shall deem
advisable or in the best interest of the Lenders.

 

SECTION 9.06. Credit Decision; Disclosure of Information by Agents. Each Lender
acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by any Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any Loan
Party or any Affiliate thereof, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender as to any matter,
including whether Agent-Related Persons have disclosed material information in
their possession. Each Lender represents to each Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Loan Parties
and their respective Subsidiaries, and all applicable bank or other regulatory
Laws relating to the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to the Borrower and the other
Loan Parties hereunder. Each Lender also represents that it will, independently
and without reliance upon any Agent-Related Person and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and

 

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creditworthiness of the Borrower and the other Loan Parties. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
any Agent herein, such Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of any of the Loan Parties or any of their respective
Affiliates which may come into the possession of any Agent-Related Person.

 

SECTION 9.07. Indemnification of Agents. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand
each Agent-Related Person (to the extent not reimbursed by or on behalf of any
Loan Party and without limiting the obligation of any Loan Party to do so), pro
rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided that no Lender shall be liable
for the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Agent-Related Person’s own gross negligence or
willful misconduct, as determined by the final judgment of a court of competent
jurisdiction; provided that no action taken in accordance with the directions of
the Required Lenders (or such other number or percentage of the Lenders as shall
be required by the Loan Documents) shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section 9.07. In the case
of any investigation, litigation or proceeding giving rise to any Indemnified
Liabilities, this Section 9.07 applies whether any such investigation,
litigation or proceeding is brought by any Lender or any other Person. Without
limitation of the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking in
this Section 9.07 shall survive termination of the Aggregate Commitments, the
payment of all other Obligations and the resignation of the Administrative
Agent.

 

SECTION 9.08. Agents in their Individual Capacities. DBNY and its Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire Equity Interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with each of the Loan
Parties and their respective Affiliates as though DBNY were not the
Administrative Agent hereunder and without notice to or consent of the Lenders.
The Lenders acknowledge that, pursuant to such activities, DBNY or its
Affiliates may receive information regarding any Loan Party or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Loan Party or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information to
them. With respect to its Loans, DBNY shall have the same rights and powers
under this Agreement as any other Lender and may exercise such rights and powers
as though it were not the Administrative Agent DBNY, and the terms “Lender” and
“Lenders” include DBNY in its individual capacity.

 

SECTION 9.09. Successor Agents. The Administrative Agent may resign as the
Administrative Agent upon thirty (30) days’ notice to the Lenders and the
Borrower. If the Administrative Agent resigns under this Agreement, the Required
Lenders shall appoint from

 

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among the Lenders a successor agent for the Lenders, which successor agent shall
be consented to by the Borrower at all times other than during the existence of
an Event of Default under Section 8.01(f) or (g) (which consent of the Borrower
shall not be unreasonably withheld or delayed). If no successor agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Lenders
and the Borrower, a successor agent from among the Lenders. Upon the acceptance
of its appointment as successor agent hereunder, the Person acting as such
successor agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term “Administrative Agent”, shall mean
such successor administrative agent and/or supplemental administrative agent, as
the case may be, and the retiring Administrative Agent’s appointment, powers and
duties as the Administrative Agent shall be terminated. After the retiring
Administrative Agent’s resignation hereunder as the Administrative Agent, the
provisions of this Article 9 and Sections 10.04 and 10.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under this Agreement. If no successor agent has accepted
appointment as the Administrative Agent by the date which is thirty (30) days
following the retiring Administrative Agent’s notice of resignation, the
retiring Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. Upon the acceptance of any appointment as
the Administrative Agent hereunder by a successor and upon the execution and
filing or recording of such financing statements, or amendments thereto, and
such amendments or supplements to the Mortgages, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders
may request, in order to (a) continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents or (b) otherwise ensure that
the Collateral and Guarantee Requirement is satisfied, the Administrative Agent
shall thereupon succeed to and become vested with all the rights, powers,
discretion, privileges, and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. After the retiring Administrative Agent’s
resignation hereunder as the Administrative Agent, the provisions of this
Article 9 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Administrative
Agent.

 

SECTION 9.10. Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise:

 

(A)                                  TO FILE AND PROVE A CLAIM FOR THE WHOLE
AMOUNT OF THE PRINCIPAL AND INTEREST OWING AND UNPAID IN RESPECT OF THE LOANS
AND ALL OTHER OBLIGATIONS THAT ARE OWING AND UNPAID AND TO FILE SUCH OTHER
DOCUMENTS AS MAY BE NECESSARY OR ADVISABLE IN ORDER TO HAVE THE CLAIMS OF THE
LENDERS 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

 

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THE LENDERS AND THE ADMINISTRATIVE AGENT UNDER SECTIONS 2.09 AND 10.04) ALLOWED
IN SUCH JUDICIAL PROCEEDING; AND

 

(B)                                 TO COLLECT AND RECEIVE ANY MONIES OR OTHER
PROPERTY PAYABLE OR DELIVERABLE ON ANY SUCH CLAIMS AND TO DISTRIBUTE THE SAME;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the Agents
and their respective agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

 

SECTION 9.11. Collateral and Guaranty Matters. The Lenders irrevocably agree,
subject to the terms of the Intercreditor Agreement:

 

(A)                                  THAT ANY LIEN ON ANY PROPERTY GRANTED TO OR
HELD BY THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT UNDER ANY LOAN DOCUMENT
SHALL BE AUTOMATICALLY RELEASED (I) UPON TERMINATION OF THE AGGREGATE
COMMITMENTS AND PAYMENT IN FULL OF ALL OBLIGATIONS (OTHER THAN (X) OBLIGATIONS
UNDER SECURED HEDGE AGREEMENTS NOT YET DUE AND PAYABLE, AND (Y) CONTINGENT
INDEMNIFICATION OBLIGATIONS NOT YET ACCRUED AND PAYABLE), (II) AT THE TIME THE
PROPERTY SUBJECT TO SUCH LIEN IS TRANSFERRED OR TO BE TRANSFERRED AS PART OF OR
IN CONNECTION WITH ANY TRANSFER PERMITTED HEREUNDER OR UNDER ANY OTHER LOAN
DOCUMENT TO ANY PERSON OTHER THAN THE BORROWER OR ANY OTHER SUBSIDIARY
GUARANTOR, (III) SUBJECT TO SECTION 10.01, IF THE RELEASE OF SUCH LIEN IS
APPROVED, AUTHORIZED OR RATIFIED IN WRITING BY THE REQUIRED LENDERS, (IV) IF THE
PROPERTY SUBJECT TO SUCH LIEN IS OWNED BY A SUBSIDIARY GUARANTOR, UPON RELEASE
OF SUCH SUBSIDIARY GUARANTOR FROM ITS OBLIGATIONS UNDER ITS GUARANTY PURSUANT TO
CLAUSE (C) BELOW OR (V) AS REQUIRED PURSUANT TO THE TERMS OF THE INTERCREDITOR
AGREEMENT;

 

(B)                                 TO RELEASE OR SUBORDINATE ANY LIEN ON ANY
PROPERTY GRANTED TO OR HELD BY THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT
UNDER ANY LOAN DOCUMENT TO THE HOLDER OF ANY LIEN ON SUCH PROPERTY THAT IS
PERMITTED BY SECTION 7.04 TO THE EXTENT REQUIRED BY LAW OR THE TERMS OF THIS
AGREEMENT (OTHER THAN LIENS SECURING THE PARI PASSU LIEN OBLIGATIONS); AND

 

(C)                                  THAT ANY RESTRICTED SUBSIDIARY THAT IS A
SUBSIDIARY GUARANTOR SHALL BE AUTOMATICALLY RELEASED FROM ITS OBLIGATIONS UNDER
ITS GUARANTY IF SUCH PERSON CEASES TO BE A RESTRICTED SUBSIDIARY AS A RESULT OF
A TRANSACTION OR DESIGNATION PERMITTED HEREUNDER (INCLUDING AS A RESULT OF A
RESTRICTED SUBSIDIARY THAT IS A SUBSIDIARY GUARANTOR BEING

 

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REDESIGNATED AS AN UNRESTRICTED SUBSIDIARY); PROVIDED THAT NO SUCH RELEASE SHALL
OCCUR IF SUCH SUBSIDIARY GUARANTOR CONTINUES TO BE A GUARANTOR IN RESPECT OF THE
NEW NOTES, ANY SUBORDINATED INDEBTEDNESS OR THE ABL CREDIT AGREEMENT.

 

Upon request by the Administrative Agent at any time, the Required Lenders (or
such greater number of Lenders as may be required under Section 10.01) will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Subsidiary Guarantor from its obligations under its Guaranty pursuant to
this Section 9.11. In each case as specified in this Section 9.11, the
Administrative Agent will (and each Lender irrevocably authorizes the
Administrative Agent to), at the Borrower’s expense, execute and deliver to the
applicable Loan Party such documents as such Loan Party may reasonably request
to evidence the release or subordination of such item of Collateral from the
assignment and security interest granted under the Collateral Documents, or to
evidence the release of such Subsidiary Guarantor from its obligations under its
Guaranty, in each case in accordance with the terms of the Loan Documents and
this Section 9.11.

 

SECTION 9.12. Other Agents; Arrangers and Managers. None of the Lenders or other
Persons identified on the facing page or signature pages of this Agreement as a
“syndication agent”, “co-documentation agent”, “joint bookrunner” or “arranger”
shall have any right, power, obligation, liability, responsibility or duty under
this Agreement other than those applicable to all Lenders as such. Without
limiting the foregoing, none of the Lenders or other Persons so identified shall
have or be deemed to have any fiduciary relationship with any Lender. Each
Lender acknowledges that it has not relied, and will not rely, on any of the
Lenders or other Persons so identified in deciding to enter into this Agreement
or in taking or not taking action hereunder.

 

SECTION 9.13. APPOINTMENT OF SUPPLEMENTAL ADMINISTRATIVE AGENTS. (A)  IT IS THE
PURPOSE OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS THAT THERE SHALL BE NO
VIOLATION OF ANY LAW OF ANY JURISDICTION DENYING OR RESTRICTING THE RIGHT OF
BANKING CORPORATIONS OR ASSOCIATIONS TO TRANSACT BUSINESS AS AGENT OR TRUSTEE IN
SUCH JURISDICTION. IT IS RECOGNIZED THAT IN CASE OF LITIGATION UNDER THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND IN PARTICULAR IN CASE OF THE
ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, OR IN CASE THE ADMINISTRATIVE AGENT
DEEMS THAT BY REASON OF ANY PRESENT OR FUTURE LAW OF ANY JURISDICTION IT MAY NOT
EXERCISE ANY OF THE RIGHTS, POWERS OR REMEDIES GRANTED HEREIN OR IN ANY OF THE
OTHER LOAN DOCUMENTS OR TAKE ANY OTHER ACTION WHICH MAY BE DESIRABLE OR
NECESSARY IN CONNECTION THEREWITH, THE ADMINISTRATIVE AGENT IS HEREBY AUTHORIZED
TO APPOINT AN ADDITIONAL INDIVIDUAL OR INSTITUTION SELECTED BY THE
ADMINISTRATIVE AGENT IN ITS SOLE DISCRETION AS A SEPARATE TRUSTEE, CO-TRUSTEE,
ADMINISTRATIVE AGENT, COLLATERAL AGENT, ADMINISTRATIVE SUB-AGENT OR
ADMINISTRATIVE CO-AGENT (ANY SUCH ADDITIONAL INDIVIDUAL OR INSTITUTION BEING
REFERRED TO HEREIN INDIVIDUALLY, AS A “SUPPLEMENTAL ADMINISTRATIVE AGENT” AND
COLLECTIVELY, AS “SUPPLEMENTAL ADMINISTRATIVE AGENTS”).

