Exhibit 10.4

AMENDMENT NO. 4 TO ABL CREDIT AGREEMENT AND WAIVER

THIS AMENDMENT NO. 4 TO ABL CREDIT AGREEMENT AND WAIVER (this “Fourth
Amendment”), dated as of September 30, 2020 (the “Fourth Amendment Effective
Date”), among JILL ACQUISITION LLC, a Delaware limited liability company (the
“Company”), J. JILL GIFT CARD SOLUTIONS, INC., a Florida corporation (together
with the Company, the “Borrowers”), the other Borrowers from time to time party
hereto, J.JILL, INC., a Delaware corporation, as successor to JJill Holdings,
Inc. and Jill Intermediate LLC (as replacement “Parent” of Jill Holdings LLC)
(“Parent”), the other Guarantors from time to time party hereto, the other
Lenders from time to time party hereto and CIT FINANCE LLC, as the
Administrative Agent and Collateral Agent (in such capacities, the “Agent”). All
capitalized terms used herein (including in this preamble) and not otherwise
defined herein shall have the respective meanings provided such terms in the ABL
Credit Agreement (as defined below).

W I T N E S S E T H:

WHEREAS, the Borrowers, Parent, the Agent and the other parties thereto are
parties to that certain ABL Credit Agreement, dated as of May 8, 2015 (as
amended by Amendment No. 3 to ABL Credit Agreement dated as of June 12, 2019,
Amendment No. 2 to ABL Credit Agreement dated as of August 22, 2018, and
Amendment No. 1 to ABL Credit Agreement dated as of May 27, 2016 (the “ABL
Credit Agreement”) and as further amended, amended and restated, supplemented or
otherwise modified from time to time, the “Amended ABL Credit Agreement”);

WHEREAS, the Borrowers have requested that the Lenders (constituting the
Required Lenders) permanently waive any Default or Event of Default (if any)
existing on or prior to the date hereof, including, without limitation, the
Forbearance Defaults (as defined in that certain First Amended and Restated
Forbearance Agreement, dated as of July 15, 2020 (as amended, amended and
restated, supplemented or otherwise modified prior to the date hereof, the
“Forbearance Agreement”), by and among the Borrowers, Parent, the Lenders party
thereto and the Agent) (collectively, the “Specified Defaults”); and

WHEREAS, in connection with the foregoing, the Agent, the Lenders (constituting
the Required Lenders) and the Borrowers have agreed to the making of certain
amendments to, and certain waivers in respect of, the ABL Credit Agreement, in
each case, subject to the terms and conditions set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which is acknowledged by each party hereto, it is agreed:

I. Defined Terms. All terms used but not otherwise defined herein have the
meanings assigned to them in the Amended ABL Credit Agreement.

II. Waiver

A. The Credit Parties represent and warrant that the Credit Parties’ failure to
timely and fully pay and perform their obligations under the leases for the
Specified Locations (as defined in the Forbearance Agreement) (a) where,
individually or in the aggregate, Inventory of the Credit Parties (or any of
them) with a book value in excess of $1,000,000, is stored or located, or
(b) where any Credit Party’s books and records are kept or maintained, has not
resulted in, and will not result in, (x) the termination of the leases with
respect to such Specified Locations, (y) the termination of a Credit Party’s
access rights with respect to such Specified Locations, or (z) the commencement
of any other enforcement action by the lessors with respect to such Specified
Locations.

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B. In reliance upon the representation and warranties of the Credit Parties set
forth in this Fourth Amendment and subject to the satisfaction of the conditions
set forth in Section V.E hereof, upon the Fourth Amendment Effective Date, the
Lenders (constituting the Required Lenders) hereby permanently waive the
Specified Defaults. The waiver contained in this Section II is a limited waiver
and (1) shall only be relied upon and used for the specific purpose set forth
herein, or (2) shall not constitute nor be deemed to constitute a waiver or
consent of any Default or Event of Default or any term or condition of the
Amended ABL Credit Agreement or any other Credit Document, in each case,
occurring after the Fourth Amendment Effective Date, and (3) shall not
constitute a custom or course of dealing among the parties hereto.

III. Amendments to ABL Credit Agreement. Subject to the satisfaction of the
conditions set forth in Section V.E hereof, on and as of the Fourth Amendment
Effective Date, the parties hereto agree that (i) the ABL Credit Agreement is
hereby amended by incorporating the changes shown on the marked copy of the ABL
Credit Agreement attached hereto as Exhibit A (it being understood that language
which appears “struck out” has been deleted and language which appears as
“double-underlined” has been added), (ii) Schedules 1.01(e), 8.12, 8.20, 10.01
and 10.12 to the Loan Agreement shall be replaced in their entireties with the
applicable Schedule that is attached hereto as Exhibit B and (iii) Exhibits F,
H, J and K to the Loan Agreement shall be added or replaced in their entireties
with the applicable Exhibit attached hereto as Exhibit C.

IV. Amendment Fee. The Borrowers shall pay to the Agent, for the account of the
Lenders (to the extent and in accordance with the arrangements by and among the
Agent and the Lenders), a commitment fee in the aggregate amount equal to
$50,000, which fee is fully earned as of, and shall be due and payable in full
on, the Fourth Amendment Effective Date. The Agent is expressly authorized by
Borrowers to (A) charge such fee to any loan account of the Borrowers in
accordance with the terms of the Amended ABL Credit Agreement, and (B) designate
such amounts as a Loan under the Amended ABL Credit Agreement. The Borrowers
hereby acknowledge and agree that such fee payable hereunder constitutes
Obligations and is in addition to any other fees payable by the Borrowers under
the Amended ABL Credit Agreement or any other Credit Document.

V. Miscellaneous Provisions.

A. Representations and Warranties.

1. Each Credit Party has the company power and authority to execute, deliver and
perform the terms and provisions of this Fourth Amendment and has taken all
necessary company action to authorize the execution, delivery and performance by
it of this Fourth Amendment. Each Credit Party has duly executed and delivered
this Fourth Amendment, and this Fourth Amendment constitutes its legal, valid
and binding obligation enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally affecting
creditors’ rights and by equitable principles (regardless of whether enforcement
is sought in equity or at law).

2. None of the execution, delivery or performance by any Credit Party of this
Fourth Amendment, nor compliance by it with the terms and provisions thereof,
will (a) contravene any provision of any law, statute, rule or regulation or any
order, writ, injunction or decree of any court or Governmental Authority,
(b) conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except Permitted Liens) upon any of the property or assets of any Credit

 

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Party or any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement or loan agreement, or any other
agreement, contract or instrument to which any Credit Party or any of its
Subsidiaries is a party or by which it or any of its property or assets is bound
or (c) violate any provision of the certificate or articles of incorporation,
certificate of formation, limited liability company agreement or by-laws (or
equivalent organizational documents), as applicable, of any Credit Party or any
of its Subsidiaries, except with respect to any violation or conflict referred
to in clauses (a) and (b) to the extent that such violation or conflict could
not reasonably be expected to have individually or in the aggregate a Material
Adverse Effect.

3. No order, consent, approval, license, authorization or validation of, or
filing, recording or registration with (except for those that have otherwise
been obtained or made on or prior to the Fourth Amendment Effective Date and
which remain in full force and effect on the Fourth Amendment Effective Date) or
exemption by, any Governmental Authority or third party is required to be
obtained or made by, or on behalf of, any Credit Party to authorize, or is
required to be obtained or made by, or on behalf of, any Credit Party in
connection with, (a) the execution, delivery and performance by the Credit
Parties of this Fourth Amendment or (b) the legality, validity, binding effect
or enforceability of this Fourth Amendment which in the case of clauses (a) and
(b), if not obtained, could reasonably be expected to result in a Material
Adverse Effect.

4. There are no actions, suits or proceedings pending or, to the knowledge of
Parent and the Borrowers, threatened (a) with respect this Fourth Amendment or
(b) that has had, or could reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect.

B. This Fourth Amendment is limited to the matters specified herein and shall
not constitute a modification, acceptance or waiver of any other provision of
the ABL Credit Agreement or any other Credit Document.

C. This Fourth Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. The parties hereto agree that delivery of an executed counterpart of a
signature page to this Fourth Amendment by telefacsimile or in ‘PDF’ format by
electronic mail shall be effective as delivery of an original executed
counterpart of this Fourth Amendment.

D. This Fourth Amendment and the rights and obligations of the parties hereunder
shall be governed by, and shall be construed and enforced in accordance with,
the laws of the State of New York.

E. The effectiveness of this Fourth Amendment shall be subject to the
satisfaction or waiver by the Agent of the following conditions precedent:

1. Executed Fourth Amendment. Receipt by the Agent of counterparts of this
Fourth Amendment, duly executed by each of the Borrowers, Parent, each other
Credit Party and the Agent, which shall have been delivered (by way of
electronic transmission) to the Agent, c/o Proskauer Rose LLP, 11 Times Square,
New York, NY 10036, Attention: Andy Bettwy (e-mail address:
abettwy@proskauer.com).

 

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2. Payment of Fee. Receipt by the Agent of the fee required to be paid under
Section IV of this Fourth Amendment.

3. Term Loan Agreement; 2015 Term Loan Amendment and Waiver; Subordinated
Facility Credit Agreement. On the Fourth Amendment Effective Date, the
Administrative Agent and the Required Lenders shall have received a true and
correct copy of the Term Loan Agreement, the Existing Term Loan Amendment and
Waiver, the Subordinated Facility Credit Agreement, the ABL Intercreditor
Agreement and the Subordination Agreement, each of which shall be in full force
and effect and shall be in form and substance reasonably acceptable to the
Administrative Agent to the extent the Administrative Agent is a party thereto

4. Initial Budget. On or prior to the Fourth Amendment Effective Date, the
Company shall have prepared and delivered to the Agent (once the Platform has
been established) the Initial Budget.

5. Secretary’s Certificates. Receipt by the Agent of a certificate from each
Credit Party, dated the Fourth Amendment Effective Date, signed by an Authorized
Officer of such Credit Party, and attested to by the secretary or any assistant
secretary of such Credit Party, together with certified copies of the
certificate or articles of incorporation and by-laws (or other equivalent
organizational documents), as applicable, of such Credit Party and the
resolutions of such Credit Party authorizing the execution, delivery and
performance of this Fourth Amendment and, in the case of the Borrowers, the
borrowings hereunder, and each of the foregoing shall be in form and substance
reasonably acceptable to the Agent.

6. Good Standing Certificates. Receipt by the Agent on or prior to the Fourth
Amendment Effective Date of good standing certificates and bring down letters,
if any, which the Agent reasonably may have requested, to be certified by proper
Governmental Authorities.

7. No Default; Representations and Warranties. On the Fourth Amendment Effective
Date (after giving effect to the Fourth Amendment) (a) no Default or Event of
Default shall have occurred and be continuing and (b) all representations and
warranties contained in the ABL Credit Agreement and in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on the Fourth
Amendment Effective Date (it being understood and agreed that (x) any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date and (y) any representation or warranty that is qualified as
to “materiality,” “Material Adverse Effect” or similar language shall be true
and correct in all respects on such date).

8. Opinions of Counsel. On the Fourth Amendment Effective Date, the Agent shall
have received from Kirkland & Ellis LLP and Holland & Knight LLP, special
counsel to the Credit Parties, opinions addressed to the Agent and dated the
Fourth Amendment Effective Date in form and substance reasonably acceptable to
the Agent.

9. Financial Statements. The Agent shall have received the Annual Financial
Statements, the Quarterly Financial Statements and the Monthly Financial
Statements.

 

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10. Transaction Support Agreement. Immediately prior to the Fourth Amendment
Effective Date, the Transaction Support Agreement shall be in full force and
effect, and shall not have been terminated by any party thereto.

11. Security Agreements. On the Fourth Amendment Effective Date, each Credit
Party, to the extent applicable, shall have duly authorized, executed and
delivered, as applicable, (a) the Amendment No. 1 to Security Agreement, (b) the
Trademark Security Agreement Amendment for filing with the United States Patent
and Trademark Office and (c) the Copyright Security Agreement for filing with
the United States Copyright Office, together with:

a) reports as of a recent date listing all effective financing statements and
intellectual property security filings that name Parent or any of its
Subsidiaries as debtor and that are filed in each jurisdiction as may be
necessary or, in the reasonable opinion of the Required Lenders, desirable to
perfect the security interests purported to be created by the foregoing Security
Documents, none of which shall evidence any Lien other than Permitted Liens; and

a) evidence of the completion of all other recordings and filings of, or with
respect to, each such Security Document as may be necessary or, in the
reasonable opinion of the Collateral Agent, desirable, to perfect and protect
the security interests intended to be created by each such Security Document;
and each such Security Document shall be in full force and effect;

2. No Material Adverse Effect. After giving effect to the Transaction 2020,
since February 1, 2020, nothing has occurred that has had, or could reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect.

A. Each Credit Party hereby acknowledges that it has read this Fourth Amendment
and consents to the terms hereof and further hereby affirms, confirms,
represents, warrants and agrees that (1) notwithstanding the effectiveness of
this Fourth Amendment, the obligations of such Credit Party under each of the
Credit Documents to which it is a party shall not be impaired and each of the
Credit Documents to which such Credit Party is a party is, and shall continue to
be, in full force and effect and is hereby confirmed and ratified in all
respects, in each case, as amended hereby; (2) after giving effect to this
Fourth Amendment, (a) neither the amendment of the ABL Credit Agreement or any
other Credit Document effected pursuant to this Fourth Amendment nor the
execution, delivery, performance or effectiveness of this Fourth Amendment or
any other Credit Document shall impair the validity, effectiveness or priority
of the Liens granted pursuant to the Security Documents (as in effect
immediately prior to the Fourth Amendment Effective Date, the “Existing Security
Documents”) and such Liens shall continue unimpaired with the same priority to
secure repayment of all Obligations, whether heretofore or hereafter incurred
and (b) in the case of any Guarantor, its guaranty, as and to the extent
provided in the Guaranty, shall continue in full force and effect in respect of
the Obligations under the ABL Credit Agreement, as amended by this Fourth
Amendment, and the other Credit Documents; and (3) the position of the Lenders
with respect to such Liens, the Collateral in which a security interest was
granted pursuant to the Existing Security Documents, and the ability of the
Agent to realize upon such Liens pursuant to the terms of the Security Documents
have not been adversely affected by modification of the ABL Credit Agreement
effected pursuant to this Fourth Amendment or by the execution, delivery,
performance or effectiveness of this Fourth Amendment.

 

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Each Credit Party acknowledges and agrees that (i) notwithstanding the
conditions to effectiveness set forth in this Fourth Amendment, such Credit
Party is not required by the terms of the ABL Credit Agreement or any other
Credit Document to consent to this Fourth Amendment, (ii) nothing in the ABL
Credit Agreement, this Fourth Amendment or any other Credit Document shall be
deemed to require the consent of such Credit Party to any future waiver of the
terms of the Amended ABL Credit Agreement and (iii) this Fourth Amendment shall
not operate as a waiver of any right, power or remedy of the Agent or Lenders or
serve to effect a novation of the Obligations.

B. From and after the Fourth Amendment Effective Date, (1) all references in the
ABL Credit Agreement and each of the other Credit Documents to the ABL Credit
Agreement shall be deemed to be references to the ABL Credit Agreement as
modified hereby on the Fourth Amendment Effective Date and (2) the Fourth
Amendment shall be considered a “Credit Document” under the Amended ABL Credit
Agreement.

C. In consideration of the agreements of the Agent and the Lenders contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Credit Party hereby remises,
releases and forever discharges the Agent, each Lender and their respective
directors, officers, partners, shareholders, trustees, employees, agents,
representatives, attorneys, Affiliates, Subsidiaries, successors and assigns,
and any of them (collectively, the “Released Parties”), from any and all
liabilities, obligations, actions, contracts, claims, causes of action, damages,
demands, costs and expenses (each, a “Claim”) whatsoever of every kind and
nature, however evidenced or created, whether known or unknown, arising prior to
or on the date of this Fourth Amendment that relate, directly or indirectly, to
the Credit Documents, other than any such Claim that arises hereafter from the
gross negligence, bad faith or willful misconduct of any Released Party as
determined by a final, non-appealable judgment by a court of competent
jurisdiction.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Fourth Amendment as of the date first above
written.

 

BORROWERS: JILL ACQUISITION LLC By:  

/s/ Mark Webb

  Name: Mark Webb   Title: Chief Financial Officer J. JILL GIFT CARD SOLUTIONS,
INC. By:  

/s/ Mark Webb

  Name: Mark Webb   Title: Chief Financial Officer GUARANTOR: J.JILL, INC. By:  

/s/ Mark Webb

  Name: Mark Webb   Title: Chief Financial Officer

[Jill Acquisition LLC – Signature Page to Fourth Amendment to ABL Credit
Agreement]

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CIT FINANCE LLC, as Administrative Agent, Collateral Agent and Lender By:  

/s/ Robert L. Klein

  Name: Robert L. Klein   Title: Director

[Jill Acquisition LLC – Signature Page to Fourth Amendment to ABL Credit
Agreement]

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Exhibit A

to

Fourth Amendment to ABL Credit Agreement

Marked Loan Agreement

See attached.

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$40,000,000

ABL CREDIT AGREEMENT

among

J.JILL, INC.1,

as Parent,

JILL ACQUISITION LLC,

as Company,

CERTAIN SUBSIDIARIES OF JILL ACQUISITION LLC FROM TIME TO TIME

PARTY HERETO,

THE LENDERS PARTY HERETO

and

CIT FINANCE LLC,

as Administrative Agent and Collateral Agent

 

 

dated as of May 8, 2015

 

 

JEFFERIES FINANCE LLC and MACQUARIE CAPITAL (USA) INC.,

as Co-Syndication Agents

and

JEFFERIES FINANCE LLC and MACQUARIE CAPITAL (USA) INC.,

as Joint Lead Arrangers and Joint Book Running Managers

 

 

 

 

1 

As successor to JJill Holdings, Inc. and Jill Intermediate LLC (as replacement
“Parent” of Jill Holdings LLC).

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TABLE OF CONTENTS

 

        

Page

 

SECTION 1. Definitions and Accounting Terms

     2  

1.01

  Defined Terms      2  

1.02

  Other Definitional Provisions      58  

SECTION 2. Amount and Terms of Credit

     59  

2.01

  The Revolving Loan Commitments      59  

2.02

  Minimum Amount of Each Borrowing      62  

2.03

  Notice of Borrowing      63  

2.04

  Disbursement of Funds      64  

2.05

  Notes      65  

2.06

  Conversions/Continuations      66  

2.07

  Pro Rata Borrowings      67  

2.08

  Interest      67  

2.09

  Interest Periods      68  

2.10

  Increased Costs, Illegality, etc.      68  

2.11

  Compensation      70  

2.12

  Change of Lending Office      71  

2.13

  Replacement of Lenders      71  

2.14

  Company as Agent for Borrowers and other Credit Parties      72  

2.15

  Incremental Revolving Loans      73  

2.16

  Extensions of Revolving Loan Commitments      74  

SECTION 3. Letters of Credit

     77  

3.01

  Letters of Credit      77  

3.02

  Maximum Letter of Credit Outstanding; Final Maturities      78  

3.03

  Letter of Credit Requests; Minimum Stated Amount      79  

3.04

  Letter of Credit Participations      79  

3.05

  Agreement to Repay Letter of Credit Drawings      81  

3.06

  Increased Costs      82  

3.07

  Extended Revolving Loan Commitments      83  

3.08

  Subrogation Rights; Letter of Credit Guaranty      83  

SECTION 4. Commitment Commission; Fees; Reductions of Commitment

     84  

4.01

  Fees      84  

4.02

  Voluntary Termination of Unutilized Commitments      84  

4.03

  Mandatory Termination of Commitments      85  

SECTION 5. Prepayments; Payments; Taxes

     85  

5.01

  Voluntary Prepayments      85  

5.02

  Mandatory Repayments; Cash Collateralization      86  

5.03

  Method and Place of Payment      88  

5.04

  Taxes      90  

SECTION 6. Conditions Precedent to Credit Events on the Effective Date

     95  

6.01

  Effective Date; Notes      95  

 

(ii)

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6.02

  Officer’s Certificate      95  

6.03

  Opinions of Counsel      95  

6.04

  Company Documents; Proceedings; etc.      95  

6.05

  Initial Borrowing Base Certificate      95  

6.06

  Financial Statements; Pro Forma Balance Sheet; Projections      95  

6.07

  Consummation of the Equity Contribution and Acquisition      96  

6.08

  Reserved      96  

6.09

  Fees, etc.      96  

6.10

  Intercreditor Agreement      96  

6.11

  Security Agreements      96  

6.12

  Term Loan Agreement; Other Indebtedness      97  

6.13

  Solvency Certificate; Insurance Certificates      98  

6.14

  Patriot Act      98  

6.15

  No Company Material Adverse Effect      98  

6.16

  Purchase Agreement Representations and Specified Representations      98  

SECTION 7. Conditions Precedent to All Credit Events

     99  

7.01

  No Default; Representations and Warranties      99  

7.02

  Notice of Borrowing; Letter of Credit Request      99  

7.03

  Borrowing Base Limitations      99  

7.04

  Borrower Status      99  

SECTION 8. Representations, Warranties and Agreements

     100  

8.01

  Company Status      100  

8.02

  Power and Authority      100  

8.03

  No Violation      101  

8.04

  Approvals      101  

8.05

  Financial Statements; Financial Condition; Projections      101  

8.06

  Litigation      102  

8.07

  True and Complete Disclosure      102  

8.08

  Use of Proceeds; Margin Regulations      102  

8.09

  Tax Returns and Payments      103  

8.10

  Compliance with ERISA      103  

8.11

  Security Documents      104  

8.12

  Properties      104  

8.13

  OFAC      104  

8.14

  Patriot Act/FCPA      105  

8.15

  Compliance with Statutes      105  

8.16

  Investment Company Act      105  

8.17

  Environmental Matters      105  

8.18

  Employment and Labor Relations      106  

8.19

  Intellectual Property, Etc.      106  

8.20

  Insurance      106  

8.21

  Borrowing Base Calculation      107  

 

(iii)

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SECTION 9. Affirmative Covenants

     107  

9.01

  Information Covenants      107  

9.02

  Books, Records and Inspections; Quarterly Conference Calls      112  

9.03

  Maintenance of Property; Insurance      112  

9.04

  Existence; Franchises      113  

9.05

  Compliance with Statutes, etc.      113  

9.06

  Compliance with Environmental Laws      114  

9.07

  ERISA      114  

9.08

  End of Fiscal Years; Fiscal Quarters      115  

9.09

  [Reserved]      115  

9.10

  Payment of Taxes      115  

9.11

  Use of Proceeds      115  

9.12

  Additional Security; Further Assurances; etc.      115  

9.13

  Certain Matters Regarding Collateral      118  

9.14

  Landlords’ Agreements, Mortgagee Agreements, Bailee Letters and Real Estate
Purchases      118  

9.15

  Inventory      119  

9.16

  Permitted Acquisitions      119  

9.17

  Ownership of Subsidiaries      120  

SECTION 10. Negative Covenants

     120  

10.01

  Liens      120  

10.02

  Consolidation, Merger, Purchase or Sale of Assets, etc.      124  

10.03

  Dividends      127  

10.04

  Indebtedness      129  

10.05

  Advances, Investments and Loans      133  

10.06

  Transactions with Affiliates      136  

10.07

  Modifications of Certificate of Incorporation, By-Laws and Certain Other
Agreements; Limitations on Voluntary Payments, etc.      137  

10.08

  Limitation on Certain Restrictions on Restricted Subsidiaries      138  

10.09

  Business; etc.      139  

10.10

  Restricted and Unrestricted Subsidiaries      139  

10.11

  Fixed Charge Coverage Ratio      140  

10.12

  No Additional Deposit Accounts; etc.      140  

SECTION 11. Events of Default

     140  

11.01

  Events of Default      140  

11.02

  Rescission      144  

11.03

  Application of Proceeds      144  

11.04

  Cure Right      145  

SECTION 12. The Administrative Agent and the Collateral Agent

     147  

12.01

  Appointment      147  

12.02

  Nature of Duties      147  

12.03

  Lack of Reliance on the Administrative Agent      148  

12.04

  Certain Rights of the Agents      148  

12.05

  Reliance      149  

 

(iv)

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12.06

  Indemnification      150  

12.07

  The Administrative Agent in its Individual Capacity      150  

12.08

  Holders      151  

12.09

  Resignation by the Administrative Agent      151  

12.10

  Collateral Matters      152  

12.11

  Delivery of Information      154  

12.12

  Withholding      155  

12.13

  Administrative Agent May File Bankruptcy Disclosure and Proofs of Claim     
155  

SECTION 13. Miscellaneous

     156  

13.01

  Expenses; Indemnity; Damage Waiver; Costs and Expenses      156  

13.02

  Right of Setoff      158  

13.03

  Notices      159  

13.04

  Benefit of Agreement; Assignments; Participations      160  

13.05

  No Waiver; Remedies Cumulative      164  

13.06

  Payments Pro Rata      164  

13.07

  Calculations; Computations      165  

13.08

  GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL     
167  

13.09

  Counterparts      168  

13.10

  Effectiveness      168  

13.11

  Headings Descriptive      168  

13.12

  Amendment or Waiver; etc.      168  

13.13

  Survival      172  

13.14

  Domicile of Loans      172  

13.15

  Register      172  

13.16

  Confidentiality      173  

13.17

  Special Notice Regarding Pledges of Equity Interests in, and Promissory Notes
Owed by, Persons Not Organized in the United States      174  

13.18

  Patriot Act      174  

13.19

  OTHER LIENS ON COLLATERAL; TERMS OF INTERCREDITOR AGREEMENTS; ETC.      174  

13.20

  Interest Rate Limitation      175  

13.21

  No Fiduciary Duty      175  

13.22

  Release of Borrowers      176  

13.23

  Post-Closing Actions      176  

13.24

  Revival and Reinstatement of Obligations      177  

13.25

  Lender Action      177  

13.26

  Cash Management Banks and Hedging Creditors      177  

SECTION 14. Nature of Borrower Obligations

     178  

14.01

  Nature of Borrower Obligations      178  

14.02

  Independent Obligation      178  

14.03

  Authorization      178  

14.04

  Reliance      179  

14.05

  Contribution; Subrogation      179  

14.06

  Waiver      179  

 

(v)

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SECTION 15. Guaranty

     179  

15.01

  The Guaranty      179  

15.02

  Obligations Unconditional      180  

15.03

  Reinstatement      181  

15.04

  Subrogation; Subordination      181  

15.05

  Remedies      182  

15.06

  Instrument for the Payment of Money      182  

15.07

  Continuing Guarantee      182  

15.08

  Excluded Swap Obligations; Keepwell      182  

 

(vi)

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SCHEDULES

 

SCHEDULE 1.01(a)    Commitments SCHEDULE 1.01(b)    Borrowers SCHEDULE 1.01(d)
   Immaterial Subsidiaries SCHEDULE 1.01(e)    Existing Letters of Credit
SCHEDULE 8.12    Real Property SCHEDULE 8.20    Insurance SCHEDULE 9.01(f)   
Borrowing Base Ancillary Deliverables SCHEDULE 10.01    Existing Liens SCHEDULE
10.04    Existing Indebtedness SCHEDULE 10.08    Restrictive Agreements SCHEDULE
10.12    Deposit Accounts SCHEDULE 13.03    Lender Addresses SCHEDULE 13.23   
Post-Closing Matters

EXHIBITS

 

EXHIBIT A-1    Form of Notice of Borrowing EXHIBIT A-2    Form of Notice of
Conversion/Continuation EXHIBIT B-1    Form of Revolving Note EXHIBIT B-2   
Form of Swingline Note EXHIBIT C    Form of Letter of Credit Request EXHIBIT D-1
   Form of U.S. Tax Compliance Certificate EXHIBIT D-2    Form of U.S. Tax
Compliance Certificate EXHIBIT D-3    Form of U.S. Tax Compliance Certificate
EXHIBIT D-4    Form of U.S. Tax Compliance Certificate EXHIBIT E    Form of
Officer’s Certificate EXHIBIT F    Form of Security Agreement EXHIBIT G    Form
of Solvency Certificate EXHIBIT H    Form of Compliance Certificate EXHIBIT I   
Form of Assignment and Assumption Agreement EXHIBIT J    Form of ABL
Intercreditor Agreement EXHIBIT K    Form of Subordination Agreement EXHIBIT L
   Form of Joinder Agreement EXHIBIT M    Form of Borrowing Base Certificate

 

 

(vii)

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ABL CREDIT AGREEMENT, dated as of May 8, 2015, among JILL ACQUISITION LLC, a
Delaware limited liability company (the “Company”), J. JILL GIFT CARD SOLUTIONS,
INC., a Florida corporation (“Gift Card”), the other Borrowers from time to time
party hereto, J.JILL, INC., a Delaware corporation, as successor to JJill
Holdings, Inc. and Jill Intermediate LLC (as replacement “Parent” of Jill
Holdings LLC) (“Parent”), the other Guarantors from time to time party hereto,
the Lenders from time to time party hereto and CIT FINANCE LLC (“CIT”), as
Administrative Agent and Collateral Agent. All capitalized terms used herein and
defined in Section 1 are used herein as therein defined.

W I T N E S S E T H:

WHEREAS, on or prior to the date hereof, JJill Holdings, Inc., a Delaware
corporation (“Holdings”), intends to acquire Jill Intermediate LLC (“Jill
Intermediate”) and its subsidiaries (the “Acquisition”) pursuant to the terms of
that certain Membership Interest Purchase Agreement, dated as of March 30, 2015,
by and among Holdings, Jill Intermediate, the members of Jill Intermediate party
thereto and JJ Holding Company Limited (as the same may be amended, restated,
amended and restated, modified and/or supplemented from time to time in
accordance with the terms hereof and thereof, and together with all exhibits,
schedules and other disclosure letters thereto, collectively, the “Purchase
Agreement”), pursuant to which (i) certain equity holders will receive equity
interests in JJIP, LLC, and contribute such equity interests to JJill Topco
Holdings, L.P. (“Topco”), in exchange for certain equity interests in Topco,
(ii) Jill Intermediate will pay off interests under the Commodities Purchase
Agreement (as defined in the Purchase Agreement as in effect on the Effective
Date) and redeem certain of its other outstanding equity interests,
(iii) certain affiliates of the Sponsor and certain other Persons will make
direct or indirect contributions of cash to Topco, the proceeds of which will be
further used to capitalize Holdings, and (iv) Holdings will purchase all of the
remaining outstanding equity interests of Jill Intermediate from its members,
all for an aggregate purchase price equal to the Purchase Price (as such term is
defined in the Purchase Agreement as in effect on the Effective Date)
(collectively, the “Acquisition Consideration”);

WHEREAS, in order to finance, in part, the Acquisition described in the first
recital to this Agreement, to pay certain fees and expenses in connection with
the Transaction, and to provide for the general corporate purposes and working
capital of the Company and its Subsidiaries, Parent and the Borrowers have
requested that the Joint Lead Arrangers arrange, and the Lenders provide, a
senior secured asset-based revolving credit facility in the form of this
Agreement (the “ABL Facility”); and

WHEREAS, subject to and upon the terms and conditions set forth herein, the
Joint Lead Arrangers have arranged, and the Lenders are willing to make
available to the Borrowers, the ABL Facility.

 

1

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NOW, THEREFORE, IT IS AGREED:

SECTION 1. Definitions and Accounting Terms.

1.01 Defined Terms. As used in this Agreement, the following terms shall have
the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):

“ABL Facility” shall have the meaning provided in the Recitals to this
Agreement.

“ABL Facility Priority Collateral” shall have the meaning provided in the ABL
Intercreditor Agreement.

“ABL Intercreditor Agreement” shall mean that certain Amended and Restated
Intercreditor Agreement, dated as of September 30, 2020, among Parent, the
Company and the other Grantors party thereto from time to time, the Priming Term
Loan Agent, the Existing Term Loan Agent, the Administrative Agent, the
Collateral Agent and the other parties thereto from time to time, in the form of
Exhibit J hereto and as amended, restated, amended and restated modified and/or
supplemented from time to time.

“ABL Secured Cash Management Agreement” shall mean any Cash Management Agreement
that is entered into by and between any Credit Party and any Cash Management
Bank designated in writing by the Company (with the consent of all parties to
the respective such Cash Management Agreement) to the Administrative Agent as an
“ABL Secured Cash Management Agreement” for purposes of this Agreement and the
other Credit Documents on or prior to the date of entering into such agreement
(or in the case of any Cash Management Agreement existing on the Effective Date,
within 30 days after the Effective Date); provided, that (a) a Cash Management
Agreement may not be so designated, and will not constitute an ABL Secured Cash
Management Agreement, if it is secured by any Term Loan Priority Collateral on a
basis prior to the Obligations pursuant to this Agreement (whether secured on a
pari passu basis with the Priming Term Loan Obligations or otherwise) and
(b) such Cash Management Agreement (and related obligations) shall be permitted
in accordance with the terms of this Agreement.

“ABL Secured Hedging Agreement” shall mean each Interest Rate Protection
Agreement and/or Other Hedging Agreement entered into by one or more Credit
Parties (which may be guaranteed by any other Credit Parties) with any Lender
Counterparty designated in writing by the Company (with the consent of all
parties to the respective such Interest Rate Protection Agreement and/or Other
Hedging Agreement) to the Administrative Agent as an “ABL Secured Hedging
Agreement” for purposes of this Agreement and the other Credit Documents within
30 days of entering into such agreement (or in the case of any Interest Rate
Protection Agreement existing on the Effective Date, within 30 days after the
Effective Date); provided, that (a) an Interest Rate Protection Agreement and/or
Other Hedging Agreement may not be so designated, and will not constitute an ABL
Secured Hedging Agreement, if it is secured by any Term Loan Priority Collateral
on a basis prior to the Obligations pursuant to this Agreement (whether secured
on a pari passu basis with the Priming Term Loan Obligations or otherwise) and
(b) such Interest Rate Protection Agreement and/or Other Hedging Agreement (and
related obligations) shall be permitted in accordance with the terms of this
Agreement.

“Account” shall mean an “account” as such term is defined in Article 9 of the
UCC, and any and all supporting obligations in respect thereof.

 

2

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“Account Debtor” shall mean each Person who is obligated on an Account.

“Acquired Entity or Business” shall mean either (a) all or substantially all of
the assets constituting a business, division or product line of any Person not
already a Subsidiary of the Company, or (b) 50.1% or more of the Equity
Interests of any such Person (including by way of merger or consolidation),
which Person shall, as a result of the acquisition of such Equity Interests or
as a result of a merger or consolidation, become a Subsidiary of the Company (or
shall be merged with and into any Borrower or any Subsidiary of any Borrower).

“Acquisition” shall have the meaning provided in the Recitals to this Agreement.

“Acquisition Consideration” shall have the meaning provided in the Recitals to
this Agreement.

“Additional Security Documents” shall have the meaning provided in
Section 9.12(a).

“Administrative Agent” shall mean CIT, in its capacity as Administrative Agent
for the Lenders hereunder and under the other Credit Documents, and shall
include any successor to the Administrative Agent appointed pursuant to
Section 12.09.

“Administrative Agent’s Account” shall have the meaning provided in
Section 5.03(d).

“Administrative Questionnaire” shall mean an Administrative Questionnaire in
such form as may be supplied from time to time by the Administrative Agent.

“Affected Financial Institution” shall mean (a) any EEA Financial Institution or
(b) any UK Financial Institution.

“Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise; provided, however, that none of
the Administrative Agent, any Lender (other than an Affiliated Person) or any of
their respective Affiliates shall be considered an Affiliate of Parent or any
Subsidiary thereof.