 

(B)                                 IN THE EVENT THAT THE ADMINISTRATIVE AGENT
APPOINTS A SUPPLEMENTAL ADMINISTRATIVE AGENT WITH RESPECT TO ANY COLLATERAL,
(I) EACH AND EVERY RIGHT, POWER, PRIVILEGE OR DUTY EXPRESSED OR INTENDED BY THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO BE EXERCISED BY OR VESTED IN OR
CONVEYED TO THE ADMINISTRATIVE AGENT WITH RESPECT TO SUCH COLLATERAL SHALL BE
EXERCISABLE BY AND VEST IN SUCH SUPPLEMENTAL ADMINISTRATIVE AGENT TO THE EXTENT,
AND ONLY TO THE EXTENT, NECESSARY TO ENABLE SUCH SUPPLEMENTAL ADMINISTRATIVE
AGENT TO EXERCISE SUCH

 

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RIGHTS, POWERS AND PRIVILEGES WITH RESPECT TO SUCH COLLATERAL AND TO
PERFORM SUCH DUTIES WITH RESPECT TO SUCH COLLATERAL, AND EVERY COVENANT AND
OBLIGATION CONTAINED IN THE LOAN DOCUMENTS AND NECESSARY TO THE EXERCISE OR
PERFORMANCE THEREOF BY SUCH SUPPLEMENTAL ADMINISTRATIVE AGENT SHALL RUN TO AND
BE ENFORCEABLE BY EITHER THE ADMINISTRATIVE AGENT OR SUCH SUPPLEMENTAL
ADMINISTRATIVE AGENT, AND (II) THE PROVISIONS OF THIS ARTICLE IX AND OF SECTIONS
10.04 AND 10.05 THAT REFER TO THE ADMINISTRATIVE AGENT SHALL INURE TO THE
BENEFIT OF SUCH SUPPLEMENTAL ADMINISTRATIVE AGENT AND ALL REFERENCES THEREIN TO
THE ADMINISTRATIVE AGENT SHALL BE DEEMED TO BE REFERENCES TO THE ADMINISTRATIVE
AGENT AND/OR SUCH SUPPLEMENTAL ADMINISTRATIVE AGENT, AS THE CONTEXT MAY REQUIRE.

 

(C)                                  SHOULD ANY INSTRUMENT IN WRITING FROM THE
BORROWER OR ANY OTHER LOAN PARTY BE REQUIRED BY ANY SUPPLEMENTAL ADMINISTRATIVE
AGENT SO APPOINTED BY THE ADMINISTRATIVE AGENT FOR MORE FULLY AND CERTAINLY
VESTING IN AND CONFIRMING TO HIM OR IT SUCH RIGHTS, POWERS, PRIVILEGES AND
DUTIES, THE BORROWER SHALL, OR SHALL CAUSE SUCH LOAN PARTY TO, EXECUTE,
ACKNOWLEDGE AND DELIVER ANY AND ALL SUCH INSTRUMENTS PROMPTLY UPON REQUEST BY
THE ADMINISTRATIVE AGENT. IN CASE ANY SUPPLEMENTAL ADMINISTRATIVE AGENT, OR A
SUCCESSOR THERETO, SHALL DIE, BECOME INCAPABLE OF ACTING, RESIGN OR BE REMOVED,
ALL THE RIGHTS, POWERS, PRIVILEGES AND DUTIES OF SUCH SUPPLEMENTAL
ADMINISTRATIVE AGENT, TO THE EXTENT PERMITTED BY LAW, SHALL VEST IN AND BE
EXERCISED BY THE ADMINISTRATIVE AGENT UNTIL THE APPOINTMENT OF A NEW
SUPPLEMENTAL ADMINISTRATIVE AGENT.

 

SECTION 9.14. Solidary Interests/Quebec Liens (Hypothecs). Without limiting the
generality of the foregoing, for the purposes of creating a solidarité active in
accordance with Article 1541 of the Civil Code of Quebec, between each Secured
Credit Party, taken individually, on the one hand, and the Administrative Agent,
on the other hand, the Borrower, the Guarantors and each such Secured Credit
Party acknowledge and agree with the Administrative Agent that such Secured
Credit Party and the Administrative Agent are hereby conferred the legal status
of solidary creditors of the Borrower and the Guarantors in respect of all
Obligations, present and future, owed by the Borrowers or the Guarantors to each
such Secured Credit Party and the Administrative Agent (collectively, the
“Solidary Claim”). Accordingly, but subject (for the avoidance of doubt) to
Article 1542 of the Civil Code of Quebec, the Borrower and the Guarantors are
irrevocably bound towards the Administrative Agent and each Secured Credit Party
in respect of the entire Solidary Claim of the Administrative Agent and such
Secured Credit Party. As a result of the foregoing, the parties hereto
acknowledge that the Administrative Agent and each Secured Credit Party shall at
all times have a valid and effective right of action for the entire Solidary
Claim of the Administrative Agent and such Secured Credit Party and the right to
give full acquittance for it. Accordingly, without limiting the generality of
the foregoing, the Administrative Agent, as solidary creditor with each Secured
Credit Party, shall at all times have a valid and effective right of action in
respect of all Obligations, present and future, owed by the Borrower or the
Guarantors to the Administrative Agent and to the Credit Parties or any of them
and the right to give a full acquittance for same. For greater certainty, the
foregoing provisions of this paragraph, and the rights of the Credit Parties,
shall at all times be subject to the provisions of this Agreement.

 

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ARTICLE X

 

MISCELLANEOUS

 

SECTION 10.01. Amendments, Etc. Except as otherwise set forth in this Agreement,
no amendment, modification, supplement or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower or the applicable Loan Party, as
the case may be, and each such waiver, amendment, modification, supplement or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided that, no such amendment, modification,
supplement, waiver or consent shall:

 

(A)                                  EXTEND OR INCREASE THE COMMITMENT OF ANY
LENDER WITHOUT THE WRITTEN CONSENT OF SUCH LENDER (IT BEING UNDERSTOOD THAT A
WAIVER OF ANY CONDITION PRECEDENT SET FORTH IN SECTION 4.01 OR THE WAIVER OF ANY
DEFAULT OR MANDATORY PREPAYMENT OR OFFER TO PURCHASE OF THE LOANS SHALL NOT
CONSTITUTE AN EXTENSION OR INCREASE OF ANY COMMITMENT OF ANY LENDER);

 

(B)                                 POSTPONE ANY DATE SCHEDULED FOR, OR REDUCE
OR FORGIVE THE AMOUNT OF, ANY PAYMENT OF PRINCIPAL OR INTEREST UNDER
SECTION 2.07 OR 2.08 WITHOUT THE WRITTEN CONSENT OF EACH LENDER DIRECTLY
AFFECTED THEREBY, IT BEING UNDERSTOOD THAT THE WAIVER OF (OR AMENDMENT TO THE
TERMS OF) ANY MANDATORY PREPAYMENT OR OFFER TO PURCHASE OF THE LOANS SHALL NOT
CONSTITUTE A POSTPONEMENT OF ANY DATE SCHEDULED FOR THE PAYMENT OF PRINCIPAL OR
INTEREST;

 

(C)                                  REDUCE THE PRINCIPAL OF, OR THE RATE OF
INTEREST SPECIFIED HEREIN ON, ANY LOAN, OR (SUBJECT TO CLAUSE (I) OF THE SECOND
PROVISO TO THIS SECTION 10.01) ANY FEES OR OTHER AMOUNTS PAYABLE HEREUNDER OR
UNDER ANY OTHER LOAN DOCUMENT WITHOUT THE WRITTEN CONSENT OF EACH LENDER
DIRECTLY AFFECTED THEREBY, IT BEING UNDERSTOOD THAT ANY CHANGE TO THE DEFINITION
OF CONSOLIDATED TOTAL LEVERAGE RATIO OR IN THE COMPONENT DEFINITIONS THEREOF
SHALL NOT CONSTITUTE A REDUCTION IN THE RATE; PROVIDED THAT ONLY THE CONSENT OF
THE REQUIRED LENDERS SHALL BE NECESSARY TO AMEND THE DEFINITION OF “DEFAULT
RATE” OR TO WAIVE ANY OBLIGATION OF THE BORROWER TO PAY INTEREST AT THE DEFAULT
RATE;

 

(D)                                 CHANGE ANY PROVISION OF THIS SECTION 10.01,
THE DEFINITION OF “REQUIRED LENDERS” OR “PRO RATA SHARE” OR SECTION 2.12(A) AND
(G), 2.13 OR 8.04 WITHOUT THE WRITTEN CONSENT OF EACH LENDER DIRECTLY AFFECTED
THEREBY;

 

(E)                                  OTHER THAN IN A TRANSACTION PERMITTED UNDER
SECTION 7.01 OR 7.06, RELEASE ALL OR SUBSTANTIALLY ALL OF THE COLLATERAL IN ANY
TRANSACTION OR SERIES OF RELATED TRANSACTIONS, WITHOUT THE WRITTEN CONSENT OF
EACH LENDER; OR

 

(F)                                    OTHER THAN IN CONNECTION WITH A
TRANSACTION PERMITTED UNDER SECTION 7.01 OR 7.06, RELEASE ALL OR SUBSTANTIALLY
ALL OF THE AGGREGATE VALUE OF THE GUARANTIES, WITHOUT THE WRITTEN CONSENT OF
EACH LENDER;

 

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and provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of, or any fees or other amounts
payable to, the Administrative Agent under this Agreement or any other Loan
Document (including in its capacity as Collateral Agent) and
(ii) Section 10.07(h) may not be amended, waived or otherwise modified without
the consent of each Granting Lender all or any part of whose Loans are being
funded by an SPC at the time of such amendment, waiver or other modification.
Any such waiver and any such amendment, modification or supplement in accordance
with the terms of this Section 10.01 shall apply equally to each of the Lenders
and shall be binding on the Loan Parties, the Lenders, the Agents and all future
holders of the Loans and the Commitments. Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder, except that the
Commitment of such Lender may not be increased or extended without the consent
of such Lender (it being understood that any Commitments or Loans held or deemed
held by any Defaulting Lender shall be excluded for a vote of the Lenders
hereunder requiring any consent of the Lenders).

 

Notwithstanding the foregoing, this Agreement may be amended (or amended and
restated) with the written consent of the Required Lenders, the Administrative
Agent and the Borrower (a) to add one or more additional credit facilities to
this Agreement and to permit the extensions of credit from time to time
outstanding thereunder and the accrued interest and fees in respect thereof to
share ratably in the benefits of this Agreement and the other Loan Documents
with the Loan and the accrued interest and fees in respect thereof and (b) to
include appropriately the Lenders holding such credit facilities in any
determination of the Required Lenders.