“Affiliated Person” shall have the meaning provided in Section 13.04(b).

“Agent Advance” shall have the meaning provided in Section 2.01(e).

“Agent Advance Period” shall have the meaning provided in Section 2.01(e).

“Agents” shall mean and include, collectively, the Administrative Agent, the
Collateral Agent and the Co-Syndication Agents; and “Agent” shall mean any of
them.

 

3

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“Aggregate Exposure” shall mean, at any time, the sum of (a) the aggregate
principal amount of all Revolving Loans, Agent Advances and Swingline Loans then
outstanding and (b) the aggregate amount of all Letter of Credit Outstandings at
such time.

“Agreement” shall mean this ABL Credit Agreement, as modified, supplemented,
amended, restated (including any amendment and restatement hereof), extended or
renewed from time to time.

“Annual Financial Statements” shall mean the audited consolidated balance sheet
of Parent and its Subsidiaries as of February 1, 2020 and related statements of
operations, member’s equity and cash flows of Parent and its Subsidiaries for
the Fiscal Year ended February 1, 2020.

“Anticipated Cure Deadline” shall have the meaning assigned to such term in
Section 11.04.

“Applicable Budget” shall have the meaning assigned to such term in
Section 9.17(a).

“Applicable Commitment Commission Percentage” shall mean (a) from the Effective
Date to the last day of the calendar month immediately preceding the date of
delivery to the Administrative Agent of the quarterly financial statements
required by Section 9.01(a) for the first full Fiscal Quarter ended after the
Effective Date, 0.375%, and (b) thereafter, (i) for each calendar quarter during
which Historical Excess Availability is greater than 50% of Availability,
0.375%, and (ii) for each calendar quarter during which Historical Excess
Availability is less than or equal to 50% of Availability, 0.25%. From and after
any Extension, with respect to any Extended Revolving Loan Commitments and
Extended Loans, the Applicable Commitment Commission Percentage specified for
such Extended Revolving Loan Commitments and Extended Loans shall be those set
forth in the applicable definitive documentation thereof. Each change in the
Applicable Commitment Commission Percentage resulting from a change in
Historical Excess Availability shall be effective with respect to all Loans and
Letters of Credit outstanding on and after the first day of the calendar month
immediately following the date of delivery to the Administrative Agent of the
Borrowing Base Certificate required by Section 9.01(f) with respect to a fiscal
period that is the final month in a Fiscal Quarter indicating such change until
the last day of the calendar month immediately preceding the next date of
delivery of such Borrowing Base Certificate with respect to a fiscal period that
is the final month of a Fiscal Quarter indicating another such change.
Notwithstanding the foregoing, Applicable Commitment Commission Percentage shall
be calculated in accordance with clause (b)(i) above at any time during which
the Company has failed to deliver the Borrowing Base Certificate required by
Section 9.01(f).

“Applicable Margin” shall mean:

(a) from the Effective Date to the last Business Day of the calendar month
immediately preceding the date of delivery to the Administrative Agent of the
Borrowing Base Certificate required by Section 9.01(f) for the first month
following the first full Fiscal Quarter ended after the Effective Date, a rate
per annum equal to (i) in the case of Base Rate Loans, 1%, and (b) in the case
of LIBOR Loans, 2%.

 

4

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(b) at all times thereafter, a rate per annum equal to the rate set forth below
for the applicable Type of Loan opposite the applicable Historical Excess
Availability:

 

Level

  

Historical Excess

Availability

  

Revolving

Loans Maintained as LIBOR

Loans

  

Revolving Loans and

Swingline Loans

Maintained as

Base Rate Loans

I    Greater than 50% of Availability   

1.50%

(prior to the Fourth Amendment Effective Date)

  

0.50%

(prior to the Fourth Amendment Effective Date)

  

 

2.25%

(on and after the Fourth Amendment Effective Date)

  

 

1.25%

(on and after the Fourth Amendment Effective Date)

II    Less than or equal to 50% of Availability   

1.75%

(prior to the Fourth Amendment Effective Date)

  

0.75%

(prior to the Fourth Amendment Effective Date)

  

2.50%

(on and after the Fourth Amendment Effective Date)

  

1.50%

(on and after the Fourth Amendment Effective Date)

Each change in the Applicable Margin resulting from a change in Historical
Excess Availability shall be effective with respect to all Loans and Letters of
Credit outstanding on and after the first Business Day of the calendar month
immediately following the date of delivery to the Administrative Agent of the
Borrowing Base Certificate required by Section 9.01(f) with respect to a fiscal
period that is the final month in a Fiscal Quarter indicating such change until
the last Business Day of the calendar month immediately preceding the next date
of delivery of such Borrowing Base Certificate with respect to a fiscal period
that is the final month of a Fiscal Quarter indicating another such change.
Notwithstanding the foregoing, Historical Excess Availability shall be deemed to
be in Level II at any time during which the Company has failed to deliver the
Borrowing Base Certificate required by Section 9.01(f).

“Asset Sale” shall mean any sale, transfer or other disposition by Parent or any
of its Subsidiaries to any Person other than to a Borrower or a Wholly-Owned
Subsidiary of any Borrower that is a Subsidiary of any asset (including, without
limitation, any capital stock or other securities of, or Equity Interests in,
another Person, other than Parent) pursuant to Section 10.02(d), but excluding
any sale, transfer or disposition (for such purpose, treating any series of
related sales, transfers or dispositions as a single such transaction) that
generates Net Sale Proceeds of less than $1,500,000.

“Assignment and Assumption Agreement” shall mean an Assignment And Assumption
Agreement substantially in the form of Exhibit I.

 

5

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“Authorized Officer” shall mean, with respect to (a) delivering the Notice of
Borrowing, Notices of Conversion/Continuation, Letter of Credit Requests and
similar notices, the chief executive officer, chief financial officer,
treasurer, chief operating officer of the Company or any person or persons that
are designated in writing by one or more persons described above to the
Administrative Agent as being authorized by the Borrowers to deliver such
notices and (b) any other matter in connection with this Agreement or any other
Credit Document, the chief executive officer, the chief financial officer, the
treasurer, the principal accounting officer, the president or other similar
officer of the Company.

“Availability” at any time shall mean the lesser of (a) the Borrowing Base at
such time and (b) the Total Revolving Loan Commitment at such time.

“Available Cash” means, at any time, the aggregate amount of all cash and Cash
Equivalents on the balance sheet of the Parent and its Subsidiaries in excess of
the Available Cash Threshold.

“Available Cash Threshold” means (a) $15,000,000 on and after the Fourth
Amendment Effective Date to and including December 31, 2020 and (b) $10,000,000
on and after January 1, 2021.

“Back-Stop Arrangements” shall mean, collectively, Letter of Credit Back-Stop
Arrangements and Swingline Back-Stop Arrangements.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable Resolution Authority in respect of any liability of an Affected
Financial Institution.

“Bail-In Legislation” means, (a) with respect to any EEA Member Country
implementing Article 55 of Directive 2014/59/EU of the European Parliament and
of the Council of the European Union, the implementing law for such EEA Member
Country from time to time which is described in the EU Bail-In Legislation
Schedule and (b) with respect to the United Kingdom, Part I of the United
Kingdom Banking Act 2009 (as amended from time to time) and any other law,
regulation or rule applicable in the United Kingdom relating to the resolution
of unsound or failing banks, investment firms or other financial institutions or
their affiliates (other than through liquidation, administration or other
insolvency proceedings).

“Bankruptcy Code” shall have the meaning provided in Section 11.01(e).

“Base Rate” shall mean, at any time, the highest of (a) the Prime Rate at such
time, (b) 1/2 of 1% per annum in excess of the overnight Federal Funds Effective
Rate at such time, (c) the One-Month LIBO Rate for such day plus 1% and (d) 2%.
If the Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition thereof, the Base Rate shall be determined without
regard to clause (b) of the preceding sentence until the circumstances giving
rise to such inability no longer exist. Any change in the Base Rate due to a
change in the Prime Rate, the Federal Funds Effective Rate or such One-Month
LIBO Rate shall be effective as of the opening of business on the day of such
change in the Prime Rate, the Federal Funds Effective Rate or such One-Month
LIBO Rate, respectively.

 

6

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“Base Rate Loan” shall mean (a) each Revolving Loan designated or deemed
designated as such by the relevant Borrower at the time of the incurrence
thereof or conversion thereto and (b) each Swingline Loan.

“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate
(which may include SOFR) that has been selected by the Administrative Agent and
the Borrower giving due consideration to (i) any selection or recommendation of
a replacement rate or the mechanism for determining such a rate by the Relevant
Governmental Body or (ii) any evolving or then-prevailing market convention for
determining a rate of interest as a replacement to the LIBO Rate for U.S.
dollar-denominated syndicated credit facilities and (b) the Benchmark
Replacement Adjustment; provided, that any such Benchmark Replacement shall be
administratively feasible as determined by the Administrative Agent in its sole
discretion; provided, further, if the Benchmark Replacement as so determined
would be less than 1.00%, the Benchmark Replacement shall be deemed to be 1.00%;
provided, further, that the Benchmark Replacement shall be a “qualified rate”
within the meaning of Proposed Treasury Regulation Section 1.1001-6.

“Benchmark Replacement Adjustment” means, with respect to any replacement of the
LIBO Rate with an Unadjusted Benchmark Replacement for each applicable Interest
Period, the spread adjustment, or method for calculating or determining such
spread adjustment (which may be a positive or negative value or zero), that has
been selected by the Administrative Agent and the Borrower giving due
consideration to (a) any selection or recommendation of a spread adjustment, or
method for calculating or determining such spread adjustment, for the
replacement of the LIBO Rate with the applicable Unadjusted Benchmark
Replacement by the Relevant Governmental Body or (b) any evolving or
then-prevailing market convention for determining a spread adjustment, or method
for calculating or determining such spread adjustment, for the replacement of
the LIBO Rate with the applicable Unadjusted Benchmark Replacement for U.S.
dollar-denominated syndicated credit facilities at such time; provided, that any
such Benchmark Replacement Adjustment shall be administratively feasible as
determined by the Administrative Agent in its sole discretion.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark
Replacement, any technical, administrative or operational changes (including
changes to the definition of “Base Rate,” the definition of “LIBO Rate”, the
definition of “Interest Period,” timing and frequency of determining rates and
making payments of interest and other administrative matters) that the
Administrative Agent and the Borrower agree may be appropriate to reflect the
adoption and implementation of such Benchmark Replacement and to permit the
administration thereof by the Administrative Agent in a manner substantially
consistent with market practice (or, if the Administrative Agent decides that
adoption of any portion of such market practice is not administratively feasible
or if the Administrative Agent determines that no market practice for the
administration of the Benchmark Replacement exists, in such other manner of
administration as the Administrative Agent (x) decides is reasonably necessary
in connection with the administration of this Agreement) and (y) determines is
administratively feasible in its sole discretion.

 

7

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“Benchmark Replacement Date” means the earlier to occur of the following events
with respect to the LIBO Rate:

(a) in the case of clause (a) or (b) of the definition of “Benchmark Transition
Event,” the later of (i) the date of the public statement or publication of
information referenced therein and (ii) the date on which the administrator of
the LIBO Rate permanently or indefinitely ceases to provide the LIBO Rate; and

(b) in the case of clause (c) of the definition of “Benchmark Transition Event,”
the date of the public statement or publication of information referenced
therein.

“Benchmark Transition Event” shall mean the occurrence of one or more of the
following events with respect to the LIBO Rate:

(a) a public statement or publication of information by or on behalf of the
administrator of the LIBO Rate announcing that such administrator has ceased or
will cease to provide the LIBO Rate, permanently or indefinitely; provided,
that, at the time of such statement or publication, there is no successor
administrator that will continue to provide the LIBO Rate;

(b) a public statement or publication of information by the regulatory
supervisor for the administrator of the LIBO Rate, the U.S. Federal Reserve
System, an insolvency official with jurisdiction over the administrator for the
LIBO Rate, a resolution authority with jurisdiction over the administrator for
the LIBO Rate or a court or an entity with similar insolvency or resolution
authority over the administrator for the LIBO Rate, which states that the
administrator of the LIBO Rate has ceased or will cease to provide the LIBO Rate
permanently or indefinitely; provided, that, at the time of such statement or
publication, there is no successor administrator that will continue to provide
the LIBO Rate; or

(c) a public statement or publication of information by the regulatory
supervisor for the administrator of the LIBO Rate announcing that the LIBO Rate
is no longer representative.

“Benchmark Transition Start Date” means (a) in the case of a Benchmark
Transition Event, the earlier of (i) the applicable Benchmark Replacement Date
and (ii) if such Benchmark Transition Event is a public statement or publication
of information of a prospective event, the 90th day prior to the expected date
of such event as of such public statement or publication of information (or if
the expected date of such prospective event is fewer than 90 days after such
statement or publication, the date of such statement or publication) and (b) in
the case of an Early Opt-in Election, the date specified by the Administrative
Agent (or, in the event such Early Opt-in Election has occurred as a result of a
determination or election by the Borrower, the Administrative Agent and the
Borrower) or the Required Lenders, as applicable, by notice to the Borrower, the
Administrative Agent (in the case of such notice by the Required Lenders) and
the Lenders.

“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its
related Benchmark Replacement Date have occurred with respect to the LIBO Rate
and solely to the extent that the LIBO Rate has not been replaced with a
Benchmark Replacement, the period (a) beginning at the time that such Benchmark
Replacement Date has occurred if, at such time, no Benchmark Replacement has
replaced the LIBO Rate for all purposes hereunder in accordance with
Section 2.10(e) and (b) ending at the time that a Benchmark Replacement has
replaced the LIBO Rate for all purposes hereunder pursuant to Section 2.10(e).

 

8

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

“Borrower Guaranteed Obligations” shall have the meaning provided in
Section 15.01.

“Borrower Materials” shall have the meaning provided in Section 13.03(c).

“Borrower Release” shall have the meaning provided in Section 13.22.

“Borrowers” shall mean, collectively, (a) the Company and each Subsidiary listed
on Schedule 1.01(b) hereto, and (b) each other Subsidiary that is or becomes a
party to this Agreement pursuant to Section 9.12; and “Borrower” shall mean any
of them.

“Borrowing” shall mean the borrowing of one Type of Revolving Loan from all the
Lenders, or from the Swingline Lender in the case of Swingline Loans, on a given
date (or resulting from a conversion or conversions on such date) having in the
case of LIBOR Loans the same Interest Period; provided, that Base Rate Loans
incurred pursuant to Section 2.10(b) shall be considered part of the related
Borrowing of LIBOR Loans.

“Borrowing Base” shall mean, as of any date of calculation, the amount,
calculated pursuant to the Borrowing Base Certificate most recently delivered to
the Administrative Agent in accordance with Section 9.01(f) (but as modified as
provided below in this definition), equal to, without duplication:

(a) 90% of the net amount of Eligible Credit Card Receivables at such time, plus

(b) 85% of the net book value of Eligible Accounts at such time, plus

(c) the lesser of (A) 100% of the Value of Eligible Inventory at such time and
(B) 90% of the Net Orderly Liquidation Value of Eligible Inventory at such time,
plus

(d) the least of (A) 100% of the Value of Eligible In Transit Inventory at such
time, (B) 90% of the Net Orderly Liquidation Value of Eligible In Transit
Inventory at such time and (C) the In Transit Maximum Amount, minus

(e) the sum of Reserves then established by the Administrative Agent, as may be
modified, amended, eliminated or established from time to time by the
Administrative Agent in its Permitted Discretion.

Each of the Administrative Agent and the Collateral Agent shall have the right
(but not the obligation) to review such computations and if, in its Permitted
Discretion, such computations have not been calculated in accordance with the
terms of this Agreement, each of the Administrative Agent and the Collateral
Agent shall have the right to correct any such errors.

“Borrowing Base Certificate” shall have the meaning provided in Section 9.01(f).

 

9

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“Business Day” shall mean (a) any day which is neither a Saturday or Sunday nor
a legal holiday on which banks are authorized or required to be closed in New
York, New York; and (b) relative to the making, continuing, prepaying or
repaying of any LIBOR Loans, any day which is a Business Day described in clause
(a) above and which is also a day on which dealings in Dollars are carried on in
the London interbank market.

“Calculation Period” shall mean, with respect to any event expressly required to
be calculated on a Pro Forma Basis pursuant to the terms of this Agreement, the
Test Period most recently ended prior to the date of such event, in each case,
for which financial statements have been (or were required to have been)
delivered to the Lenders pursuant to Section 8.05 or 9.01(a) or (b), as
applicable.

“Capital Expenditures” shall mean, with respect to any Person, for any period,
(a) all expenditures by such Person during such period which are required to be
included as capital expenditures on a consolidated statement of cash flows in
accordance with GAAP and (b) without duplication, the amount expended or
capitalized under leases evidencing Capitalized Lease Obligations incurred by
such Person in such period.

“Capitalized Lease Obligations” shall mean, with respect to any Person, all
rental obligations of such Person which, under GAAP, are or will be required to
be capitalized on the books of such Person, in each case taken at the amount
thereof accounted for as indebtedness in accordance with such principles.

“Capitalized Software Expenditures” shall mean, for any period, the aggregate of
all expenditures (whether paid in cash or accrued as liabilities) by a Person
during such period in respect of licensed or purchased software or internally
developed software and software enhancements that, in accordance with GAAP, are
or are required to be reflected as capitalized costs on the consolidated balance
sheet of such Person and its Subsidiaries.

“Cash Equivalents” shall mean (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within one year from the date of acquisition thereof, (b) marketable
direct obligations issued or fully guaranteed by any state of the United States
or any political subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of acquisition thereof and, at
the time of acquisition, having one of the two highest ratings obtainable from
either S&P or Moody’s, (c) commercial paper maturing no more than 270 days from
the date of creation thereof and, at the time of acquisition, having a rating of
at least A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit,
time deposits, overnight bank deposits or bankers’ acceptances maturing within
one year from the date of acquisition thereof issued by any commercial bank
(A) organized under the laws of the United States or any state thereof or the
District of Columbia or any member nation of the Organization for Economic
Cooperation and Development and (B) having at the date of acquisition thereof
combined capital and surplus of not less than $250,000,000 in the case of U.S.
banks or $100,000,000 (or the Dollar equivalent as of the date of determination)
in the case of non-U.S. banks, (e) Deposit Accounts maintained with (i) any bank
that satisfies the criteria described in clause (d) above, or (ii) any other
bank organized under the laws of the United States or any state thereof so long
as the amount maintained with any such other bank is insured by the Federal

 

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Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank
satisfying the requirements of clause (d) of this definition or any recognized
securities dealer having combined capital and surplus of not less than
$250,000,000 in the case of U.S. banks or $100,000,000 (or the Dollar equivalent
as of the date of determination) in the case of non-U.S. banks, having a term of
not more than seven days, with respect to securities satisfying the criteria in
clauses (a) or (d) above, (g) debt securities with maturities of six months or
less from the date of acquisition backed by standby letters of credit issued by
any commercial bank satisfying the criteria described in clause (d) above, (h)
Investments in money market funds substantially all of whose assets are invested
in the types of assets described in clauses (a) through (g) above, and (i) in
the case of any Foreign Subsidiary (i) such local currencies in those countries
in which such Foreign Subsidiary transacts business from time to time in the
ordinary course of business and (ii) investments of comparable tenor and credit
quality to those described in clauses (a) through (g) above customarily utilized
in such countries in which such Foreign Subsidiary operates for short term cash
management purposes.

“Cash Management Agreement” shall mean any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements.

“Cash Management Bank” shall mean (a) any Lender or an Affiliate of a Lender
that as of the Effective Date has a Cash Management Agreement that is permitted
under this Agreement and (b) any Person that, at the time it enters into a Cash
Management Agreement permitted under this Agreement, is a Lender or an Affiliate
of a Lender, in each case in its capacity as a party to such Cash Management
Agreement.

“Cash Management Obligations” shall mean any and all obligations, whether
absolute or contingent and however and whenever created, arising, evidenced or
acquired (including all renewals, extensions and modifications thereof and
substitutions therefor), in connection with Cash Management Services.

“Cash Management Services” shall mean any cash management or related services
including treasury, depository, return items, overdraft, controlled
disbursement, merchant store value cards, e-payable services, electronic funds
transfer, interstate depository network, automatic clearing house transfer
(including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) and other cash management
arrangements.

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as the same has been amended and may hereafter be amended
from time to time, 42 U.S.C. § 9601 et seq.

“Change of Control” shall mean that (a) any Person or “group” (within the
meaning of Rule 13d-3 and 13d-5 under the Exchange Act) (other than the Sponsor)
owns and controls, directly or indirectly, Equity Interests of Parent having the
right to vote for the election of members of the board of directors of Parent
representing (A) 35% or more of all such Equity Interests and (B) a percentage
of such Equity Interests in excess of those held by the Sponsor, (b) Parent
ceases to own and control, directly, 100% of the Equity Interests of the
Company, or (c) a “change of

 

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control” or similar event shall occur as provided in the Priming Term Loan
Agreement (or any Permitted Refinancing Indebtedness in respect thereof), the
Subordinated Facility Credit Agreement or any other Indebtedness or Disqualified
Equity Interests with an outstanding principal amount (or aggregate liquidation
preference) equal to or greater than $15,000,000.

“Chattel Paper” shall mean “chattel paper” (as such term is defined in Article 9
of the UCC).

“CIT” shall have the meaning provided in the introductory paragraph to this
Agreement.

“Claims” shall have the meaning provided in the definition of “Environmental
Claims”.

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

“Collateral” shall mean all property (whether real or personal) with respect to
which any security interests have been granted (or are purported to be granted)
pursuant to any Security Document, including, without limitation, all Security
Agreement Collateral and all Mortgaged Properties.

“Collateral Agent” shall mean CIT, in its capacity as Collateral Agent for the
Lenders hereunder and under the other Credit Documents, and shall include any
successor to the Collateral Agent appointed pursuant to Section 12.09.

“Collection Account” shall mean each account established at a Collection Bank
subject to a Control Agreement into which funds shall be transferred as provided
in Section 5.03(b).

“Collection Banks” shall have the meaning provided in Section 5.03(b).

“Commingled Inventory” shall mean Inventory of any Borrower that is commingled
(whether pursuant to a consignment, a toll manufacturing agreement or otherwise)
with Inventory of another Person (other than another Borrower) at a location
owned or leased by a Borrower to the extent that such Inventory of such Borrower
is not readily identifiable.

“Commitment Commission” shall have the meaning provided in Section 4.01(a).

“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

“Communications” shall have the meaning provided in Section 13.03(b).

“Company” shall have the meaning provided in the introductory paragraph to this
Agreement.

 

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“Company Material Adverse Effect” shall mean any change, circumstance,
development, effect or occurrence that, individually or in the aggregate,
(a) has or would reasonably be expected to have a material adverse effect on the
business, assets, liabilities, condition (financial or otherwise) or results of
operations of the Company Group, taken as a whole; provided, however, that the
term “Company Material Adverse Effect” will not include any change,
circumstance, development, effect or occurrence to the extent caused by
(i) changes or proposed changes in Laws or interpretations thereof or decisions
by courts or any Governmental Entity first effected after the Effective Date,
(ii) changes or proposed changes in GAAP first effected after the Effective
Date, (iii) actions or omissions of any Company Group Member taken with the
explicit written consent of Buyer in contemplation of the Contemplated
Transactions, including the impact thereof on relationships, contractual or
otherwise, with, or actual or potential loss or impairment of, customers,
suppliers, distributors, partners, financing sources, officers, employees and/or
consultants on revenue, profitability or cash flows, or actions by Buyer and its
Affiliates, (iv) general conditions affecting the economy as a whole, including
changes in the credit, debt, financial, capital or reinsurance markets
(including changes in interest or exchange rates, prices of any security or
market index or any disruption of such markets), in each case, in the United
States or anywhere else in the world, (v) events or conditions generally
affecting the industries in which any Company Group Member operates,
(vi) global, national or regional political conditions, including national or
international hostilities, acts of terror or acts of war, sabotage or terrorism
or military actions or any escalation or worsening of any hostilities, acts of
war, sabotage or terrorism or military actions, (vii) pandemics, earthquakes,
hurricanes, tornados or other natural disasters, (viii) other than for purposes
of Section 3.5 and Section 3.16(b)(x) of the Purchase Agreement (and, to the
extent related thereto, the conditions set forth in Section 7.3(a) of the
Purchase Agreement) the announcement or pendency of the Purchase Agreement or
the Contemplated Transactions to the extent related to the identity of Buyer,
(ix) any matter set forth on Schedule 1.1(c) to the Purchase Agreement, (x) the
failure by any Company Group Member to take any action that is prohibited by any
Transaction Document and for which the written consent of Buyer was sought but
denied, (xi) any change or prospective change in the credit ratings of any
Company Group Member, or (xii) any failure to meet any projections, forecasts,
guidance, estimates, milestones, budgets or financial or operating predictions
of revenue, earnings, cash flow or cash position (provided, that (A) the matters
described in clauses (i), (ii), (iv), (v), (vi) and (vii) shall be included in
the term “Company Material Adverse Effect” to the extent any such matter has a
disproportionate and adverse impact on the business, assets, condition
(financial or otherwise) or results of operations of the Company Group, taken as
a whole, relative to other participants in the same business as the Company
Group, and (B) clauses (xi) and (xii) will not prevent a determination that any
change or effect underlying any such change or failure, as applicable, has
resulted in a Company Material Adverse Effect, to the extent such change or
effect is not otherwise excluded from this definition of Company Material
Adverse Effect), or (b) that has or would reasonably be expected to prevent the
Members or the Company from performing their respective obligations under the
Purchase Agreement or materially delay the ability of the Members or the Company
Group to consummate the Contemplated Transactions.

For purposes of the foregoing definition of Company Material Adverse Effect,
capitalized terms used therein (other than “Purchase Agreement” and “Company
Material Adverse Effect”) shall have the meanings assigned to such terms in the
Purchase Agreement as in effect on the Effective Date.

“Compliance Certificate” shall mean a certificate of an Authorized Officer of
the Company substantially in the form of Exhibit H.

 

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“Concentration Account” shall have the meaning provided in Section 5.03(c).

“Consolidated Current Assets” shall mean, at any time, the consolidated current
assets of the Parent and its Subsidiaries at such time (other than current
deferred tax assets).

“Consolidated EBITDA” shall mean, as of any date for the applicable period
ending on such date with respect to the Company and its Subsidiaries on a
consolidated basis, and without duplication:

(a) Consolidated Net Income; plus

(b) an amount which, in the determination of Consolidated Net Income for such
period, has been deducted (and not added back) (or, in the case of amounts
pursuant to clause (i) below, not already included in Consolidated Net Income),
without duplication,

(i) Consolidated Interest Expense (and to the extent not included in interest
expense, (A) all cash dividend payments (excluding items eliminated in
consolidation) on any series of Preferred Equity or Disqualified Equity
Interests and (B) costs of surety bonds in connection with financing activities)
for such period,

(ii) provision for Taxes based on income, profits or capital of the Company and
its Subsidiaries, including federal, state, franchise, excise and similar taxes
and foreign withholding taxes paid or accrued during such period including
(A) penalties and interest related to such taxes or arising from any tax
examinations and (B) in respect of repatriated funds,

(iii) depreciation and amortization expense and impairment charges (including
amortization of intangible assets (including goodwill), deferred financing fees
or costs), Capitalized Software Expenditures and amortization of unrecognized
prior service costs and actuarial gains and losses related to pensions and other
post-employment benefits),

(iv) (x) net unusual, extraordinary or nonrecurring charges, expenses or losses
(including accruals and payments for amounts payable under executive employment
agreements, severance costs, relocation costs, strategic review costs,
store/office closure costs, legal settlement costs, retention or completion
bonuses and losses realized on disposition of property outside of the ordinary
course of business, and losses relating to activities constituting a business
that is being terminated or discontinued) and (y) restructuring charges
(including any unusual, extraordinary or nonrecurring operating expenses
directly attributable to the implementation of any cost savings initiatives),
accruals or reserves and business optimization expense, costs associated with
strategic reviews, project start-up costs, transition costs, costs related to
the opening, closure and/or consolidation of offices, facilities and stores
(including the termination or discontinuance of activities constituting a
business) (and proposals in connection therewith, whether or not successful),
retention charges, contract termination costs, recruiting and signing bonuses
and expenses, future lease commitments, systems establishment costs, conversion
costs and excess pension charges and consulting fees and Pre-Opening Expenses;
provided, that any such cash charges, expenses, losses, accruals or reserves
added to Consolidated Net Income in the calculation of Consolidated EBITDA
pursuant to this clause (iv) shall not exceed 7.5% of Consolidated EBITDA
(calculated prior to giving effect to the addbacks made pursuant to this clause
(iv)),

 

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(v) other non-cash charges, expenses or losses (excluding any such non-cash
charge, expense or loss to the extent that it represents an accrual of or
reserve for cash expenses in any future period, an amortization of a prepaid
cash expense that was paid in a prior period, or write-off or write-down or
reserves with respect to Consolidated Current Assets) including (A) any non-cash
increase in expenses resulting from the revaluation of Inventory (including any
impact of changes to Inventory valuation policy methods including changes in
capitalization and variances), (B) losses recognized in respect of
post-retirement benefits as a result of the application of FASB ASC 715, (C)
losses on minority interests owned by any Person, (D) all losses from
Investments recorded using the equity method, (E) the non-cash impact of
accounting changes or restatements, (F) non-cash fair value adjustments in
Investments, (G) the non-cash portion of rent expense and (H) any non-cash
charges, expenses, losses, accruals or reserves described in clause (iv) above),

(vi) [reserved],

(vii) [reserved],

(viii) non-cash expenses resulting from any employee benefit or management
compensation plan or the grant of stock and stock options or other Equity
Interests to employees of Parent, the Company or any Subsidiary pursuant to a
written plan or agreement (including expenses arising from the grant of stock
and stock options prior to the Effective Date) or the treatment of such options
or other Equity Interests under variable plan accounting,

(ix) Transaction Costs,

(x) the amount of expenses relating to payments made to option holders or
related equity holders of Parent or any parent holding company in connection
with, or as a result of, any distribution being made to shareholders of such
Person or its direct or indirect parent companies, which payments are being made
to compensate such option holders as though they were shareholders at the time
of, and entitled to share in, such distribution, in each case to the extent
permitted by this Agreement,

(xi) any costs or expenses incurred pursuant to any management equity plan or
share or unit option plan or any other management or employee benefit plan or
agreement or share or unit subscription or shareholder or similar agreement, to
the extent such costs or expenses are funded with cash proceeds contributed to
the capital of the Company or the Net Cash Proceeds of any issuance of Equity
Interests (other than Disqualified Equity Interests) of Parent or the Company
(or any parent holding company thereof),

(xii) transaction fees and expenses incurred, or amortization thereof, in
connection with, to the extent permitted hereunder, any Investment, any debt
issuance, any issuance of Qualified Equity Interests, any acquisition, any
disposition, any casualty event, or any amendments or waivers of the Credit
Documents and Permitted Refinancings in connection therewith, in each case,
whether or not consummated,

(xiii) proceeds from business interruption insurance (to the extent not
reflected as revenue or income in Consolidated Net Income and to the extent that
the related loss was deducted in the determination of Consolidated Net Income),

 

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(xiv) charges, losses, lost profits, expenses or write-offs to the extent
indemnified or insured by a third party, including expenses covered by
indemnification provisions in connection with any acquisition permitted by the
Credit Documents or any transaction permitted by the Credit Documents, in each
case, to the extent that coverage has not been denied and so long as such
amounts are actually reimbursed to the Company or any Subsidiary in cash within
one year after the related amount is first added to Consolidated EBITDA pursuant
to this clause (xiv) (and if not so reimbursed within one year, such amount
shall be deducted from Consolidated EBITDA during the next measurement period),

(xv) cash receipts (or any netting arrangements resulting in reduced cash
expenses) not included in Consolidated EBITDA in any period to the extent
non-cash gains relating to such receipts were deducted in the calculation of
Consolidated EBITDA pursuant to clause (c) below for any previous period and not
added back,

(xvi) [reserved],

(xvii) [reserved], and

(xviii) net realized losses relating to mark-to-market of amounts denominated in
foreign currencies resulting from the application of FASB ASC 830, minus

(c) an amount which, in the determination of Consolidated Net Income, has been
included for,

(i) all non-recurring, extraordinary or unusual gains and non-cash income during
such period (including income related to any purchase of the Priming Term Loans
and the Existing Term Loans by any Affiliated Person),

(ii) other non-cash income or gains including (A) any non-cash increase in
income resulting from the revaluation of Inventory (including any impact of
changes to Inventory valuation policy methods including changes in
capitalization and variances and the non-cash portion of rent expense), (B)
gains recognized in respect of postretirement benefits as a result of the
application of FASB ASC 715 or FASB 106, (C) gains on minority interests owned
by any Person, (D) all gains from Investments recorded using the equity method,
(E) the non-cash impact of accounting changes or restatements and (F) non-cash
fair value adjustments in Investments but excluding (1) accrual of revenue in
the ordinary course, (2) any such items in respect of which cash was received in
a prior period or will be received in a future period (and, in the case of cash
that was received in a prior period, such amounts previously reduced
Consolidated Net Income in a prior period (and would not have been required to
be added back pursuant to preceding clause (b) of this definition)) or (3) any
such items which represent the reversal in such period of any accrual of, or
reserve for, anticipated cash charges in any prior period where such accrual or
reserve is no longer required (and where such accrual or reserve previously
reduced Consolidated Net Income in a prior period (and would not have been
required to be added back pursuant to clause (b) of this definition)), all as
determined on a consolidated basis,

 

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(iii) the amount of cash received in such period in respect of any non-cash
income or gain in a prior period (to the extent such non-cash income or gain
previously increased Consolidated Net Income in a prior period (and would not
have been required to be deducted pursuant to preceding clause (c)(ii) of this
definition)),

(iv) any gains realized upon the disposition of property outside of the ordinary
course of business or gains relating to activities constituting a business that
is being terminated or discontinued; and

(v) all cash payments made during the respective period in respect of any
amounts that previously were added under preceding clause (b) on basis that they
were non-cash items, minus

(d) the amount of Dividends paid (i) to Parent or any parent entity of Parent
for operating expenses or (ii) as fees to and indemnities to directors of Parent
or any parent entity of Parent or of the Company or its Subsidiaries, to the
extent (A) such amount, if paid directly by the Company, would have reduced
Consolidated Net Income (assuming such amount was paid by the Company) and would
not otherwise have been required to be added back pursuant to preceding clause
(b) of this definition or (B) such Dividend payment is paid by the Company in
respect of an expense or other item that has resulted in, or will result in, a
reduction of Consolidated EBITDA, as calculated pursuant to this definition).

Notwithstanding anything to the contrary, to the extent that such amounts were
included in the determination of Consolidated Net Income, any calculation of
Consolidated EBITDA shall exclude for any period, any income (loss) for such
period attributable to the early extinguishment of (x) Indebtedness or
(y) obligations under any Interest Rate Protection Agreement.

“Consolidated Indebtedness” shall mean the sum of (without duplication) all
Indebtedness (other than letters of credit or bank guarantees, to the extent
undrawn) consisting of Capitalized Lease Obligations, Indebtedness for borrowed
money and Disqualified Equity Interests of Parent, the Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.

“Consolidated Interest Expense” shall mean, for any period, the total interest
expense of the Company and its Subsidiaries on a consolidated basis deducted in
the determination of Consolidated Net Income of such Person for such period (and
not added back), including, as applicable (a) amortization of original issue
discount resulting from the issuance of Indebtedness at less than par, (b) all
commissions, discounts and other fees and charges owed with respect to letters
of credit or bankers’ acceptances, (c) non-cash interest payments, (d) the
interest component of Capitalized Lease Obligations, (e) net payments, if any,
made (less net amounts, if any, received) pursuant to Interest Rate Protection
Agreements with respect to Indebtedness, (f) amortization or write-off of
deferred financing fees, debt issuance costs, commissions, fees and expenses,
including commitment, letter of credit and administrative fees and charges with
respect to this Agreement and with respect to other Indebtedness permitted to be
incurred hereunder and (g) any expensing of bridge, commitment and other
financing fees, but excluding total interest expense associated with synthetic
lease obligations) and, to the extent not reflected in such total interest
expense, any losses on hedging obligations or other derivative instruments
entered into for the purpose of hedging interest rate risk, net of interest
income or gains on such hedging obligations, and costs of surety bonds in
connection with financing activities (whether amortized or immediately
expensed).

 

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“Consolidated Net Income” shall mean, as of any date for the applicable period
ending on such date, with respect to the Company and its Subsidiaries on a
consolidated basis, net income, determined in accordance with GAAP, but
excluding, without duplication, (a) [reserved], (b) any amounts attributable to
Investments in any joint venture to the extent that such amounts have not been
distributed in cash to the Company and its Subsidiaries during such applicable
period, (c) (i) any net unrealized gains and losses resulting from fair value
accounting required by FASB ASC 815 and (ii) any net unrealized gains and losses
relating to mark-to-market of amounts denominated in foreign currencies
resulting from the application of FASB ASC 830, in each case, to the extent
included in Consolidated Net Income, (d) the income (or loss) of any Person
accrued prior to the date it becomes a Subsidiary of the Company or is merged
into or consolidated with the Company or any Subsidiary (except to the extent
required for any calculation of Consolidated EBITDA on a Pro Forma Basis), (e)
net income of any Subsidiary (other than a Credit Party) for any period to the
extent that, during such period, there exists any encumbrance or restriction on
the ability of such Subsidiary to pay Dividends or make any other distributions
in cash on the Equity Interests of such Subsidiary held by the Company and its
Subsidiaries, except to the extent of cash actually distributed during such
period to the Company or to a Subsidiary of the Company that is not itself
subject to any such encumbrance or restriction, (f) to the extent not already
excluded or deducted as minority interest expense in accordance with GAAP,
payments made in respect of minority interests of third parties in any
Non-Wholly-Owned Subsidiary, non-Wholly-Owned Foreign Subsidiary or joint
venture in such period, including pursuant to Dividends declared or paid on
equity interests held by third parties in respect of such Non-Wholly-Owned
Subsidiary, non-Wholly-Owned Foreign Subsidiary or joint venture, and (g) the
cumulative effect of a change in GAAP or the Company’s accounting policy. There
shall be excluded from Consolidated Net Income for any period the accounting
effects of adjustments to Inventory, property and equipment, software and other
intangible assets and deferred revenue required or permitted by GAAP and related
authoritative pronouncements (including the effects of such adjustments pushed
down to the Company and the Subsidiaries), as a result of any acquisition
consummated prior to the Effective Date, any Investment permitted hereunder or
the amortization or write-off of any amounts thereof.

“Consolidated Total Assets” shall have the meaning provided in the Priming Term
Loan Agreement as in effect on the Effective Date or as amended in accordance
with the terms hereof.

“Contingent Obligation” shall mean, as to any Person, any obligation of such
Person as a result of such Person being a general partner of any other Person,
unless the underlying obligation is expressly made non-recourse as to such
general partner, and any obligation of such Person guaranteeing or intended to
guarantee any Indebtedness, leases, dividends or other obligations (“primary
obligations”) of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (a) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (c) to purchase

 

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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 or (d) otherwise to assure or hold harmless
the holder of such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.

“Control Agreement” shall mean a control agreement, in form and substance
reasonably satisfactory to the Collateral Agent, executed and delivered by a
Borrower or one of its Subsidiaries, the Collateral Agent and the applicable
securities intermediary (with respect to a Securities Account) or bank (with
respect to a Deposit Account), subject to the terms of the Intercreditor
Agreements and consistent with the requirements of Section 5.03.

“Copyright Security Agreement” shall have the meaning specified in the Security
Agreement.

“Co-Syndication Agents” shall mean Jefferies Finance LLC and Macquarie Capital
(USA) Inc., in their capacity as Co-Syndication Agents and any successor(s)
thereto.

“Credit Card Notification” shall have the meaning provided in Section 5.03(b).

“Credit Documents” shall mean, collectively, (a) this Agreement, the
Intercreditor Agreements, any Intercompany Subordination Agreement, the Notes
(if any), any Joinder Agreement, each Security Document and the Fee Letter and
(b) all other agreements, instruments, documents and certificates executed and
delivered to, or in favor of, the Administrative Agent, the Collateral Agent or
any Lender in connection with the foregoing.

“Credit Event” shall mean the making of any Loan or the issuance, amendment,
extension or renewal of any Letter of Credit (other than any amendment,
extension or renewal that does not increase the maximum Stated Amount of such
Letter of Credit).

“Credit Parties” shall mean, collectively, the Borrowers and the Guarantors; and
“Credit Party” shall mean any of them.

“Cure Amount” shall have the meaning provided in Section 11.04.

“Cure Right” shall have the meaning provided in Section 11.04.

“Customer Credit Liability Reserve” shall mean at any time, the aggregate
remaining value at such time of (a) outstanding gift certificates and gift cards
sold by any Borrower entitling the holder thereof to use all or a portion of the
certificate or gift card to pay all or a portion of the purchase price for any
Inventory, and (b) outstanding merchandise credits issued by and customer
deposits received by any Borrower.

 

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

“Defaulting Lender” shall mean any Lender with respect to which a Lender Default
is in effect.

“Deposit Account” shall mean any deposit account (as that term is defined in the
UCC).

“Designated Non-Cash Consideration” shall mean the fair market value (as
determined by the Borrowers in good faith) of non-cash consideration received by
the Company or any of its Subsidiaries in connection with a sale that is so
designated as Designated Non-Cash Consideration pursuant to an officer’s
certificate signed by an Authorized Officer, setting forth the basis of such
valuation, less the amount of cash or Cash Equivalents received in connection
with a subsequent sale, redemption or payment of, on or with respect to, such
Designated Non-Cash Consideration.

“Disbursement Account” shall mean each disbursement account maintained by each
Credit Party for their respective general corporate purposes, including for the
purpose of paying their trade payables and other operating expenses.

“Disqualified Equity Interests” shall mean any Equity Interest that, by its
terms (or by the terms of any security or other Equity Interests into which it
is convertible or for which it is exchangeable), or upon the happening of any
event or condition (a) matures or is mandatorily redeemable (other than solely
for Qualified Equity Interests) pursuant to a sinking fund obligation or
otherwise (except 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 the termination of all Letters of Credit and all other Obligations that are
accrued and payable and the termination of the Revolving Loan Commitments), (b)
is redeemable at the option of the holder thereof (other than solely for
Qualified Equity Interests), in whole or in part, (c) provides for the scheduled
payments of dividends in cash, or (d) is or becomes convertible into or
exchangeable for Indebtedness or any other Equity Interests that would
constitute Disqualified Equity Interests, in each case, prior to the date that
is 91 days after the then latest Final Maturity Date at the time of issuance;
provided, that if such Equity Interests are issued pursuant to a plan for the
benefit of employees of Parent, the Company or its Subsidiaries or by any such
plan to such employees, such Equity Interests shall not constitute Disqualified
Equity Interests solely because they may be required to be repurchased by
Parent, the Company or its Subsidiaries in order to satisfy applicable statutory
or regulatory obligations or as a result of such employee’s termination, death
or disability.

“Disqualified Lender” shall mean (a) those competitors of Parent and its
Subsidiaries and Affiliates of such competitors (other than any Affiliates that
are banks, financial institutions, bona fide debt funds or investment vehicles
that are engaged in making, purchasing, holding or otherwise investing in
commercial loans, bonds and similar extensions of credit in the ordinary
course), in each case, that were specified in writing to the Joint Lead
Arrangers on March 30, 2015, as such list may be updated by written notice to
the Administrative Agent from time to time (and subject to the consent of the
Administrative Agent, not to be unreasonably withheld,

 

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conditioned or delayed) and (b) those certain banks, financial institutions and
other entities that, in each case, were specified in writing to the Joint Lead
Arrangers on March 30, 2015; provided, that to the extent the Borrowers update
the list of Disqualified Lenders, the inclusion of any Person shall not
retroactively apply to prior assignments or participations.

“Dividend” shall mean, with respect to any Person, that such Person has paid a
dividend, distribution or returned any equity capital to its stockholders,
partners or members or authorized or made any other distribution, payment or
delivery of property (other than common Equity Interests of such Person) or cash
to its stockholders, partners or members in their capacity as such, or redeemed,
retired, purchased or otherwise acquired for a consideration any shares of any
class of its capital stock or any of its other Equity Interests outstanding on
or after the Effective Date (or any options or warrants issued by such Person
with respect to its capital stock or other Equity Interests) or shall have
permitted any of its Subsidiaries to purchase or otherwise acquire for a
consideration any shares of any class of the capital stock or any other Equity
Interests of such Person outstanding on or after the Effective Date (or any
options or warrants issued by such Person with respect to its capital stock or
other Equity Interests). Without limiting the foregoing, “Dividends” with
respect to any Person shall also include all payments made or required to be
made by such Person with respect to any stock appreciation rights, plans, equity
incentive or achievement plans or any similar plans.

“Dollars” and the sign “$” shall each mean freely transferable lawful money of
the United States.

“Domestic Subsidiary” of any Person shall mean any Subsidiary of such Person
incorporated or organized in the United States or any State or territory thereof
or the District of Columbia.

“Dominion Period” shall mean any period (a) commencing on the date on which
(i) a Default or an Event of Default has occurred and is continuing or
(ii) Excess Availability has been less than the greater of (A) $5,000,000 and
(ii) 12.5% of Availability for five consecutive Business Days, and (b) ending on
the first date thereafter on which (i) in the case of a Dominion Period
commencing as a result of clause (a)(i) above, no Default or Event of Default
exists or is continuing (including as a result of such Default or Event of
Default having been cured or waived in accordance with the provisions of this
Agreement) and (ii) in the case of a Dominion Period commencing as a result of
clause (a)(ii) above, Excess Availability has been equal to or greater than the
greater of (A) $5,000,000 or (B) 12.5% of Availability for 30 consecutive days.

“Drawing” shall have the meaning provided in Section 3.05(b).

“Early Opt-in Election” shall mean the occurrence of:

(a) (i) a determination by the Administrative Agent or the Borrower (as notified
to the Administrative Agent) or (ii) a notification by the Required Lenders to
the Administrative Agent (with a copy to the Borrower) that the Required Lenders
have determined that U.S. dollar-denominated syndicated credit facilities being
executed at such time, or that include language similar to that contained in
Section 2.10 are being executed or amended, as applicable, to incorporate or
adopt a new benchmark interest rate to replace the LIBO Rate, and

 

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(b) (i) the election by the Administrative Agent or the Borrower or (ii) the
election by the Required Lenders to declare that an Early Opt-in Election has
occurred and the provision, as applicable, by the Administrative Agent of
written notice of such election to the Borrower and the Lenders, by the Borrower
to the Administrative Agent or by the Required Lenders of written notice of such
election to the Administrative Agent.

“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Effective Date” shall have the meaning provided in Section 13.10.

“Eligible Accounts” shall mean all Accounts of (and owed to) the Borrowers that
(x) arise in the ordinary course of their business, (y) arise out of their sale
of goods or rendition of services, and (z) are not excluded as ineligible by
virtue of one or more of the excluding criteria set forth below. Eligible
Accounts shall not include the following:

(a) Eligible Credit Card Receivables (and Accounts which would constitute
Eligible Credit Card Receivables if not excluded pursuant to clauses (a) through
(h) of the definition thereof);

(b) Accounts which either are 60 days or more past due or are unpaid more than
120 days after the original invoice date;

(c) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of
the total amount of all Accounts owed by that Account Debtor (and its
Affiliates) are deemed ineligible hereunder;

(d) Accounts with respect to which the Account Debtor is (i) a Credit Party or
an Affiliate of a Credit Party (excluding portfolio companies of the Sponsor
that are not Parent, Subsidiaries of Parent, any direct or indirect holding
company of Parent or any other Person whose Equity Interests are owned by any of
the foregoing) or (ii) an employee or agent of a Credit Party;

(e) Accounts arising in a transaction wherein goods are placed on consignment or
are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a
bill and hold, or any other terms by reason of which the payment by an Account
Debtor may be conditional;

 

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(f) Accounts that are not payable in Dollars or Canadian dollars, unless (i) the
Account is supported by an irrevocable letter of credit satisfactory to the
Administrative Agent, in its Permitted Discretion (as to form, substance, and
issuer or domestic confirming bank), that has been delivered to the
Administrative Agent and is directly drawable by the Administrative Agent, or
(ii) the Account is covered by credit insurance in form, substance, and amount,
and by an insurer satisfactory to the Administrative Agent in its Permitted
Discretion;

(g) Accounts with respect to which the Account Debtor is a non-Governmental
Authority unless: (i) the Account Debtor either (A) maintains its chief
executive office in the United States or Canada, or (B) is organized under the
laws of the United States or Canada, or any state or subdivision thereof; or
(ii) (A) the Account is supported by an irrevocable letter of credit
satisfactory to the Administrative Agent, in its Permitted Discretion (as to
form, substance, and issuer or domestic confirming bank), that has been
delivered to the Administrative Agent and is directly drawable by the
Administrative Agent, or (B) the Account is covered by credit insurance in form,
substance, and amount, and by an insurer, satisfactory to the Administrative
Agent, in its Permitted Discretion;

(h) Accounts with respect to which the Account Debtor is the government of any
foreign country or sovereign state, or of any state, province, municipality, or
other political subdivision thereof, or of any department, agency, public
corporation, or other instrumentality thereof, unless (i) the Account is
supported by an irrevocable letter of credit satisfactory to the Administrative
Agent, in its Permitted Discretion (as to form, substance, and issuer or
domestic confirming bank), that has been delivered to the Administrative Agent
and is directly drawable by the Administrative Agent, or (ii) the Account is
covered by credit insurance in form, substance, and amount, and by an insurer,
satisfactory to the Administrative Agent, in its Permitted Discretion;

(i) Accounts with respect to which the Account Debtor is the government of the
United States or of any state, territory, municipality, or other political
subdivision thereof or any department, agency, municipality or instrumentality
of any of the foregoing;

(j) Accounts with respect to which the Account Debtor (i) is also a creditor or
supplier of the Company or any of its Subsidiaries, (ii) has or has asserted a
right of setoff or (iii) has disputed its obligation to pay all or any portion
of the Account; provided, that any such Account shall be eligible (A) to the
extent such amount thereof exceeds any such obligation to a creditor, claim,
contract, right of setoff, or dispute or (B) such Account Debtor has entered
into a written agreement reasonably satisfactory to the Administrative Agent in
its Permitted Discretion to waive any claim, right of setoff, or dispute with
respect to the foregoing;

(k) Accounts with respect to an Account Debtor (and its Affiliates) whose total
obligations owing to the Borrowers exceed 15% of all Eligible Accounts, to the
extent of the obligations owing by such Account Debtor (and its Affiliates) in
excess of such percentages; provided, further, that the amount of Eligible
Accounts that are excluded because they exceed the foregoing percentages shall
be determined by the Administrative Agent based on all of the otherwise Eligible
Accounts prior to giving effect to any eliminations based upon the foregoing
concentration limit;

 

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(l) Accounts with respect to which the Account Debtor is subject to an
Insolvency Proceeding, has gone out of business, or as to which any Credit Party
has received notice of an imminent Insolvency Proceeding or a material
impairment of the financial condition of such Account Debtor unless (i) such
Account is supported by a letter of credit satisfactory to the Collateral Agent,
in its Permitted Discretion (as to form, substance, and issuer or domestic
confirming bank), that has been delivered to the Administrative Agent and is
directly drawable by the Administrative Agent, (ii) such Account Debtor has
received debtor-in-possession financing sufficient as determined by the
Collateral Agent in its Permitted Discretion to finance its ongoing business
activities or (iii) a court order satisfactory to the Administrative Agent in
its Permitted Discretion relating to the Insolvency Proceeding has been issued
allowing payment on such Account by the Account Debtor so long as the
Administrative Agent is satisfied in its Permitted Discretion that the requisite
Account Debtor has sufficient resources to pay, and will pay, such Accounts in a
timely fashion;

(m) Accounts that are not subject to a valid and perfected First Priority Lien
in favor of the Collateral Agent on behalf of the Secured Creditors pursuant to
the relevant Security Documents as provided in the Intercreditor Agreement;

(n) Accounts with respect to which (i) the goods giving rise to such Account
have not been shipped and billed to the Account Debtor, or (ii) the services
giving rise to such Account have not been performed and billed to the Account
Debtor;

(o) Accounts that represent the right to receive progress payments or other
advance billings that are due prior to the completion of performance by a Credit
Party of the subject contract for goods or services (other than customary
maintenance contracts);

(p) Accounts with respect to which any return, rejection or repossession of any
of the merchandise giving rise to such Account has occurred, but only to the
extent of the value of the goods returned, rejected or repossessed;

(q) Accounts that are evidenced by Chattel Paper unless such Chattel Paper has
been delivered to the Collateral Agent;

(r) any Account that has not been invoiced, has not been billed and has not been
recognized as received by the applicable Account Debtor;

(s) any Account with respect to which a partial payment of such Account has been
made by the respective Account Debtor; provided, that to the extent such Account
consists of multiple separate line-items, only the line items that have been
partially paid shall be excluded;

(t) Accounts that are not payable to a Borrower;

(u) Accounts to the extent representing service charges or late fees up to the
amount of such service charges or late fees; or

(v) Accounts to the extent representing unapplied cash balances up to the amount
of such unapplied cash balances.

 

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“Eligible Credit Card Receivables” shall mean Accounts (net of any applicable
fees) due to any Credit Party from Visa, MasterCard, American Express Company,
Discover and other major credit card or debit card issuer and processors which
may be approved by the Administrative Agent, as arise in the ordinary course of
business and are not excluded as ineligible by one or more of the criteria set
forth below (without duplication of any Reserves established in accordance with
Section 2.01(d)). Without limiting the foregoing, none of the following shall be
deemed to be Eligible Credit Card Receivables:

(a) Accounts due from credit card or debit card processors that have been
outstanding for more than five Business Days from the date of sale or for such
longer period as may be approved by the Administrative Agent in its reasonable
discretion;

(b) Accounts due from credit card or debit card processors with respect to which
a Credit Party does not have good, valid and marketable title, free and clear of
any Lien (other than Liens granted to the Collateral Agent for its own benefit
and the benefit of the other Secured Creditors and other Liens permitted
pursuant to Sections 10.01(a), (b), (d), (e), (h), (j), (k), (n), (p), (q), (r),
(t) and (w));

(c) Accounts due from credit card or debit card processors that are not subject
to a First Priority security interest in favor of the Collateral Agent for its
own benefit and the benefit of the Secured Creditors having priority by
applicable law (it being the intent that chargebacks in the ordinary course by
the credit card processors shall not be deemed violative of this clause (c));

(d) Accounts due from credit card or debit card processors which are disputed or
with respect to which a claim, counterclaim, offset or chargeback has been
asserted (to the extent of such claim, counterclaim, offset or chargeback and
except to the extent such claim, counterclaim, offset or chargeback is limited
by an agreement that is reasonably satisfactory to the Administrative Agent);

(e) except as otherwise approved by the Administrative Agent (such approval not
to be unreasonably withheld), Accounts due from credit card or debit card
processors as to which the credit card or debit card processor has the right
under certain circumstances to require any Borrower to repurchase the Accounts
from such credit card processor;

(f) except as otherwise approved by the Administrative Agent (such approval not
to be unreasonably withheld), Accounts due from any Person on account of any
private label credit card or debit card receivables other than such Accounts
under programs between any Borrower and a third party reasonably acceptable to
the Administrative Agent where the third party retains the consumer credit
exposure;

(g) Accounts due from credit card or debit card processors (other than Visa,
MasterCard, American Express Company and Discover) which the Administrative
Agent determines in its Permitted Discretion to be uncertain of collection; or

(h) Accounts due from credit card or debit card processors with respect to which
a Credit Card Notification has not been executed and delivered (and a copy
thereof provided to the Administrative Agent); provided, that any such Accounts
in existence on the Effective Date shall not be excluded so long as Credit Card
Notifications are delivered with respect thereto in accordance with (and within
the time period required by) Section 5.03(b).

 

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“Eligible In Transit Inventory” shall mean In Transit Inventory owned by the
Borrowers which would qualify as “Eligible Inventory” but for clauses (d), (f),
(g) and (o) in the definition of “Eligible Inventory”, and:

(a) is fully insured by marine cargo or other similar insurance, in such
amounts, with such insurance companies and subject to such deductibles as are
customary in the Borrowers’ industry and in respect of which the Administrative
Agent has been named as loss payee;

(b) for which title has passed to a Borrower;

(c) has been in transit for a period not exceeding 45 days (whether by vessel,
air or land) from any location to a location within the United States owned or
leased by one or more Credit Parties; and

(d) either:

(i) is evidenced by a full set of clean, tangible, original, negotiable bills of
lading that evidence ownership of such Inventory, and such bills of lading are
in the physical possession, in the United States, of (i) the Administrative
Agent or (ii) the Borrowers’ customs broker or freight forwarder from whom the
Administrative Agent has received an acceptable agreement in which the custom
broker or freight forwarder agrees that it holds the applicable negotiable bill
of lading as agent for the Administrative Agent and has granted the
Administrative Agent access to such Inventory; or

(ii) with respect to Inventory located in the United States that was Eligible In
Transit Inventory immediately prior to it having entered the United States, is
in transit via rail or truck within the United States with a carrier hired by
the Borrowers to a location owned or leased by one or more of the Credit Parties
and for which (A) nonnegotiable bills of lading, documents or other documents of
title (collectively, the “Nonnegotiable Title Documents”) have been issued,
(B) upon request of the Administrative Agent, copies of all such Nonnegotiable
Title Documents shall have been provided to the Administrative Agent, (C) no
negotiable bills of lading or other negotiable documents exist with respect to
such Inventory and (D) the Borrowers have provided to the Administrative Agent
any other documentation relating to such Inventory as the Administrative Agent
may reasonably require to confirm that such Inventory is otherwise Eligible In
Transit Inventory.

“Eligible Inventory” shall mean all of the Inventory owned by the Borrowers
(without duplication as to Eligible In Transit Inventory) and properly reflected
as “Eligible Inventory” in the most recent Borrowing Base Certificate delivered
by the Company to the Administrative Agent, except any Inventory as to which any
of the exclusionary criteria set forth below applies. Eligible Inventory shall
not include any Inventory of a Borrower that:

(a) is not of a type held for sale by the applicable Borrower in the ordinary
course of business as is being conducted by each such Borrower;

 

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(b) is not subject to a First Priority Lien in favor of the Collateral Agent on
behalf of the Secured Creditors as provided in the Intercreditor Agreement;
provided, that no Inventory subject to a Lien shall be Eligible Inventory to the
extent such Lien (i) is not a Permitted Lien or (ii) primes the perfected lien
granted to the Collateral Agent, as determined by the Administrative Agent in
its Permitted Discretion, in each case only to the extent of the value of such
Lien;

(c) is not owned by a Borrower free and clear of the rights of any other Person
(including the rights of a purchaser that has made progress payments and the
rights of a surety that has issued a bond to assure a Borrower’s performance
with respect to that Inventory), except the First Priority Lien in favor of the
Collateral Agent on behalf of the Secured Creditors and Permitted Liens (which
shall be subject to the provisions of clause (b) above);

(d) (i) is not located on premises owned, leased or rented by a Borrower
(excluding in-transit Inventory located in the United States, which is subject
to the following clause (f), and In Transit Inventory, which shall be subject to
the definition of “Eligible In Transit Inventory”) or stored with a bailee or
warehouseman or (ii) is located on premises leased or rented by a Borrower
(except for Inventory located at a retail store leased or rented by a Borrower)
or stored with a bailee or warehouseman, unless, in the case of this sub-clause
(ii), (A) in the case of leased or rented premises, either (1) if requested by
the Administrative Agent, a reasonably satisfactory landlord waiver has been
delivered to the Administrative Agent or (2) Rent Reserves reasonably
satisfactory to the Administrative Agent in its Permitted Discretion have been
established with respect thereto, (B) if stored with a bailee at a leased
location, either (1) a reasonably satisfactory landlord waiver or collateral
access agreement has been delivered to the Administrative Agent, or (2) Rent
Reserves reasonably satisfactory to the Administrative Agent in its Permitted
Discretion have been established with respect thereto, and/or (C) if stored with
a bailee or warehouseman, either (1) a reasonably satisfactory and acknowledged
bailee letter has been received by the Administrative Agent or (2) Reserves
reasonably satisfactory to the Administrative Agent in its Permitted Discretion
have been established with respect thereto (provided, that any Reserves
established under this clause (d) may be reduced or removed by the
Administrative Agent in its Permitted Discretion (including if it subsequently
receives a landlord waiver, collateral access agreement or bailee letter, as the
case may be, as set forth above));

(e) is placed on consignment unless Reserves reasonably satisfactory to the
Administrative Agent in its Permitted Discretion have been established with
respect thereto;

(f) is in transit, except inventory that (i) is in transit between domestic
(U.S.) locations owned or leased by one or more Credit Parties or (ii) is in
transit within the United States and is under the control of one or more Credit
Parties;

(g) is covered by a negotiable document of title, unless, at the Administrative
Agent’s request, such document has been delivered to the Collateral Agent or an
agent thereof and such Credit Party takes such other actions as the
Administrative Agent requests in order to create a perfected First Priority
security interest in favor of the Collateral Agent in such Inventory with all
necessary endorsements, free and clear of all Liens except Permitted Liens, and
the amount of any shipping fees, costs and expenses shall be reflected in
Reserves;

 

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(h) consists of goods that are unsaleable, damaged or obsolete (to the extent
not included in determining Net Orderly Liquidation Value) or constitute spare
parts, samples or trim (not intended for sale), packaging and shipping
materials, promotional products (not intended for sale), or supplies used or
consumed in a Credit Party business;

(i) consists of any gross profit mark-up in connection with the sale and
distribution thereof to any division of any Credit Party or Subsidiary or
Affiliate of such Credit Party, to the extent of such gross profit mark-up;

(j) is manufactured, assembled or otherwise produced in violation of the Fair
Labor Standards Act and subject to the “hot goods” provisions contained in Title
25 U.S.C. 215(a)(i);

(k) is not covered by casualty insurance required by the terms of this
Agreement;

(l) breaches in any material respect any of the representations or warranties
pertaining to such Inventory set forth in any Credit Document;

(m) does not conform in all material respects to all standards imposed by any
governmental agency, division or department thereof which has regulatory
authority over such goods or the use or sale thereof;

(n) is Commingled Inventory;

(o) is located outside the United States (other than In Transit Inventory, which
shall be subject to the definition of “Eligible In Transit Inventory”);

(p) is subject to a license agreement or other arrangement with a third party
which, in the Administrative Agent’s Permitted Discretion, restricts the ability
of the Administrative Agent or the Collateral Agent to exercise its rights under
the Credit Documents with respect to such Inventory unless (i) such third party
has entered into an agreement in form and substance reasonably satisfactory to
the Administrative Agent permitting the Administrative Agent or the Collateral
Agent to exercise its rights with respect to such Inventory, (ii) Reserves
satisfactory to the Administrative Agent have been established with respect
thereto or (iii) the Administrative Agent has otherwise agreed to allow such
Inventory to be eligible in the Administrative Agent’s Permitted Discretion; or

(q) consists of Hazardous Materials or goods that can be transported or sold
only with licenses that are not readily available.

“Eligible Transferee” shall mean and include any Person that is eligible to
become a Lender pursuant to Section 13.04, but in any event excluding (a) the
Sponsor, the Borrowers, Guarantors and their respective Affiliates and
Subsidiaries, (b) natural persons and (c) any Disqualified Lender.

“Environmental Claims” shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings arising
under any Environmental Law or any permit issued, or any approval given, under
any such Environmental Law (hereafter, “Claims”), including,

 

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without limitation, (a) any and all Claims by Governmental Authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to health, safety or the environment due to the presence of Hazardous
Materials.

“Environmental Law” shall mean any applicable Federal, state, foreign or local
statute, law, regulation and ordinance, and any legally binding code, guideline,
policy and rule of common law now or hereafter in effect and in each case as
amended, and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating to
the environment, employee health and safety as such matters relate to Hazardous
Materials or Hazardous Materials, including, without limitation, CERCLA; the
Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal
Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Toxic Substances
Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et
seq.; the Safe Drinking Water Act, 42 U.S.C. § 3803 et seq.; the Oil Pollution
Act of 1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Hazardous Material
Transportation Act, 49 U.S.C. § 5101 et seq.; the Occupational Safety and Health
Act, 29 U.S.C. § 651 et seq. (as it relates to Hazardous Materials); and any
state and local or foreign counterparts or equivalents, in each case as amended
from time to time.

“Equity Contribution” shall mean the direct or indirect equity contributions to
Topco to be made by affiliates of the Sponsor and certain other Persons
(including certain individuals who will be directors or officers of the Company
upon consummation of the Acquisition), the Net Cash Proceeds of which will be
further used to capitalize Holdings in an aggregate amount equal to, when
combined with the fair market value of any Equity Interests of any management or
other existing direct or indirect equity holders of Jill Intermediate, rolled
over or invested in connection with the Transaction (whether contributed to
Holdings or a direct or indirect parent of Holdings), at least 35% of the pro
forma capitalization of Jill Intermediate and its Subsidiaries on the Effective
Date after giving effect to the Transaction; provided, that the Sponsor shall
own or control at least a majority of the economic and voting equity interests
of Parent and its Subsidiaries on the Effective Date. To the extent that all or
any portion of such contributions made to Parent is not in the form of common
equity, the amounts and terms thereof shall be reasonably acceptable to the
Joint Lead Arrangers.

“Equity Interests” of any Person shall mean any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interest in (however designated) equity of such Person, including any common
stock, Preferred Equity, any limited or general partnership interest and any
limited liability company membership interest.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.

 

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“ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA)
which together with Parent or a Subsidiary of Parent would be deemed to be a
“single employer” within the meaning of Section 414(b), (c), (m) or (o) of the
Code.

“ERISA Event” shall mean any one or more of the following:

(a) any Reportable Event;

(b) the filing of a notice of intent to terminate any Plan, if such termination
would require material additional contributions in order to be considered a
standard termination within the meaning of Section 4041(b) of ERISA; or the
filing under Section 4041(a)(2) of ERISA of a notice of intent to terminate any
Plan or the termination of any Plan under Section 4041(c) of ERISA;

(c) the institution of proceedings by the PBGC under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Plan;

(d) the failure to make a required contribution to any Plan that results in the
imposition of a lien or other encumbrance under Section 430 of the Code or
Section 303 or 4068 of ERISA, or the arising of such a lien or encumbrance; the
failure of any Plan to satisfy the minimum funding standard under Section 412 of
the Code or Section 302 of ERISA, whether or not waived; or the filing of any
request for or receipt of a minimum funding waiver under Section 412 of the Code
with respect to any Plan; a determination that any Plan is considered an at-risk
plan within the meaning of Section 430 of the Code or Section 303 of ERISA; or
Parent, any Subsidiary of Parent or any ERISA Affiliate incurring any liability
under Section 436 of the Code, or a violation of Section 436 of the Code with
respect to a Plan; or the failure to make any required contribution to a
Multiemployer Plan;

(e) engaging in a non-exempt prohibited transaction within the meaning of
Section 4975 of the Code or Section 406 of ERISA with respect to a Plan;

(f) the complete or partial withdrawal of Parent, any Subsidiary of Parent or
any ERISA Affiliate from a Multiemployer Plan that results in a material
liability to Parent or any Subsidiary; the reorganization or insolvency under
Title IV of ERISA of any Multiemployer Plan that results in a material liability
to Parent or any Subsidiary; or the receipt by Parent, any Subsidiary of Parent
or any ERISA Affiliate, of any notice that a Multiemployer Plan is in endangered
or critical status under Section 432 of the Code or Section 305 of ERISA; or

(g) Parent, any Subsidiary of Parent or any ERISA Affiliate incurring any
liability under Title IV of ERISA with respect to any Plan (other than premiums
due and not delinquent under Section 4007 of ERISA).

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person) as in effect
from time to time.

“Event of Default” shall have the meaning provided in Section 11.01.

 

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“Excess Availability” shall mean, as of any date of determination, the amount by
which (a) Availability at such time exceeds (b) the Aggregate Exposure at such
time.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Excluded Deposit Accounts” shall mean (a) Deposit Accounts and Securities
Accounts established (or otherwise maintained) by Parent or any of its
Subsidiaries the balance of which consists exclusively of (i) withheld income
taxes and federal, state or local employment taxes in such amounts as are
required in the reasonable judgment of the Company to be paid to the IRS or
state or local government agencies with respect to employees of any of the
Credit Parties and (ii) amounts required to be paid over to an employee benefit
plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or for the benefit of
employees of one or more Credit Parties, (b) all segregated Deposit Accounts and
Securities Accounts established (or otherwise maintained) by Parent or any of
its Subsidiaries constituting (and the balance of which consists solely of funds
set aside in connection with) tax accounts, payroll (and other wage and benefit)
accounts, trust or similar accounts, (c) all other Deposit Accounts established
(or otherwise maintained) by Parent or any of its Subsidiaries (excluding
Collection Accounts, Concentration Accounts and Administrative Agent’s Accounts)
that do not have cash balances at any time exceeding $1,000,000 for any
individual Deposit Account or in the aggregate for all such Deposit Accounts and
(d) Deposit Accounts of any Borrower maintained with the Administrative Agent
the balance of which consists solely of proceeds of any sale or other
disposition of any Term Loan Priority Collateral (and only such Collateral).

“Excluded Subsidiary” shall mean (a) any Immaterial Subsidiary, (b) any
Subsidiary that is prohibited by law, rule, regulation or contractual obligation
(including organizational documentation in the case of a joint venture) (as in
effect on the Effective Date or, if later, that date of acquisition of such
Subsidiary so long as not created in contemplation thereof) from providing the
Guaranty, for so long as such prohibition is in effect, or that would require
governmental consent, approval, license or authorization to provide a guarantee
(unless such consent, approval, license or authorization has been obtained) or
(c) any Subsidiary to the extent that the Borrowers and the Administrative Agent
reasonably agree that the cost or other consequence of obtaining the Guaranty by
such Subsidiary is excessive in relation to the value afforded thereby.

“Excluded Swap Obligation” shall mean, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Guaranty of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Guarantor’s failure for any reason to constitute an
“eligible contract participant” as defined in the Commodity Exchange Act and the
regulations thereunder at the time the Guaranty of such Guarantor or the grant
of such security interest becomes effective with respect to such Swap
Obligation. If a Swap Obligation arises under a master agreement governing more
than one swap, such exclusion shall apply only to the portion of such Swap
Obligation that is attributable to swaps for which such Guaranty or security
interest is or becomes illegal.