 

In addition, notwithstanding the foregoing, this Agreement may be amended with
the written consent of the Administrative Agent, the Borrower and the Lenders
providing the relevant Replacement Term Loans to permit the refinancing of all
outstanding Loans (“Refinanced Term Loans”) with a replacement term loan tranche
denominated in Dollars (“Replacement Term Loans”) hereunder; provided that
(a) the aggregate principal amount of such Replacement Term Loans shall not
exceed the aggregate principal amount of such Refinanced Term Loans, (b) the
Applicable Rate for such Replacement Term Loans shall not be higher than the
Applicable Rate for such Refinanced Term Loans, (c) the Weighted Average Life to
Maturity of such Replacement Term Loans shall not be shorter than the Weighted
Average Life to Maturity of such Refinanced Term Loans at the time of such
refinancing (except to the extent of nominal amortization for periods where
amortization has been eliminated as a result of prepayment of the Loans) and
(d) all other terms applicable to such Replacement Term Loans shall be
substantially identical to, or less favorable to the Lenders providing such
Replacement Term Loans than, those applicable to such Refinanced Term Loans,
except to the extent necessary to provide for covenants and other terms
applicable to any period after the latest final maturity of the Loans in effect
immediately prior to such refinancing.

 

SECTION 10.02. NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES. (A) GENERAL.
UNLESS OTHERWISE EXPRESSLY PROVIDED HEREIN, ALL NOTICES AND OTHER COMMUNICATIONS
PROVIDED FOR HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT SHALL BE IN WRITING
(INCLUDING BY FACSIMILE TRANSMISSION). ALL SUCH WRITTEN NOTICES SHALL BE MAILED,
FAXED OR DELIVERED TO THE APPLICABLE ADDRESS, FACSIMILE NUMBER OR ELECTRONIC
MAIL ADDRESS, AND ALL NOTICES AND OTHER

 

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COMMUNICATIONS EXPRESSLY PERMITTED HEREUNDER TO BE GIVEN BY TELEPHONE SHALL BE
MADE TO THE APPLICABLE TELEPHONE NUMBER, AS FOLLOWS:

 

(I)                                     IF TO THE BORROWER OR THE ADMINISTRATIVE
AGENT, TO THE ADDRESS, FACSIMILE NUMBER, ELECTRONIC MAIL ADDRESS OR TELEPHONE
NUMBER SPECIFIED FOR SUCH PERSON ON SCHEDULE 10.02 OR TO SUCH OTHER ADDRESS,
FACSIMILE NUMBER, ELECTRONIC MAIL ADDRESS OR TELEPHONE NUMBER AS SHALL BE
DESIGNATED BY SUCH PARTY IN A NOTICE TO THE OTHER PARTIES; AND

 

(II)                                  IF TO ANY OTHER LENDER, TO THE ADDRESS,
FACSIMILE NUMBER, ELECTRONIC MAIL ADDRESS OR TELEPHONE NUMBER SPECIFIED IN ITS
ADMINISTRATIVE QUESTIONNAIRE OR TO SUCH OTHER ADDRESS, FACSIMILE NUMBER,
ELECTRONIC MAIL ADDRESS OR TELEPHONE NUMBER AS SHALL BE DESIGNATED BY SUCH PARTY
IN A NOTICE TO THE BORROWER, AND THE ADMINISTRATIVE AGENT.

 

All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four (4) Business Days
after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when
sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
Section 10.02(c)), when delivered; provided that notices and other
communications to the Administrative Agent pursuant to Article 2 shall not be
effective until actually received by such Person. In no event shall a voice mail
message be effective as a notice, communication or confirmation hereunder.

 

(B)                                 EFFECTIVENESS OF FACSIMILE DOCUMENTS AND
SIGNATURES. LOAN DOCUMENTS MAY BE TRANSMITTED AND/OR SIGNED BY FACSIMILE. THE
EFFECTIVENESS OF ANY SUCH DOCUMENTS AND SIGNATURES SHALL, SUBJECT TO APPLICABLE
LAW, HAVE THE SAME FORCE AND EFFECT AS MANUALLY SIGNED ORIGINALS AND SHALL BE
BINDING ON ALL LOAN PARTIES, THE AGENTS AND THE LENDERS.

 

(C)                                  RELIANCE BY AGENTS AND LENDERS. THE
ADMINISTRATIVE AGENT AND THE LENDERS SHALL BE ENTITLED TO RELY AND ACT UPON ANY
NOTICES (INCLUDING TELEPHONIC COMMITTED LOAN NOTICES) PURPORTEDLY GIVEN BY OR ON
BEHALF OF THE BORROWER EVEN IF (I) SUCH NOTICES WERE NOT MADE IN A MANNER
SPECIFIED HEREIN, WERE INCOMPLETE OR WERE NOT PRECEDED OR FOLLOWED BY ANY OTHER
FORM OF NOTICE SPECIFIED HEREIN, OR (II) THE TERMS THEREOF, AS UNDERSTOOD BY THE
RECIPIENT, VARIED FROM ANY CONFIRMATION THEREOF. THE BORROWER SHALL INDEMNIFY
EACH AGENT-RELATED PERSON AND EACH LENDER FROM ALL LOSSES, COSTS, EXPENSES AND
LIABILITIES RESULTING FROM THE RELIANCE BY SUCH PERSON ON EACH NOTICE
PURPORTEDLY GIVEN BY OR ON BEHALF OF THE BORROWER IN THE ABSENCE OF GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. ALL TELEPHONIC NOTICES TO THE ADMINISTRATIVE
AGENT MAY BE RECORDED BY THE ADMINISTRATIVE AGENT, AND EACH OF THE PARTIES
HERETO HEREBY CONSENTS TO SUCH RECORDING.

 

SECTION 10.03. No Waiver; Cumulative Remedies. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder or under any other Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided, and

 

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provided under each other Loan Document, are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by Law.

 

SECTION 10.04. ATTORNEY COSTS AND EXPENSES. THE BORROWER AGREES (A) IF THE
CLOSING DATE OCCURS, TO PAY OR REIMBURSE THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT, THE SYNDICATION AGENT, THE CO-DOCUMENTATION AGENTS AND THE
ARRANGERS FOR ALL REASONABLE OUT-OF-POCKET COSTS AND EXPENSES INCURRED IN
CONNECTION WITH THE PREPARATION, NEGOTIATION, SYNDICATION AND EXECUTION OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND ANY AMENDMENT, WAIVER, CONSENT OR
OTHER MODIFICATION OF THE PROVISIONS HEREOF AND THEREOF (WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED THEREBY ARE CONSUMMATED), AND THE CONSUMMATION AND
ADMINISTRATION OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, INCLUDING
ALL ATTORNEY COSTS OF WHITE & CASE LLP AND LOCAL COUNSEL IN ANY OTHER RELEVANT
JURISDICTION (BUT EXCLUDING ALL OTHER ATTORNEY COSTS), AND (B) TO PAY OR
REIMBURSE THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE SYNDICATION AGENT,
THE CO-DOCUMENTATION AGENTS, THE ARRANGERS AND EACH LENDER FOR ALL OUT-OF-POCKET
COSTS AND EXPENSES INCURRED IN CONNECTION WITH THE ENFORCEMENT OF ANY RIGHTS OR
REMEDIES UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS (INCLUDING ALL SUCH
COSTS AND EXPENSES INCURRED DURING ANY LEGAL PROCEEDING, INCLUDING ANY
PROCEEDING UNDER ANY DEBTOR RELIEF LAW, AND INCLUDING ALL ATTORNEY COSTS OF A
SINGLE LAW FIRM ACTING AS COUNSEL TO THE ADMINISTRATIVE AGENT IN EACH RELEVANT
JURISDICTION). THE FOREGOING COSTS AND EXPENSES SHALL INCLUDE ALL REASONABLE
SEARCH, FILING, RECORDING AND TITLE INSURANCE CHARGES AND FEES AND TAXES RELATED
THERETO, AND OTHER (REASONABLE, IN THE CASE OF SECTION 10.04(A)) OUT-OF-POCKET
EXPENSES INCURRED BY ANY AGENT. THE AGREEMENTS IN THIS SECTION 10.04 SHALL
SURVIVE THE TERMINATION OF THE AGGREGATE COMMITMENTS AND REPAYMENT OF ALL OTHER
OBLIGATIONS. ALL AMOUNTS DUE UNDER THIS SECTION 10.04 SHALL BE PAID WITHIN TEN
(10) BUSINESS DAYS OF RECEIPT BY THE BORROWER OF AN INVOICE RELATING THERETO
SETTING FORTH SUCH EXPENSES IN REASONABLE DETAIL. IF ANY LOAN PARTY FAILS TO PAY
WHEN DUE ANY COSTS, EXPENSES OR OTHER AMOUNTS PAYABLE BY IT HEREUNDER OR UNDER
ANY LOAN DOCUMENT, SUCH AMOUNT MAY BE PAID ON BEHALF OF SUCH LOAN PARTY BY THE
ADMINISTRATIVE AGENT IN ITS SOLE DISCRETION.

 

SECTION 10.05. Indemnification by the Borrower. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents, trustees, investment advisors
and attorneys-in-fact (collectively, the “Indemnitees”) from and against any and
all liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever (other than Taxes, which are governed by
Sections 3.01 and 10.15 herein) which may at any time be imposed on, incurred by
or asserted against any such Indemnitee in any way relating to or arising out of
or in connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or instrument
delivered in connection with the transactions contemplated thereby or the
consummation of the transactions contemplated thereby, (b) any Commitment, Loan
or the use or proposed use of the proceeds therefrom, or (c) any actual or
alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by the Borrower, any Subsidiary or any
other Loan Party, or any Environmental Liability related in any way to the
Borrower, any Subsidiary or any other Loan Party, or (d) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including

 

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any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified
Liabilities”), in all cases, whether or not caused by or arising, in whole or in
part, out of the negligence of the Indemnitee; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements (x) resulted from the gross
negligence, bad faith or willful misconduct of such Indemnitee or of any
Affiliate, director, officer, employee, counsel, agent or attorney-in-fact of
such Indemnitee, and (y) resulted from a breach by such Indemnitee of its
obligations to a Loan Party. No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnitee or any Loan Party have
any liability for any special, punitive, indirect or consequential damages
relating to this Agreement or any other Loan Document or arising out of its
activities in connection herewith or therewith (whether before or after the
Closing Date). In the case of an investigation, litigation or other proceeding
to which the indemnity in this Section 10.05 applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is brought
by any Loan Party, its directors, stockholders or creditors or an Indemnitee or
any other Person, whether or not any Indemnitee is otherwise a party thereto and
whether or not any of the transactions contemplated hereunder or under any of
the other Loan Documents is consummated. All amounts due under this
Section 10.05 shall be paid within ten (10) Business Days after demand therefor;
provided, however, that such Indemnitee shall promptly refund such amount to the
extent that there is a final judicial or arbitral determination that such
Indemnitee was not entitled to indemnification or contribution rights with
respect to such payment pursuant to the express terms of this Section 10.05. The
agreements in this Section 10.05 shall survive the resignation of the
Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

 

SECTION 10.06. Payments Set Aside. To the extent that any payment by or on
behalf of the Borrower is made to any Agent or any Lender, or any Agent or any
Lender exercises its right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by such Agent or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its applicable
share of any amount so recovered from or repaid by any Agent, plus interest
thereon from the date of such demand to the date such payment is made at a rate
per annum equal to the Federal Funds Rate from time to time in effect.