 

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“Excluded Taxes” shall mean any of the following Taxes imposed on or with
respect to a Recipient or required to be withheld or deducted from a payment to
a Recipient (a) Taxes imposed on or measured by net income (however
denominated), franchise Taxes, and branch profits Taxes, in each case,
(i) imposed as a result of such Recipient being organized under the laws of, or
having its principal office or, in the case of any Lender, its applicable
lending office located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Recipient with respect to an applicable interest in the Loan (or any fees
hereunder) pursuant to a law in effect on the date on which (i) such Recipient
becomes a party to this Agreement (other than pursuant to an assignment request
by a Borrower under Section 2.13) or (ii) in the case of a Lender, such Lender
changes its lending office, except in each case to the extent that, pursuant to
Section 5.04, amounts with respect to such Taxes were payable either to such
Lender’s assignor immediately before such Lender became a party hereto or to
such Lender immediately before it changed its lending office, (c) Taxes
attributable to such Recipient’s failure to comply with Section 5.04(f) and
(d) any U.S. federal withholding Taxes imposed under FATCA.

“Existing Credit Documents” shall mean each of (a) the Credit Agreement, dated
as of April 29, 2011, among JJ AB Funding Corp., as Borrower, the Lenders party
thereto and The CIT Group/Business Credit, Inc., as Administrative Agent;
(b) the Credit Agreement, dated as of April 29, 2011, among JJ Lease Funding
Corp., as Borrower, the Lenders party thereto and Credit Suisse AG, Cayman
Islands Branch, as Administrative Agent; (c) the Credit Agreement, dated as of
September 27, 2012, among JJ Mezz Funding Corp., as Borrower, the Lenders party
thereto and CC Holdings Agency Corp., as Administrative Agent; (d) the Working
Capital Murabaha Facility Agreement dated as of April 29, 2011, among JJ AB
Funding Corp., Jill Acquisition LLC, AIA Limited, Arcapita Investment Funding
Limited and The CIT Group/Business Credit, Inc., as agent; (e) the Registered
Lease and License Financing and Purchase Option Agreement, dated as of April 29,
2011, among Jill Acquisition LLC, JJ Lease Funding Corp. and Credit Suisse AG,
Cayman Islands Branch, as agent; and (f) the Commodities Purchase Facility
Agreement, dated as of September 27, 2012, among Jill Acquisition LLC, JJ Mezz
Funding Corp., AIA Limited, Arcapita Investment Funding Limited, and CC Holdings
Agency Corp.

“Existing Letters of Credit” shall mean those letters of credit listed on
Schedule 1.01(e).

“Existing Term Loan Agent” shall mean Wilmington Trust, National Association (as
successor to Jefferies Finance LLC) as “Administrative Agent” and as “Collateral
Agent”, each under and as defined in the Existing Term Loan Credit Agreement,
and any successor or replacement agent under the Existing Term Loan Credit
Agreement or any other Existing Term Loan Document.

“Existing Term Loan Amendment and Waiver” shall mean Amendment No. 2 to Term
Loan Credit Agreement, Consent and Waiver, dated as of September 30, 2020, by
and among Parent, the Company, certain of its Subsidiaries, the lenders party
thereto and the Existing Term Loan Agent.

“Existing Term Loan Credit Agreement” shall mean the Term Loan Credit Agreement,
dated as May 8, 2015, by and among Parent, the Company, the lenders party
thereto

 

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from time to time and the Existing Term Loan Agent, providing for the making of
the Existing Term Loans on the Initial Term Loan Borrowing Date, as it may be
amended, restated amended and restated, amended and extended, supplemented or
modified from time to time, in each case, in accordance with the terms hereof
and thereof and the ABL Intercreditor Agreement. Any reference to the Existing
Term Loan Credit Agreement hereunder shall be deemed a reference to any Existing
Term Loan Credit Agreement then in existence.

“Existing Term Loan Documents” shall mean the “Credit Documents” as defined in
the Existing Term Loan Credit Agreement, including any amendments, restatements,
amendments and restatements, supplements, modifications, or replacements thereto
to the extent the same are permitted hereby and by the ABL Intercreditor
Agreement.

“Existing Term Loan Obligations” shall mean “Obligations” as defined in the
Existing Term Loan Credit Agreement.

“Existing Term Loan Secured Creditors” shall mean the “Secured Creditors” as
defined in the Existing Term Loan Credit Agreement.

“Existing Term Loans” shall mean the “Term Loans” as defined in the Existing
Term Loan Credit Agreement or any equivalent term used to describe loans made
thereunder.

“Extended Final Maturity Date” shall mean, with respect to any Extended Loan or
Extended Revolving Loan Commitment, the agreed upon date occurring after the
Initial Maturity Date as specified in the applicable definitive documentation
thereof.

“Extended Loan” shall mean each Revolving Loan and each Swingline Loan pursuant
to an Extended Revolving Loan Commitment.

“Extended Revolving Loan Commitments” shall have the meaning provided in
Section 2.16(b)(ii).

“Extending Lender” shall have the meaning provided in Section 2.16(d).

“Extension” shall have the meaning provided in Section 2.16(a).

“Extension Amendment” shall have the meaning provided in Section 2.16(d).

“Extension Offer” shall have the meaning provided in Section 2.16(a).

“Facing Fee” shall have the meaning provided in Section 4.01(c).

“Fair Market Value” shall mean, with respect to any asset (including any Equity
Interests of any Person), the price at which a willing buyer, not an Affiliate
of the seller, and a willing seller who does not have to sell, would agree to
purchase and sell such asset, as determined in good faith by the Company.

 

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“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of
this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or
future regulations or official interpretations thereof, any agreements entered
into pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental
agreement entered into in connection with the implementation of such sections of
the Code.

“FCPA” shall mean The United States Foreign Corrupt Practices Act of 1977, as
amended.

“Federal Funds Effective Rate” shall mean, 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 (rounded upwards, if
necessary to the next 1/100th of 1%) for such day on such transactions received
by the Administrative Agent from three Federal Funds brokers of recognized
standing selected by the Administrative Agent.

“Fee Letter” shall mean the Fee Letter dated as of the Effective Date among the
Borrowers and the Administrative Agent.

“Fees” shall mean all amounts payable pursuant to or referred to in
Section 4.01.

“Final Maturity Date” shall mean the Initial Maturity Date or, if such date is
not a Business Day, the first Business Day thereafter; provided, that with
respect to any Extended Revolving Loan Commitment, the Final Maturity Date with
respect thereto instead shall be the Extended Final Maturity Date.

“Financial Covenant Compliance Period” shall mean any period (a) commencing on
the date on which Excess Availability is less than the greater of (i) $4,000,000
and (ii) 10% of Availability, and (b) ending on the first date thereafter on
which Excess Availability has been equal to or greater than the greater of (i)
$4,000,000 and (ii) 10% of Availability, in each case of this clause (b) for 21
consecutive Business Days.

“First Priority” shall have the meaning provided in the ABL Intercreditor
Agreement.

“Fiscal Month” shall mean each monthly period beginning on the day after the
last day of the immediately preceding Fiscal Month and ending on the Saturday
closest to the last day of each calendar month.

“Fiscal Quarter” shall mean each of the quarterly periods beginning on the day
after the last day of the immediately preceding Fiscal Quarter and ending on the
Saturday closest to April 30, July 31, October 31 and January 31.

“Fiscal Year” shall mean each fiscal year of Parent and its Subsidiaries ending
on the Saturday closest to January 31 in each calendar year.

 

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“Fixed Charge Coverage Ratio” shall mean, with respect to the Company and its
Subsidiaries for any period, the ratio of Consolidated EBITDA for such period,
determined on a Pro Forma Basis, to Fixed Charges for such period, also
determined on a Pro Forma Basis.

“Fixed Charges” shall mean, with respect to the Company and its Subsidiaries,
for any period, the sum (without duplication) of (a) Consolidated Interest
Expense less interest income, (b) all cash Dividends, distributions and other
payments made in respect of any Qualified Preferred Stock or Disqualified Equity
Interests (excluding items eliminated in consolidation) of Parent, other than
Dividends deducted in calculating Consolidated EBITDA, (c) scheduled principal
payments made on Indebtedness of the Company and its Subsidiaries, (d) cash
taxes paid by the Company and its Subsidiaries and (e) except to the extent
financed with long-term Indebtedness (but not under revolving or similar
facilities), Capital Expenditures.

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

“Foreign Pension Plan” shall mean any plan, fund (including, without limitation,
any superannuation fund) or other similar program established or maintained
outside the United States by Parent or any one or more of its Subsidiaries
primarily for the benefit of employees of Parent or such Subsidiaries residing
outside the United States, which plan, fund or other similar program provides,
or results in, retirement income, a deferral of income in contemplation of
retirement or payments to be made upon termination of employment, and which plan
is not subject to ERISA or the Code.

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

“Fourth Amendment” shall mean Amendment No. 4 to ABL Credit Agreement and
Waiver, dated as of the Fourth Amendment Effective Date, by and among the
Borrowers, Parent, the other Credit Parties party thereto, the Administrative
Agent, the Collateral Agent and the Lenders party thereto.

“Fourth Amendment Effective Date” shall mean September 30, 2020.

“GAAP” shall mean generally accepted accounting principles in the United States
as in effect from time to time; provided, that determinations in accordance with
GAAP for purposes of Sections 9.16 and 10, including defined terms as used
therein, and for all purposes of determining the Fixed Charge Coverage Ratio and
the Secured Net Leverage Ratio, are subject (to the extent provided therein) to
Section 13.07(a).

“Gift Card” shall have the meaning provided in the introductory paragraph to
this Agreement.

“Gift Certificate/Card and Merchandise Credit Liabilities” shall mean, at any
time, the aggregate remaining value at such time of (a) gift certificates and
gift cards of the Borrowers entitling the holder thereof to use all or a portion
of the certificate or gift card to pay all or a portion of the purchase price
for any Inventory that have been outstanding for three years or less, and
(b) merchandise credits of the Borrowers that have been outstanding for three
years or less.

 

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“Governmental Authority” shall mean the government of the United States, any
other nation or any political subdivision thereof, whether state, provincial or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

“Guaranteed Obligations” shall have the meaning provided in Section 15.01.

“Guarantors” shall mean, collectively, (a) Parent (in its capacity as a
guarantor under the Guaranty of all Parent Guaranteed Obligations) and (b) each
Borrower (in its capacity as a guarantor under the Guaranty of Borrower
Guaranteed Obligations); and “Guarantor” shall mean any of them.

“Guaranty” shall mean the guaranty of the Guarantors pursuant to Section 15.

“Hazardous Materials” shall mean (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, dielectric fluid containing levels of
polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or
substances defined as or included in the definition of “hazardous substances,”
“hazardous waste,” “hazardous materials,” “extremely hazardous substances,”
“restricted hazardous waste,” “toxic substances,” “toxic pollutants,”
“contaminants,” or “pollutants,” or words of similar import, under any
applicable Environmental Law; and (c) any other chemical, material or substance,
the exposure to, or Release of which is prohibited, limited or regulated by any
Governmental Authority.

“Hedging Creditors” shall mean, collectively, each Lender Counterparty party to
an ABL Secured Hedging Agreement.

“Historical Excess Availability” shall mean, for the purposes of the definition
of “Applicable Margin” and “Applicable Commitment Commission Percentage”, from
and after each day of delivery of any Borrowing Base Certificate delivered in
accordance with the definition of “Applicable Margin” or “Applicable Commitment
Commission Percentage”, an amount equal to (a) the sum of each day’s Excess
Availability during the most recently ended Fiscal Quarter divided by (b) the
number of days in such Fiscal Quarter; provided, that Excess Availability shall
be determined on a Pro Forma Basis in accordance with the requirements of the
definition of “Pro Forma Basis” contained herein.

“Holdings” shall have the meaning provided in the Recitals to this Agreement.

“ICE” shall mean the ICE Benchmark Administration Direct Data Service.

“Immaterial Subsidiary” shall mean any Subsidiary of the Company (that is not a
Borrower) that the Company elects to treat as an Immaterial Subsidiary;
provided, that a Subsidiary may be designated an Immaterial Subsidiary (and
remain an Immaterial Subsidiary) only so long as such Subsidiary (a) does not,
as of the last day of the Fiscal Quarter of the Company most recently ended,
have assets with a value in excess of 2.5% of the total assets or revenues
representing in excess of 2.5% of total revenues of Parent, the Company and
their Subsidiaries, in each case, on a consolidated basis as of such date, and
(b) taken together with all Immaterial

 

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Subsidiaries as of the last day of the Fiscal Quarter of the Company most
recently ended, did not have assets with a value in excess of 5% of total assets
or revenues representing in excess of 5% of total revenues of Parent, the
Company and their Subsidiaries, in each case, on a consolidated basis as of such
date. Each Immaterial Subsidiary as of the Effective Date is set forth in
Schedule 1.01(d).

“In Transit Inventory” shall mean Inventory which is in transit and not yet in
the physical possession of one or more Credit Parties at domestic (U.S.)
locations owned or leased by one or more Credit Parties.

“In Transit Maximum Amount” shall mean (a) during the months of January,
February, March, July, August and September of each calendar year, $9,500,000,
and (b) during all other months during each calendar year, $7,000,000.

“Incremental Amendment” shall have the meaning provided in Section 2.15(b).

“Incremental Availability” shall have the meaning provided in Section 2.15(a).

“Incremental Facility” shall have the meaning provided in Section 2.15(a).

“Incremental Facility Closing Date” shall have the meaning provided in
Section 2.15(b).

“Incremental Revolving Loan Commitments” shall have the meaning provided in
Section 2.15(a).

“Incremental Revolving Loans” shall have the meaning provided in
Section 2.15(b).

“Indebtedness” shall mean, as to any Person, if and to the extent (other than
with respect to clause (c)) the same would constitute indebtedness or a
liability in accordance with GAAP, without duplication, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property or
services, (b) the maximum amount available to be drawn or paid under all letters
of credit, bankers’ acceptances, bank guaranties, surety and appeal bonds and
similar obligations issued for the account of such Person and all unpaid
drawings and unreimbursed payments in respect of such letters of credit,
bankers’ acceptances, bank guaranties, surety and appeal bonds and similar
obligations, (c) all indebtedness of the types described in clause (a), (b),
(d), (e), (f) or (g) of this definition secured by any Lien on any property
owned by such Person, whether or not such indebtedness has been assumed by such
Person (provided, that if the Person has not assumed or otherwise become liable
in respect of such indebtedness, such indebtedness shall be deemed to be in an
amount equal to the lesser of the amount secured and the Fair Market Value of
the property to which such Lien relates), (d) all Capitalized Lease Obligations
of such Person, (e) all obligations of such Person to pay a specified purchase
price for goods or services, whether or not delivered or accepted (i.e., take or
pay and similar obligations), (f) all Contingent Obligations of such Person in
respect of Indebtedness of others of the kinds referred to in clauses
(a) through (e) above and clause (g) below and (g) all net payments under any
Interest Rate Protection Agreement or any Other Hedging Agreement that such
Person would have to make in the event of an early termination, on the date
Indebtedness of such Person is being determined.

 

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Notwithstanding the foregoing, Indebtedness shall not include (i) trade and
other ordinary course payables, accrued expenses and intercompany liabilities
arising in the ordinary course of business, (ii) prepaid or deferred revenue,
(iii) purchase price holdbacks in respect of assets pending the satisfaction by
the seller of such assets of unperformed obligations, (iv) accrued expenses and
deferred tax and other credits incurred by any Person in the ordinary course of
business of such Person or (v) in the case of the Company and its Subsidiaries,
(A) all intercompany Indebtedness having a term not exceeding 364 days
(inclusive of any rollover or extension of terms) and made in the ordinary
course of business and (B) intercompany liabilities in connection with the cash
management, tax and accounting operations of the Company and its Subsidiaries.

“Indemnified Liabilities” shall have the meaning provided in
Section 13.01(a)(iii).

“Indemnified Person” shall have the meaning provided in Section 13.01(a)(iii).

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

“Individual Exposure” of any Lender shall mean, at any time, the sum of (a) the
aggregate principal amount of all Revolving Loans made by such Lender and then
outstanding, (b) such Lender’s RL Percentage of the aggregate principal amount
of all Swingline Loans then outstanding and (c) such Lender’s RL Percentage of
the aggregate amount of all Letter of Credit Outstandings at such time.

“Initial Budget” shall mean the 13-week budget and cash flow forecast the
Company shall have prepared and delivered to the Administrative Agent on or
prior to the Fourth Amendment Effective Date as a condition precedent to the
Fourth Amendment, in a form substantially similar to the budget delivered by the
Company to certain lenders under the Existing Term Loan Credit Agreement prior
to the Fourth Amendment Effective Date, which shall (x) reflect, on a line-item
basis, the projected receipts and disbursements of Parent, the Company and their
Subsidiaries (including all necessary and required expenses that such persons
expect to incur) on a weekly basis and (y) cover the 13-week period that
commences with the fiscal week of the Company ending on the first Saturday
occurring after the date on which the Initial Budget is delivered and including
the subsequent twelve (12) fiscal weeks.

“Initial Intercreditor Agreement” shall have the meaning provided in
Section 6.10.

“Initial Maturity Date” means May 8, 2023; provided that, if as of the date that
is sixty (60) days prior to the Priming Term Loan Maturity Date, such Priming
Term Loan Maturity Date has not been extended to a date that is at least ninety
(90) days after the Initial Maturity Date, then the Initial Maturity Date shall
automatically be deemed to be sixty (60) days prior to such Priming Term Loan
Maturity Date.

“Initial Term Loan Borrowing Date” shall mean the date occurring on or after the
Effective Date on which the initial borrowing of the Existing Term Loans occurs.

 

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“Insolvency Proceeding” shall mean any proceeding commenced by or against any
Person under any provision of the Bankruptcy Code or under any state or foreign
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.

“Intercompany Loans” shall have the meaning provided in Section 10.05(h).

“Intercompany Note” shall mean any promissory note evidencing Intercompany
Loans.

“Intercompany Subordination Agreement” shall have the meaning provided in
Section 10.05(h).

“Intercreditor Agreement” shall mean the ABL Intercreditor Agreement and the
Subordination Agreement, as applicable.

“Interest Determination Date” shall mean, with respect to any LIBOR Loan, the
second Business Day prior to the commencement of any Interest Period relating to
such LIBOR Loan.

“Interest Period” shall have the meaning provided in Section 2.09.

“Interest Rate Protection Agreement” shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.

“Inventory” shall mean inventory (as such term is defined in Article 9 of the
UCC).

“Investments” shall have the meaning provided in Section 10.05.

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

“Issuing Lender” shall mean each of (a) the Administrative Agent or an Affiliate
thereof (except as otherwise provided in Section 12.09), (b) any other Lender
reasonably acceptable to the Administrative Agent and the Company which agrees
to issue Letters of Credit hereunder and (c) a bank or other legally authorized
Person selected by or acceptable to the Administrative Agent in its sole
discretion and guaranteed by the Administrative Agent (a “Letter of Credit
Guaranty”) and, so long as no Event of Default exists at the time of selection,
reasonably satisfactory to the Company; provided, that if any Extension is
effected in accordance with Section 2.16, then on the occurrence of the Initial
Maturity Date (or any subsequent Final Maturity Date which has been extended),
each Issuing Lender shall have the right to resign as such on, or on any date
within 20 Business Days after, the Initial Maturity Date (or any subsequent
Final Maturity Date which has been extended), upon not less than 10 Business
Days’ prior written notice thereof to the Company and the Administrative Agent
and, in the event of any such resignation and upon the effectiveness thereof,
the resigning Issuing Lender shall retain all of its rights hereunder and under
the other Credit Documents as Issuing Lender with respect to all Letters of
Credit theretofore issued by it (which Letters of Credit shall remain
outstanding in accordance with the terms hereof until their respective
expirations) but shall not be required to issue any further Letters of Credit
hereunder. If at any time and for any reason (including as a result of
resignations as contemplated

 

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by the last proviso to the preceding sentence), an Issuing Lender has resigned
in such capacity in accordance with the preceding sentence and no Issuing
Lenders exist at such time, then no Person shall be an Issuing Lender hereunder
obligated to issue Letters of Credit unless and until (and only for so long as)
a Lender (or Affiliate of a Lender) reasonably satisfactory to the
Administrative Agent and the Company agrees to act as Issuing Lender hereunder.
Any Issuing Lender may, in its discretion, arrange for one or more Letters of
Credit to be issued by one or more Affiliates of such Issuing Lender (and such
Affiliate shall be deemed to be an “Issuing Lender” for all purposes of the
Credit Documents).

“Jill Intermediate” shall have the meaning provided in the Recitals to this
Agreement.

“Joinder Agreement” shall mean a Joinder Agreement substantially in the form of
Exhibit L.

“Joint Book-Running Managers” shall mean Jefferies Finance LLC and Macquarie
Capital (USA) Inc., in their capacity as Joint Book-Running Managers and any
successor(s) thereto.

“Joint Lead Arrangers” shall mean Jefferies Finance LLC and Macquarie Capital
(USA) Inc., in their capacity as Joint Lead Arrangers and any successor(s)
thereto.

“L/C Supportable Obligations” shall mean (a) obligations of the Company or any
of its Subsidiaries with respect to workers compensation, surety bonds and other
similar statutory obligations and (b) such other obligations of the Company or
any of its Subsidiaries as are reasonably acceptable to the respective Issuing
Lender and otherwise permitted to exist pursuant to the terms of this Agreement
(other than obligations in respect of (i) Indebtedness pursuant to the Priming
Term Loan Agreement, the Existing Term Loan Credit Agreement and the
Subordination Facility Credit Agreement (and any Permitted Refinancings
thereof), (ii) any Indebtedness or other obligations that are subordinated in
right of payment (or in security) to the Obligations and (iii) any Equity
Interests).

“Leaseholds” of any Person shall mean all the right, title and interest of such
Person as lessee, sublessee or licensee in, to and under leases, subleases or
licenses of land, improvements and/or fixtures.

“Legal Requirements” shall mean, as to any person, the organizational documents
of such person, and any treaty, law (including the common law), statute,
ordinance, code, rule, regulation, guidelines, license, permit requirement,
judgment, decree, verdict, order, consent order, consent decree, writ,
declaration or injunction or determination of an arbitrator or a court or other
Governmental Authority, and the interpretation or administration thereof, in
each case applicable to or binding upon such person or any of its property or to
which such person or any of its property is subject, in each case whether or not
having the force of law.

“Lender” shall mean each financial institution listed on Schedule 1.01(a), as
well as any Person that becomes a “Lender” hereunder pursuant to Section 2.13,
or 13.04(b), in each case, (other than with respect to Section 12.06 or 13.01)
for so long as such Person holds Loans or Revolving Loan Commitments hereunder.

 

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“Lender Affiliate” shall mean (a) any Affiliate of any Lender, (b) any person
that is administered or managed by any Lender or any Affiliate of any Lender and
that is engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and (c) with respect to any Lender which is a fund that invests in
commercial loans and similar extensions of credit, any other fund that invests
in commercial loans and similar extensions of credit and is managed or advised
by the same investment advisor as such Lender or by an Affiliate of such Lender
or investment advisor.

“Lender Counterparty” shall mean any counterparty to an Interest Rate Protection
Agreement and/or Other Hedging Agreement that is the Administrative Agent, a
Lender or an Affiliate of the Administrative Agent or a Lender at the time such
Person enters into such Interest Rate Protection Agreement and/or Other Hedging
Agreement (even if the Administrative Agent or such Lender subsequently ceases
to be the Administrative Agent or a Lender, as the case may be, under this
Agreement for any reason).

“Lender Default” shall mean, as to any Lender, (a) the wrongful refusal (which
has not been retracted) of such Lender or the failure of such Lender (which has
not been cured) to make available its portion of any Borrowing (including any
Mandatory Borrowing) or to fund its portion of any unreimbursed payment with
respect to a Letter of Credit pursuant to Section 3.04(c), (b) such Lender
having been deemed insolvent or having become the subject of an Insolvency
Proceeding or a takeover by a regulatory authority, (c) such Lender having
failed, within three Business Days after written request by the Administrative
Agent or the Company to confirm in writing to the Administrative Agent and the
Company that it will comply with its prospective funding obligations hereunder
(provided, that such Lender Default shall cease to exist upon receipt of such
written confirmation by the Administrative Agent and the Company), (d) such
Lender having notified in writing to the Company and/or the Administrative
Agent, the Swingline Lender, any Issuing Lender and/or any Credit Party (i) that
it does not intend to comply with its obligations under Sections 2.01(a) or (c),
2.04 or 3, as the case may be, in circumstances where such non-compliance would
constitute a breach of such Lender’s obligations under the respective Section or
(ii) of the events described in preceding clause (b); provided, that for
purposes of any documentation entered into pursuant to the Back-Stop
Arrangements and any requirements to provide same (and the term “Defaulting
Lender” as used therein), the term “Lender Default” shall also include, as to
any Lender, (A) any Affiliate of such Lender that has “control” (within the
meaning provided in the definition of “Affiliate”) of such Lender having been
deemed insolvent or having become the subject of an Insolvency Proceeding or a
takeover by a regulatory authority, (B) any previously cured “Lender Default” of
such Lender under this Agreement, unless the Company, Administrative Agent, each
Issuing Lender and the Swingline Lender have agreed in writing that the
“Defaulting Lender” has adequately remedied all matters that caused such Lender
Default, and (C) the failure of such Lender to make available its portion of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment with respect to a Letter of Credit pursuant to
Section 3.04(c) within one Business Day of the date (1) the Administrative Agent
(in its capacity as a Lender) or (2) Lenders constituting the Required Lenders
with Revolving Loan Commitments has or have, as applicable, funded its or their
portion thereof or (e) such Lender becomes the subject of a Bail-In Action.

“Letter of Credit” shall have the meaning provided in Section 3.01(a).

 

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“Letter of Credit Back-Stop Arrangements” shall have the meaning provided in
Section 3.03(b).

“Letter of Credit Fee” shall have the meaning provided in Section 4.01(b).

“Letter of Credit Guaranty” shall have the meaning provided in the definition of
Issuing Lender.

“Letter of Credit Outstandings” shall mean, at any time, the sum of (a) the
Stated Amount of all outstanding Letters of Credit at such time and (b) the
aggregate amount of all Unpaid Drawings in respect of all Letters of Credit at
such time.

“Letter of Credit Request” shall have the meaning provided in Section 3.03(a).

“LIBO Rate” shall mean, with respect to any Borrowing of LIBOR Loans for any
Interest Period, the rate per annum equal to the rate determined by CIT to be
the London Interbank Offered Rate benchmark rate which is calculated and
distributed daily by ICE (or any successor thereto) for deposits in Dollars (for
delivery on the first day of such interest period) with a term equivalent to
such interest period, distributed at approximately 11:45 a.m. (London time) (or
such other time as confirmed by ICE) two business days prior to the first day of
such Interest Period. The Borrowers may elect to use the LIBO Rate provided
(a) the Borrowers give CIT at least three business days prior notice of such
election and (b) no Default is then outstanding under the Credit Documents.
Interest on any Borrowing of LIBOR Loans will be computed and payable at the end
of the applicable Interest Period (or, in the case of any Interest Period longer
than three months, at the end of each three-month period) in arrears on the
basis of a 360 day year and based on the actual number of days elapsed.
Notwithstanding the foregoing, for purposes of this Agreement, the LIBO Rate
shall at no time be less than 1.00% per annum.

“LIBOR Loan” shall mean each Loan (other than a Swingline Loan) designated as
such by the applicable Borrower at the time of the incurrence thereof or
conversion thereto bearing interest at a rate determined by reference to the
LIBO Rate.

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other) or other security agreement
of any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement and any Capitalized Lease Obligations
having substantially the same economic effect as any of the foregoing).

“Loan” shall mean each Revolving Loan (including, without limitation, each
extension of credit pursuant to the Incremental Facility) and each Swingline
Loan.

“Loan Communication” shall have the meaning provided in Section 13.28.

“Mandatory Borrowing” shall have the meaning provided in Section 2.01(c).

“Margin Stock” shall have the meaning provided in Regulation U.

 

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“Material Adverse Effect” shall mean (a) a material adverse effect on the
business, operations, property, assets, liabilities or financial condition of
Parent, the Company and their respective Subsidiaries taken as a whole (other
than, in the case of this clause (a), as a direct result of the impact of the
COVID-19 pandemic) or (b) a material adverse effect (i) on the rights or
remedies of the Lenders, the Administrative Agent or the Collateral Agent under
the Credit Documents or (ii) on the ability of the Credit Parties (taken as a
whole) to perform their obligations to the Lenders, the Administrative Agent or
the Collateral Agent under the Credit Documents.

“Maximum Letter of Credit Amount” shall mean $10,000,000.

“Maximum Rate” shall have the meaning provided in Section 13.20.

“Maximum Swingline Amount” shall mean $5,000,000.

“Minimum Borrowing Amount” shall mean (a) for Revolving Loans, $250,000 and
(b) for Swingline Loans, $100,000 or such lesser amount as may be agreed by the
Administrative Agent.

“Minimum Extension Condition” shall have the meaning provided in
Section 2.16(c).

“Monthly Financial Statements” shall mean the unaudited consolidated statement
of income of Parent and its Subsidiaries for the Fiscal Month ended August 29,
2020.

“Monthly Reporting Period” shall mean any period (a) commencing on the date on
which Excess Availability has been less than the greater of (i) $25,000,000 and
(ii) 70% of Availability for three consecutive Business Days, and (b) ending on
the first date thereafter on which Excess Availability has been equal to or
greater than the greater of (i) $25,000,000 or (B) 70% of Availability for 30
consecutive days.

“Moody’s” shall mean Moody’s Investors Service, Inc. or any successor to its
rating agency business.

“Mortgage” shall mean a mortgage, deed of trust, deed to secure debt, debenture
or similar security instrument in form and substance reasonably satisfactory to
the Administrative Agent.

“Mortgage Policy” shall mean an ALTA Lender’s title insurance policy (Form 2006)
or other form reasonably satisfactory in form and substance to the
Administrative Agent.

“Mortgaged Property” shall mean any Real Property owned by the Company or any of
its Subsidiaries which is encumbered (or required to be encumbered) by a
Mortgage pursuant to the terms of this Agreement.

“Multiemployer Plan” shall mean any multiemployer plan as defined in
Section 4001(a)(3) of ERISA that is subject to Title IV of ERISA and is
contributed to by (or to which there is an obligation to contribute of) Parent
or a Subsidiary of Parent or an ERISA Affiliate, or to which Parent, a
subsidiary of Parent or an ERISA Affiliate has any liability, contingent or
otherwise.

 

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“NAIC” shall mean the National Association of Insurance Commissioners.

“Net Cash Proceeds” shall mean, with respect to any event, the gross cash
proceeds received from such event, net of transaction costs (including, as
applicable, any underwriting, brokerage or other customary commissions and
reasonable legal, advisory and other fees and expenses associated therewith)
incurred in connection with such event.

“Net Orderly Liquidation Value” shall mean the cash proceeds of Inventory which
could be obtained in an orderly liquidation (net of all liquidation expenses,
costs of sale, commissions, operating expenses and retrieval and related costs),
as determined pursuant to the most recent third-party appraisal of such
Inventory delivered to the Administrative Agent by an appraiser reasonably
acceptable to the Administrative Agent, and in each case expressed as a recovery
percentage with respect to each category of such assets. The Net Orderly
Liquidation Value for each category of assets will be increased or reduced
promptly upon receipt by the Administrative Agent of each updated appraisal.

“Net Sale Proceeds” shall mean for any sale or other disposition of assets, the
gross cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as and when
received) received from such sale or other disposition of assets, net of
(a) transaction costs (including, without limitation, any underwriting,
brokerage or other customary selling commissions, reasonable legal, advisory and
other fees and expenses (including title and recording expenses), associated
therewith and sales, VAT and transfer taxes arising therefrom), (b) payments of
unassumed liabilities relating to the assets sold or otherwise disposed of at
the time of, or within 90 days after, the date of such sale or other
disposition, (c) the amount of such gross cash proceeds required to be used and
actually used within 90 days following such sale or disposition to permanently
repay any Indebtedness (other than Indebtedness secured by the assets disposed
of on a junior or pari passu basis relative to the Obligations) which is secured
by the respective assets which were sold or otherwise disposed of, and (d) the
estimated income taxes payable in respect of such sale or other disposition;
provided, however, that such gross proceeds shall not include any portion of
such gross cash proceeds which the Company determines in good faith should be
reserved for post-closing adjustments or indemnities (to the extent the Company
delivers to the Administrative Agent a certificate signed by an Authorized
Officer as to such determination), it being understood and agreed that on the
day that all such post-closing adjustments have been determined (which shall not
be later than eighteen months following the date of the respective asset sale),
the amount (if any) by which the reserved amount in respect of such sale or
disposition exceeds the actual post-closing adjustments payable by Parent or any
of its Subsidiaries shall constitute Net Sale Proceeds on such date received by
Parent and/or any of its Subsidiaries from such sale or other disposition.

“Non-Defaulting Lender” shall mean and include each Lender, other than a
Defaulting Lender.

“Non-Wholly-Owned Subsidiary” shall mean, as to any Person, each Subsidiary of
such Person which is not a Wholly-Owned Subsidiary of such Person.

 

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“Note” shall mean each Revolving Note and the Swingline Note.

“Notice of Borrowing” shall have the meaning provided in Section 2.03(a).

“Notice of Conversion/Continuation” shall have the meaning provided in
Section 2.06.

“Notice Office” shall mean the office of the Administrative Agent located at 11
West 42nd Street, New York, NY 10036, Attention: Timothy Kober and Bob Klein,
and Emails: Timothy.Kober@cit.com and Bob.Klein@cit.com, or such other office or
person as the Administrative Agent may hereafter designate in writing as such to
the other parties hereto.

“Obligations” shall mean all amounts owing to the Administrative Agent, the
Collateral Agent or any Lender pursuant to the terms of this Agreement or any
other Credit Document, including, without limitation, all amounts in respect of
any principal, interest (including any interest accruing following maturity of
the Loans, all reimbursement obligations and Unpaid Drawings with respect to
Letters of Credit and interest accruing subsequent to the filing of a petition
in bankruptcy, reorganization or similar proceeding at the rate provided for in
this Agreement, whether or not such interest is an allowed claim under any such
proceeding or under applicable state, federal or foreign law), penalties, fees
(including all legal fees and disbursements required to be paid by the Company
and its Subsidiaries hereunder), expenses, indemnifications, reimbursements and
other liabilities, and guarantees of the foregoing amounts.

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

“One-Month LIBO Rate” shall mean, for any day, the rate per annum equal to the
rate determined by CIT to be the London Interbank Offered Rate benchmark rate
which is calculated and distributed daily by ICE (or any successor thereto) for
deposits in Dollars (for delivery on such day) with a term equivalent to one
month, distributed at approximately 11:45 a.m. (London time) (or such other time
as confirmed by ICE) on such day (or if such day is not a Business Day, the
immediately preceding Business Day). In the event that such rate is not
available at such time for any reason, then the “One-Month LIBO Rate” for such
day shall be determined by CIT by reference to such other comparable publicly
available service for displaying the offered rate for dollar deposits in the
London interbank market as may be selected by CIT and, in the absence of
availability, such other method as may be selected by CIT in its sole
discretion. Notwithstanding the foregoing, for purposes of this Agreement, the
One-Month LIBO Rate shall at no time be less than 1.00%.

“Organization” shall mean any corporation, limited liability company,
partnership or other business entity (or the adjectival form thereof, where
applicable) or the equivalent of the foregoing in any foreign jurisdiction.

“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes
imposed as a result of a present or former connection between such Recipient and
the jurisdiction imposing such Tax (other than connections arising solely from
such Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under or enforced any Credit Document).