 

SECTION 10.07. SUCCESSORS AND ASSIGNS. (A)  THE PROVISIONS OF THIS AGREEMENT
SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR
RESPECTIVE SUCCESSORS AND ASSIGNS PERMITTED HEREBY, EXCEPT THAT THE BORROWER
MAY NOT ASSIGN OR OTHERWISE TRANSFER ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER
WITHOUT THE PRIOR WRITTEN CONSENT OF EACH LENDER (EXCEPT AS

 

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EXPRESSLY PERMITTED BY SECTIONS 7.06(A) AND (B)) AND NO LENDER MAY ASSIGN OR
OTHERWISE TRANSFER ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER EXCEPT (I) TO AN
ELIGIBLE ASSIGNEE, (II) BY WAY OF PARTICIPATION IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 10.07(E), (III) BY WAY OF PLEDGE OR ASSIGNMENT OF A
SECURITY INTEREST SUBJECT TO THE RESTRICTIONS OF SECTION 10.07(G) AND (I) OR
(IV) TO AN SPC IN ACCORDANCE WITH THE PROVISIONS OF SECTION 10.07(H) (AND ANY
OTHER ATTEMPTED ASSIGNMENT OR TRANSFER BY ANY PARTY HERETO SHALL BE NULL AND
VOID). NOTHING IN THIS AGREEMENT, EXPRESSED OR IMPLIED, SHALL BE CONSTRUED TO
CONFER UPON ANY PERSON (OTHER THAN THE PARTIES HERETO, THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS PERMITTED HEREBY, PARTICIPANTS TO THE EXTENT PROVIDED IN
SECTION 10.07(E) AND, TO THE EXTENT EXPRESSLY CONTEMPLATED HEREBY, THE
INDEMNITEES) ANY LEGAL OR EQUITABLE RIGHT, REMEDY OR CLAIM UNDER OR BY REASON OF
THIS AGREEMENT.

 

(B)                                 (I)  SUBJECT TO THE CONDITIONS SET FORTH IN
PARAGRAPH (B)(II) BELOW, ANY LENDER MAY ASSIGN TO ONE OR MORE ASSIGNEES
(“ASSIGNEES”) ALL OR A PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER THIS
AGREEMENT (INCLUDING ALL OR A PORTION OF ITS COMMITMENT AND THE LOANS AT THE
TIME OWING TO IT) WITH THE PRIOR WRITTEN CONSENT (SUCH CONSENT NOT TO BE
UNREASONABLY WITHHELD, DELAYED OR CONDITIONED) OF:

 

(A)                              the Borrower, provided that no consent of the
Borrower shall be required for an assignment to a Lender, an Affiliate of a
Lender, an Approved Fund or, if an Event of Default under Section 8.01(a),
(f) or (g) has occurred and is continuing, any Assignee; and

 

(B)                                the Administrative Agent, provided that no
consent of the Administrative Agent shall be required for an assignment (i) of
all or any portion of a Loan to a Lender, an Affiliate of a Lender or an
Approved Fund or (ii) to an Agent or an Affiliate of an Agent.

 

(II)                                  ASSIGNMENTS SHALL BE SUBJECT TO THE
FOLLOWING ADDITIONAL CONDITIONS:

 

(A)                              except in the case of an assignment to a Lender
or an Affiliate of a Lender or Approved Fund or an assignment of the entire
remaining amount of the assigning Lender’s Commitment or Loans, the amount of
the Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$1,000,000 unless each of the Borrower and the Administrative Agent otherwise
consents, provided that (1) no such consent of the Borrower shall be required if
an Event of Default under Section 8.01(a), (f) or (g) has occurred and is
continuing and (2) such amounts shall be aggregated in respect of each Lender
and its Affiliates or Approved Funds, if any;

 

(B)                                the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee of $3,500; and

 

(C)                                the Assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire.

 

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(C)                                  SUBJECT TO ACCEPTANCE AND RECORDING THEREOF
BY THE ADMINISTRATIVE AGENT PURSUANT TO SECTION 10.07(D), FROM AND AFTER THE
EFFECTIVE DATE SPECIFIED IN EACH ASSIGNMENT AND ASSUMPTION, THE ELIGIBLE
ASSIGNEE THEREUNDER SHALL BE A PARTY TO THIS AGREEMENT AND, TO THE EXTENT OF THE
INTEREST ASSIGNED BY SUCH ASSIGNMENT AND ASSUMPTION, HAVE THE RIGHTS AND
OBLIGATIONS OF A LENDER UNDER THIS AGREEMENT, AND THE ASSIGNING LENDER
THEREUNDER SHALL, TO THE EXTENT OF THE INTEREST ASSIGNED BY SUCH ASSIGNMENT AND
ASSUMPTION, BE RELEASED FROM ITS OBLIGATIONS UNDER THIS AGREEMENT (AND, IN THE
CASE OF AN ASSIGNMENT AND ASSUMPTION COVERING ALL OF THE ASSIGNING LENDER’S
RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT, SUCH LENDER SHALL CEASE TO BE A
PARTY HERETO BUT SHALL CONTINUE TO BE ENTITLED TO THE BENEFITS OF SECTIONS 3.01,
3.04, 3.05, 10.04 AND 10.05 WITH RESPECT TO FACTS AND CIRCUMSTANCES OCCURRING
PRIOR TO THE EFFECTIVE DATE OF SUCH ASSIGNMENT). UPON REQUEST, AND THE SURRENDER
BY THE ASSIGNING LENDER OF ITS NOTE, THE BORROWER (AT ITS EXPENSE) SHALL EXECUTE
AND DELIVER A NOTE TO THE ASSIGNEE LENDER. ANY ASSIGNMENT OR TRANSFER BY A
LENDER OF RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT THAT DOES NOT COMPLY WITH
THIS CLAUSE (C) SHALL BE TREATED FOR PURPOSES OF THIS AGREEMENT AS A SALE BY
SUCH LENDER OF A PARTICIPATION IN SUCH RIGHTS AND OBLIGATIONS IN ACCORDANCE WITH
SECTION 10.07(E).

 

(D)                                 THE ADMINISTRATIVE AGENT, ACTING SOLELY FOR
THIS PURPOSE AS AN AGENT OF THE BORROWER, SHALL MAINTAIN AT THE ADMINISTRATIVE
AGENT’S OFFICE A COPY OF EACH ASSIGNMENT AND ASSUMPTION DELIVERED TO IT AND A
REGISTER FOR THE RECORDATION OF THE NAMES AND ADDRESSES OF THE LENDERS, AND THE
COMMITMENTS OF, AND PRINCIPAL AMOUNTS (AND RELATED INTEREST AMOUNTS) OF THE
LOANS OWING TO EACH LENDER PURSUANT TO THE TERMS HEREOF FROM TIME TO TIME (THE
“REGISTER”). THE ENTRIES IN THE REGISTER SHALL BE CONCLUSIVE, ABSENT MANIFEST
ERROR, AND THE BORROWER, THE AGENTS AND THE LENDERS SHALL TREAT EACH PERSON
WHOSE NAME IS RECORDED IN THE REGISTER PURSUANT TO THE TERMS HEREOF AS A LENDER
HEREUNDER FOR ALL PURPOSES OF THIS AGREEMENT, NOTWITHSTANDING NOTICE TO THE
CONTRARY. THE REGISTER SHALL BE AVAILABLE FOR INSPECTION BY THE BORROWER, ANY
AGENT AND ANY LENDER, AT ANY REASONABLE TIME AND FROM TIME TO TIME UPON
REASONABLE PRIOR NOTICE.

 

(E)                                  ANY LENDER MAY AT ANY TIME, WITHOUT THE
CONSENT OF, OR NOTICE TO, THE BORROWER OR THE ADMINISTRATIVE AGENT, SELL
PARTICIPATIONS TO ANY PERSON (OTHER THAN A NATURAL PERSON) (EACH, A
“PARTICIPANT”) IN ALL OR A PORTION OF SUCH LENDER’S RIGHTS AND/OR OBLIGATIONS
UNDER THIS AGREEMENT (INCLUDING ALL OR A PORTION OF ITS COMMITMENT AND/OR THE
LOANS OWING TO IT); PROVIDED THAT (I) SUCH LENDER’S OBLIGATIONS UNDER THIS
AGREEMENT SHALL REMAIN UNCHANGED, (II) SUCH LENDER SHALL REMAIN SOLELY
RESPONSIBLE TO THE OTHER PARTIES HERETO FOR THE PERFORMANCE OF SUCH OBLIGATIONS
AND (III) THE BORROWER, THE AGENTS AND THE OTHER LENDERS SHALL CONTINUE TO DEAL
SOLELY AND DIRECTLY WITH SUCH LENDER IN CONNECTION WITH SUCH LENDER’S RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT. ANY AGREEMENT OR INSTRUMENT PURSUANT TO WHICH
A LENDER SELLS SUCH A PARTICIPATION SHALL PROVIDE THAT SUCH LENDER SHALL RETAIN
THE SOLE RIGHT TO ENFORCE THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND TO
APPROVE ANY AMENDMENT, MODIFICATION OR WAIVER OF ANY PROVISION OF THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS; PROVIDED THAT SUCH AGREEMENT OR INSTRUMENT
MAY PROVIDE THAT SUCH LENDER WILL NOT, WITHOUT THE CONSENT OF THE PARTICIPANT,
AGREE TO ANY AMENDMENT, WAIVER OR OTHER MODIFICATION DESCRIBED IN THE FIRST
PROVISO TO SECTION 10.01 THAT DIRECTLY AFFECTS SUCH PARTICIPANT. SUBJECT TO
SECTION 10.07(F), THE BORROWER AGREES THAT EACH PARTICIPANT SHALL BE ENTITLED TO
THE BENEFITS OF SECTIONS 3.01, 3.04 AND 3.05 TO THE SAME EXTENT AS IF IT WERE A
LENDER AND HAD ACQUIRED ITS INTEREST BY ASSIGNMENT PURSUANT TO
SECTION 10.07(C) BUT SHALL NOT BE ENTITLED TO RECOVER GREATER AMOUNTS UNDER SUCH
SECTIONS THAN THE SELLING LENDER WOULD BE ENTITLED TO RECOVER. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, EACH PARTICIPANT ALSO

 

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SHALL BE ENTITLED TO THE BENEFITS OF SECTION 10.09 AS THOUGH IT WERE A LENDER;
PROVIDED THAT SUCH PARTICIPANT AGREES TO BE SUBJECT TO SECTION 2.13 AS THOUGH IT
WERE A LENDER.