 

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“Other Hedging Agreements” shall mean any foreign exchange contracts, currency
swap agreements, commodity agreements or other similar agreements (including
commodity futures or forward purchase contracts), or arrangements designed to
protect against fluctuations in currency values or commodity prices.

“Other Taxes” shall mean all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Credit Document except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.13).

“Parent” shall have the meaning provided in the introductory paragraph to this
Agreement.

“Parent Common Stock” shall mean the authorized shares of common stock of Parent
on the Effective Date, together with any subsequently authorized shares of
common stock of Parent.

“Parent Guaranteed Obligations” shall have the meaning provided in
Section 15.01.

“Participant” shall have the meaning provided in Section 3.04(a).

“Participant Register” shall have the meaning provided in Section 13.04(a).

“Past-Due Rent Reserves” shall mean (A) with respect to those certain leased
locations identified to and approved by the Administrative Agent in its
Permitted Discretion as “approved but not papered locations” or “unapproved and
passive locations”, (i) on and after the Fourth Amendment Effective Date to and
including December 31, 2020, a reserve equal to 0%, (ii) on and after January 1,
2021 to and including January 31, 2021, a reserve equal to 25% applied against
the outstanding past-due rent amounts for unexecuted agreements with respective
Landlords, (iii) on and after February 1, 2021 to and including February 28,
2021, a reserve equal to 50% applied against the outstanding past-due rent
amounts for unexecuted agreements with respective Landlords, and (iv) on and
after March 1, 2021, a reserve equal to 100% applied against the outstanding
past-due rent amounts for unexecuted agreements with respective Landlords,
(B) with respect to those certain leased locations identified to and approved by
the Administrative Agent in its Permitted Discretion as “unapproved and
resistant locations”, (i) on and after the Fourth Amendment Effective Date to
and including November 30, 2020, a reserve equal to 0%, (ii) on and after
December 1, 2020 to and including December 31, 2020, a reserve equal to 50%
applied against the outstanding past-due rent amounts for unexecuted agreements
with respective Landlords, (iii) on and after January 1, 2021 to and including
January 31, 2021, a reserve equal to 75% applied against the outstanding
past-due rent amounts for unexecuted agreements with respective Landlords and
(iv) on and after February 1, 2021, a reserve equal to 100% applied against the
outstanding past-due rent amounts for unexecuted agreements with respective
Landlords, and (C) with respect to those certain leased locations identified to
and approved by the Administrative Agent in its Permitted Discretion as
“approved and papered locations” for which an executed agreement is in effect
with respective Landlords, any past-due rent that is not timely paid pursuant to
the terms of the applicable executed agreement shall be subject to a reserve
equal to 100% of such total remaining past-due rent; an updated spreadsheet
detailing the foregoing information shall be delivered to the Administrative
Agent pursuant to Section 9.01(f).

 

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“Patent Security Agreement” shall have the meaning provided in the Security
Agreement.

“Patriot Act” shall have the meaning provided in Section 13.18.

“Payment Conditions” shall mean, with respect to any proposed action for which
the Payment Conditions are required to be satisfied, that each of the following
conditions are satisfied at the time such action is proposed to occur and
immediately after giving effect thereto:

(a) (i) no Default or Event of Default shall have occurred and be continuing,
(ii) Thirty-Day Excess Availability and Excess Availability (in each case
calculated on a Pro Forma Basis after giving effect to the Borrowing of any
Loans or issuance of any Letters of Credit in connection with the proposed
action (and assuming that such Loans and Letters of Credit had remained
outstanding throughout the applicable 30-day period for which Thirty-Day Excess
Availability is to be determined)) shall be equal to or exceed the greater of
(A) $6,000,000 and (B) 15% of Availability, (iii) the Company and its
Subsidiaries shall be in compliance with a Fixed Charge Coverage Ratio of not
less than 1.00:1.00 for the Test Period then most recently ended on a Pro Forma
Basis as if such proposed action had occurred on the first day of such Test
Period, and (iv) the Company shall have delivered to the Administrative Agent a
certificate of an Authorized Officer of the Company certifying as to compliance
with preceding clauses (i) through (iii) and demonstrating (in reasonable
detail) the calculations required by preceding clauses (ii) and (iii); or

(b) (i) no Default or Event of Default shall have occurred and be continuing,
(ii) Thirty-Day Excess Availability and Excess Availability (in each case
calculated on a Pro Forma Basis to include the Borrowing of any Revolving Loans
or the issuance of any Letters of Credit in connection with the proposed action
(and assuming that such Loans and Letters of Credit had remained outstanding
throughout the applicable 30-day period for which Thirty-Day Excess Availability
is to be determined)), shall be equal to or exceed the greater of (A)
$10,000,000 and (B) 25% of Availability, and (iii) the Company shall have
delivered to the Administrative Agent a certificate of an Authorized Officer of
the Company certifying as to compliance with preceding clauses (i) and (ii) and
demonstrating (in reasonable detail) the calculations required by preceding
clause (ii).

“Payment Office” shall mean the office of the Administrative Agent located at 11
West 42nd Street, New York, NY 10036, Attention: Bob Klein, and Email:
Bob.Klein@cit.com, or such other office as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, or any successor thereto.

 

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“Permitted Audit Opinion Qualifications” shall mean (i) with respect to the
Fiscal Year of Parent ending January 30, 2021, any qualification or exception,
(ii) with respect to the Fiscal Year of Parent ending January 29, 2022, a
qualification or exception that relates solely to any potential inability to
satisfy the covenant set forth in Section 9.11 of the Priming Term Loan
Agreement on a future date or in a future period, and (iii) with respect to the
Fiscal Year of Parent ending January 28, 2023 and thereafter, none.

“Permitted Discretion” shall mean a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment.

“Permitted Encumbrance” shall mean, with respect to any Mortgaged Property,
easements, zoning restrictions, rights-of-way restrictions and other similar
encumbrances permitted under Section 10.01(h), and such exceptions to title as
are set forth in the Mortgage Policy delivered with respect thereto.

“Permitted Liens” shall have the meaning provided in Section 10.01.

“Permitted Refinancing” shall mean, with respect to any Person, any
modification, refinancing, replacement, refunding, renewal or extension of any
Indebtedness of such Person; provided, that (a) the aggregate principal amount
(or accreted value, if applicable) of the Indebtedness incurred pursuant to such
modification, refinancing, replacement, refunding, renewal or extension does not
exceed the aggregate principal amount (or accreted value, if applicable) of the
Indebtedness so modified, refinanced, replaced, refunded, renewed or extended
except by an amount equal to unpaid accrued interest, fees, expenses and premium
thereon and any make-whole payments applicable thereto and by an amount equal to
any existing commitments unutilized thereunder, (b) such modification,
refinancing, replacement, refunding, renewal or extension has a final stated
maturity date equal to or later than the final stated maturity date of, and has
a Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Indebtedness being modified, refinanced,
replaced, refunded, renewed or extended (excluding the effects of nominal
amortization in the amount of no greater than one percent per annum and
prepayments of Indebtedness), (c) at the time thereof, no Event of Default shall
have occurred and be continuing, (d) such modification, refinancing,
replacement, refunding, renewal or extension does not add guarantors, change
obligors or provide for security different from that which applied to the
Indebtedness being modified, refinanced, replaced, refunded, renewed or
extended, (e) to the extent such Indebtedness being modified, refinanced,
replaced, refunded, renewed or extended is subordinated in right of payment to
the Obligations, such Indebtedness incurred pursuant to such modification,
refinancing, replacement, refunding, renewal or extension is subordinated in
right of payment to the Obligations on terms at least as favorable to the
Lenders as those contained in the documentation governing the Indebtedness being
modified, refinanced, replaced, refunded, renewed or extended, (f) to the extent
such Indebtedness being modified, refinanced, replaced, refunded, renewed or
extended is secured by Liens that are subordinated to the Liens securing the
Obligations, such Indebtedness incurred pursuant to such modification,
refinancing, replacement, refunding, renewal or extension is unsecured or
secured by Liens that are subordinated to the Liens securing the Obligations on
terms at least as favorable to the Lenders as those contained in the
documentation (including any intercreditor or similar agreements) governing the
Indebtedness being modified, refinanced, replaced, refunded, renewed or
extended; provided, that a certificate of an officer of the Company delivered to
the Administrative Agent at least five Business Days prior to the incurrence of
such Indebtedness, together with a reasonably detailed description of the
material terms and conditions of such Indebtedness or drafts of the

 

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documentation relating thereto, stating that the Company has determined in good
faith that such terms and conditions satisfy the requirements of this clause
(f) shall be conclusive evidence that such terms and conditions satisfy such
requirement unless the Administrative Agent notifies the Borrowers within five
Business Days following receipt of such certificate that it disagrees with such
determination (including a reasonable description of the basis upon which it
disagrees) and (g) in the case of any Permitted Refinancing in respect of the
Priming Term Loan Obligations, Existing Term Loan Obligations and Subordinated
Facility Obligations proposed to be secured by the Liens on the Collateral, such
Permitted Refinancing is subject to the ABL Intercreditor Agreement and the
Subordination Agreement, as applicable.

“Permitted Refinancing Indebtedness” shall mean any Indebtedness implemented
pursuant to, and in accordance with the requirements of, a Permitted
Refinancing.

“Permitted Unsecured Ratio Debt” shall mean unsecured Indebtedness of a
Borrower, so long as (a) such Indebtedness is unsecured Indebtedness or
Subordinated Indebtedness, (b) such Indebtedness does not mature prior to the
date that is 91 days after the then latest Final Maturity Date at the time such
Indebtedness is incurred and the Weighted Average Life to Maturity of such
Indebtedness is no shorter than the remaining Weighted Average Life to Maturity
applicable to the then outstanding Priming Term Loans, (c) immediately after
giving effect thereto and to the use of the proceeds thereof, (i) no Event of
Default shall exist or result therefrom and (ii) on a Pro Forma Basis giving
effect to the occurrence of such Indebtedness, the Interest Coverage Ratio (as
defined in the Priming Term Loan Agreement as in effect on the Effective Date or
as amended in accordance with the terms hereof) shall equal or exceed 2.00:1.00
as of the last day of the most recently ended Calculation Period prior to the
incurrence of such Indebtedness, (d) such Indebtedness is not guaranteed by any
Person other than the Credit Parties, and (e) such Indebtedness does not have
covenants more restrictive to the Credit Parties than those set forth in the
Priming Term Loan Agreement as in effect on the date of incurrence.

“Person” shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any Governmental Authority.

“Plan” shall mean any pension plan as defined in Section 3(2) of ERISA which is
maintained or contributed to by (or to which there is an obligation to
contribute of) Parent or a Subsidiary of Parent or an ERISA Affiliate, or to
which Parent, a subsidiary of Parent or an ERISA Affiliate has any liability,
contingent or otherwise, and is subject to Section 302 or Title IV of ERISA or
Section 412 of the Code, other than a Multiemployer Plan.

“Platform” shall have the meaning provided in Section 13.03(c).

“Post-Closing Refunds” shall mean the proceeds of refunds of federal or state
income taxes received by the Credit Parties following the Fourth Amendment
Effective Date on account of the carryback by the Credit Parties of any tax
attributes from the 2020 taxable year pursuant to the Coronavirus Aid, Relieve
and Economic Security (CARES) Act.

“Pre-Opening Expenses” shall mean, with respect to any fiscal period, the amount
of expenses (other than interest expense) incurred with respect to stores which
are classified as “pre-opening expenses” or “store-opening costs” (or any
similar or equivalent caption) in the applicable financial statements of the
Company and its Subsidiaries for such period, prepared in accordance with GAAP.

 

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“Preferred Equity” shall mean, as to any Person, Equity Interests of such Person
(other than common Equity Interests of such Person) of any class or classes
(however designed) that ranks prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Equity Interests of any
other class of such Person, and shall include any Qualified Preferred Stock.

“Prime Rate” shall mean, for any day, the rate of interest per annum quoted by
JPMorgan Chase Bank as its “prime rate” in effect from time to time (or if such
rate is at any time not available, the prime rate so quoted by any banking
institution selected by CIT), which rate is not intended to be the lowest rate
charged by any such banking institution to its borrowers.

“Priming Term Loan Agent” shall mean Wilmington Trust, National Association, as
“Administrative Agent” and as “Collateral Agent”, each under and as defined in
the Priming Term Loan Agreement, and any successor or replacement agent under
the Priming Term Loan Agreement.

“Priming Term Loan Agreement” shall mean the Priming Term Loan Credit Agreement,
dated as of September 30, 2020, by and among Parent, Company, the subsidiaries
of Parent and the Company party thereto, the lenders party thereto from time to
time and the Term Loan Agent, as it may be amended, restated, amended and
restated, amended and extended, supplemented or modified from time to time, in
each case, in accordance with the terms hereof and thereof and the ABL
Intercreditor Agreement. Any reference to the Priming Term Loan Agreement
hereunder shall be deemed a reference to any Priming Term Loan Agreement then in
existence.

“Priming Term Loan Documents” shall mean the “Credit Documents” as defined in
the Primary Term Loan Agreement, including any amendments, restatements,
amendments and restatements, supplements, modifications, or replacements thereto
to the extent the same are permitted hereby and by the ABL Intercreditor
Agreement.

“Priming Term Loan Maturity Date” shall mean the “Maturity Date” as defined in
the Primary Term Loan Agreement.

“Priming Term Loan Obligations” shall mean “Obligations” as defined in the
Priming Term Loan Agreement.

“Priming Term Loans” shall mean the “Term Loans” as defined in the Priming Term
Loan Agreement.

“Pro Forma Basis” shall mean, in connection with any calculation of compliance
with any financial ratio or test, in respect of a Specified Transaction, that
such Specified Transaction and the following transactions in connection
therewith (to the extent applicable) shall be deemed to have occurred as of the
first day of the applicable period of measurement for the applicable covenant or
requirement: (a) income statement items (whether positive or negative)
attributable to the property or Person, if any, subject to such Specified
Transaction shall be (i)

 

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excluded (in the case of a disposition of all or substantially all Equity
Interests in any Subsidiary or any division, product line or facility used for
operations of the Company or any Subsidiary) and (ii) included (in the case of a
purchase or other acquisition of all or substantially all of the property and
assets or business of any Person, or of assets constituting a business unit, a
line of business or division of such Person, or of all or substantially all of
the Equity Interests in a Person or non-maintenance capital expenditures
expected to result in increased revenue upon completion), (b) any retirement of
Indebtedness, (c) if and to the extent applicable hereunder, any incurrence or
assumption of Indebtedness by the Company or any Subsidiary (and if such
Indebtedness has a floating or formula rate, such Indebtedness shall have an
implied rate of interest for the applicable period for purposes of this
definition determined by utilizing the rate which is or would be in effect with
respect to such Indebtedness as at the relevant date of determination) and
(d) any other Specified Transaction if consummated after the first day of the
relevant Test Period or Calculation Period, as the case may be, and on or prior
to the date of such Specified Transaction than being effected; provided, that
(A) Pro Forma Basis, in respect of any Specified Transaction shall be calculated
in a reasonable and factually supportable manner and certified by an Authorized
Officer of the Company and (B) any such calculation shall be subject to the
applicable limitations set forth in the definition of “Consolidated EBITDA”.

“Pro Forma Financial Statements” shall have the meaning provided in
Section 8.05(a)(ii).

“Pro Rata Share” shall have the meaning provided in Section 12.05.

“Projections” shall mean the projections that were prepared by or on behalf of
the Company in connection with this Agreement and delivered to the
Administrative Agent and the Lenders prior to the Effective Date.

“Purchase Agreement” shall have the meaning provided in the Recitals to this
Agreement.

“Purchase Agreement Representations” shall mean the representations and
warranties made by Jill Intermediate in the Purchase Agreement as are material
to the interests of the Lenders, but only to the extent that Holdings or its
applicable Affiliates have the right to terminate their respective obligations
under the Purchase Agreement (or to decline to consummate the Acquisition) as a
result of a breach of such representations.

“QFC Credit Support” shall have the meaning provided in Section 13.31.

“Qualified ECP Guarantor” shall mean, in respect of any Swap Obligation, each
Credit Party that has total assets exceeding $10,000,000 at the time the
relevant Guaranty or grant of the relevant security interest becomes effective
with respect to such Swap Obligation or such other person that constitutes an
“eligible contract participant” under the Commodity Exchange Act or any
regulations promulgated thereunder and can cause another person to qualify as an
“eligible contract participant” at such time by entering into a keepwell under
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Qualified Equity Interests” shall mean any Equity Interests that are not
Disqualified Equity Interests.

 

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“Qualified Preferred Stock” of a Person shall mean any Preferred Equity of such
Person that does not constitute Disqualified Equity Interests.

“Quarterly Financial Statements” shall mean the unaudited consolidated balance
sheets and related statements of operations and cash flows of Parent and its
Subsidiaries for the Fiscal Quarter ended August 1, 2020.

“Quarterly Payment Date” shall mean the last Business Day of each April, July,
October and January occurring after the Effective Date.

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

“Recipient” shall mean (a) the Administrative Agent and (b) any Lender, as
applicable.

“Register” shall have the meaning provided in Section 13.15.

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

“Regulation T” shall mean Regulation T of the Board as from time to time in
effect and any successor to all or a portion thereof.

“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and any successor to all or a portion thereof.

“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and any successor to all or a portion thereof.

“Related Persons” shall have the meaning provided in Section 12.06.

“Release” shall mean actively or passively disposing, discharging, injecting,
spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying,
pouring, seeping, migrating or the like, into or upon any land or water or air,
or otherwise entering into the environment.

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal
Reserve Bank of New York, or a committee officially endorsed or convened by the
Federal Reserve Board and/or the Federal Reserve Bank of New York or any
successor thereto.

“Rent Reserve” shall mean a reserve that may be established by the
Administrative Agent in respect of rent payments made by a Borrower for a period
equal to at least the liquidation period as established in the respective
inventory appraisal last received by the Administrative Agent pursuant to this
Agreement for each (a) leased store (i) that is in Pennsylvania, Texas,
Virginia, Washington, Washington, D.C. or any other State providing lessors with
statutory or common law Lien rights on personal property located at such store
securing payment of rent and other charges that prime a previously perfected
security interest or (ii) that is subject to a lease that

 

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grants to the landlord a security interest in property that would otherwise
constitute Eligible Inventory which would prime the perfected security interest
granted to the Collateral Agent, as determined by the Administrative Agent in
its Permitted Discretion, (b) distribution center, warehouse or other location
other than a leased store at which Inventory of a Borrower is located, unless,
in each case, such location is subject to a landlord waiver or collateral access
agreement reasonably acceptable to the Administrative Agent (as reported to the
Administrative Agent by the Company from time to time as requested by the
Administrative Agent) and (c) without duplication of any amounts in clauses
(a) and (b), Past-Due Rent Reserves, as adjusted from time to time by the
Administrative Agent in its Permitted Discretion.

“Replaced Lender” shall have the meaning provided in Section 2.13.

“Replacement Lender” shall have the meaning provided in Section 2.13.

“Reportable Event” shall mean an event described in Section 4043(c) of ERISA
with respect to a Plan that is subject to Title IV of ERISA other than those
events as to which the 30-day notice period is waived under subsection .22, .23,
.25, .27 or .28 of PBGC Regulation Section 4043.

“Required Lenders” shall mean, at any time, Non-Defaulting Lenders the sum of
whose outstanding Revolving Loan Commitments at such time (or, after the
termination thereof, outstanding Revolving Loans and RL Percentages of
(a) Swingline Loans at such time and (b) Letter of Credit Outstandings at such
time) represents at least a majority of the sum of the Total Revolving Loan
Commitment in effect at such time less the Revolving Loan Commitments of all
Defaulting Lenders at such time (or, after the termination thereof, the sum of
the total outstanding Revolving Loans of Non-Defaulting Lenders and the
aggregate RL Percentage of all Non-Defaulting Lenders of the total outstanding
Swingline Loans and Letter of Credit Outstandings at such time.

“Requirements of Law” shall mean, collectively, any and all requirements of any
Governmental Authority including any and all laws, judgments, orders, decrees,
ordinances, rules, regulations, statutes or case law.

“Reserves” shall mean reserves, if any, established by the Administrative Agent
from time to time hereunder in its Permitted Discretion against the Borrowing
Base, including without limitation, (a) Customer Credit Liability Reserves,
(b) Rent Reserves, (c) potential dilution related to Accounts, (d) sums that the
Borrowers are or will be required to pay (such as taxes, assessments and
insurance premiums) and have not yet paid, (e) amounts owing by any Borrowers to
any Person to the extent secured by a Lien on, or trust over, any Collateral
that (i) is not a Permitted Lien or (ii) to the extent same could reasonably be
expected to have priority over the Liens granted to the Collateral Agent
pursuant to the Security Documents, (f) reserves for customs charges, freight
and shipping charges related to any In Transit Inventory or other Inventory in
transit, (g) reserves against Eligible Inventory as a result of rights of
licensors with respect thereto and of Liens as described in Section 10.01(x),
(h) reserves for Gift Certificate/Card and Merchandise Credit Liabilities
(limited to 50% of such potential liability) and (i) such other events,
conditions or contingencies as to which the Administrative Agent, in its
Permitted Discretion, determines reserves should be established from time to
time hereunder; provided, however, that the Administrative Agent may not
implement reserves with respect to matters which are already specifically
reflected as ineligible Accounts, Inventory or In Transit Inventory or criteria
deducted in computing the net book value of Eligible Accounts, Eligible Credit
Card Receivables, Eligible Inventory or Eligible In Transit Inventory or the Net
Orderly Liquidation Value of Eligible Inventory or Eligible In Transit
Inventory.

 

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“Restricted Junior Payments” shall have the meaning provided in
Section 10.07(a).

“Returns” shall have the meaning provided in Section 8.09.

“Revolving Loan” shall have the meaning provided in Section 2.01(a).

“Revolving Loan Commitment” shall mean, for each Lender, the amount set forth
opposite such Lender’s name in Schedule 1.01(a) directly below the column
entitled “Revolving Loan Commitment,” as same may be (a) reduced from time to
time or terminated pursuant to Sections 4.02, 4.03 and/or 11, as applicable or
(b) adjusted from time to time as a result of assignments to or from such Lender
pursuant to Section 2.13 or 13.04(b). In addition, the Revolving Loan Commitment
of each Lender shall include, subject to the consent of such Lender, any
Extended Revolving Loan Commitment and any Incremental Revolving Loan Commitment
of such Lender. The aggregate amount of the Revolving Loan Commitments as of the
Effective Date is $40,000,000.

“Revolving Note” shall have the meaning provided in Section 2.05(a).

“RL Percentage” of any Lender at any time shall mean a fraction (expressed as a
percentage) the numerator of which is the Revolving Loan Commitment of such
Lender at such time and the denominator of which is the Total Revolving Loan
Commitment at such time; provided, that if the RL Percentage of any Lender is to
be determined after the Total Revolving Loan Commitment has been terminated,
then the RL Percentages of such Lender shall be determined immediately prior
(and without giving effect) to such termination.

“S&P” shall mean Standard & Poor’s Rating Service, a division of S&P Global, or
any successor thereto.

“SEC” shall mean the Securities and Exchange Commission, or any successor
thereto.

“Second Amendment” shall mean Amendment No. 2 to ABL Credit Agreement, dated as
of the Second Amendment Effective Date, by and among the Borrowers, Parent, the
other Credit Parties party thereto, the Administrative Agent and the Lenders
party thereto.

“Second Amendment Effective Date” shall mean August 22, 2018.

“Second Priority” shall have the meaning provided in the ABL Intercreditor
Agreement.

 

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“Secured Creditors” shall mean collectively, the Administrative Agent, the
Collateral Agent, the Lenders, the Swingline Lender, the Issuing Lender, each
Hedging Creditor and each Cash Management Bank.

“Secured Net Leverage Ratio” shall have the meaning provided in the Priming Term
Loan Agreement as in effect on the Fourth Amendment Effective Date or as amended
in accordance with the terms hereof.

“Secured Obligations” shall mean all (a) Obligations and (b) obligations of any
Credit Party arising under (i) any ABL Secured Hedging Agreement or the
guarantee thereof pursuant to the Credit Documents (other than Excluded Swap
Obligations) and (ii) any ABL Secured Cash Management Agreement.

“Securities Account” shall mean a securities account (as that term is defined in
the UCC).

“Security Agreement” shall have the meaning provided in Section 6.11.

“Security Agreement Collateral” shall mean all “Collateral” as defined in the
Security Agreement.

“Security Document” shall mean and include each of the Security Agreement, each
Control Agreement, each Copyright Security Agreement, each Patent Security
Agreement, each Trademark Security Agreement, each Mortgage, after the execution
and delivery thereof, each Additional Security Document and any other related
document, agreement or grant pursuant to which Parent or any of its Subsidiaries
grants, perfects or continues a security interest in favor of the Collateral
Agent for the benefit of the Secured Creditors.

“Settlement Date” shall have the meaning provided in Section 2.04(b)(i).

“SOFR” with respect to any day means the secured overnight financing rate
published for such day by the Federal Reserve Bank of New York, as the
administrator of the benchmark, (or a successor administrator) on the Federal
Reserve Bank of New York’s Website.

“Specified Foreign Guarantor” shall mean any Foreign Subsidiary that is a
Guarantor (x) which has not entered into (and remains subject to) security
documentation granting Liens to secure the Obligations over substantially all of
its assets and property governed by the laws of the local jurisdiction of
organization of such Foreign Subsidiary or (y) the capital stock of which is not
subject to security documentation granting Liens to secure the Obligations
governed by the laws of the local jurisdiction of organization of such Foreign
Subsidiary, in each case, in form and substance reasonably acceptable to the
Administrative Agent.

“Specified Representations” shall mean those representations and warranties set
forth in Sections 8.01(a) and (b), 802, 8.03(c) (as relating to the Credit
Documents), 8.05(b), 8.08(b), 8.13, 8.14 and 8.16.

 

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“Specified Transaction” shall mean (a) any incurrence or repayment of
Indebtedness (excluding revolving Indebtedness incurred in the ordinary course
of business for working capital purposes), any Investment that results in a
Person becoming a Subsidiary of the Company, any disposition that results in a
Subsidiary ceasing to be a Subsidiary of the Company, any Investment
constituting an acquisition of assets constituting a business unit, line of
business or division of another Person or any disposition of a business unit,
line of business or division of the Company or any Subsidiary, in each case
whether by merger, consolidation, amalgamation or otherwise or any material
restructuring of the Company or implementation of any initiative not in the
ordinary course of business and (b) any non-maintenance capital expenditure
expected to result in increased revenue upon completion.

“Sponsor” shall mean, collectively, TowerBrook Capital Partners L.P., its
Affiliates (excluding portfolio companies) and investment funds managed by any
of them.

“Stated Amount” of each Letter of Credit shall mean, at any time, the maximum
amount available to be drawn thereunder in each case determined (a) as if any
future automatic increases in the maximum amount available that are provided for
in any such Letter of Credit had in fact occurred at such time and (b) without
regard to whether any conditions to drawing could then be met but after giving
effect to all previous drawings made thereunder.

“Subordinated Facility Agent” shall mean Wilmington Trust, National Association,
as “Administrative Agent” and as “Collateral Agent”, each under and as defined
in the Subordinated Facility Credit Agreement, and any successor or replacement
agent under the Subordinated Facility Credit Agreement.

“Subordinated Facility Credit Agreement” shall mean that certain Subordinated
Term Loan Credit Agreement, dated as of September 30, 2020, by and among the
Company, Parent, the Subordinated Facility Agent, and the lenders party thereto,
as may be amended, restated, amended and restated, amended and extended,
supplemented or modified from time to time, in each case, in accordance with the
terms hereof and thereof and the Subordination Agreement. Any reference to the
Subordinated Facility Credit Agreement hereunder shall be deemed a reference to
any Subordinated Facility Credit Agreement then in existence.

“Subordinated Facility Loan Documents” shall mean the “Credit Documents” (or any
analogous term) as defined in the Subordinated Facility Credit Agreement,
including any amendments, restatements, amendments and restatements,
supplements, modifications, or replacements thereto to the extent permitted
pursuant to the terms hereof and the Subordination Agreement.

“Subordinated Facility Loans” shall mean the “Loans” (or any analogous term) as
defined in the Subordinated Facility Credit Agreement or any equivalent term
used to describe loans made thereunder, including any incremental loans
thereunder.

“Subordinated Facility Obligations” shall mean the “Obligations” (or any
analogous term) as defined in the Subordinated Facility Credit Agreement or any
equivalent term used to describe loans made thereunder.

“Subordinated Indebtedness” shall mean, with respect to the Obligations, any
Indebtedness of any 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). The Subordinated Facility
Loans and the Subordinated Facility Obligations are Subordinated Indebtedness.

 

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“Subordination Agreement” shall mean that certain Subordination and
Intercreditor Agreement, dated as of September 30, 2020, by and among the Credit
Parties, the Subordinated Facility Agent, the Priming Term Loan Agent, the
Existing Term Loan Agent, the Administrative Agent and the Collateral Agent, in
the form of Exhibit K hereto and as may be amended, restated, amended and
restated, amended and extended, supplemented or modified from time to time, in
each case, in accordance with the terms hereof and thereof.

“Subsidiary” shall mean, as to any Person, (a) any corporation more than 50% of
whose stock having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation is owned by such Person and/or one
or more Subsidiaries of such Person or (b) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time. Unless otherwise qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of
Parent. For the avoidance of doubt, the Company shall at all times constitute a
Subsidiary of Parent.

“Supermajority Lenders” shall mean those Non-Defaulting Lenders which would
constitute the Required Lenders under, and as defined in, this Agreement if the
reference to “a majority” contained therein were changed to “662/3%”.

“Supported QFC” shall have the meaning provided in Section 13.31.

“Swap Obligation” shall mean, with respect to a Guarantor, any obligations under
any ABL Secured Hedging Agreement that constitutes a “swap” within the meaning
of the Commodity Exchange Act.

“Swingline Back-Stop Arrangements” shall have the meaning provided in
Section 2.01(b).

“Swingline Expiry Date” shall mean that date which is five Business Days prior
to the Final Maturity Date.

“Swingline Lender” shall mean the Administrative Agent, in its capacity as
Swingline Lender hereunder.

“Swingline Loan” shall have the meaning provided in Section 2.01(b).

“Swingline Note” shall have the meaning provided in Section 2.05(a).

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

“Temporary Store Closure Period” shall mean from any time that more than 50% of
the stores of Parent and its Subsidiaries are required or recommended to be
closed, and are so closed, by governmental mandates due to COVID-19, COVID-20 or
any similar pandemic, until two months after the date on which no more than 5%
of the stores of Parent and its Subsidiaries are closed (excluding any stores
that have been permanently closed).

 

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“Term Loan Priority Collateral” shall mean “Term Loan Priority Collateral” as
defined in the ABL Intercreditor Agreement.

“Test Period” shall mean each period of four consecutive Fiscal Quarters of the
Borrowers (calculated, for any period beginning prior to the Effective Date, as
if the Transaction had occurred on the first day of such period) then last
ended, in each case, taken as one accounting period; provided, that, subject to
adjustments to be made on a Pro Forma Basis other than the Transaction, if the
respective Test Period (a) includes the period from February 1, 2014, to May 3,
2014, Consolidated EBITDA for such period shall be deemed to be $14,100,000, (b)
includes the period from May 4, 2014, to August 2, 2014, Consolidated EBITDA for
such period shall be deemed to be $20,200,000, (c) includes the period from
August 3, 2014, to November 1, 2014, Consolidated EBITDA for such period shall
be deemed to be $20,400,000 and/or (d) includes the period from November 2,
2014, to January 31, 2015, Consolidated EBITDA for such period shall be deemed
to be $13,400,000.

“Third Amendment” shall mean Amendment No. 3 to ABL Credit Agreement, dated as
of the Third Amendment Effective Date, by and among the Borrowers, Parent, the
other Credit Parties party thereto, the Administrative Agent and the Lenders
party thereto.

“Third Amendment Effective Date” shall mean June 12, 2019.

“Thirty-Day Excess Availability” shall mean, as of any date of determination,
the quotient obtained by dividing (a) the sum of each day’s Excess Availability
during the 30 consecutive day period immediately preceding such date, by (b) 30;
provided, that with respect to any test on a date that is less than 30 days from
the Effective Date, “Thirty-Day Excess Availability” shall mean the quotient
obtained by dividing (i) the sum of each day’s Excess Availability for the
period commencing on the Effective Date and ending on the date immediately
preceding the date of determination by (ii) the number of days in such period.

“Topco” shall have the meaning provided in the introductory paragraph to this
Agreement.

“Total Revolving Loan Commitment” shall mean, at any time, the sum of the
Revolving Loan Commitments of each of the Lenders at such time.

“Total Unutilized Revolving Loan Commitment” shall mean, at any time, an amount
equal to the remainder of (a) the Total Revolving Loan Commitment in effect at
such time less (b) the sum of (i) the aggregate principal amount of all
Revolving Loans and Swingline Loans outstanding at such time plus (ii) the
aggregate amount of all Letter of Credit Outstandings at such time.

“Trademark Security Agreement” shall have the meaning provided in the Security
Agreement.

 

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“Transaction” shall mean, collectively, (a) the consummation of the Acquisition
and the other transactions contemplated by the Purchase Agreement, (b) the
execution and delivery by each Credit Party of the Credit Documents to which it
is a party, the incurrence of Loans, if any, on the Effective Date and the use
of proceeds thereof, (c) the execution and delivery by each Credit Party of the
Existing Term Loan Documents, the incurrence of the Existing Term Loans on the
Initial Term Loan Borrowing Date and the use of proceeds thereof and (d) the
payment of all Transaction Costs.

“Transaction 2020” shall mean, collectively, (a) the execution and delivery by
each Credit Party of the Credit Documents to which it is a party and the
incurrence of Loans (if any) on the Fourth Amendment Effective Date, (b) the
execution and delivery by each Credit Party of the Priming Term Loan Agreement,
(c) the execution and delivery of the Existing Term Loan Amendment and Waiver,
(d) the execution and delivery of the Subordinated Facility Credit Agreement and
the initial borrowing thereunder, (e) the execution and delivery of the Fourth
Amendment and (f) the payment of all Transaction Costs relating to the
foregoing.

“Transaction Costs” shall mean, collectively, one-time costs, fees and expenses
incurred in connection with the Transaction or the Transaction 2020, as
applicable.

“Treasury Regulations” shall mean the United States federal income tax
regulations promulgated under the Code.

“Type” shall mean the type of Loan determined with regard to the interest option
applicable thereto, i.e., whether a Base Rate Loan or a LIBOR Loan.

“UCC” shall mean the Uniform Commercial Code as from time to time in effect in
the relevant state or jurisdiction.

“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the
Benchmark Replacement Adjustment.

“Unfunded Pension Liability” of any Plan shall mean the amount, if any, by which
the value of the accumulated plan benefits under such Plan determined on a plan
termination basis in accordance with actuarial assumptions at such time
consistent with those prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds the Fair Market Value of all plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions).

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

“Unpaid Drawing” shall have the meaning provided in Section 3.05(a).

“Unutilized Revolving Loan Commitment” shall mean, with respect to any Lender at
any time, such Lender’s Revolving Loan Commitment at such time less the sum of
(a) the aggregate outstanding principal amount of all Revolving Loans made by
such Lender at such time and (b) such Lender’s RL Percentage of the Letter of
Credit Outstandings at such time.

 

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“U.S. Person” shall mean any person that is a “United States person” as defined
in Section 7701(a)(30) of the Code.

“U.S. Special Resolution Regimes” shall have the meaning provided in
Section 13.31.

“U.S. Tax Compliance Certificate” shall have the meaning provided in
Section 5.04(f)(ii)(B)(3).