 

(F)                                    A PARTICIPANT SHALL NOT BE ENTITLED TO
RECEIVE ANY GREATER PAYMENT UNDER SECTION 3.01, 3.04 OR 3.05 THAN THE APPLICABLE
LENDER WOULD HAVE BEEN ENTITLED TO RECEIVE WITH RESPECT TO THE PARTICIPATION
SOLD TO SUCH PARTICIPANT, UNLESS THE SALE OF THE PARTICIPATION TO SUCH
PARTICIPANT IS MADE WITH THE BORROWER’S PRIOR WRITTEN CONSENT. A PARTICIPANT
SHALL NOT BE ENTITLED TO THE BENEFITS OF SECTION 3.01 UNLESS THE BORROWER IS
NOTIFIED OF THE PARTICIPATION SOLD TO SUCH PARTICIPANT AND SUCH PARTICIPANT
AGREES, FOR THE BENEFIT OF THE BORROWER, TO COMPLY WITH SECTION 10.15 AS THOUGH
IT WERE A LENDER.

 

(G)                                 ANY LENDER, WITHOUT THE CONSENT OF THE
BORROWER OR THE ADMINISTRATIVE AGENT, MAY AT ANY TIME PLEDGE OR ASSIGN A
SECURITY INTEREST IN ALL OR ANY PORTION OF ITS RIGHTS UNDER THIS AGREEMENT
(INCLUDING UNDER ITS NOTE, IF ANY) TO SECURE OBLIGATIONS OF SUCH LENDER,
INCLUDING ANY PLEDGE OR ASSIGNMENT TO SECURE OBLIGATIONS TO A FEDERAL RESERVE
BANK; PROVIDED THAT NO SUCH PLEDGE OR ASSIGNMENT SHALL RELEASE SUCH LENDER FROM
ANY OF ITS OBLIGATIONS HEREUNDER OR SUBSTITUTE ANY SUCH PLEDGEE OR ASSIGNEE FOR
SUCH LENDER AS A PARTY HERETO.

 

(H)                                 NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, ANY LENDER (A “GRANTING LENDER”) MAY GRANT TO A SPECIAL
PURPOSE FUNDING VEHICLE IDENTIFIED AS SUCH IN WRITING FROM TIME TO TIME BY THE
GRANTING LENDER TO THE ADMINISTRATIVE AGENT AND THE BORROWER (AN “SPC”) THE
OPTION TO PROVIDE ALL OR ANY PART OF ANY LOAN THAT SUCH GRANTING LENDER WOULD
OTHERWISE BE OBLIGATED TO MAKE PURSUANT TO THIS AGREEMENT; PROVIDED THAT
(I) NOTHING HEREIN SHALL CONSTITUTE A COMMITMENT BY ANY SPC TO FUND ANY LOAN,
AND (II) IF AN SPC ELECTS NOT TO EXERCISE SUCH OPTION OR OTHERWISE FAILS TO MAKE
ALL OR ANY PART OF SUCH LOAN, THE GRANTING LENDER SHALL BE OBLIGATED TO MAKE
SUCH LOAN PURSUANT TO THE TERMS HEREOF. EACH PARTY HERETO HEREBY AGREES THAT
(I) NEITHER THE GRANT TO ANY SPC NOR THE EXERCISE BY ANY SPC OF SUCH OPTION
SHALL INCREASE THE COSTS OR EXPENSES OR OTHERWISE INCREASE OR CHANGE THE
OBLIGATIONS OF THE BORROWER UNDER THIS AGREEMENT (INCLUDING ITS OBLIGATIONS
UNDER SECTION 3.01, 3.04 OR 3.05), (II) NO SPC SHALL BE LIABLE FOR ANY INDEMNITY
OR SIMILAR PAYMENT OBLIGATION UNDER THIS AGREEMENT FOR WHICH A LENDER WOULD BE
LIABLE, AND (III) THE GRANTING LENDER SHALL FOR ALL PURPOSES, INCLUDING THE
APPROVAL OF ANY AMENDMENT, WAIVER OR OTHER MODIFICATION OF ANY PROVISION OF ANY
LOAN DOCUMENT, REMAIN THE LENDER OF RECORD HEREUNDER. THE MAKING OF A LOAN BY AN
SPC HEREUNDER SHALL UTILIZE THE COMMITMENT OF THE GRANTING LENDER TO THE SAME
EXTENT, AND AS IF, SUCH LOAN WERE MADE BY SUCH GRANTING LENDER. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN, ANY SPC MAY (I) WITH NOTICE TO, BUT
WITHOUT PRIOR CONSENT OF THE BORROWER AND THE ADMINISTRATIVE AGENT AND WITH THE
PAYMENT OF A PROCESSING FEE OF $3,500, ASSIGN ALL OR ANY PORTION OF ITS RIGHT TO
RECEIVE PAYMENT WITH RESPECT TO ANY LOAN TO THE GRANTING LENDER AND
(II) DISCLOSE ON A CONFIDENTIAL BASIS ANY NON-PUBLIC INFORMATION RELATING TO ITS
FUNDING OF LOANS TO ANY RATING AGENCY, COMMERCIAL PAPER DEALER OR PROVIDER OF
ANY SURETY OR GUARANTEE OR CREDIT OR LIQUIDITY ENHANCEMENT TO SUCH SPC.

 

Notwithstanding anything to the contrary contained herein, (1) any Lender,
without the consent of the Borrower or the Administrative Agent, may in
accordance with applicable Law create a security interest in all or any portion
of the Loans owing to it and the Note, if any, held by it and (2) any Lender
that is a Fund, without the consent of the Borrower or the Administrative Agent,
may create a security interest in all or any portion of the Loans owing to it
and the Note, if any,

 

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held by it to the trustee for holders of obligations owed, or securities issued,
by such Fund as security for such obligations or securities; provided that
unless and until such trustee actually becomes a Lender in compliance with the
other provisions of this Section 10.07, (i) no such pledge shall release the
pledging Lender from any of its obligations under the Loan Documents and
(ii) such trustee shall not be entitled to exercise any of the rights of a
Lender under the Loan Documents even though such trustee may have acquired
ownership rights with respect to the pledged interest through foreclosure or
otherwise.

 

SECTION 10.08. Confidentiality. Each of the Agents and the Lenders agrees to
maintain the confidentiality of the Information, except that Information may be
disclosed (a) to its Affiliates and its and its Affiliates’ directors, officers,
employees, trustees, investment advisors and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (b) to the
extent requested by any Governmental Authority; (c) to the extent required by
applicable Laws or regulations or by any subpoena or similar legal process;
(d) to any other party to this Agreement; (e) subject to an agreement containing
provisions substantially the same as those of this Section 10.08 (or as
may otherwise be reasonably acceptable to the Borrower), to any pledgee referred
to in Section 10.07(g), counterparty to a Swap Contract, Eligible Assignee of or
Participant in, or any prospective Eligible Assignee of or Participant in, any
of its rights or obligations under this Agreement; (f) with the written consent
of the Borrower; (g) to the extent such Information becomes publicly available
other than as a result of a breach of this Section 10.08; (h) to any
Governmental Authority or examiner (including the National Association of
Insurance Commissioners or any other similar organization) regulating any Lender
or its Affiliates; or (i) to any rating agency when required by it (it being
understood that, prior to any such disclosure, such rating agency shall
undertake to preserve the confidentiality of any Information relating to the
Loan Parties received by it from such Lender). In addition, the Agents and the
Lenders may disclose the existence of this Agreement and information about this
Agreement to market data collectors, similar service providers to the lending
industry, and service providers to the Agents and the Lenders in connection with
the administration and management of this Agreement, the other Loan Documents,
the Commitments, and the Loans. For the purposes of this Section 10.08,
“Information” means all information received from any Loan Party relating to any
Loan Party or its business, other than any such information that is publicly
available to any Agent or any Lender prior to disclosure by any Loan Party other
than as a result of a breach of this Section 10.08; provided that, in the case
of information received from a Loan Party after the date hereof, such
information is clearly identified at the time of delivery as confidential or
(ii) is delivered pursuant to Section 6.01, 6.02 or 6.03 hereof.

 

SECTION 10.09. Setoff. In addition to any rights and remedies of the Lenders
provided by Law, upon the occurrence and during the continuance of any Event of
Default, each Lender and its Affiliates is authorized at any time and from time
to time, without prior notice to the Borrower or any other Loan Party, any such
notice being waived by the Borrower (on its own behalf and on behalf of each
Loan Party and its Subsidiaries) to the fullest extent permitted by applicable
Law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held by, and other Indebtedness at any
time owing by, such Lender and its Affiliates to or for the credit or the
account of the respective Loan Parties and their Subsidiaries against any and
all Obligations owing to such Lender and its Affiliates

 

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hereunder or under any other Loan Document, now or hereafter existing,
irrespective of whether or not such Agent or such Lender or Affiliate shall have
made demand under this Agreement or any other Loan Document and although such
Obligations may be contingent or unmatured or denominated in a currency
different from that of the applicable deposit or Indebtedness. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such set off and application made by such Lender; provided that the failure to
give such notice shall not affect the validity of such setoff and application.
The rights of the Administrative Agent and each Lender under this Section 10.09
are in addition to other rights and remedies (including other rights of setoff)
that the Administrative Agent and such Lender may have.

 

SECTION 10.10. Interest Rate Limitation. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”). If any Agent or any
Lender shall receive interest in an amount that exceeds the Maximum Rate, the
excess interest shall be applied to the principal of the Loans or, if it exceeds
such unpaid principal, refunded to the Borrower. In determining whether the
interest contracted for, charged, or received by an Agent or a Lender exceeds
the Maximum Rate, such Person may, to the extent permitted by applicable Law,
(a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.

 

SECTION 10.11. Counterparts. This Agreement and each other Loan Document may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. Delivery
by telecopier of an executed counterpart of a signature page to this Agreement
and each other Loan Document shall be effective as delivery of an original
executed counterpart of this Agreement and such other Loan Document. The Agents
may also require that any such documents and signatures delivered by telecopier
be confirmed by a manually signed original thereof; provided that the failure to
request or deliver the same shall not limit the effectiveness of any document or
signature delivered by telecopier.

 

SECTION 10.12. Integration. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Agents or the Lenders in any
other Loan Document shall not be deemed a conflict with this Agreement. Each
Loan Document was drafted with the joint participation of the respective parties
thereto and shall be construed neither against nor in favor of any party, but
rather in accordance with the fair meaning thereof.

 

SECTION 10.13. Survival of Representations and Warranties. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have

 

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been or will be relied upon by each Agent and each Lender, regardless of any
investigation made by any Agent or any Lender or on their behalf and
notwithstanding that any Agent or any Lender may have had notice or knowledge of
any Default at the time of any Loan, and shall continue in full force and effect
as long as any Loan or any other Obligation hereunder shall remain unpaid or
unsatisfied (other than Obligations under Secured Hedge Agreements or contingent
indemnification obligations, in any such case, not then due and payable).