“Value” shall mean, with respect to Eligible Inventory and Eligible In Transit
Inventory, the lower of (a) the cost thereof computed on a first-in first-out
basis in accordance with GAAP and (b) the market value thereof (net of any
intercompany profit).

“Variance Report” shall have the meaning assigned to such term in
Section 9.17(b).

“Variance Report Date” shall have the meaning assigned to such term in
Section 9.17(b).

“Voidable Transfer” shall have the meaning provided in Section 13.24.

“Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness
or Preferred Equity, 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 Preferred
Equity multiplied by the amount of such payment; by (b) the sum of all such
payments.

“Wholly-Owned Foreign Subsidiary” shall mean, as to any Person, any Foreign
Subsidiary of such Person that is a Wholly-Owned Subsidiary.

“Wholly-Owned Subsidiary” shall mean, as to any Person, (a) any corporation 100%
of whose capital stock is at the time owned by such Person and/or one or more
Wholly-Owned Subsidiaries of such Person and (b) any partnership, limited
liability company, association, joint venture or other entity in which such
Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100%
equity interest at such time (other than, in the case of a Foreign Subsidiary of
the Company with respect to the preceding clauses (a) and (b), directors’
qualifying shares and/or other nominal amounts of shares required to be held by
Persons other than the Company and its Subsidiaries under applicable law).

“Withholding Agent” shall mean the Credit Parties and the Administrative Agent.

“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule and (b) with respect to the United Kingdom, any powers of
the applicable Resolution Authority under the Bail-In Legislation to cancel,
reduce, modify or change the form of a liability of any UK Financial Institution
or any contract or instrument under which that liability arises, to convert all
or part of that liability into shares, securities or obligations of that person
or any other person, to provide that any such contract or instrument is to have
effect as if a right had been exercised under it or to suspend any obligation in
respect of that liability or any of the powers under that Bail-In Legislation
that are related to or ancillary to any of those powers.

 

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1.02 Other Definitional Provisions. (a) Unless otherwise specified therein, all
terms defined in this Agreement shall have the defined meanings when used in the
other Credit Documents or any certificate or other document made or delivered
pursuant hereto or thereto.

(b) As used herein and in the other Credit Documents, and any certificate or
other document made or delivered pursuant hereto or thereto, (i) accounting
terms not defined in Section 1.01 shall have the respective meanings given to
them under GAAP, (ii) the words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”, (iii) the word “incur”
shall be construed to mean incur, create, issue, assume, become liable in
respect of or suffer to exist (and the words “incurred” and “incurrence” shall
have correlative meanings), (iv) unless the context otherwise requires, the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, Equity Interests, securities, accounts, leasehold
interests and contract rights, (v) the word “will” shall be construed to have
the same meaning and effect as the word “shall”, (vi) unless the context
otherwise requires, any reference herein (A) to any Person shall be construed to
include such Person’s successors and assigns and (B) to the Company or any other
Credit Party shall be construed to include the Company or such Credit Party as
debtor and debtor-in-possession and any receiver or trustee for the Company or
any other Credit Party, as the case may be, in any insolvency or liquidation
proceeding and (vii) references to agreements (including this Agreement) or
other contractual obligations shall, unless otherwise specified, be deemed to
refer to such agreements or obligations as amended, supplemented, restated,
amended and restated or otherwise modified from time to time.

(c) For purposes of determining compliance at any time with Sections 10.01,
10.02, 10.03, 10.04, 10.05, 10.06 or 10.07, as applicable, in the event that any
Lien, disposition, Dividends, Indebtedness, Investments, Affiliate Transactions
or Restricted Junior Payments, as applicable, meets the criteria of more than
one basket or carveout under the applicable section at the time such Lien,
disposition, Dividends, Indebtedness, Investment, Affiliate Transaction or
Restricted Junior Payment was originally incurred or made, the Borrowers, in
their sole discretion, may classify or reclassify such transaction or item (or
portion thereof) in any such baskets or carveouts under the applicable section.
It is understood and agreed that any Indebtedness, Lien, Dividend, Restricted
Junior Payment, Investment, disposition or Affiliate transaction, as applicable,
need not be permitted solely by reference to one basket or carveout for
permitted Liens, dispositions, Dividends, Indebtedness, Investments, Affiliate
Transactions or Restricted Junior Payments under Sections 10.01, 10.02, 10.03,
10.04, 10.05, 10.06 or 10.07, respectively, but may instead be permitted in part
under any combination thereof.

(d) The words “hereof”, “herein” and “hereunder” and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.

(e) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

 

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1.03 Divisions. For all purposes under the Credit Documents, in connection with
any division or plan of division under Delaware law (or any comparable event
under a different jurisdiction’s laws): (a) if any asset, right, obligation or
liability of any Person becomes the asset, right, obligation or liability of a
different Person, then it shall be deemed to have been transferred from the
original Person to the subsequent Person, and (b) if any new Person comes into
existence, such new Person shall be deemed to have been organized on the first
date of its existence by the holders of its Equity Interests at such time.

SECTION 2. Amount and Terms of Credit.

2.01 The Revolving Loan Commitments.

(a) Subject to and upon the terms and conditions set forth herein, each Lender
with a Revolving Loan Commitment severally agrees to make, at any time and from
time to time on or after the Effective Date and prior to the Final Maturity
Date, a revolving loan or revolving loans (each, a “Revolving Loan” and,
collectively, the “Revolving Loans”) to the Borrowers (on a joint and several
basis), which Revolving Loans (i) shall be denominated in Dollars, (ii) shall,
at the option of the Borrowers, be incurred and maintained as, and/or converted
into, Base Rate Loans or LIBOR Loans; provided, that except as otherwise
specifically provided in Section 2.10(b), all Revolving Loans comprising the
same Borrowing shall at all times be of the same Type, (iii) may be repaid and
reborrowed in accordance with the provisions hereof, (iv) shall not be made (and
shall not be required to be made) by any Lender in any instance where the
incurrence thereof (after giving effect to the use of the proceeds thereof on
the date of the incurrence thereof to repay any amounts theretofore outstanding
pursuant to this Agreement) would cause the Individual Exposure of such Lender
to exceed the amount of its Revolving Loan Commitment at such time and (v) shall
not be made (and shall not be required to be made) by any Lender in any instance
where the incurrence thereof (after giving effect to the use of the proceeds
thereof on the date of the incurrence thereof to repay any amounts theretofore
outstanding pursuant to this Agreement) would cause the Aggregate Exposure to
exceed Availability at such time. Without in any way limiting the foregoing, the
Borrowers acknowledge, confirm and agree that the aggregate outstanding
principal amount of Loans made to Borrowers that have not contributed any assets
to the Borrowing Base, as reflected in the most recent Borrowing Base
Certificate received by the Administrative Agent in accordance with
Section 9.01(f), shall not without the prior written consent of the
Administrative Agent, exceed $5,000,000.

(b) Subject to and upon the terms and conditions set forth herein, the Swingline
Lender agrees to make, at any time and from time to time after the Effective
Date and prior to the Swingline Expiry Date, a revolving loan or revolving loans
(each, a “Swingline Loan” and, collectively, the “Swingline Loans”) to the
Borrowers (on a joint and several basis), which Swingline Loans (i) shall be
denominated in Dollars, (ii) shall be incurred and maintained as Base Rate
Loans; (iii) may be repaid and reborrowed in accordance with the provisions
hereof, (iv) shall not be made (and shall not be required to be made) by the
Swingline Lender in any instance where the incurrence thereof (after giving
effect to the use of the proceeds thereof on the date of the incurrence thereof
to repay any amounts theretofore outstanding pursuant to this Agreement) would
cause the Aggregate Exposure to exceed Availability at such time, and (v) shall
not exceed in aggregate principal amount at any time outstanding the Maximum
Swingline Amount. Notwithstanding anything to the contrary contained in this
Section 2.01(b), (A) the Swingline Lender shall not be obligated to make any
Swingline Loans at a time when a Lender Default exists unless the Swingline
Lender has entered into arrangements reasonably satisfactory to it to eliminate
the Swingline Lender’s risk with respect to the Defaulting Lender’s or
Defaulting Lenders’ participation in such Swingline Loans (which arrangements
are hereby consented to by the Lenders), including by cash collateralizing such
Defaulting Lender’s or Defaulting Lenders’ RL

 

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Percentage of the outstanding Swingline Loans (such arrangements, the “Swingline
Back-Stop Arrangements”) and (B) the Swingline Lender shall not make any
Swingline Loan after it has received written notice from any Borrower, any other
Credit Party or the Required Lenders stating that a Default or an Event of
Default exists and is continuing until such time as the Swingline Lender shall
have received written notice (1) of rescission of all such notices from the
party or parties originally delivering such notice or notices or (2) of the
waiver of such Default or Event of Default by the Required Lenders.

(c) On any Business Day, the Swingline Lender may, in its sole discretion give
notice to the Lenders that the Swingline Lender’s outstanding Swingline Loans
shall be funded with one or more Borrowings of Revolving Loans (provided, that
such notice shall be deemed to have been automatically given upon the occurrence
of a Default or an Event of Default under Section 11.01(e) or upon the exercise
of any of the remedies provided in the last paragraph of Section 11.01), in
which case one or more Borrowings of Revolving Loans constituting Base Rate
Loans (each such Borrowing, a “Mandatory Borrowing”) shall be made on the
immediately succeeding Business Day by all Lenders pro rata based on each such
Lender’s RL Percentage (determined before giving effect to any termination of
the Revolving Loan Commitments pursuant to the last paragraph of Section 11.01)
and the proceeds thereof shall be applied directly by the Swingline Lender to
repay the Swingline Lender for such outstanding Swingline Loans. Each Lender
hereby irrevocably agrees to make Revolving Loans upon one Business Day’s prior
notice pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by the
Swingline Lender notwithstanding (i) the amount of the Mandatory Borrowing may
not comply with the Minimum Borrowing Amount otherwise required hereunder,
(ii) whether any conditions specified in Section 7 are then satisfied,
(iii) whether a Default or an Event of Default then exists, (iv) the date of
such Mandatory Borrowing, and (v) the amount of the Borrowing Base or the Total
Revolving Loan Commitment at such time. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to any Borrower), then each Lender hereby
agrees that it shall forthwith purchase (as of the date the Mandatory Borrowing
would otherwise have occurred, but adjusted for any payments received from any
Borrower on or after such date and prior to such purchase) from the Swingline
Lender such participations in the outstanding Swingline Loans as shall be
necessary to cause the Lenders to share in such Swingline Loans ratably based
upon their respective RL Percentages (determined before giving effect to any
termination of the Revolving Loan Commitments pursuant to the last paragraph of
Section 11.01); provided, that (A) all interest payable on the Swingline Loans
shall be for the account of the Swingline Lender until the date as of which the
respective participation is required to be purchased and, to the extent
attributable to the purchased participation, shall be payable to the participant
from and after such date and (B) at the time any purchase of participations
pursuant to this sentence is actually made, the purchasing Lender shall be
required to pay the Swingline Lender interest on the principal amount of
participation purchased for each day from and including the day upon which the
Mandatory Borrowing would otherwise have occurred to but excluding the date of
payment for such participation, at the overnight Federal Funds Effective Rate
for the first three days and at the interest rate otherwise applicable to
Revolving Loans maintained as Base Rate Loans hereunder for each day thereafter.

(d) Notwithstanding anything to the contrary in Section 2.01(a) or elsewhere in
this Agreement, the Administrative Agent shall have the right to establish
Reserves in such amounts, and with respect to such matters, but subject to the
limitations contained in the definition of “Reserves” herein, as the
Administrative Agent in its Permitted Discretion shall deem necessary or
appropriate, against the Borrowing Base (which Reserves shall reduce the then
existing Borrowing Base in an amount equal to such Reserves).

 

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(e) In the event that (i) the Borrowers are unable to comply with the Borrowing
Base limitations set forth in Section 2.01(a) or (ii) the Borrowers are unable
to satisfy the conditions precedent to the making of Revolving Loans set forth
in Section 7, in either case, the Lenders, subject to the immediately succeeding
proviso, hereby authorize the Administrative Agent, for the account of the
Lenders, to make Revolving Loans to the Borrowers (on a joint and several
basis), in either case solely in the event that the Administrative Agent in its
Permitted Discretion deems necessary or desirable (A) to preserve or protect the
Collateral, or any portion thereof, (B) to enhance the likelihood of repayment
of the Obligations, or (C) to pay any other amount chargeable to the Borrowers
pursuant to the terms of this Agreement, including, without limitation, expenses
and Fees, which Revolving Loans may only be made as Base Rate Loans (each, an
“Agent Advance”) for a period commencing on the date the Administrative Agent
first receives a Notice of Borrowing requesting an Agent Advance until the
earliest of (1) the 20th Business Day after such date (or such earlier date as
determined by the Administrative Agent), (2) the date the Borrowers are again
able to comply with the Borrowing Base limitations and the conditions precedent
to the making of Revolving Loans, or obtain an amendment or waiver with respect
thereto and (3) the date the Required Lenders instruct the Administrative Agent
to cease making Agent Advances (in each case, the “Agent Advance Period”);
provided, that the Administrative Agent shall not make any Agent Advance to the
extent that at the time of the making of such Agent Advance, the amount of such
Agent Advance (x) when added to the aggregate outstanding amount of all other
Agent Advances made to the Borrowers at such time, would exceed 10% of the
Borrowing Base at such time or (y) when added to the Aggregate Exposure as then
in effect (immediately prior to the incurrence of such Agent Advance), would
exceed the Total Revolving Loan Commitment at such time. Agent Advances may be
made by the Administrative Agent in its sole discretion and the Borrowers shall
have no right whatsoever to require that any Agent Advances be made. Agent
Advances will be subject to periodic settlement with the Lenders pursuant to
Section 2.04(b).

(f) If the Initial Maturity Date shall have occurred at a time when Extended
Revolving Loan Commitments are in effect, then on the Initial Maturity Date all
then outstanding Swingline Loans shall be repaid in full on such date (and there
shall be no adjustment to the participations in such Swingline Loans as a result
of the occurrence of such Initial Maturity Date) or refinanced with a borrowing
of an Extension pursuant to Section 2.16; provided, that, if on the occurrence
of the Initial Maturity Date (after giving effect to any repayments of Revolving
Loans and any reallocation of Letter of Credit participations as contemplated in
Section 3.07), there shall exist sufficient unutilized Extended Revolving Loan
Commitments so that the respective outstanding Swingline Loans could be incurred
pursuant to the Extended Revolving Loan Commitments which will remain in effect
after the occurrence of the Initial Maturity Date, then there shall be an
automatic adjustment on such date of the participations in such Swingline Loans
and same shall be deemed to have been incurred solely pursuant to the Extended
Revolving Loan Commitments and such Swingline Loans shall not be so required to
be repaid in full on the Initial Maturity Date.

2.02 Minimum Amount of Each Borrowing. The aggregate principal amount of each
Borrowing of Loans of a specific Type shall not be less than the Minimum
Borrowing Amount applicable thereto. More than one Borrowing may occur on the
same date, but at no time shall there be outstanding more than eight Borrowings
of LIBOR Loans (or such greater number of Borrowings of LIBOR Loans as may be
agreed to from time to time by the Administrative Agent).

 

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2.03 Notice of Borrowing. (a) When the Borrowers desire to incur (i) LIBOR Loans
hereunder, the Company shall give the Administrative Agent at the Notice Office
notice thereof, which notice must be received by the Administrative Agent prior
to 1:00 P.M. (New York City time) at least three Business Days prior to the
requested date of Borrowing (except with respect to a requested Borrowing on the
Effective Date, for which notice must be received by the Administrative Agent
prior to 1:00 P.M. (New York City time) on the Business Day immediately
preceding the Effective Date), and (ii) Base Rate Loans hereunder (including
Agent Advances, but excluding Swingline Loans and Revolving Loans made pursuant
to a Mandatory Borrowing), the Company shall give the Administrative Agent at
the Notice Office notice thereof, which notice must be received by the
Administrative Agent prior to 1:00 P.M. (New York City time) on the Business Day
of the requested date of Borrowing. Each such notice (each, a “Notice of
Borrowing”), except as otherwise expressly provided in Section 2.10, shall be
irrevocable and shall be in writing, or by telephone promptly confirmed in
writing, in the form of Exhibit A-1, appropriately completed to specify: (A) the
aggregate principal amount of the Revolving Loans to be incurred pursuant to
such Borrowing, (B) the date of such Borrowing (which shall be a Business Day),
(C) if the Revolving Loans proposed to be made pursuant to such Borrowing will
constitute Agent Advances (it being understood that the Administrative Agent
shall be under no obligation to make such Agent Advance), notice thereof,
(D) whether the Revolving Loans being incurred pursuant to such Borrowing are to
be initially maintained as Base Rate Loans or, to the extent permitted
hereunder, LIBOR Loans and, if LIBOR Loans, the initial Interest Period to be
applicable thereto and (E) the Borrowing Base at such time. Except as provided
in Section 2.04(b), the Administrative Agent shall promptly give each Lender
notice of such proposed Borrowing, of such Lender’s proportionate share thereof
and of the other matters required by the immediately preceding sentence to be
specified in the Notice of Borrowing.

(b) (i) Whenever the Borrowers desire to incur Swingline Loans hereunder, the
Company shall give the Swingline Lender no later than 1:00 P.M. (New York City
time) on the date that a Swingline Loan is to be incurred, written notice or
telephonic notice promptly confirmed in writing of each Swingline Loan to be
incurred hereunder. Each such notice shall be irrevocable and specify in each
case (A) the date of Borrowing (which shall be a Business Day) and (B) the
aggregate principal amount of the Swingline Loans to be incurred pursuant to
such Borrowing.

(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 2.01(c), with the Borrowers irrevocably agreeing, by their incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 2.01(c).

(c) Without in any way limiting the obligation of the Company to confirm in
writing any telephonic notice of any Borrowing or prepayment of Loans, the
Administrative Agent or the Swingline Lender, as the case may be, shall be
entitled to rely and act without liability upon the basis of telephonic notice
of such Borrowing or prepayment, as the case may be, believed by the
Administrative Agent or the Swingline Lender, as the case may be, in good faith
to be from an Authorized Officer of the Company, prior to receipt of written
confirmation. In each such case, each Borrower hereby waives the right to
dispute the Administrative Agent’s or the Swingline Lender’s record of the terms
of such telephonic notice of such Borrowing or prepayment of Loans, as the case
may be, absent manifest error.

2.04 Disbursement of Funds. (a) No later than 1:00 P.M. (New York City time) on
the date specified in each Notice of Borrowing (or (i) in the case of Revolving
Loans that are Base Rate Loans that are to be made on same day notice, no later
than 2:00 P.M. (New York City time) on the date specified pursuant to
Section 2.03(a), (ii) in the case of Swingline Loans, no later than 2:00 P.M.
(New York City time) on the date specified pursuant to Section 2.03(b) or
(iii) in the case of Mandatory Borrowings, no

 

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later than 1:00 P.M. (New York City time) on the date specified in
Section 2.01(c)), each Lender will make available its pro rata portion
(determined in accordance with Section 2.07) of each such Borrowing requested to
be made on such date (or in the case of Swingline Loans, the Swingline Lender
will make available the full amount thereof). All such amounts will be made
available in Dollars and in immediately available funds at the Payment Office,
and the Administrative Agent will make available to the Borrowers at the Payment
Office, or to such other account as the Company may specify in writing prior to
the Effective Date, the aggregate of the amounts so made available by the
Lenders; provided, that, if, on the date of a Borrowing of Revolving Loans
(other than a Mandatory Borrowing), there are Unpaid Drawings or Swingline Loans
then outstanding, then the proceeds of such Borrowing shall be applied, first,
to the payment in full of any such Unpaid Drawings with respect to Letters of
Credit, second, to the payment in full of any such Swingline Loans, and third,
to the Borrowers as otherwise provided above. Unless the Administrative Agent
shall have been notified by any Lender prior to the date of any Borrowing that
such Lender does not intend to make available to the Administrative Agent such
Lender’s portion of such Borrowing, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent on the
date of such Borrowing and the Administrative Agent may (but shall not be
obligated to), in reliance upon such assumption, make available to the Borrowers
a corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent by such Lender, the Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Lender. If such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent’s demand therefor, the Administrative Agent shall promptly
notify the Borrowers, and the Borrowers shall repay such corresponding amount to
the Administrative Agent within one Business Day. The Administrative Agent also
shall be entitled to recover on demand from such Lender or the Borrowers, as the
case may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Administrative
Agent to the Borrowers until the date such corresponding amount is recovered by
the Administrative Agent, at a rate per annum equal to (A) if recovered from
such Lender, the overnight Federal Funds Effective Rate for the first three days
and at the interest rate otherwise applicable to such Loans for each day
thereafter and (B) if recovered from the Borrowers, the rate of interest
applicable to the respective Borrowing, as determined pursuant to Section 2.08.
Nothing in this Section 2.04 shall be deemed to relieve any Lender from its
obligation to make Loans hereunder or to prejudice any rights which the
Borrowers may have against any Lender as a result of any failure by such Lender
to make Loans hereunder.

(b) Unless the Required Lenders have instructed the Administrative Agent to the
contrary, the Administrative Agent on behalf of the Lenders may, but shall not
be obligated to, make Revolving Loans to the Borrowers that are maintained as
Base Rate Loans under Section 2.01(a) without prior notice of the proposed
Borrowing to the Lenders as follows:

(i) The amount of each Lender’s RL Percentage of Revolving Loans shall be
computed weekly (or more frequently in the Administrative Agent’s sole
discretion) and shall be adjusted upward or downward on the basis of the amount
of outstanding Revolving Loans as of 12:00 P.M. (noon) (New York City time) on
the last Business Day of each week, or such other period specified by the
Administrative Agent (each such date, a “Settlement Date”). The Lenders shall
transfer to the Administrative Agent, or the Administrative Agent shall transfer
to the Lenders, such amounts as are necessary so that (after giving effect to
all such transfers) the amount of Revolving Loans made by each Lender shall be
equal to such Lender’s RL Percentage of the aggregate amount of Revolving Loans
outstanding as of such

 

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Settlement Date. If a notice from the Administrative Agent of any such necessary
transfer is received by a Lender on or prior to 12:00 P.M. (noon) (New York City
time) on any Business Day, then such Lender shall make transfers described above
in immediately available funds no later than 2:00 P.M. (New York City time) on
the day such notice was received; and if such notice is received by a Lender
after 12:00 P.M. (noon) (New York City time) on any Business Day, such Lender
shall make such transfers no later than 3:00 P.M. (New York City time) on the
next succeeding Business Day. The obligation of each of the Lenders to transfer
such funds shall be irrevocable and unconditional and without recourse to, or
without representation or warranty by, the Administrative Agent. Each of the
Administrative Agent and each Lender agrees and the Lenders agree to mark their
respective books and records on each Settlement Date to show at all times the
dollar amount of their respective RL Percentage of the outstanding Revolving
Loans on such date.

(ii) To the extent that the settlement described in preceding clause (i) shall
not yet have occurred with respect to any particular Settlement Date, upon any
repayment of Revolving Loans by the Borrowers prior to such settlement, the
Administrative Agent may apply such amounts repaid directly to the amounts that
would otherwise be made available by the Administrative Agent pursuant to this
Section 2.04(b).

(iii) Because the Administrative Agent on behalf of the Lenders may be advancing
and/or may be repaid Revolving Loans prior to the time when the Lenders will
actually advance and/or be repaid Revolving Loans, interest with respect to
Revolving Loans shall be allocated by the Administrative Agent to each Lender
and the Administrative Agent in accordance with the amount of Revolving Loans
actually advanced by and repaid to each Lender and the Administrative Agent and
shall accrue from and including the date such Revolving Loans are so advanced to
but excluding the date such Revolving Loans are either repaid by the Borrowers
in accordance with the terms of this Agreement or actually settled by the
Administrative Agent or the applicable Lender as described in this
Section 2.04(b).

2.05 Notes. (a) Each Borrower’s joint and several obligation to pay the
principal of, and interest on, the Loans made by each Lender shall be evidenced
in the Register maintained by the Administrative Agent pursuant to Section 13.15
and shall, if requested by such Lender, also be evidenced (i) in the case of
Revolving Loans, by a promissory note duly executed and delivered by each
Borrower substantially in the form of Exhibit B-1, with blanks appropriately
completed in conformity herewith (each, a “Revolving Note” and, collectively,
the “Revolving Notes”), and (ii) in the case of Swingline Loans, by a promissory
note duly executed and delivered by each Borrower substantially in the form of
Exhibit B-2, with blanks appropriately completed in conformity herewith (the
“Swingline Note”).

 

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(b) Each Lender will note on its internal records the amount of each Loan made
by it and each payment in respect thereof and prior to any transfer of any of
its Notes will endorse on the reverse side thereof the outstanding principal
amount of Loans evidenced thereby. Failure to make any such notation or any
error in such notation shall not affect any Borrower’s obligations in respect of
such Loans.

(c) Notwithstanding anything to the contrary contained above in this
Section 2.05 or elsewhere in this Agreement, Notes shall only be delivered to
Lenders which at any time specifically request the delivery of such Notes. No
failure of any Lender to request, obtain, maintain or produce a Note evidencing
its Loans to the Borrowers shall affect, or in any manner impair, the joint and
several obligations of the Borrowers to repay the Loans (and all related
Obligations) incurred by the Borrowers which would otherwise be evidenced
thereby in accordance with the requirements of this Agreement, and shall not in
any way affect the security or guaranties therefor provided pursuant to any
Credit Document. Any Lender which does not have a Note evidencing its
outstanding Loans shall in no event be required to make the notations otherwise
described in preceding clause (b). At any time when any Lender requests the
delivery of a Note to evidence any of its Loans, the Borrowers shall reasonably
promptly execute and deliver to the respective Lender the requested Note in the
appropriate amount or amounts to evidence such Loans.

2.06 Conversions/Continuations. The Borrowers shall have the option to convert
(or continue), on any Business Day, all or a portion equal to at least the
Minimum Borrowing Amount of the outstanding principal amount of Revolving Loans
made pursuant to one or more Borrowings of one or more Types of Revolving Loans
into a Borrowing of another Type of Revolving Loan (or to continue all or a
portion of any LIBOR Loan as a LIBOR Loan); provided, that (a) except as
otherwise provided in Section 2.10(b), LIBOR Loans may be converted into Base
Rate Loans (or continued as LIBOR Loans with a new Interest Period) only on the
last day of an Interest Period applicable to the Revolving Loans being converted
(or continued) and no such partial conversion of LIBOR Loans shall reduce the
outstanding principal amount of such LIBOR Loans made pursuant to a single
Borrowing to less than the Minimum Borrowing Amount applicable thereto,
(b) unless the Required Lenders otherwise agree, Base Rate Loans may only be
converted into LIBOR Loans if no Default or Event of Default has occurred and is
continuing on the date of the conversion, and (c) no conversion pursuant to this
Section 2.06 shall result in a greater number of Borrowings of LIBOR Loans than
is permitted under Section 2.02. Each such conversion or continuation shall be
effected by the Borrowers by the Company giving the Administrative Agent at the
Notice Office prior to 1:00 P.M. (New York City time) at least (i) in the case
of conversions of Base Rate Loans into LIBOR Loans (or continuations of LIBOR
Loans), three Business Days’ prior notice and (ii) in the case of conversions of
LIBOR Loans into Base Rate Loans, one Business Day’s prior notice (each, a
“Notice of Conversion/Continuation”), in each case in the form of Exhibit A-2,
appropriately completed to specify the Revolving Loans to be so converted (or
continued), the Borrowing or Borrowings pursuant to which such Revolving Loans
were incurred and, if to be converted into (or continued as) LIBOR Loans, the
Interest Period to be applicable thereto. The Administrative Agent shall give
each Lender prompt notice of any such proposed conversion affecting any of its
Revolving Loans.

2.07 Pro Rata Borrowings. All Borrowings of Revolving Loans under this Agreement
shall be incurred from the Lenders pro rata on the basis of their Revolving Loan
Commitments; provided, that all Mandatory Borrowings shall be incurred from the
Lenders pro rata on the basis of their RL Percentages. It is understood that no
Lender shall be responsible for any default by any other Lender of its
obligation to make Loans hereunder and that each Lender shall be obligated to
make the Loans provided to be made by it hereunder, regardless of the failure of
any other Lender to make its Loans hereunder.

 

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2.08 Interest. (a) Each Borrower jointly and severally agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan from the date of
Borrowing thereof until the earlier of (i) the maturity thereof (whether by
acceleration or otherwise) and (ii) the conversion of such Base Rate Loan to a
LIBOR Loan pursuant to Section 2.06 or 2.09, as applicable, at a rate per annum
which shall be equal to the sum of the relevant Applicable Margin plus the Base
Rate, each as in effect from time to time.

(b) Each Borrower jointly and severally agrees to pay interest in respect of the
unpaid principal amount of each LIBOR Loan from the date of Borrowing thereof
until the earlier of (i) the maturity thereof (whether by acceleration or
otherwise) and (ii) the conversion of such LIBOR Loan to a Base Rate Loan
pursuant to Section 2.06, 2.09 or 2.10, as applicable, at a rate per annum which
shall, during each Interest Period applicable thereto, be equal to the sum of
the relevant Applicable Margin plus the LIBO Rate for such Interest Period.

(c) At any time when an Event of Default has occurred and is continuing, overdue
principal in respect of each Loan shall bear interest (including post-petition
interest in any proceeding under the Bankruptcy Code or other applicable
bankruptcy laws) or accrue as applicable, at a rate per annum equal to the rate
which is 2% in excess of the rate otherwise then applicable to such Loans. To
the maximum extent permitted by law, overdue interest in respect of each Loan,
Letter of Credit Fees and all overdue amounts payable hereunder and under any
other Credit Document shall bear interest at a rate per annum equal to the rate
which is 2% in excess of the rate applicable to Base Rate Loans from time to
time. Interest that accrues under this Section 2.08(c) shall be payable on
demand.

(d) Accrued (and theretofore unpaid) interest shall be payable (i) in respect of
each Base Rate Loan, (A) quarterly in arrears on each Quarterly Payment Date,
(B) on the date of any repayment or prepayment (on the amount repaid or
prepaid), and (C) at maturity (whether by acceleration or otherwise) and, after
such maturity, on demand, and (ii) in respect of each LIBOR Loan, (A) on the
last day of each Interest Period applicable thereto and, in the case of an
Interest Period in excess of three months, on each date occurring at three month
intervals after the first day of such Interest Period, (B) on the date of any
repayment or prepayment (on the amount repaid or prepaid), and (C) at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.

(e) Upon each Interest Determination Date, the Administrative Agent shall
determine the LIBO Rate for each Interest Period applicable to the respective
LIBOR Loans and shall promptly notify the Borrowers and the Lenders thereof.
Each such determination shall, absent manifest error, be final and conclusive
and binding on all parties hereto.

2.09 Interest Periods. At the time the Company gives any Notice of Borrowing or
Notice of Conversion/Continuation in respect of the making of, continuation as
or conversion into any LIBOR Loan, the Borrowers shall have the right to elect
the interest period (each, an “Interest Period”) applicable to such LIBOR Loan,
which Interest Period shall, at the option of the Borrowers, be (x) a one, two,
three or six month period, (y) to the extent agreed to by all Lenders, a twelve
month period or (z) if agreed by the Administrative Agent in its discretion and
each Lender, such other period not to exceed one-month; provided, that (in each
case):

(a) all LIBOR Loans comprising a Borrowing shall at all times have the same
Interest Period;

(b) the initial Interest Period for any LIBOR Loan shall commence on the date of
Borrowing of such LIBOR Loan (including the date of any conversion thereto from
a Base Rate Loan) and each Interest Period occurring thereafter in respect of
such LIBOR Loan shall commence on the day on which the next preceding Interest
Period applicable thereto expires;

 

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(c) if any Interest Period for a LIBOR Loan begins on a day for which there is
no numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day of such
calendar month;

(d) if any Interest Period for a LIBOR Loan would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period for a
LIBOR Loan would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;

(e) unless the Required Lenders otherwise agree, no Interest Period may be
selected at any time when a Default or an Event of Default has occurred and is
continuing; and

(f) no Interest Period in respect of any Borrowing shall be selected which
extends beyond the Final Maturity Date.

If by 1:00 P.M. (New York City time) on the third Business Day prior to the
expiration of any Interest Period applicable to a Borrowing of LIBOR Loans, the
Borrowers have failed to elect, or is not permitted to elect, a new Interest
Period to be applicable to such LIBOR Loans as provided above, the Borrowers
shall be deemed to have elected to convert such LIBOR Loans into Base Rate Loans
effective as of the expiration date of such current Interest Period.

2.10 Increased Costs, Illegality, etc. (a) In the event that any Lender shall
have determined (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto but, with respect to clause
(i) below, may be made only by the Administrative Agent):

(i) on any Interest Determination Date that, by reason of any changes arising
after the date of this Agreement affecting the London interbank market, adequate
and fair means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of “LIBO Rate”; or

(ii) at any time, that such Lender shall incur increased costs or reductions in
the amounts received or receivable hereunder with respect to any LIBOR Loan
because of any change since the Effective Date (or the date such Lender became a
Lender hereunder, if later) in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the force of law)
or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, order, guideline
or request, such as, but not limited to: (A) a change in official reserve
requirements, but, in all events, excluding reserves required under Regulation D
to the extent included in the computation of the LIBO Rate, or (B) any change
subjecting any Recipient to any Taxes (except for Excluded Taxes and any
Indemnified Taxes) on its loans, loan principal, letters of credit, commitments,
or other obligations, or its deposits, reserves, other liabilities or capital
attributable thereto; or

 

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(iii) at any time, that the making or continuance of any LIBOR Loan has been
made (A) unlawful by any law or governmental rule, regulation or order,
(B) impossible by compliance by any Lender in good faith with any request from a
Governmental Authority (whether or not having force of law) or (C) impracticable
as a result of a contingency, other than with respect to a tax matter not
otherwise provided for in this Section 2.10, occurring after the Effective Date
or since the date such Person becomes a Lender, if later, which materially and
adversely affects the London interbank market generally;

then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone promptly
confirmed in writing) to the Company and, except in the case of clause
(i) above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Lenders).
Thereafter (1) in the case of clause (i) above, LIBOR Loans shall not be
available until such time as the Administrative Agent notifies the Borrowers and
the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or any Notice
of Conversion/Continuation given by any Borrower with respect to LIBOR Loans
which have not yet been incurred (including by way of conversion) shall be
deemed rescinded by the Borrowers, (2) in the case of clause (ii) above, the
Borrowers jointly and severally agree to pay to such Lender, upon such Lender’s
written request therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Lender in its sole discretion shall determine) as shall be required to
compensate such Lender for such increased costs or reductions in amounts
received or receivable hereunder (a written notice as to the additional amounts
owed to such Lender, showing in reasonable detail the basis for the calculation
thereof, and stating that such Lender is charging such costs to its borrowers
generally pursuant to its internal policies, submitted to the Company by such
Lender shall, absent manifest error, be final and conclusive and binding on all
the parties hereto) and (3) in the case of clause (iii) above, the Borrowers
shall take one of the actions specified in Section 2.10(b) as promptly as
reasonably possible and, in any event, within the time period required by law.

(b) At any time that any LIBOR Loan is affected by the circumstances described
in Section 2.10(a)(ii), the Borrowers may, and in the case of a LIBOR Loan
affected by the circumstances described in Section 2.10(a)(iii), the Borrowers
shall, either (i) if the affected LIBOR Loan is then being made initially or
pursuant to a conversion, cancel such Borrowing by the Company giving the
Administrative Agent telephonic notice (confirmed in writing) on the same date
that the Company was notified by the affected Lender or the Administrative Agent
pursuant to Section 2.10(a)(ii) or (iii) or (ii) if the affected LIBOR Loan is
then outstanding, upon at least three Business Days’ written notice by the
Company to the Administrative Agent, require the affected Lender to convert such
LIBOR Loan into a Base Rate Loan; provided, that if more than one Lender is
affected at any time, then all affected Lenders must be treated the same
pursuant to this Section 2.10(b).

 

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(c) If any Lender determines that after the Effective Date (or the date such
Lender became a Lender hereunder, if later) the introduction of or any change in
any applicable law or governmental rule, regulation, order, guideline, directive
or request (whether or not having the force of law) concerning capital adequacy,
or any change in interpretation or administration thereof by the NAIC or any
Governmental Authority, central bank or comparable agency, will have the effect
of increasing the amount of capital required or expected to be maintained by
such Lender or any corporation controlling such Lender based on the existence of
such Lender’s Revolving Loan Commitment hereunder or its obligations hereunder,
then the Borrowers jointly and severally agree to pay to such Lender, upon its
written demand therefor, such additional amounts as shall be required to
compensate such Lender or such other corporation for the increased cost to such
Lender or such other corporation or the reduction in the rate of return to such
Lender or such other corporation as a result of such increase of capital. In
determining such additional amounts, each Lender will act reasonably and in good
faith and will use averaging and attribution methods which are reasonable;
provided, that such Lender’s determination of compensation owing under this
Section 2.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto. Each Lender, upon determining that any
additional amounts will be payable pursuant to this Section 2.10(c), will give
prompt written notice thereof to the Company, which notice shall show in
reasonable detail the basis for calculation of such additional amounts provided,
further, that, notwithstanding anything in this Agreement to the contrary,
(i) the Dodd-Frank Wall Street Reform and Consumer Protection Act, and all
requests, rules, guidelines, requirements and directives thereunder, issued in
connection therewith or in implementation thereof, and (ii) all requests, rules,
guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States or foreign regulatory authorities, in each case
pursuant to Basel III shall, in each case, be deemed to be a change after the
Effective Date in a requirement of law or government rule, regulation or order,
regardless of the date enacted, adopted, issued or implemented (including for
purposes of this Section 2.10).

(d) It is understood that this Section 2.10 shall not apply to Excluded Taxes or
Indemnified Taxes.

(e) Effect of Benchmark Transition Event.

(i) Benchmark Replacement. Notwithstanding anything to the contrary herein or in
any other Credit Document, upon the occurrence of a Benchmark Transition Event
or an Early Opt-in Election, as applicable, the Administrative Agent, the
Required Lenders and the Borrower may amend this Agreement to replace the LIBO
Rate with a Benchmark Replacement, provided that any such Benchmark Replacement
shall be administratively feasible for the Administrative Agent (and the Lenders
hereby (A) authorize and direct the Administrative Agent to execute and deliver
any such amendment in which the Required Lenders are a signatory thereto and
(B) acknowledge and agree that the Administrative Agent shall be entitled to all
of the exculpations, protections and indemnifications provided for in this
Agreement in favor of the Administrative Agent in executing and delivering any
such amendment). In addition, the Administrative Agent shall not be bound to
comply with, acknowledge or consent to any Benchmark Replacement

 

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or Benchmark Replacement Conforming Changes or any other amendment to this
Agreement or any Credit Document that would affect its rights, duties,
privileges, protections, obligations or liabilities, or in such Administrative
Agent’s reasonable judgment, otherwise adversely affect it. No replacement of
the LIBO Rate with a Benchmark Replacement pursuant to this Section 2.10(e) will
occur prior to the applicable Benchmark Transition Start Date.

(ii) Benchmark Replacement Conforming Changes. In connection with the
implementation of a Benchmark Replacement, the Administrative Agent, the
Required Lenders and the Borrower will have the right to make Benchmark
Replacement Conforming Changes from time to time and, notwithstanding anything
to the contrary herein or in any other Credit Document, any amendments
implementing such Benchmark Replacement Conforming Changes will become effective
without any further action or consent of any other party to this Agreement,
provided that any such Benchmark Replacement Conforming Changes shall be
administratively feasible for the Administrative Agent. In addition, the
Administrative Agent shall not be bound to comply with, acknowledge or consent
to any Benchmark Replacement Conforming Changes or any other amendment to this
Agreement or any Credit Document that would affect its rights, duties,
privileges, protections, obligations or liabilities, or in such Administrative
Agent’s reasonable judgment, otherwise adversely affect it.

(iii) Notices; Standards for Decisions and Determinations. The Required Lenders
will promptly notify the Borrower, the Administrative Agent and the Lenders of
(i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election,
as applicable, and its related Benchmark Replacement Date and Benchmark
Transition Start Date, (ii) the implementation of any Benchmark Replacement,
(iii) the effectiveness of any Benchmark Replacement Conforming Changes and
(iv) the commencement or conclusion of any Benchmark Unavailability Period. Any
determination, decision or election that may be made by the Lenders or the
Administrative Agent pursuant to this Section 2.10(e), including any
determination with respect to a tenor, rate or adjustment or of the occurrence
or non-occurrence of an event, circumstance or date and any decision to take or
refrain from taking any action, will be conclusive and binding absent manifest
error and may be made in its or their sole discretion and without consent from
any other party hereto, except, in each case, as expressly required pursuant to
this Section 2.10(e). In the event that the LIBO Rate is unavailable and the
Administrative Agent has not been notified in writing of a Benchmark Replacement
by the Required Lenders and the Borrower in accordance with this Agreement
within two Business Days prior to an applicable Interest Determination Date, the
Administrative Agent shall use the LIBO Rate in effect for the immediately prior
Interest Period until a Benchmark Replacement has become effective in accordance
with this Agreement

 

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(iv) Benchmark Unavailability Period. Upon the Borrower’s receipt of notice from
the Required Lenders of the commencement of a Benchmark Unavailability Period,
the Borrower may revoke any request for a LIBO Rate Borrowing of, conversion to
or continuation of LIBOR Loans to be made, converted or continued during any
Benchmark Unavailability Period and, failing that, the Borrower will be deemed
to have converted any such request into a request for a Borrowing of or
conversion to Base Rate Loans. During any Benchmark Unavailability Period, the
component of Base Rate based upon the LIBO Rate will not be used in any
determination of Base Rate.

2.11 Compensation. Each Borrower jointly and severally agrees to compensate each
Lender, upon its written request (which request shall set forth in reasonable
detail the basis for requesting such compensation) to the Company, for all
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund its LIBOR Loans but
excluding loss of anticipated profits) which such Lender may sustain: (a) if for
any reason (other than a default by such Lender or the Administrative Agent) a
Borrowing of, or conversion from or into, LIBOR Loans does not occur on a date
specified therefor in a Notice of Borrowing or in a Notice of
Conversion/Continuation (whether or not withdrawn by the Borrowers or deemed
withdrawn or rescinded pursuant to Section 2.10(a)); (b) if any prepayment or
repayment (including any prepayment or repayment made pursuant to Section 5.01,
5.02 or as a result of an acceleration of the Loans pursuant to Section 11) or
conversion of any of its LIBOR Loans occurs on a date which is not the last day
of an Interest Period with respect thereto; (c) if any prepayment of any of its
LIBOR Loans is not made on any date specified in a notice of prepayment given
by, or on behalf of, any Borrower; or (d) as a consequence of (i) any other
default by any Borrower to repay LIBOR Loans when required by the terms of this
Agreement or any Note held by such Lender or (ii) any election made pursuant to
Section 2.10(b).

2.12 Change of Lending Office. Each Lender agrees that on the occurrence of any
event giving rise to the operation of Section 2.10(a)(ii) or (iii),
Section 2.10(c), 3.06 or 5.04 with respect to such Lender, it will, if requested
by the Borrowers, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans
or Letters of Credit affected by such event or to assign and delegate its rights
and obligations hereunder to another of its offices, branches or Affiliates, if
any; provided, that such designation is made on such terms that such Lender and
its lending office suffer no economic, legal or regulatory disadvantage, with
the object of avoiding the consequence of the event giving rise to the operation
of such Section. Nothing in this Section 2.12 shall affect or postpone any of
the obligations of any Borrower or the right of any Lender provided in Sections
2.10, 3.06 and 5.04.

 

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2.13 Replacement of Lenders. (a) (x) If any Lender becomes a Defaulting Lender,
(y) upon the occurrence of any event giving rise to the operation of
Section 2.10(a)(ii) or (iii), 2.10(c), 3.06 or 5.04 with respect to any Lender
which results in such Lender charging to the Borrowers increased costs in excess
of those being generally charged by the other Lenders or which results in any
Borrower being required to pay any Indemnified Taxes or additional amounts to
any Lender or any Governmental Authority for the account of such Lender pursuant
to Section 5.04 or (z) in the case of a refusal by a Lender to consent to a
proposed amendment, change, waiver, discharge or termination with respect to
this Agreement which expressly requires the consent of such Lender and which has
been approved by the Required Lenders as (and to the extent) provided in
Section 13.12(b), the Company shall have the right, in accordance with
Section 13.04(b), to replace such Lender (the “Replaced Lender”) with one or
more other Eligible Transferees, none of whom shall constitute a Defaulting
Lender at the time of such replacement (collectively, the “Replacement Lender”)
and each of which shall (other than in the case of an existing Lender) be
reasonably acceptable to the Administrative Agent and each Issuing Lender;
provided, that:

(i) at the time of any replacement pursuant to this Section 2.13, the
Replacement Lender shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant to
said Section 13.04(b) to be paid by the Borrowers) pursuant to which the
Replacement Lender shall acquire the entire Revolving Loan Commitment and all
outstanding Revolving Loans of, and all participations in Letters of Credit and
Swingline Loans by, the Replaced Lender and, in connection therewith, shall pay
to (A) the Replaced Lender in respect thereof an amount equal to the sum of
(1) an amount equal to the principal of, and all accrued interest on, all
outstanding Revolving Loans of the respective Replaced Lender, (2) an amount
equal to all Unpaid Drawings that have been funded by (and not reimbursed to)
such Replaced Lender, together with all then unpaid interest with respect
thereto at such time and (3) an amount equal to all accrued, but theretofore
unpaid, Fees owing to the Replaced Lender pursuant to Section 4.01, (B) each
Issuing Lender an amount equal to such Replaced Lender’s RL Percentage of any
Unpaid Drawing relating to Letters of Credit issued by such Issuing Lender
(which at such time remains an Unpaid Drawing) to the extent such amount was not
theretofore funded by such Replaced Lender and (C) the Swingline Lender an
amount equal to such Replaced Lender’s RL Percentage of any Mandatory Borrowing
to the extent such amount was not theretofore funded by such Replaced Lender to
the Swingline Lender; and

(ii) all obligations of the Borrowers then owing to the Replaced Lender (other
than those specifically described in clause (i) above in respect of which the
assignment purchase price has been, or is concurrently being, paid, but
including all amounts, if any, owing under Section 2.11) shall be paid in full
to such Replaced Lender concurrently with such replacement.

 

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(b) Upon receipt by the Replaced Lender of all amounts required to be paid to it
pursuant to this Section 2.13 and satisfaction of the other conditions set forth
in this Section 2.13, the Administrative Agent shall be entitled (but not
obligated) and is hereby authorized (which authorization is coupled with an
interest) to execute an Assignment and Assumption Agreement on behalf of such
Replaced Lender, and any such Assignment and Assumption Agreement so executed by
the Administrative Agent and the Replacement Lender shall be effective for
purposes of this Section 2.13 and Section 13.04. Upon the execution of the
respective Assignment and Assumption Agreement, the payment of amounts referred
to in clauses (i) and (ii) immediately preceding clause (a), recordation of the
assignment on the Register by the Administrative Agent pursuant to Section 13.15
and, if so requested by the Replacement Lender, delivery to the Replacement
Lender of the appropriate Note or Notes executed by the Borrowers, (i) the
Replacement Lender shall become a Lender hereunder and the Replaced Lender shall
cease to constitute a Lender hereunder, except with respect to indemnification
provisions under this Agreement (including, without limitation, Sections 2.10,
2.11, 3.06, 5.04, 12.06, 13.01 and 13.06), which shall survive as to such
Replaced Lender and (ii) the RL Percentages of the Lenders shall be
automatically adjusted at such time to give effect to such replacement.

2.14 Company as Agent for Borrowers and other Credit Parties. Each Credit Party
hereby irrevocably appoints the Company as its agent and attorney-in-fact for
all purposes under this Agreement and each other Credit Document, which
appointment shall remain in full force and effect unless and until the
Administrative Agent shall have consented in writing to the revocation of such
appointment. (a) Each Borrower hereby irrevocably appoints and authorizes the
Company to (i) provide the Administrative Agent with all notices with respect to
Loans and Letters of Credit obtained for the benefit of the Borrowers and
(ii) take such action as the Company deems appropriate on its behalf to obtain
Loans and Letters of Credit and to exercise such other powers as are reasonably
incidental thereto to carry out the purposes of this Agreement and the other
Credit Documents, and (b) each Credit Party hereby irrevocably appoints and
authorizes the Company to (i) provide the Administrative Agent with all other
notices and instructions under this Agreement or any other Credit Document,
(ii) receive statements of account and all other notices from the Administrative
Agent with respect to the Obligations or otherwise under or in connection with
this Agreement and the other Credit Documents, and (iii) otherwise act on behalf
of such Credit Party pursuant to this Agreement and the other Credit Documents.
It is understood that the co-borrower structure, as more fully set forth herein,
is done solely as an accommodation to the Borrowers in order to utilize the
collective borrowing powers of the Borrowers in the most efficient and
economical manner and at their request, and that the Lenders shall not incur
liability to any Borrower as a result thereof. Each Borrower expects to derive
benefit, directly or indirectly, in a combined fashion from this Agreement since
the successful operation of each Borrower is dependent on the continued
successful performance of the consolidated group. Each Borrower hereby jointly
and severally agrees to indemnify each Lender and hold each Lender harmless
against any and all liability, expense, loss or claim of damage or injury, made
against any Lender by any Borrower or by any third party whosoever, arising from
or incurred by reason of the Lenders’ relying on any instructions of the
Company; except, that the Borrowers will have no liability to any Lender,
Administrative Agent or the Collateral Agent with respect to any liability that
has been finally determined by a court of competent jurisdiction to have
(A) resulted solely from (i) the bad faith, gross negligence or willful
misconduct of such Lender, the Administrative Agent or the Collateral Agent, as
the case may be, or (2) the breach of a material obligation hereunder or under
any other Credit Document by such Lender, the Administrative Agent or the
Collateral Agent, as the case may be, or (B) resulted from any disputes solely
among such Lender, the Administrative Agent or the Collateral Agent, as the case
may be that do not relate to any action or inaction on the part of the Borrowers
or their respective Affiliates and which does not involve any dispute with the
Administrative Agent or the Collateral Agent in its capacity as such.

 

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2.15 Incremental Revolving Loans.

(a) The Borrowers may at any time or from time to time after the Effective Date
(but not to exceed four times prior to the Initial Maturity Date), upon not less
than five Business Days’ notice to the Administrative Agent (whereupon the
Administrative Agent shall promptly deliver a copy to each of the Lenders),
request that an increase in the then existing Revolving Loan Commitments (the
“Incremental Revolving Loan Commitments”; with Revolving Loans made pursuant to
any Incremental Revolving Loan Commitments being, “Incremental Revolving Loans”)
be made available to the Borrowers (the “Incremental Facility”); provided, that
immediately before and after giving effect to the incurrence of such Incremental
Facility, (i) the representations and warranties contained in Section 8 and the
other Credit Documents are true and correct in all material respects); provided,
that to the extent that such representations and warranties specifically refer
to an earlier date, they shall be true and correct in all material respects as
of such earlier date; provided, further, that any representation and warranty
that is qualified as to “materiality,” “Material Adverse Effect” or similar
language shall be true and correct (after giving effect to any qualification
therein) in all respects on such respective dates, (ii) no Default or Event of
Default shall have occurred at the time of the incurrence of such Incremental
Facility and be continuing or result therefrom, (iii) the Fixed Charge Coverage
Ratio shall be not less than 1.00:1.00, (A) determined on a Pro Forma Basis as
of the last day of the Calculation Period most recently ended prior to the date
of the incurrence of such Incremental Facility, as if such Incremental Facility
(and any other Indebtedness incurred or to be incurred after the last day of
such Calculation Period and on or prior to the date of determination) had been
incurred (and, if incurred to finance a Specified Transaction, such Specified
Transaction had been consummated) on the first day of such Calculation Period
and (B) without netting the cash proceeds of any Incremental Facility in
calculating such ratio and (iv) on a Pro Forma Basis after giving effect to any
such Incremental Facility, Excess Availability shall be no less than $5,000,000.
Each Incremental Revolving Loan Commitment shall be in an aggregate principal
amount of at least $2,500,000. Notwithstanding anything to the contrary herein,
the aggregate principal amount of the Incremental Facility shall not exceed
$10,000,000 (the “Incremental Availability”). The Incremental Facility shall
rank pari passu in right of payment and of security with the existing
Facilities. Any Incremental Revolving Loan Commitments and Incremental Revolving
Loans shall (A) mature on the same date as the Final Maturity Date applicable to
the existing ABL Facility, (B) require no scheduled amortization or mandatory
commitment reduction prior to the final maturity thereof and (C) be subject to
the same terms and conditions as the ABL Facility and shall be treated
substantially the same as, and made under the same documentation as, the
existing ABL Facility. Any Incremental Facility may participate on a pro rata
basis or on a less than pro rata basis (but not on a greater than pro rata
basis) in any voluntary or mandatory prepayments hereunder, as specified in the
applicable Incremental Amendment.

(b) Each notice from the Borrowers pursuant to this Section 2.15 shall set forth
the requested amount and proposed terms of the relevant Incremental Revolving
Loan Commitments. Incremental Revolving Loan Commitments may be made by any
existing Lender or by any other bank or other financial institution reasonably
acceptable to (i) the Borrowers, (ii) if the consent of the Administrative Agent
would be required for an assignment to such additional bank or other financial
institution under this Agreement, the Administrative Agent and (iii) each
Issuing Lender (any such other bank or other financial institution being called
an “Additional Lender”). Commitments in respect of Incremental Revolving Loan
Commitments shall become Commitments under this Agreement pursuant to an
amendment (an “Incremental Amendment”) to this Agreement and, as appropriate,
the other Credit Documents, executed by the Borrowers, the Guarantors, each
Lender agreeing to provide such Incremental Revolving Loan Commitment, if any,
each Additional Lender, if any, and, to the extent such Incremental Amendment
will affect the rights, obligations and duties of the Administrative Agent, the
Administrative Agent. The Incremental Amendment may, without the consent of any
other Lenders, effect such amendments to this Agreement and the other Credit
Documents as may be necessary or appropriate, in the reasonable opinion of the
Administrative Agent and the Borrowers, to effect the provisions of this
Section 2.15. The effectiveness of, and the borrowing under, any Incremental
Amendment shall not be subject to the satisfaction on the date thereof (each, an
“Incremental Facility Closing Date”) of each of the conditions set forth in
Section 7, but only such other conditions as the parties thereto shall agree.
The Borrowers will use the proceeds of the Incremental Revolving Loan
Commitments for any purpose not prohibited by this Agreement. No Lender shall be
obligated to provide any Incremental Revolving Loan Commitments, unless it so
agrees.

 

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2.16 Extensions of Revolving Loan Commitments.

(a) Notwithstanding anything to the contrary in this Agreement, subject to the
terms of this Section 2.16, the Company may extend the maturity date, and
otherwise modify the terms of the Total Revolving Loan Commitment, or any
portion thereof (including by increasing the interest rate or fees payable in
respect of any Loans and/or Revolving Loan Commitments or any portion thereof
(and related outstandings) (the “Extension”) pursuant to a written offer (the
“Extension Offer”) made by the Company to all Lenders of a given tranche, in
each case on a pro rata basis (based on the aggregate outstanding principal
amount of the respective outstanding Revolving Loans and unfunded Revolving Loan
Commitments) and on the same terms to each such Lender. In connection with any
Extension, the Company will provide notification to the Administrative Agent
(for distribution to the Lenders) no later than 10 days prior to the maturity
date of the Revolving Loan Commitments to be extended of the requested new
Extended Final Maturity Date for the Extension and the due date for Lender
responses. In connection with any Extension, each Lender of the applicable
tranche wishing to participate in the Extension shall, prior to such due date,
provide the Administrative Agent with a written notice thereof in a form
reasonably satisfactory to the Administrative Agent. Any Lender that does not
respond to the Extension Offer by the applicable due date shall be deemed to
have rejected the Extension. After giving effect to the Extension, the Revolving
Loan Commitments so extended shall cease to be a part of the tranche of the
Revolving Loan Commitments they were a part of immediately prior to the
Extension and shall be a new tranche of Extended Revolving Loan Commitments
hereunder.

(b) The Extension shall be subject to the following:

(i) no Default or Event of Default shall have occurred and be continuing at the
time any offering document in respect of an Extension Offer is delivered to the
Lenders and at the time of such Extension;

(ii) except as to interest rates, commitment commissions, upfront fees, final
maturity (which shall be determined by the Company and set forth in the
Extension Offer), the Revolving Loan Commitment of any Lender extended pursuant
to the Extension (the “Extended Revolving Loan Commitment”), and the related
outstandings, shall be a Revolving Loan Commitment (or related outstandings, as
the case may be) and shall have the same terms as the original Revolving Loan
Commitments (and related outstandings); provided, that, subject to the
provisions of Sections 3.07 and 2.01(f) to the extent dealing with Swingline
Loans and Letters of Credit which mature or expire after the Initial Maturity
Date, all Swingline Loans and Letters of Credit shall be

 

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participated in on a pro rata basis by all Lenders with Revolving Loan
Commitments and/or Extended Revolving Loan Commitments in accordance with their
RL Percentages (and except as provided in Sections 3.07 and 2.01(f), without
giving effect to changes thereto on the Initial Maturity Date with respect to
Swingline Loans and Letters of Credit theretofore incurred or issued) and all
borrowings under Revolving Loan Commitments and Extended Revolving Loan
Commitments and repayments thereunder shall be made on a pro rata basis (except
for (A) payments of interest and fees at different rates on Extended Revolving
Loan Commitments (and related outstandings) and (B) repayments required upon any
Final Maturity Date of any tranche of Revolving Loan Commitments or Extended
Revolving Loan Commitments);

(iii) if the aggregate principal amount of Revolving Loan Commitments in respect
of which Lenders shall have accepted the Extension Offer shall exceed the
maximum aggregate principal amount of Revolving Loan Commitments offered to be
extended by the Borrowers pursuant to such Extension Offer, then the Revolving
Loan Commitments of such Lenders shall be extended ratably up to such maximum
amount based on the respective principal amounts (but not to exceed actual
holdings of record) with respect to which such Lenders have accepted the
Extension Offer;

(iv) all documentation in respect of the Extension shall be consistent with the
foregoing; and

(v) any applicable Minimum Extension Condition shall be satisfied.

(c) With respect to each Extension consummated by the Borrowers pursuant to this
Section 2.16, (i) such Extension shall not constitute voluntary or mandatory
payments or prepayments for purposes of Section 5.01, 5.02, 5.03, 13.02 or
13.06, (ii) such Extension Offer shall be required to contain a condition (a
“Minimum Extension Condition”) to consummating any such Extension that a minimum
amount (to be determined and specified in the relevant Extension Offer in the
Company’s discretion, but in no event less than $5,000,000 (unless another
amount is agreed to by the Administrative Agent)) be tendered, (iii) if the
amount extended is less than the Maximum Letter of Credit Amount, the Maximum
Letter of Credit Amount shall be reduced upon the date that is five Business
Days prior to the Initial Maturity Date (to the extent needed so that the
Maximum Letter of Credit Amount does not exceed the aggregate Revolving Loan
Commitments which would be in effect after the Initial Maturity Date), and, if
applicable, the Borrowers shall cash collateralize obligations under any issued
Letters of Credit in an amount equal to 105% of the portion of the Stated Amount
of such Letters of Credit in excess of the Maximum Letter of Credit Amount, as
reduced as provided above, and (iv) if the amount extended

 

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is less than the Maximum Swingline Amount, the Maximum Swingline Amount shall be
reduced upon the date that is five Business Days prior to the Initial Maturity
Date (to the extent needed so that the Maximum Swingline Amount does not exceed
the aggregate Revolving Loan Commitments which would be in effect after the
Initial Maturity Date), and, if applicable, the Borrowers shall prepay any
outstanding Swingline Loans. The Administrative Agent, Swingline Lender, Issuing
Lenders and the Lenders hereby consent to the Extension and the other
transactions contemplated by this Section 2.16 (including, for the avoidance of
doubt, payment of any interest or fees in respect of any Extended Revolving Loan
Commitments on such terms as may be set forth in the Extension Offer) and hereby
waive the requirements of any provision of this Agreement (including, without
limitation, Section 5.01, 5.02, 5.03, 13.02 or 13.06) or any other Credit
Document that may otherwise prohibit the Extension or any other transaction
contemplated by this Section 2.16.

(d) Each Extension shall be established pursuant to an amendment (each, an
“Extension Amendment”) to this Agreement among the Borrower, the Administrative
Agent and each Lender providing an Extended Revolving Loan Commitment thereunder
(each, an “Extending Lender”), which shall be consistent with the provisions set
forth in this Section 2.16 (but which shall not require the consent of any other
Lender). The effectiveness of any Extension Amendment shall be subject to the
satisfaction (or waiver in accordance with such Extension Amendment) on the date
thereof of each of the conditions set forth in Section 7 and, to the extent
reasonably requested by the Administrative Agent, receipt by the Administrative
Agent of (i) legal opinions and officers’ certificates consistent with those
delivered on the Effective Date under Section 6 and (ii) reaffirmation
agreements and/or such amendments to the Credit Documents (including, without
limitation, any Mortgage modifications and related date-down endorsements to the
Mortgage Policies) as may be reasonably requested by the Administrative Agent in
order to ensure that the Extended Revolving Loan Commitments are provided with
the benefit of the applicable Credit Documents. Each of the parties hereto
hereby agrees that this Agreement and the other Credit Documents may be amended
pursuant to an Extension Amendment, without the consent of any other Lenders, as
may be necessary or appropriate, in the reasonable opinion of the Administrative
Agent and the Company, to effect the provisions of this Section 2.16, and the
Required Lenders hereby expressly authorize the Administrative Agent to enter
into any such Extension Amendment. The Administrative Agent shall promptly
notify each Lender as to the effectiveness of each Extension Amendment. Without
limiting the foregoing, in connection with any Extensions the respective Credit
Parties shall (at their expense) amend (and the Collateral Agent is hereby
directed to amend) any Mortgage that has a maturity date prior to the then
latest Maturity Date so that such maturity date is extended to the then latest
Maturity Date (or such later date as may be advised by local counsel to the
Collateral Agent).

(e) In connection with the Extension, the Company shall provide the
Administrative Agent at least five Business Days’ (or such shorter period as may
be agreed by the Administrative Agent) prior written notice thereof, and shall
agree to such procedures (including, without limitation, rendering timing,
rounding and other adjustments and to ensure reasonable administrative
management of the credit facilities hereunder after such Extension), if any, as
may be established by, or acceptable to, the Administrative Agent, in each case
acting reasonably to accomplish the purposes of this Section 2.16.

 

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SECTION 3. Letters of Credit.

3.01 Letters of Credit. (a) Subject to and upon the terms and conditions set
forth herein, (i) Letters of Credit may be issued on the Effective Date in order
to backstop or replace existing letters of credit issued under facilities no
longer available to the Borrowers as of the Effective Date and (ii) the Company
(on behalf of the Borrowers) may request that an Issuing Lender issue, at any
time and from time to time after the Effective Date and prior to the 30th day
prior to the Final Maturity Date, for the joint and several account of the
Borrowers and for the benefit of (A) any holder (or any trustee, agent or other
similar representative for any such holders) of L/C Supportable Obligations, an
irrevocable standby letter of credit, in a form customarily used by such Issuing
Lender or in such other form as is reasonably acceptable to such Issuing Lender,
and (B) sellers of goods to the Borrowers or any of their Subsidiaries, an
irrevocable trade letter of credit, in a form customarily used by such Issuing
Lender or in such other form as has been approved by such Issuing Lender (each
such letter of credit, a “Letter of Credit” and, collectively, the “Letters of
Credit”) (provided, that without limiting the joint and several nature of the
Borrowers’ obligations in respect of the Letters of Credit, any particular
Letter of Credit may name only one or more Borrowers as the account party
therein). All Letters of Credit shall be issued on a sight basis only. The
Borrowers, the other Credit Parties and the Lender hereby acknowledge and agree
that all Existing Letters of Credit shall constitute Letters of Credit under
this Agreement on and after the Effective Date with the same effect as if such
Existing Letters of Credit were issued by Issuing Lender at the request of the
Borrowers on the Effective Date.

(b) Subject to and upon the terms and conditions set forth herein, each Issuing
Lender agrees that it will, at any time and from time to time on and after the
Effective Date and prior to the 30th day prior to the Final Maturity Date,
following its receipt of the respective Letter of Credit Request, issue for the
joint and several account of the Borrowers, one or more Letters of Credit;
provided, that no Issuing Lender shall be under any obligation to issue any
Letter of Credit if at the time of such issuance:

(i) any order, judgment or decree of any Governmental Authority shall purport by
its terms to enjoin or restrain such Issuing Lender from issuing such Letter of
Credit or any requirement of law applicable to such Issuing Lender or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over such Issuing Lender shall
prohibit, or request that such Issuing Lender refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Lender with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuing Lender is
not otherwise compensated hereunder) not in effect with respect to such Issuing
Lender on the date hereof, or any unreimbursed loss, cost or expense which was
not applicable or in effect with respect to such Issuing Lender as of the date
hereof and which such Issuing Lender reasonably and in good faith deems material
to it; or

(ii) such Issuing Lender shall have received from such Borrower, any other
Credit Party or the Required Lenders prior to the issuance of such Letter of
Credit notice of the type described in the second sentence of Section 3.03(b).

 

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3.02 Maximum Letter of Credit Outstandings; Final Maturities. Notwithstanding
anything to the contrary contained in this Agreement, (a) no Letter of Credit
shall be issued (or required to be issued) if the Stated Amount of such Letter
of Credit, when added to the Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid on the date of, and prior to the issuance of, the
respective Letter of Credit) at such time would exceed the Maximum Letter of
Credit Amount, (b) no Letter of Credit shall be issued (or required to be
issued) at any time when the Aggregate Exposure exceeds (or would after giving
effect to such issuance exceed) Availability at such time, (c) each Letter of
Credit shall be denominated in Dollars, (d) each standby Letter of Credit shall
by its terms terminate on or before the earlier of (i) the date which occurs 12
months after the date of the issuance thereof (although any such standby Letter
of Credit may be extendible for successive periods of up to 12 months) and
(ii) five Business Days prior to the Final Maturity Date unless, in the case of
this clause (ii), cash collateralized on terms reasonably satisfactory to the
Administrative Agent and the Issuing Lender and (e) each trade Letter of Credit
shall by its terms terminate on or before the earlier of (i) the date which
occurs 180 days after the date of issuance thereof and (ii) five Business Days
prior to the Final Maturity Date. Notwithstanding anything to the contrary
contained herein, if there are at any time multiple Final Maturity Dates then in
effect, Letters of Credit will not be issued which extend beyond any applicable
Final Maturity Date unless at the time of the issuance of each such Letter of
Credit, that portion of the Total Revolving Loan Commitment which matures after
the stated termination of all then outstanding Letters of Credit which mature
after each earlier Final Maturity Date equals or exceeds the aggregate stated
amounts thereof.

3.03 Letter of Credit Requests; Minimum Stated Amount. (a) Whenever the
Borrowers desire that a Letter of Credit be issued for their account, the
Company shall give the Administrative Agent and the respective Issuing Lender at
least three Business Days’ (or such shorter period as is acceptable to such
Issuing Lender) prior written notice thereof (including by way of facsimile).
Each notice shall be in the form of Exhibit C, appropriately completed (each, a
“Letter of Credit Request”).

(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by each Borrower to the Lenders that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of, Section 3.02. Unless the respective Issuing Lender has received notice from
any Borrower, any other Credit Party or the Required Lenders before it issues a
Letter of Credit that one or more of the conditions specified in Section 6 or 7
are not then satisfied, or that the issuance of such Letter of Credit would
violate Section 3.02, then such Issuing Lender shall, subject to the terms and
conditions of this Agreement, issue the requested Letter of Credit for the
account of the Borrowers in accordance with such Issuing Lender’s usual and
customary practices. Upon the issuance of or modification or amendment to any
standby Letter of Credit, each Issuing Lender shall promptly notify the
Borrowers and the Administrative Agent, in writing of such issuance,
modification or amendment and such notice shall be accompanied by a copy of such
Letter of Credit or the respective modification or amendment thereto, as the
case may be. Promptly after receipt of such notice the Administrative Agent
shall notify the Participants, in writing, of such issuance, modification or
amendment. On the first Business Day of each week, each Issuing Lender shall
furnish the Administrative Agent with a written (including via facsimile) report
of the daily aggregate outstandings of trade Letters of Credit issued by such
Issuing Lender for the immediately preceding week. Notwithstanding anything to
the contrary contained in this Agreement, in the event that a Lender Default
exists with respect to a Lender, no Issuing Lender shall be required to issue,
renew, extend or amend any Letter of Credit unless such Issuing Lender has
entered into arrangements reasonably satisfactory to it to eliminate such
Issuing Lender’s risk with respect to the participation in Letters of Credit by
the Defaulting Lender (which arrangements are hereby consented to by the
Lenders), including by cash collateralizing such Defaulting Lender’s or
Defaulting Lenders’ RL Percentage of the Letter of Credit Outstandings with
respect to such Letters of Credit (such arrangements, the “Letter of Credit
Back-Stop Arrangements”).

 

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(c) The initial Stated Amount of each Letter of Credit shall not be less than
$50,000 or such lesser amount as is acceptable to the respective Issuing Lender.

3.04 Letter of Credit Participations. (a) Immediately upon the issuance by an
Issuing Lender of any Letter of Credit, such Issuing Lender shall be deemed to
have sold and transferred to each Lender, and each such Lender (in its capacity
under this Section 3.04, a “Participant”) shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuing Lender, without
recourse or warranty, an undivided interest and participation, to the extent of
such Participant’s RL Percentage, in such Letter of Credit, each drawing or
payment made thereunder and the obligations of the Borrowers under this
Agreement with respect thereto, and any security therefor or guaranty pertaining
thereto. Upon any change in the Revolving Loan Commitments or RL Percentages of
the Lenders pursuant to Section 2.13 or 13.04(b), it is hereby agreed that, with
respect to all outstanding Letters of Credit and Unpaid Drawings relating
thereto, there shall be an automatic adjustment to the participations pursuant
to this Section 3.04 to reflect the new RL Percentages of the assignor and
assignee Lender, as the case may be.

(b) In determining whether to pay under any Letter of Credit, no Issuing Lender
shall have any obligation relative to the other Lenders other than to confirm
that any documents required to be delivered under such Letter of Credit appear
to have been delivered and that they appear to substantially comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by an Issuing Lender under or in connection with any Letter of
Credit issued by it shall not create for such Issuing Lender any resulting
liability to any Borrower, any other Credit Party, any Lender or any other
Person unless such action is taken or omitted to be taken with gross negligence
or willful misconduct on the part of such Issuing Lender (as determined by a
court of competent jurisdiction in a final and non-appealable decision).