 

SECTION 10.14. Severability. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby. The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

SECTION 10.15. TAX FORMS. (A)  EACH LENDER AND AGENT THAT IS NOT A “UNITED
STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE CODE (EACH, A
“FOREIGN LENDER”) SHALL DELIVER TO THE BORROWER AND THE ADMINISTRATIVE AGENT, ON
OR PRIOR TO THE DATE WHICH IS TEN (10) BUSINESS DAYS AFTER THE CLOSING DATE (OR
UPON ACCEPTING AN ASSIGNMENT OF AN INTEREST HEREIN), TWO DULY SIGNED, PROPERLY
COMPLETED COPIES OF EITHER IRS FORM W-8BEN OR ANY SUCCESSOR THERETO (RELATING TO
SUCH FOREIGN LENDER AND ENTITLING IT TO AN EXEMPTION FROM, OR REDUCTION OF,
UNITED STATES WITHHOLDING TAX ON ALL PAYMENTS TO BE MADE TO SUCH FOREIGN LENDER
BY THE BORROWER OR ANY OTHER LOAN PARTY PURSUANT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT) OR IRS FORM W-8ECI OR ANY SUCCESSOR THERETO (RELATING TO ALL
PAYMENTS TO BE MADE TO SUCH FOREIGN LENDER BY THE BORROWER OR ANY OTHER LOAN
PARTY PURSUANT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT) OR SUCH OTHER
EVIDENCE REASONABLY SATISFACTORY TO THE BORROWER AND THE ADMINISTRATIVE AGENT
THAT SUCH FOREIGN LENDER IS ENTITLED TO AN EXEMPTION FROM, OR REDUCTION OF,
UNITED STATES WITHHOLDING TAX, INCLUDING ANY EXEMPTION PURSUANT TO
SECTION 871(H) OR 881(C) OF THE CODE, AND IN THE CASE OF A FOREIGN LENDER
CLAIMING SUCH AN EXEMPTION UNDER SECTION 881(C) OF THE CODE, A CERTIFICATE THAT
ESTABLISHES IN WRITING TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT SUCH
FOREIGN LENDER IS NOT (I) A “BANK” AS DEFINED IN SECTION 881(C)(3)(A) OF THE
CODE, (II) A 10-PERCENT STOCKHOLDER WITHIN THE MEANING OF
SECTION 871(H)(3)(B) OF THE CODE, OR (III) A CONTROLLED FOREIGN CORPORATION
RELATED TO THE BORROWER WITH THE MEANING OF SECTION 864(D) OF THE CODE.
THEREAFTER AND FROM TIME TO TIME, EACH SUCH FOREIGN LENDER SHALL (A) PROMPTLY
SUBMIT TO THE BORROWER AND THE ADMINISTRATIVE AGENT SUCH ADDITIONAL DULY
COMPLETED AND SIGNED COPIES OF ONE OR MORE OF SUCH FORMS OR CERTIFICATES (OR
SUCH SUCCESSOR FORMS OR CERTIFICATES AS SHALL BE ADOPTED FROM TIME TO TIME BY
THE RELEVANT UNITED STATES TAXING AUTHORITIES) AS MAY THEN BE AVAILABLE UNDER
THEN CURRENT UNITED STATES LAWS AND REGULATIONS TO AVOID, OR SUCH EVIDENCE AS IS
REASONABLY SATISFACTORY TO THE BORROWER AND THE ADMINISTRATIVE AGENT OF ANY
AVAILABLE EXEMPTION FROM, OR REDUCTION OF, UNITED STATES WITHHOLDING TAXES IN
RESPECT OF ALL PAYMENTS TO BE MADE TO SUCH FOREIGN LENDER BY THE BORROWER OR
OTHER LOAN PARTY PURSUANT TO THIS AGREEMENT, OR ANY OTHER LOAN DOCUMENT, IN EACH
CASE, (1) ON OR BEFORE THE DATE THAT ANY SUCH FORM, CERTIFICATE OR OTHER
EVIDENCE EXPIRES OR BECOMES OBSOLETE, (2) AFTER THE OCCURRENCE OF ANY EVENT
REQUIRING A CHANGE IN THE MOST RECENT FORM, CERTIFICATE OR EVIDENCE PREVIOUSLY
DELIVERED BY IT TO THE BORROWER AND THE ADMINISTRATIVE AGENT AND (3) FROM TIME
TO TIME THEREAFTER IF REASONABLY REQUESTED BY THE BORROWER OR THE ADMINISTRATIVE
AGENT, AND (B) PROMPTLY NOTIFY THE BORROWER AND THE ADMINISTRATIVE AGENT OF ANY
CHANGE IN CIRCUMSTANCES WHICH WOULD MODIFY OR RENDER INVALID ANY CLAIMED
EXEMPTION OR REDUCTION. IN THE EVENT THAT A PAYMENT WILL BE MADE TO A LENDER OR
AGENT UNDER THE CANADIAN GUARANTEE, SUCH LENDER OR AGENT AGREES TO USE
REASONABLE

 

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EFFORTS (CONSISTENT WITH LEGAL AND REGULATORY RESTRICTIONS AND SUBJECT TO
OVERALL POLICY CONSIDERATIONS OF SUCH LENDER OR AGENT), IF REQUESTED BY A LOAN
PARTY, TO DELIVER SUCH OTHER INFORMATION PRESCRIBED BY APPLICABLE LAWS OR
REASONABLY REQUESTED BY THE LOAN PARTY AS WILL ENABLE SUCH LOAN PARTY TO
DETERMINE WHETHER SUCH LENDER OR AGENT IS SUBJECT TO CANADIAN WITHHOLDING TAX,
IS ENTITLED TO AN EXEMPTION FROM CANADIAN WITHHOLDING TAX OR IS ELIGIBLE FOR A
REDUCED RATE OF CANADIAN WITHHOLDING TAX; PROVIDED, HOWEVER, THAT NOTHING IN
THIS SECTION 10.15(A) SHALL REQUIRE A LENDER OR AGENT TO DISCLOSE ANY
CONFIDENTIAL INFORMATION (INCLUDING, WITHOUT LIMITATION, ITS TAX RETURNS OR ITS
CALCULATIONS).

 

(B)                                 EACH FOREIGN LENDER, TO THE EXTENT IT DOES
NOT ACT OR CEASES TO ACT FOR ITS OWN ACCOUNT WITH RESPECT TO ANY PORTION OF ANY
SUMS PAID OR PAYABLE TO SUCH FOREIGN LENDER UNDER ANY OF THE LOAN DOCUMENTS (FOR
EXAMPLE, IN THE CASE OF A TYPICAL PARTICIPATION BY SUCH FOREIGN LENDER), SHALL
DELIVER TO THE BORROWER AND THE ADMINISTRATIVE AGENT ON THE DATE WHEN SUCH
FOREIGN LENDER CEASES TO ACT FOR ITS OWN ACCOUNT WITH RESPECT TO ANY PORTION OF
ANY SUCH SUMS PAID OR PAYABLE, AND AT SUCH OTHER TIMES AS MAY BE NECESSARY IN
THE DETERMINATION OF THE BORROWER OR THE ADMINISTRATIVE AGENT (IN EITHER CASE,
IN THE REASONABLE EXERCISE OF ITS DISCRETION), (A) TWO DULY SIGNED COMPLETED
COPIES OF THE FORMS OR STATEMENTS REQUIRED TO BE PROVIDED BY SUCH FOREIGN LENDER
AS SET FORTH ABOVE, TO ESTABLISH THE PORTION OF ANY SUCH SUMS PAID OR PAYABLE
WITH RESPECT TO WHICH SUCH FOREIGN LENDER ACTS FOR ITS OWN ACCOUNT THAT IS NOT
SUBJECT TO UNITED STATES WITHHOLDING TAX, AND (B) TWO DULY SIGNED COMPLETED
COPIES OF IRS FORM W-8IMY (OR ANY SUCCESSOR THERETO), TOGETHER WITH ANY
INFORMATION SUCH FOREIGN LENDER CHOOSES TO TRANSMIT WITH SUCH FORM, AND ANY
OTHER CERTIFICATE OR STATEMENT OF EXEMPTION REQUIRED UNDER THE CODE, TO
ESTABLISH THAT SUCH FOREIGN LENDER IS NOT ACTING FOR ITS OWN ACCOUNT WITH
RESPECT TO A PORTION OF ANY SUCH SUMS PAYABLE TO SUCH FOREIGN LENDER.

 

(C)                                  EACH LENDER AND AGENT THAT IS A “UNITED
STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE CODE (EACH, A
“U.S. LENDER”) SHALL DELIVER TO THE ADMINISTRATIVE AGENT AND THE BORROWER TWO
DULY SIGNED, PROPERLY COMPLETED COPIES OF IRS FORM W-9 (OR ANY SUCCESSOR FORM)
ON OR PRIOR TO THE CLOSING DATE (OR ON OR PRIOR TO THE DATE IT BECOMES A PARTY
TO THIS AGREEMENT), CERTIFYING THAT SUCH U.S. LENDER IS ENTITLED TO AN EXEMPTION
FROM UNITED STATES BACKUP WITHHOLDING TAX.

 

(D)                                 NO LOAN PARTY SHALL BE REQUIRED TO PAY ANY
ADDITIONAL AMOUNT OR ANY INDEMNITY PAYMENT UNDER SECTION 3.01 TO (A) ANY LENDER
TO THE EXTENT TAXES ARE NOT DUE BUT FOR THE FAILURE OF SUCH LENDER TO SATISFY
THE FOREGOING PROVISIONS OF THIS SECTION 10.15 OR (B) ANY LENDER TO THE EXTENT
SUCH AMOUNTS ARE UNITED STATES WITHHOLDING TAXES IMPOSED ON AMOUNTS PAYABLE TO
SUCH LENDER AT THE TIME SUCH LENDER BECOMES A PARTY TO THIS AGREEMENT, EXCEPT TO
THE EXTENT SUCH LENDER’S ASSIGNOR (IF ANY) WAS ENTITLED, AT THE TIME OF THE
ASSIGNMENT, TO RECEIVE ADDITIONAL AMOUNTS FROM THE BORROWER WITH RESPECT TO SUCH
TAXES PURSUANT TO SECTION 3.01 OF THIS AGREEMENT; PROVIDED THAT (I) IF SUCH
LENDER SHALL HAVE SATISFIED THE REQUIREMENT OF THIS SECTION 10.15 ON THE DATE
REQUIRED IN THIS SECTION 10.15, NOTHING IN THIS SECTION 10.15 SHALL RELIEVE THE
BORROWER OF ITS OBLIGATION TO PAY ANY AMOUNTS PURSUANT TO SECTION 3.01 IN THE
EVENT THAT, AS A RESULT OF ANY CHANGE IN ANY APPLICABLE LAW, TREATY OR
GOVERNMENTAL RULE, REGULATION OR ORDER, OR ANY CHANGE IN THE INTERPRETATION,
ADMINISTRATION OR APPLICATION THEREOF, SUCH LENDER IS NO LONGER PROPERLY
ENTITLED TO DELIVER FORMS, CERTIFICATES OR OTHER EVIDENCE AT A SUBSEQUENT DATE
ESTABLISHING THE FACT THAT SUCH LENDER OR OTHER PERSON FOR THE ACCOUNT OF WHICH
SUCH LENDER RECEIVES ANY SUMS PAYABLE UNDER ANY OF THE LOAN DOCUMENTS IS NOT
SUBJECT TO WITHHOLDING OR IS SUBJECT TO

 

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WITHHOLDING AT A REDUCED RATE AND (II) NOTHING IN THIS SECTION 10.15 SHALL
RELIEVE THE BORROWER OF ITS OBLIGATION TO PAY ANY AMOUNTS PURSUANT TO
SECTION 3.01 IN THE EVENT THAT THE REQUIREMENTS OF 10.15(B) HAVE NOT BEEN
SATISFIED IF THE BORROWER IS ENTITLED, UNDER APPLICABLE LAW, TO RELY ON ANY
APPLICABLE FORMS AND STATEMENTS REQUIRED TO BE PROVIDED UNDER THIS SECTION 10.15
BY THE FOREIGN LENDER THAT DOES NOT ACT OR HAS CEASED TO ACT FOR ITS OWN ACCOUNT
UNDER ANY OF THE LOAN DOCUMENTS, INCLUDING IN THE CASE OF A TYPICAL
PARTICIPATION.

 

(E)                                  THE ADMINISTRATIVE AGENT MAY DEDUCT AND
WITHHOLD ANY TAXES REQUIRED BY ANY LAWS TO BE DEDUCTED AND WITHHELD FROM ANY
PAYMENT UNDER ANY OF THE LOAN DOCUMENTS.

 

SECTION 10.16. GOVERNING LAW. (A)  THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK; PROVIDED, HOWEVER, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW
YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION
OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY
LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO
APPLY TO THAT EXTENT.

 

(B)                                 ANY LEGAL ACTION OR PROCEEDING ARISING UNDER
ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT,
OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING
IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH
STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, EACH AGENT
AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, EACH AGENT AND EACH
LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION,
IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.

 

SECTION 10.17. WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL

 

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COUNTERPART OR A COPY OF THIS SECTION 10.17 WITH ANY COURT AS WRITTEN EVIDENCE
OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL
BY JURY.

 

SECTION 10.18. Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agent shall have
been notified by each Lender that each such Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, each
Agent and each Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders, except as
permitted by Section 7.04.

 

SECTION 10.19. Lender Action. Each Lender agrees that it shall not take or
institute any actions or proceedings, judicial or otherwise, for any right or
remedy against any Loan Party or any other obligor under any of the Loan
Documents or the Secured Hedge Agreements (including the exercise of any right
of setoff, rights on account of any banker’s lien or similar claim or other
rights of self-help), or institute any actions or proceedings, or otherwise
commence any remedial procedures, with respect to any Collateral or any other
property of any such Loan Party, without the prior written consent of the
Administrative Agent. The provisions of this Section 10.19 are for the sole
benefit of the Lenders and shall not afford any right to, or constitute a
defense available to, any Loan Party.

 

SECTION 10.20. USA PATRIOT Act; Proceeds of Crime Act. Each Lender hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it
is required to obtain, verify and record information that identifies the Loan
Parties, which information includes the name and address of the Loan Parties and
other information that will allow such Lender to identify the Loan Parties in
accordance with the Act. Each Loan Party is in compliance in all material
respects with the Act and the Proceeds of Crime Act.

 

SECTION 10.21. Judgment Currency. If, for the purposes of obtaining judgment in
any court, it is necessary to convert a sum due hereunder or any other Loan
Document in one currency into another currency, the rate of exchange used shall
be that at which in accordance with normal banking procedures the Administrative
Agent could purchase the first currency with such other currency on the Business
Day preceding that on which final judgment is given. The obligation of each
Borrower in respect of any such sum due from it to the Administrative Agent or
the Lenders hereunder or under the other Loan Documents shall, notwithstanding
any judgment in a currency (the “Judgment Currency”) other than that in which
such sum is denominated in accordance with the applicable provisions of this
Agreement (the “Agreement Currency”) be discharged only to the extent that on
the Business Day following receipt by the Administrative Agent of any sum
adjudged to be so due in the Judgment Currency, the Administrative Agent may in
accordance with normal banking procedures purchase the Agreement Currency with
the Judgment Currency. If the amount of the Agreement Currency so purchased is
less than the sum originally due to the Administrative Agent from any Borrower
in the Agreement Currency, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or the
Person to whom such obligation was owing against such loss. If the amount of the
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is greater than the sum originally due to the Administrative Agent in such
currency, the Administrative Agent agrees to return the amount of any excess to
such Borrower (or to any other Person who may be entitled thereto under
Applicable Law).

 

SECTION 10.22. Other Liens on Collateral; Terms of Intercreditor Agreement; Etc.
(i)  EACH LENDER HERETO UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT LIENS SHALL BE
CREATED ON THE COLLATERAL PURSUANT TO THE ABL CREDIT AGREEMENT AND THE ABL LOAN
DOCUMENTS, WHICH LIENS (x) TO THE EXTENT CREATED WITH RESPECT TO ABL PRIORITY
COLLATERAL, SHALL BE SENIOR TO THE LIENS CREATED UNDER THIS AGREEMENT AND THE
RELATED LOAN DOCUMENTS (WITH THE LIENS SO CREATED HEREUNDER AND UNDER THE OTHER
LOAN DOCUMENTS ON ABL PRIORITY COLLATERAL BEING SUBORDINATED TO SUCH LIENS
PURSUANT TO THE TERMS OF THE INTERCREDITOR AGREEMENT) AND (Y) TO THE EXTENT
CREATED WITH RESPECT TO TL PRIORITY COLLATERAL, SHALL BE REQUIRED TO BE SUBJECT
TO THE SUBORDINATION PROVISIONS (TO THE EXTENT APPLICABLE) OF THE INTERCREDITOR
AGREEMENT. THE INTERCREDITOR AGREEMENT ALSO HAS OTHER PROVISIONS WHICH ARE
BINDING UPON THE LENDERS AND THE HEDGE BANKS PURSUANT TO THIS AGREEMENT.
PURSUANT TO THE EXPRESS TERMS OF SECTION 7.17 OF THE INTERCREDITOR AGREEMENT, IN
THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND
ANY OF THE LOAN DOCUMENTS, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL
GOVERN AND CONTROL.

 

(ii)                                  EACH LENDER AUTHORIZES AND INSTRUCTS THE
COLLATERAL AGENT AND THE ADMINISTRATIVE AGENT TO ENTER INTO THE INTERCREDITOR
AGREEMENT ON BEHALF OF SUCH LENDER, AND TO TAKE ALL ACTIONS (AND EXECUTE ALL
DOCUMENTS) REQUIRED (OR DEEMED ADVISABLE) BY IT IN ACCORDANCE WITH THE TERMS OF
THE INTERCREDITOR AGREEMENT.

 

(iii)                               THE PROVISIONS OF THIS SECTION 10.22 ARE NOT
INTENDED TO SUMMARIZE ALL RELEVANT PROVISIONS OF THE INTERCREDITOR AGREEMENT,
THE FORM OF WHICH IS ATTACHED AS AN EXHIBIT TO THIS AGREEMENT. REFERENCE MUST BE
MADE TO THE INTERCREDITOR AGREEMENT ITSELF TO UNDERSTAND ALL TERMS AND
CONDITIONS THEREOF. EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND
REVIEW OF THE INTERCREDITOR AGREEMENT AND THE TERMS AND PROVISIONS THEREOF, AND
NO AGENT (AND NONE OF ITS AFFILIATES) MAKES ANY REPRESENTATION TO ANY LENDER AS
TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN THE
INTERCREDITOR AGREEMENT.

 

SECTION 10.23. Assignment of Obligations. The Borrower hereby agrees to assume
any and all obligations of Bain Paste Finco, LLC (“Bain Finco”) and Blackstone
Paste Finco, LLC (“Blackstone Finco”) under (i) the Commitment Letter dated as
of July 13, 2006 among Bain Finco, Blackstone Finco, Bain Capital Fund IX, LLC
(“Bain Fund”), Blackstone Capital Partners V L.P. (“Blackstone Fund”), Deutsche
Bank AG New York Branch (“DBNY”), Deutsche Bank AG Cayman Islands Branch
(“DBCI”), Deutsche Bank Securities

 

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Inc. (“DBSI”), J.P. Morgan Securities Inc. (“JPMorgan”), JPMorgan Chase Bank,
N.A. (“JPMorgan Chase Bank”), Bank of America, N.A. (“Bank of America”), Banc of
America Securities LLC (“BAS”), Banc of America Bridge LLC (“Banc of America
Bridge”), Credit Suisse Securities (USA) LLC (“CS Securities”) and Credit Suisse
(“CS”), (ii) the Fee Letter dated as of July 13, 2006 among Bain Finco,
Blackstone Finco, DBNY, DBCI, DBSI, JPMorgan, JPMorgan Chase Bank, Bank of
America, BAS, Banc of America Bridge, CS Securities and CS and (iii) the
Engagement Letter dated as of July 13, 2006 among Bain Finco, Blackstone Finco,
DBSI, JPMorgan, BAS and CS Securities. The Lenders party hereto hereby
acknowledge and accept such assumption of obligations by the Borrower.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

 

148

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

 

 

MICHAELS STORES, INC.

 

 

 

 

 

 

 

 

By:

  /s/ Jeffrey N. Boyer

 

 

 

 

Title:  President and Chief Financial Officer

 

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

 

 

 

DEUTSCHE BANK AG NEW YORK
BRANCH, Individually and as Administrative Agent

 

 

 

 

 

 

 

 

By:

  /s/ Marguerite Sutton

 

 

 

 

Title: Director

 

 

 

 

 

 

By:

  /s/ Omayra Laucella

 

 

 

 

Title: Vice President

 

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

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

 

  as Syndication Agent

 

 

 

 

 

 

 

 

By:

  /s/ Barry Bergman

 

 

 

 

Title: Managing Director

 

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

 

 

 

BANK OF AMERICA, N.A.,

 

 

  Co-Documentation Agent

 

 

 

 

 

 

 

 

By:

  /s/ Matthew C. Sclafani

 

 

 

 

Title: Principal

 

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

 

 

 

CREDIT SUISSE,

 

 

  as Co-Documentation Agent

 

 

 

 

 

 

 

 

By:

  /s/ Ian Nalitt

 

 

 

 

Title: Vice President

 

 

 

 

 

 

By:

  /s/ David Dodd

 

 

 

 

Title: Vice President

 

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

 

SCHEDULE 1.01B

To Credit Agreement

 

Schedule 1.01B

Collateral Documents

 

1. Guarantee Agreement, dated as of October 31, 2006, among Michaels
Stores, Inc., a Delaware corporation, the Subsidiaries of the Borrower
identified therein and Deutsche Bank AG New York Branch, as Administrative
Agent.

 

2. Security Agreement, dated as of October 31, 2006, among Michaels
Stores, Inc., a Delaware corporation, the Subsidiaries of the Borrower
identified therein and Deutsche Bank AG New York Branch, as Collateral Agent for
the Secured Parties.

 

3. Canadian Guarantee, dated as of October 31, 2006, among Michaels of Canada,
ULC, a Nova Scotia unlimited liability company, and Deutsche Bank AG New York
Branch, as Administrative Agent.

 

4. Canadian Security Agreement, dated as of October 31, 2006, among Michaels of
Canada, ULC, a Nova Scotia unlimited liability company, and  Deutsche Bank AG
New York Branch, as Collateral Agent for the Secured Parties.

 

5. Grant of Security Interest in United States Trademarks, dated as of
October 31, 2006, between Aaron Brothers, Inc., a Delaware corporation, and
Deutsche Bank AG New York Branch, as Collateral Agent.

 

6. Grant of Security Interest in United States Trademarks, dated as of
October 31, 2006, between Michaels Stores Procurement Company, Inc., a Delaware
corporation, and Deutsche Bank AG New York Branch, as Collateral Agent.

 

8. Grant of Security Interest in Canadian Trademarks, dated as of October 31,
2006, between Michaels Stores Procurement Company, Inc., a Delaware corporation,
and Deutsche Bank AG New York Branch, as Collateral Agent.

 

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

 

SCHEDULE 1.01D

To Credit Agreement

 

Schedule 1.01D

Mortgaged Properties

 

None.

 

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

 

SCHEDULE 1.01E

To Credit Agreement

 

Schedule 1.01E

Excluded Subsidiary

 

None.

 

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

 

SCHEDULE 1.01F

To Credit Agreement

 

Schedule 1.01F

Foreign Subsidiary

 

None.

 

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

 

SCHEDULE 2.01

To Credit Agreement

 

Schedule 2.01

Commitments

 

LENDER

 

COMMITMENT

 

DEUTSCHE BANK AG NEW YORK BRANCH

 

$

2,400,000,000

 

 

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

 

SCHEDULE 5.05

To Credit Agreement

Schedule 5.05

Financial Statements

 

1. See Risk Factor “We face risks relating to our historical stock option
practices” in the Offering Memorandum, dated October 25, 2006.

 

2. See Risk Factor “We face risks related to unresolved SEC staff comments” in
the Offering Memorandum, dated October 25, 2006.

 

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

 

SCHEDULE 5.10

To Credit Agreement

 

Schedule 5.10

Taxes

 

1. The Company currently has state income tax audits in process in the following
states: California (Fiscal Years 1994 – 2003); Colorado (Fiscal Years 2002 –
2006); Connecticut (Fiscal Years 2002 – 2004); Maryland (Fiscal Years 2002 –
2003); Massachusetts (Fiscal Years 2001 – 2004); New York (Fiscal Years 2005 –
2007); North Carolina (Fiscal Year 2004); Ohio (Fiscal Years 2002 – 2003);
Wisconsin (1998 – 2004).

 

2. The Company currently has sales tax audits in process in the following
states:  California (1/1/03 to 9/30/06); Colorado (9/1/03 to 8/31/06);
Connecticut (11/1/01 to 10/31/04); Illinois (11/1/03 to 12/31/06); Kansas
(1/1/04 to 3/31/05); Louisiana (4/1/02 to 3/31/05); Michigan (7/1/01 to
3/31/05); Minnesota (4/1/01 to 3/31/05); North Carolina (12/1/01 to 9/30/05);
Ohio (10/1/02 to 12/31/05); Texas (8/1/01 to 1/31/06); Virginia (10/1/03 to
9/30/06); Washington (1/1/02 to 3/31/05); Wisconsin (4/1/01 to 3/31/05).

 

3. On May 17, 2006, the Company received approval of their May 10, 2006 filing
of Form 872, Consent to Extend the Time to Assess Tax, with the IRS extending
the assessment period for fiscal year 2002 to the expiration date of
December 31, 2006. The Company has filed an additional six-month extension for
the fiscal year 2002 return.

 

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

 

SCHEDULE 5.11

To Credit Agreement

 

Schedule 5.11

ERISA and other Pension Plan Compliance

 

None.

 

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

 

SCHEDULE 5.12

To Credit Agreement

 

Schedule 5.12

Subsidiaries and Other Equity Investments

 

Subsidiary

 

Jurisdiction

 

Owner

 

# of
Shares
Owned

 

Total Shares
Outstanding

 

% of
Interest

 

%
Pledged

 

Aaron Brothers, Inc.

 

Delaware

 

Michaels Stores, Inc.

 

100

 

100

 

100

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michaels Finance Company, Inc.

 

Delaware

 

Michaels Stores, Inc.

 

100

 

100

 

100

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michaels Stores Card Services, LLC

 

Virginia

 

Michaels Stores, Inc.

 

100

 

100

 

100

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michaels Stores Procurement Company, Inc.

 

Delaware

 

Michaels Stores, Inc.

 

100

 

100

 

100

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Artistree, Inc.

 

Delaware

 

Michaels Stores Procurement Company, Inc.

 

100

 

100

 

100

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michaels of Canada, ULC

 

Nova Scotia

 

Michaels Stores, Inc.

 

1,000 Common

 

1,000

 

100

%

0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michaels of Canada, ULC

 

Nova Scotia

 

Michaels Stores, Inc.

 

4,000 Class A Preferred

 

4,000

 

100

%

0

%

 

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

 

SCHEDULE 6.07

To Credit Agreement

 

Schedule 6.07

Insurance

 

See attached.

 

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

 

SCHEDULE 7.03

To Credit Agreement

 

Schedule 7.03

Existing Indebtedness

 

Letters of Credit as follows:

 

Issuing Bank

 

Beneficiary

 

Amount

 

Bank of America

 

Lumbermens Mutual Casualty Company

American Motorists Insurance Co.

American Manufacturers
Mutual Insurance Company

American Protection Company

 

US$

8,138,000

 

Bank of America

 

Zurich American Insurance Company

 

US$

1,000,000

 

Bank of America

 

Royal Indemnity Company

 

US$

5,600,000

 

 

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

 

SCHEDULE 7.04

To Credit Agreement

 

Schedule 7.04

Existing Liens

 

Name

 

Jurisdiction

 

Filing
Reference #

 

Filing Date

 

Secured Party
(of Record)

 

Description

Aaron Brothers, Inc.

 

DE SOS

 

31159915

 

5/6/2003

 

OCE-USA, Inc.

 

Equipment Lien

Aaron Brothers, Inc.

 

DE SOS

 

31934580

 

7/28/2003

 

OCE-USA, Inc.

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

11355853

 

10/9/2001

 

Toyota Motor Credit Corp.

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

20954465

 

3/25/2002

 

IBM Credit Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

20969240

 

3/25/2002

 

IBM Credit Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

21273360

 

5/2/2002

 

IBM Credit Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

22817736

 

10/28/2002

 

US Bancorp

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

30548670

 

2/3/2003

 

Fleet Capital Corporation, successor by merger to, BancBoston Leasing, Inc.

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

30938483

 

4/10/2003

 

BancBoston Leasing Inc., additional s/p: Ameritech Credit Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

30938657

 

4/10/2003

 

BancBoston Leasing Inc., additional s/p: Ameritech Credit Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

30938756

 

4/10/2003

 

BancBoston Leasing Inc., additional s/p: Ameritech Credit Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

30940315

 

4/10/2003

 

BancBoston Leasing Inc., additional s/p: Ameritech Credit Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

30940653

 

4/10/2003

 

Ameritech Credit Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

30940885

 

4/10/2003

 

Ameritech Credit Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

31034225

 

4/22/2003

 

Mobile Storage Group, Inc.

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

31057143

 

4/11/2003

 

US Bancorp

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

50136706

 

1/10/2005

 

CPRE-1 END, Lakeline, L.P.

 

Fixture Filing.

 

2

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

 

Name

 

Jurisdiction

 

Filing
Reference #

 

Filing Date

 

Secured Party
(of Record)

 

Description

Michaels Finance Company, Inc.

 

DE SOS

 

33215657

 

12/8/2003

 

Fleet Business Credit, LLC

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

33215780

 

12/8/2003

 

Fleet Business Credit, LLC

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

33216200

 

12/8/2003

 

Fleet Business Credit, LLC

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

43018878

 

10/26/2004

 

Crown Lift Trucks

 

Equipment Lien

Michaels Finance Company, Inc.

 

DE SOS

 

43697440

 

12/31/2004

 

US Bancorp

 

Equipment Lien

Michaels Finance Company, Inc.

 

NC SOS

 

20040011219A

 

2/4/2004

 

The CIT Group/Equipment Financing, Inc.

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

02-0032723574

 

6/7/2002

 

Fleet Business Credit, LLC, addt’l s/p: EMC Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

04-00516990

 

12/19/2003

 

Fleet Business Credit, LLC, addt’l s/p: EMC Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

04-00518513

 

12/22/2003

 

Fleet Business Credit, LLC, addt’l s/p: EMC Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

03-0005677230

 

10/21/2002

 

Fleet Business Credit, LLC, addt’l s/p: EMC Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

04-00516699

 

12/19/2003

 

Fleet Business Credit, LLC, addt’l s/p: EMC Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

03-0006790247

 

10/31/2002

 

US Bancorp

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

03-0017100719

 

2/11/2003

 

Sumner Group

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

03-0017100931

 

2/11/2003

 

Sumner Group

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

03-0017101285

 

2/11/2003

 

Sumner Group

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

03-0017101396

 

2/11/2003

 

Sumner Group

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

03-0017101518

 

2/11/2003

 

Sumner Group

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

03-0017101629

 

2/11/2003

 

Sumner Group

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

03-0023367064

 

4/7/2003

 

Fleet Business Credit, LLC, addt’l s/p: EMC Corporation

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

05-0019455877

 

6/22/2005

 

Sumner Group Inc

 

Equipment Lien

 

3

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

 

Name

 

Jurisdiction

 

Filing
Reference #

 

Filing Date

 

Secured Party
(of Record)

 

Description

Michaels Finance Company, Inc.

 

TX SOS

 

05-0034548382

 

11/8/2005

 

Sumner Group Inc

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

05-0034548837

 

11/8/2005

 

Sumner Group Inc

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

05-0034549414

 

11/8/2005

 

Sumner Group Inc

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

05-0034549858

 

11/8/2005

 

Sumner Group Inc

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

05-0034550779

 

11/8/2005

 

Sumner Group Inc

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

05-0034551245

 

11/8/2005

 

Sumner Group Inc

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

05-0034551912

 

11/8/2005

 

Sumner Group Inc

 

Equipment Lien

Michaels Finance Company, Inc.

 

TX SOS

 

05-0034552599

 

11/8/2005

 

Sumner Group Inc

 

Equipment Lien

 

4

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

 

SCHEDULE 10.02

To Credit Agreement

 

Schedule 10.02

Administrative Agent’s Office, Certain Addresses for Notices

 

Deutsche Bank AG New York Branch

60 Wall Street

New York, New York  10005

Fax:  212-797-6655

Attn:  Marguerite Sutton (marguerite.sutton@db.com)

 

Michaels Stores, Inc.

8000 Bent Branch Drive

Irving, Texas  75063

Fax:  972-409-1556

Attn:  Lisa Klinger (klingerl@michaels.com)

 

With copies to:

Michaels Stores, Inc.

8000 Bent Branch Drive

Irving, Texas  75063

Fax:  972-409-1965

Attn:  General Counsel

 

Bain Capital Partners, LLC

111 Huntington Avenue

Boston, Massachusetts  02199

Fax:  617-516-2010

Attn:  Josh Bekenstein (jbekenstein@baincapital.com), Matthew Levin

(mlevin@baincapital.com) and Todd Cook (tcook@baincapital.com)

 

Blackstone Management Associates V LLC

345 Park Avenue

New York, New York  10154

Fax:  212-583-5717

Attn:  Michael Chae (chae@blackstone.com) and Matthew Kabaker

(kabaker@blackstone.com)

 

Ropes & Gray LLP

One International Place

Boston, Massachusetts  02110

Fax:  617-951-7050

Attn:  Byung Choi, Esquire (byung.choi@ropesgray.com)

 

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