(c) In the event that an Issuing Lender makes any payment under any Letter of
Credit issued by it and the Borrowers shall not have reimbursed such amount in
full to such Issuing Lender pursuant to Section 3.05(a), such Issuing Lender
shall promptly notify the Administrative Agent, which shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to such Issuing Lender the amount of such Participant’s RL
Percentage of such unreimbursed payment in Dollars and in same day funds. If the
Administrative Agent so notifies, prior to 2:00 P.M. (New York City time) on any
Business Day, any Participant required to fund a payment under a Letter of
Credit, such Participant shall make available to the respective Issuing Lender
in Dollars such Participant’s RL Percentage of the amount of such payment on
such Business Day in same day funds. If and to the extent such Participant shall
not have so made its RL Percentage of the amount of such payment available to
the respective Issuing Lender, such Participant agrees to pay to such Issuing
Lender, forthwith on demand such amount, together with interest thereon, for
each day from such date until the date such amount is paid to such Issuing
Lender at the overnight Federal Funds Effective Rate for the first three days
and at the interest rate applicable to Loans that are maintained as Base Rate
Loans for each day thereafter. The failure of any Participant to make available
to an Issuing Lender its RL Percentage of any payment under any Letter of Credit
issued by such Issuing Lender shall not relieve any other Participant of its
obligation hereunder to make available to such Issuing Lender its RL Percentage
of any payment under any Letter of Credit on the date required, as specified
above, but no Participant shall be responsible for the failure of any other
Participant to make available to such Issuing Lender such other Participant’s RL
Percentage of any such payment.

 

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(d) Whenever an Issuing Lender receives a payment of a reimbursement obligation
as to which it has received any payments from the Participants pursuant to
clause (c) above, such Issuing Lender shall pay to each such Participant which
has paid its RL Percentage thereof, in Dollars and in same day funds, an amount
equal to such Participant’s share (based upon the proportionate aggregate amount
originally funded by such Participant to the aggregate amount funded by all
Participants) of the principal amount of such reimbursement obligation and
interest thereon accruing after the purchase of the respective participations.

(e) Upon the request of any Participant, each Issuing Lender shall furnish to
such Participant copies of any standby Letter of Credit issued by it and such
other documentation as may reasonably be requested by such Participant.

(f) The obligations of the Participants to make payments to each Issuing Lender
with respect to Letters of Credit shall be irrevocable and not subject to any
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:

(g) any lack of validity or enforceability of this Agreement or any of the other
Credit Documents;

(h) the existence of any claim, setoff, defense or other right which Parent or
any of its Subsidiaries may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person for whom
any such transferee may be acting), the Administrative Agent, any Participant,
or any other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between Parent or any Subsidiary of Parent
and the beneficiary named in any such Letter of Credit);

(i) any draft, certificate or any other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;

(j) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents; or

(k) the occurrence of any Default or Event of Default.

3.05 Agreement to Repay Letter of Credit Drawings. (a) Each Borrower hereby
jointly and severally agrees to reimburse each Issuing Lender, by making payment
to the Administrative Agent in Dollars in immediately available funds at the
Payment Office, for any payment or disbursement made by such Issuing Lender
under any Letter of Credit issued by it (each such amount, so paid until
reimbursed by the Borrowers, an “Unpaid Drawing”), not later than one Business
Day following receipt by the Company of notice of such payment or disbursement
(provided, that no such notice shall be required to be given if a Default or an
Event of Default under Section 11.01(e) shall have occurred and be continuing,
in which case the Unpaid Drawing shall be due and payable immediately without
presentment, demand, protest or notice of any kind (all of which are hereby
waived by the Borrowers)), with interest on the amount so paid or disbursed by
such Issuing Lender, to the extent not reimbursed prior to 12:00 P.M. (noon)
(New York City time) on the date of such payment or disbursement from and
including the date paid or disbursed to but excluding the date such Issuing
Lender was reimbursed by the Borrowers therefor at a rate per annum equal to the
Base Rate as in effect from time to time plus the Applicable Margin as in effect
from time to time for Loans that are maintained as Base Rate Loans; provided,
however, to the extent such amounts are not reimbursed prior to 12:00 P.M.
(noon) (New York City time) on the third Business Day following the receipt by
the Company of notice of such payment or disbursement or following the
occurrence of a Default

 

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or an Event of Default under Section 11.01(e), interest shall thereafter accrue
on the amounts so paid or disbursed by such Issuing Lender (and until reimbursed
by the Borrowers) at a rate per annum equal to the Base Rate as in effect from
time to time plus the Applicable Margin for Loans that are maintained as Base
Rate Loans as in effect from time to time plus 2%, with such interest to be
payable on demand. Each Issuing Lender shall give the Company prompt written
notice of each Drawing under any Letter of Credit issued by it; provided, that
the failure to give any such notice shall in no way affect, impair or diminish
the Borrowers’ obligations hereunder.

(b) The joint and several obligations of the Borrowers under this Section 3.05
to reimburse each Issuing Lender with respect to drafts, demands and other
presentations for payment under Letters of Credit issued by it (each, a
“Drawing”) (including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which Parent or any Subsidiary of Parent may
have or have had against any Lender (including in its capacity as an Issuing
Lender or as a Participant), including, without limitation, any defense based
upon the failure of any drawing under a Letter of Credit to conform to the terms
of the Letter of Credit or any nonapplication or misapplication by the
beneficiary of the proceeds of such Drawing; provided, however, that no Borrower
shall be obligated to reimburse any Issuing Lender for any wrongful payment made
by such Issuing Lender under a Letter of Credit issued by it as a result of acts
or omissions constituting willful misconduct or gross negligence on the part of
such Issuing Lender (as determined by a court of competent jurisdiction in a
final and non-appealable decision).

3.06 Increased Costs. If at any time after the Effective Date, the introduction
of or any change in any applicable law, rule, regulation, order, guideline or
request or in the interpretation or administration thereof by the NAIC or any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Issuing Lender or any Participant with any request
or directive by the NAIC or by any such Governmental Authority (whether or not
having the force of law), shall either (a) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against letters of
credit issued by any Issuing Lender or participated in by any Participant, or
(b) impose on any Issuing Lender or any Participant any other conditions
relating, directly or indirectly, to this Agreement or any Letter of Credit; and
the result of any of the foregoing is to increase the cost to any Issuing Lender
or any Participant of issuing, maintaining or participating in any Letter of
Credit, or reduce the amount of any sum received or receivable by any Issuing
Lender or any Participant hereunder or reduce the rate of return on its capital
with respect to Letters of Credit (except for Indemnified Taxes and the
imposition of, or any change in the rate of, any Excluded Tax payable by such
Issuing Lender or Participant), then, upon the delivery of the certificate
referred to below to the Company by any Issuing Lender or any Participant (a
copy of which certificate shall be sent by such Issuing Lender or such
Participant to the Administrative Agent), the Borrowers jointly and severally
agree to pay to such Issuing Lender or such Participant such additional amount
or amounts as will compensate such Issuing Lender or such Participant for such
increased cost or reduction in the amount receivable or reduction on the rate of
return on its capital. Any Issuing Lender or any Participant, upon determining
that any additional amounts will be payable to it pursuant to this Section 3.06,
will give prompt written notice thereof to the Company, which notice shall
include a certificate submitted to the Company by such Issuing Lender or such
Participant (a copy of which certificate shall be sent by such Issuing Lender or
such Participant to the Administrative Agent), setting forth in reasonable
detail the basis for the calculation of such additional amount or amounts
necessary to compensate such Issuing Lender or such Participant. The certificate
required to be delivered pursuant to this Section 3.06 shall, absent manifest
error, be final and conclusive and binding on the Borrowers.

 

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3.07 Extended Revolving Loan Commitments. If the Initial Maturity Date shall
have occurred at a time when Extended Revolving Loan Commitments are in effect,
then such Letters of Credit shall automatically be deemed to have been issued
(including for purposes of the obligations of the Lenders to purchase
participations therein and to make payments in respect thereof pursuant to
Sections 3.04 and 3.05) under (and ratably participated in by Lenders under the
applicable tranche pursuant to) the Extended Revolving Loan Commitments up to an
aggregate amount not to exceed the aggregate principal amount of the unutilized
Extended Revolving Loan Commitments thereunder at such time (it being understood
that no partial face amount of any Letter of Credit may be so reallocated).
Except to the extent of reallocations of participations pursuant to the prior
sentence, the occurrence of the Initial Maturity Date shall have no effect upon
(and shall not diminish) the percentage participations of the Lenders under the
Revolving Loan Commitments in any Letter of Credit issued before the Initial
Maturity Date.

3.08 Subrogation Rights; Letter of Credit Guaranty.

(a) Upon any payments made by Administrative Agent to an Issuing Lender under a
Letter of Credit Guaranty, the Administrative Agent, for the benefit of the
Lenders, shall acquire by subrogation, any rights, remedies, duties or
obligations granted to or undertaken by the applicable Borrower to the Issuing
Lender in any application for Letters of Credit, any standing agreement relating
to Letters of Credit or otherwise, all of which shall be deemed to have been
granted to Administrative Agent, for the benefit of the Lenders, and apply in
all respects to the Administrative Agent and shall be in addition to any rights,
remedies, duties or obligations contained herein.

(b) Each Borrower hereby authorizes and directs any Issuing Lender which is not
a Lender hereunder to deliver to the Administrative Agent all instruments,
documents, and other writings and property received by such Issuing Lender
pursuant to such Letter of Credit and to accept and rely upon the Administrative
Agent’s instructions with respect to all matters arising in connection with such
Letter of Credit and the related application.

(c) Any and all charges, commissions, out-of-pocket fees, and costs incurred by
the Administrative Agent relating to Letters of Credit issued by an Issuing
Lender which is not a Lender hereunder in reliance on a Letter of Credit
Guaranty shall constitute Obligations for purposes of this Agreement and
immediately shall be reimbursable by Borrowers to the Administrative Agent.

SECTION 4. Commitment Commission; Fees; Reductions of Commitment.

4.01 Fees. (a) The Borrowers jointly and severally agree to pay to the
Administrative Agent for distribution to each Non-Defaulting Lender a commitment
commission (the “Commitment Commission”) for the period from and including the
Effective Date to and including the Final Maturity Date (or such earlier date on
which the Total Revolving Loan Commitment has been terminated) computed at a
rate per annum equal to the Applicable Commitment Commission Percentage of the
Unutilized Revolving Loan Commitment of such Non-Defaulting Lender as in effect
from time to time. Accrued Commitment Commission shall be due and payable
quarterly in arrears on each Quarterly Payment Date and on the date upon which
the Total Revolving Loan Commitment is terminated.

(b) The Borrowers jointly and severally agree to pay to the Administrative Agent
for distribution to each Lender (based on each such Lender’s respective RL
Percentage) a fee in respect of each Letter of Credit (the “Letter of Credit
Fee”) for the period from and including the date of issuance of such Letter of
Credit to and including the date of termination or expiration of such Letter of
Credit, computed at a rate per annum equal to the Applicable Margin as in effect
from time to time during such period with respect to Revolving Loans that are
maintained as LIBOR Loans on the daily Stated Amount of each such Letter of
Credit. Accrued Letter of Credit Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and on the first day on or after the
termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.

 

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(c) The Borrowers jointly and severally agree to pay to each Issuing Lender, for
its own account, a facing fee in respect of each Letter of Credit issued by it
(the “Facing Fee”) for the period from and including the date of issuance of
such Letter of Credit to and including the date of termination or expiration of
such Letter of Credit, computed at a rate per annum equal to 1/8 of 1% on the
daily Stated Amount of such Letter of Credit. Accrued Facing Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date and upon the
first day on or after the termination of the Total Revolving Loan Commitment,
upon which no Letters of Credit remain outstanding.

(d) The Borrowers jointly and severally agree to pay to each Issuing Lender, for
its own account, upon each payment under, issuance of, or amendment to, any
Letter of Credit issued by it, such amount as shall at the time of such event be
the administrative charge and the reasonable expenses which such Issuing Lender
is generally imposing in connection with such occurrence with respect to letters
of credit.

(e) The Borrowers jointly and severally agree to pay to the Administrative Agent
such fees as may have been, or are hereafter, agreed to in writing from time to
time by Parent or any of its Subsidiaries and the Administrative Agent
(including, without limitation, pursuant to the Fee Letter).

4.02 Voluntary Termination of Unutilized Commitments. (a) Upon at least three
Business Days’ prior written notice to the Administrative Agent at the Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Lenders), the Company shall have the right, at any time or from time to
time, without premium or penalty, to terminate the Total Unutilized Revolving
Loan Commitment in whole, or reduce it in part, pursuant to this
Section 4.02(a), in an amount not less than $1,000,000 and an integral multiple
of $500,000 in the case of partial reductions to the Total Unutilized Revolving
Loan Commitment; provided, that (i) each such reduction shall apply
proportionately to permanently reduce the Revolving Loan Commitment of each
Lender and (ii) after giving effect to such termination (A) the aggregate amount
of the Letter of Credit Outstandings shall not exceed the Maximum Letter of
Credit Amount and (B) the aggregate principal amount of Swingline Loans then
outstanding shall not exceed the Maximum Swingline Amount. Notwithstanding
anything to the contrary contained in this Agreement, the Company may, subject
to Section 2.11, rescind any notice of termination pursuant to this
Section 4.02(a) if such termination would have resulted from a refinancing which
is not consummated or is otherwise delayed.

(b) In the event of refusal by a Lender to consent to proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Lenders as (and to the extent) provided in
Section 13.12(b), the Borrowers shall have the right, subject to obtaining the
consents required by Section 13.12(b), upon five Business Days’ prior written
notice by the Company to the Administrative Agent at the Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Lenders),
to terminate the entire Revolving Loan Commitment of such Lender, so long as
(i) all Loans, together with accrued and unpaid interest, Fees and all other
amounts then owing to such Lender (including all amounts, if any, owing pursuant
to Section 2.11) are repaid concurrently with the effectiveness of such
termination (at which time Schedule 1.01(a) shall be deemed modified to reflect
such Revolving Loan Commitments) and (ii) such Lender’s RL Percentage of all
outstanding Letters of Credit is cash collateralized in a manner reasonably
satisfactory to the Administrative Agent and the respective Issuing Lenders, and
at such time such Lender shall no longer constitute a “Lender” for purposes of
this Agreement, except with respect to indemnifications under this Agreement
(including, without limitation, Sections 2.10, 2.11, 3.06, 5.04, 12.06, 13.01
and 13.06), which shall survive as to such repaid Lender.

 

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4.03 Mandatory Termination of Commitments. The Total Revolving Loan Commitment
(and the Revolving Loan Commitment of each Lender) shall terminate in its
entirety upon the Final Maturity Date.

SECTION 5. Prepayments; Payments; Taxes.

5.01 Voluntary Prepayments. (a) The Borrowers shall have the right to prepay the
Loans, without premium or penalty (other than reimbursement of Lenders’ costs in
accordance with Section 2.11), in whole or in part at any time and from time to
time on the following terms and conditions: (i) the Company shall give the
Administrative Agent prior to 12:00 P.M. (noon) (New York City time) at the
Notice Office (A) at least one Business Day’s prior written notice (or
telephonic notice promptly confirmed in writing) of the Borrowers’ intent to
prepay Base Rate Loans (or same day notice in the case of a prepayment of
Swingline Loans) and (B) at least three Business Days’ prior written notice (or
telephonic notice promptly confirmed in writing) of the Borrowers’ intent to
prepay LIBOR Loans, which notice (in each case) shall specify whether Revolving
Loans or Swingline Loans shall be prepaid, the amount of such prepayment, the
date of prepayment (which shall be a Business Day) and the Types of Loans to be
prepaid and, in the case of LIBOR Loans, the specific Borrowing or Borrowings
pursuant to which such LIBOR Loans were made, and which notice the
Administrative Agent shall, except in the case of a prepayment of Swingline
Loans, promptly transmit to each of the Lenders; (ii) (A) each partial
prepayment of Revolving Loans pursuant to this Section 5.01(a) shall be in an
aggregate principal amount of at least $250,000 (or such lesser amount as is
acceptable to the Administrative Agent) and (B) each partial prepayment of
Swingline Loans pursuant to this Section 5.01(a) shall be in an aggregate
principal amount of at least $100,000 (or such lesser amount as is acceptable to
the Administrative Agent in any given case); provided, that if any partial
prepayment of LIBOR Loans made pursuant to any Borrowing shall reduce the
outstanding principal amount of LIBOR Loans made pursuant to such Borrowing to
an amount less than the Minimum Borrowing Amount applicable thereto, then such
Borrowing may not be continued as a Borrowing of LIBOR Loans (and same shall
automatically be converted into a Borrowing of Base Rate Loans) and any election
of an Interest Period with respect thereto given by the Company shall have no
force or effect; and (iii) each prepayment pursuant to this Section 5.01(a) in
respect of any Revolving Loans made pursuant to a Borrowing shall be applied pro
rata among such Revolving Loans; provided, that at the Company’s election in
connection with any prepayment of Revolving Loans pursuant to this
Section 5.01(a), such prepayment shall not, so long as no Default or Event of
Default then exists, be applied to any Revolving Loan of a Defaulting Lender.

(b) In the event of refusal by a Lender to consent to proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Lenders as (and to the extent) provided in
Section 13.12(b), the Borrowers shall have the right, upon five Business Days’
prior written notice by the Company to the Administrative Agent at the Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Lenders), to repay all Revolving Loans of such Lender, together with accrued
and unpaid interest, Fees and all other amounts then owing to such Lender
(including all amounts, if any, owing pursuant to Section 2.11) in accordance
with, and subject to the requirements of Section 13.12(b), so long as in the
case of the repayment of Revolving Loans of any Lender pursuant to this clause
(b), (A) the Revolving Loan Commitment of such Lender is terminated concurrently
with such repayment pursuant to Section 4.02(b) (at which time Schedule 1.01(a)
shall be deemed modified to reflect the changed Revolving Loan Commitments) and
(B) such Lender’s RL Percentage of all outstanding Letters of Credit is cash
collateralized in a manner reasonably satisfactory to the Administrative Agent
and the respective Issuing Lenders.

 

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(c) Notwithstanding anything to the contrary contained in this Agreement, the
Company may, subject to Section 2.11, rescind any notice of prepayment pursuant
to this Section 5.01 if such prepayment would have resulted from a refinancing
which is not consummated or is otherwise delayed.

5.02 Mandatory Repayments; Cash Collateralization. (a) (i) On any day on which
the Aggregate Exposure exceeds Availability (plus, during an Agent Advance
Period, the principal amount of any then outstanding Agent Advances which have
not remained outstanding beyond the period described in Section 2.01(e) and do
not exceed 10% of the Borrowing Base as then in effect) at such time, then in
each case, the Borrowers shall, and shall be jointly and severally obligated to,
repay on such day the principal of Swingline Loans and, after all Swingline
Loans have been repaid in full or if no Swingline Loans are outstanding,
Revolving Loans in an amount equal to such excess. If, after giving effect to
the repayment of all outstanding Swingline Loans and Revolving Loans, the
aggregate amount of the Letter of Credit Outstandings exceeds Availability at
such time, then in each case, the Borrowers shall, and shall be jointly and
severally obligated to, pay to the Administrative Agent at the Payment Office on
such day an amount of cash and/or Cash Equivalents equal to the amount of such
excess (up to a maximum amount equal to the Letter of Credit Outstandings at
such time), such cash and/or Cash Equivalents to be held as security for all
Obligations of the Borrowers to each applicable Issuing Lender and the Lenders
hereunder in a cash collateral account to be established by, and under the sole
dominion and control of, the Administrative Agent; provided, that, subject to
compliance with the requirements set forth in Section 5.03, all such cash and/or
Cash Equivalents paid to the Administrative Agent by the Borrowers as security
in such cash collateral account shall be made available to the Borrowers
promptly following the Company’s written request (in reasonable detail as to any
requested funds transfer) delivered to the Administrative Agent, when (and then
to the extent) the Aggregate Exposure no longer exceeds Availability.

(ii) On any day on which the aggregate amount of the Letter of Credit
Outstandings exceeds the Maximum Letter of Credit Amount, the Borrowers shall,
and shall be jointly and severally obligated to, pay to the Administrative Agent
at the Payment Office on such day an amount of cash and/or Cash Equivalents
equal to the amount of such excess, such cash and/or Cash Equivalents to be held
as security for all Obligations of the Borrowers to each applicable Issuing
Lender and the Lenders hereunder in a cash collateral account to be established
by, and under the sole dominion and control of, the Administrative Agent;
provided, that, subject to the compliance with the requirements set forth in
Section 5.03, all such cash and/or Cash Equivalents paid to the Administrative
Agent by the Borrowers as security in such cash collateral account shall be made
available to the Borrowers promptly following the Company’s written request (in
reasonable detail as to any requested funds transfer) delivered to the
Administrative Agent, when (and then to the extent) the Letter of Credit
Outstandings no longer exceed the Maximum Letter of Credit Amount.

 

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(iii) On any day on which the aggregate principal amount of Swingline Loans then
outstanding exceeds the Maximum Swingline Amount, the Borrowers shall, and shall
be jointly and severally obligated to, repay on such day the principal of
Swingline Loans in an amount equal to such excess.

(iv) If the Borrowers have Available Cash (after giving pro forma effect to any
anticipated use of proceeds of such Available Cash within the next five
(5) Business Days) as of the close of business on (x) the last Business Day of
the first full fiscal week of Parent ending after the Fourth Amendment Effective
Date, and (y) the last Business Day of each fiscal week of Parent ending
thereafter (the “Determination Date”), the Borrowers shall, and shall be jointly
and severally obligated to, repay the outstanding Revolving Loans under this
Agreement no later than the fifth (5th) Business Day following the applicable
Determination Date in an amount equal to the lesser of (i) the amount of such
Available Cash and (ii) the aggregate principal amount of Revolving Loans then
outstanding.

(b) With respect to each repayment of Loans required by this Section 5.02, the
Company (on behalf of the Borrowers) may designate the Types of Loans which are
to be repaid and, in the case of LIBOR Loans, the specific Borrowing or
Borrowings pursuant to which such LIBOR Loans were made; provided, that:
(i) repayments of LIBOR Loans pursuant to this Section 5.02 made on a day other
than the last day of an Interest Period applicable thereto shall be subject to
Section 2.11; (ii) if any repayment of LIBOR Loans made pursuant to a single
Borrowing shall reduce the outstanding LIBOR Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, such Borrowing shall be automatically converted into a Borrowing of
Base Rate Loans; and (iii) each repayment of any Revolving Loans made pursuant
to a Borrowing shall be applied pro rata among the Lenders holding such
Revolving Loans. In the absence of a designation by the Company as described in
the preceding sentence, the Administrative Agent shall, subject to the above,
apply such repayment first, to the then outstanding Borrowings of Base Rate
Loans and second, at such time as there remain no outstanding Borrowings of Base
Rate Loans, to LIBOR Loans in direct order of the maturities of the Interest
Periods applicable thereto (or pro rata to such Borrowings with Interest Periods
expiring on the same date). For the avoidance of doubt, it is understood that
all mandatory repayments made pursuant to Section 5.02(a) will be made without a
corresponding reduction to the Total Revolving Loan Commitment.

(c) In addition to any other mandatory repayments pursuant to this Section 5.02,
(i) all then outstanding Swingline Loans shall be repaid in full on the earlier
of (A) the fifth Business Day following the date the incurrence of such
Swingline Loans and (B) Swingline Expiry Date and (ii) all then outstanding
Revolving Loans shall be repaid in full on the Final Maturity Date.

(d) If any Lender becomes a Defaulting Lender at any time that any Letter of
Credit issued by any Issuing Lender is outstanding, the Borrowers shall, and
shall be jointly and severally obligated to, enter into the applicable Letter of
Credit Back-Stop Arrangements with such Issuing Lender no later than five
Business Days after the date such Lender has become a Defaulting Lender.

 

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5.03 Method and Place of Payment. (a) Except as otherwise specifically provided
herein, all payments under this Agreement and under any Note shall be made to
the Administrative Agent for the account of the Lender or Lenders entitled
thereto not later than 12:00 P.M. (noon) (New York City time) on the date when
due and shall be made in Dollars in immediately available funds at the Payment
Office. Any amounts received after such time on any date may, in the discretion
of the Administrative Agent, be deemed to have been received on the next
succeeding Business Day for purposes of calculating interest thereon. Whenever
any payment to be made hereunder or under any Note shall be stated to be due on
a day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall be payable at the applicable rate during such extension.

(b) The Borrowers and each other Credit Party shall, along with the Collateral
Agent and certain financial institutions selected by the Company and reasonably
approved by the Administrative Agent (the “Collection Banks”), enter into and
thereafter maintain separate Control Agreements with respect to all Deposit
Accounts (other than Excluded Deposit Accounts) of such Credit Parties (A) in
the case of Deposit Accounts in existence on the Effective Date, on or prior to
the 90th day following the Effective Date (as such date may be extended from
time to time by the Administrative Agent in its sole discretion), (B)
[reserved], (C) in the case of any new Deposit Account, concurrently with the
establishment thereof and (D) in the case of any existing Excluded Deposit
Account into which the depositing of funds would result in such account ceasing
to be an Excluded Deposit Account, prior to depositing any such funds. The
Borrowers shall also deliver to the Administrative Agent notifications in form
reasonably satisfactory to the Administrative Agent executed on behalf of such
Borrower and addressed to such Borrower’s credit card clearinghouses and
processors (each a “Credit Card Notification”) (A) in the case of the Borrower’s
credit card clearinghouses and processors as the Effective Date, on or prior to
the 30th day thereafter (as such date may be extended from time to time by the
Administrative Agent in its sole discretion), (B) [reserved] and (C) in the case
of all other credit card clearinghouse and processor arrangements, concurrently
with the establishment thereof. Each Credit Party shall instruct all Account
Debtors of the Credit Parties to remit all payments to the applicable “P.O.
Boxes” or “Lockbox Addresses” of the applicable Collection Bank (or to remit
such payments to the applicable Collection Bank by electronic settlement) with
respect to all Accounts of such Account Debtor which remittances shall be
collected by the applicable Collection Bank and deposited in the applicable
Collection Account. All amounts received by any Credit Party and any Collection
Bank, in respect of any Account, in addition to all other cash received from any
other source, shall upon receipt be deposited into a Collection Account or
directly into a Concentration Account or, subject to the limitations in the
definition of “Excluded Deposit Account”, an Excluded Deposit Account.

(c) All amounts held in all of the Collection Accounts and Disbursement Accounts
(but not Excluded Deposit Accounts) with respect to each Credit Party shall be
wired by the close of business on each Business Day into one or more
concentration accounts with the Collateral Agent and/or one or more other
institutions reasonably acceptable to the Administrative Agent (each, a
“Concentration Account”) unless such amounts are otherwise required or permitted
to be applied pursuant to Section 5.02. All of the Collection Accounts and
Disbursement Accounts (other than Excluded Deposit Accounts) shall be “zero”
balance accounts. So long as no Dominion Period then exists, the Borrowers shall
be permitted to transfer cash from the Concentration Accounts to the
Disbursement Accounts to be used for working capital and general corporate
purposes, all subject to the requirements of this Section 5.03(c) and pursuant
to procedures and arrangements to be reasonably determined by the Administrative
Agent. If a Dominion Period exists, all collected amounts held in the
Concentration Accounts shall be applied as provided in Section 5.03(d).

 

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(d) Each Control Agreement relating to a Concentration Account shall (unless
otherwise agreed by the Administrative Agent in its sole discretion) include
provisions that allow, during any Dominion Period, for all collected amounts
held in such Concentration Account from and after the date requested by the
Administrative Agent, to be sent by ACH or wire transfer or similar electronic
transfer no less frequently than once per Business Day to one or more accounts
maintained with the Administrative Agent (each, a, “Administrative Agent’s
Account”). Subject to the terms of the Intercreditor Agreement, all amounts
received in an Administrative Agent’s Account shall be applied (and allocated)
by the Administrative Agent (i) if the circumstances described in Section 11.03
are applicable, in accordance with such Section 11.03 and (ii) otherwise, on a
daily basis in the following order (in each case, to the extent the
Administrative Agent has actual knowledge of the amounts owing or outstanding as
described below): (A) first, to the payment (on a ratable basis) of any
outstanding expenses actually due and payable to the Administrative Agent and
the Collateral Agent under any of the Credit Documents and to repay or prepay
outstanding Loans advanced by the Administrative Agent on behalf of the Lenders
pursuant to Sections 2.01(e) and 2.04(b); (B) second, to the extent all amounts
referred to in preceding clause (A) have been paid in full, to pay (on a ratable
basis) all outstanding expenses actually due and payable to each Issuing Lender
under any of the Credit Documents and to repay all outstanding Unpaid Drawings
and all interest thereon; (C) third, to the extent all amounts referred to in
preceding clauses (A) and (B) have been paid in full, to pay (on a ratable
basis) all accrued and unpaid interest actually due and payable on the Loans and
all accrued and unpaid Fees actually due and payable to the Administrative
Agent, the Issuing Lenders and the Lenders under any of the Credit Documents;
(D) fourth, to the extent all amounts referred to in preceding clauses
(A) through (C), inclusive, have been paid in full, to repay (on a ratable
basis) the outstanding principal of Loans which are then due and payable;
(E) fifth, to the extent all amounts referred to in preceding clauses
(A) through (D), inclusive, have been paid in full, to pay (on a ratable basis)
all other outstanding Obligations then due and payable to the Administrative
Agent, the Collateral Agent and the Lenders under any of the Credit Documents;
(F) sixth, to the extent all amounts referred to in preceding clauses
(A) through (E), inclusive, have been paid in full to repay (on a ratable basis)
the outstanding principal of Loans which are not then due and payable;
(G) seventh, to the extent all amounts referred to in preceding clauses
(A) through (F), inclusive, have been paid in full, to pay an amount to the
Administrative Agent equal to 105% of the Stated Amount of outstanding Letters
of Credit on such date, to be held in a cash collateral account to be
established by, and under the sole dominion and control of, the Administrative
Agent; and (H) eighth, to the extent all amounts referred to in preceding
clauses (A) through (G), inclusive, have been paid in full and so long as no
Default under Section 11.01(a), (b) or (e) or any Event of Default then exists,
to be returned to the Borrowers (as directed by the Company) for the Borrowers’
own account.

5.04 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Credit Party under any Credit Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If
any applicable law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable Credit Party shall be increased as necessary so that after
such deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 5.04) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

 

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(b) Payment of Other Taxes. The Credit Parties shall timely pay to the relevant
Governmental Authority in accordance with applicable law any Other Taxes, or at
the option of the Administrative Agent timely reimburse it for the payment of
any Other Tax.

(c) Indemnification by the Borrowers. The Credit Parties shall, without
duplication of Section 5.04(a) or (b) above, jointly and severally indemnify
each Recipient, within 10 days after demand therefor, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section 5.04) payable or paid by such
Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrowers by a Lender (with a copy
to the Administrative Agent), or by the Administrative Agent on its own behalf
or on behalf of a Lender, shall be conclusive absent manifest error.

(d) Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within 10 days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that any
Credit Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Credit Parties to
do so), (ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 13.04 relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any
Credit Document, and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to any Lender by the Administrative Agent shall
be conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Credit Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this clause (d).

(e) Evidence of Payments. As soon as reasonably practicable after any payment of
Taxes by any Credit Party to a Governmental Authority pursuant to this
Section 5.04, such Credit Party shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.

(f) Status of Lenders. (i) Any Lender that is entitled to an exemption from or
reduction of withholding Tax with respect to payments made under any Credit
Document shall deliver to the Borrowers and the Administrative Agent, at the
time or times reasonably requested by the Borrowers or the Administrative Agent,
such properly completed and executed documentation reasonably requested by the
Borrowers or the Administrative Agent as will permit such payments to be made
without withholding or at a reduced rate of withholding. In addition, any
Lender, if reasonably requested by the Borrowers or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrowers or the Administrative Agent as will enable
the Borrowers or the Administrative Agent to determine whether or not such
Lender is subject to backup withholding or information reporting

 

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requirements. Notwithstanding anything to the contrary in the preceding two
sentences, the completion, execution and submission of such documentation (other
than such documentation set forth in clauses (ii)(A), (ii)(B) and (ii)(D) below)
shall not be required if (A) a change in treaty, law or regulation has occurred
prior to the date on which such delivery would otherwise be required that
renders any such form or certificate inapplicable or would prevent the Lender
from duly completing and delivering any such form or certificate with respect to
it and such Lender so advises the Borrowers and (B) in the Lender’s reasonable
judgment such completion, execution or submission would subject such Lender to
any material unreimbursed cost or expense or would materially prejudice the
legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing,

(A) any Lender that is a U.S. Person shall, to the extent it is legally entitled
to do so, deliver to the Borrowers and the Administrative Agent (in such number
of copies as shall be reasonably requested by the recipient) on or prior to the
date on which such Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the reasonable request of the Borrowers or the
Administrative Agent) duly completed and executed originals of IRS Form W-9
certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrowers and the Administrative Agent (in such number of copies
as shall be reasonably requested by the recipient) on or prior to the date on
which such Foreign Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the reasonable request of the Borrowers or the
Administrative Agent), whichever of the following is applicable:

 

  (1)

in the case of a Foreign Lender claiming the benefits of an income tax treaty to
which the United States is a party (x) with respect to payments of interest
under any Credit Document, duly completed and executed originals of IRS Form
W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “interest” article of such tax treaty and
(y) with respect to any other applicable payments under any Credit Document,
duly completed and executed originals of IRS Form W-8BEN or W-8BEN-E
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

 

  (2)

duly completed and executed originals of IRS Form W-8ECI with respect to such
Foreign Lender;

 

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  (3)

in the case of any Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit D-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a
“10 percent shareholder” of the Borrowers within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) duly completed and executed originals of IRS Form W-8BEN
or W-8BEN-E; or

 

  (4)

to the extent a Foreign Lender is not the beneficial owner, duly completed and
executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form
W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form
of Exhibit D-2 or Exhibit D-3, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided, that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender shall provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit D-4 on behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrowers and the Administrative Agent (in such number of copies
as shall be reasonably requested by the recipient) on or prior to the date on
which such Foreign Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the reasonable request of the Borrowers or the
Administrative Agent), executed originals of any other form prescribed by
applicable law as a basis for claiming exemption from or a reduction in U.S.
federal withholding Tax, duly completed, together with such supplementary
documentation as may be prescribed by applicable law to permit the Borrowers or
the Administrative Agent to determine the withholding or deduction required to
be made; and

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

 

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(E) each Agent that is entitled to an exemption from or reduction of withholding
tax with respect to any payment under this Agreement made by any Borrower to
such Agent under the law of the jurisdiction in which such Borrower is located
shall deliver to the Borrowers or the Administrative Agent, as applicable, (in
such number of copies as shall be reasonably requested by the recipient) on or
prior to the date on which such Agent becomes an Agent under this Agreement (and
from time to time thereafter upon the request of the Borrowers or the
Administrative Agent, as applicable), any such properly completed and executed
documentation prescribed by applicable law and such additional documentation
reasonably requested by the Borrowers or the Administrative Agent as may permit
such payments to be made without withholding or at a reduced rate of withholding
tax. Without limiting the generality of the foregoing, each Agent that is a U.S.
Person shall deliver to the Borrowers and the Administrative Agent (or, in the
case of an Administrative Agent, the Borrowers) (in such number of copies as
shall be reasonably requested by the recipient) on or prior to the date on which
such Agent becomes an Agent under this Agreement (and from time to time
thereafter upon the request of the Borrowers or the Administrative Agent, as
applicable) duly completed and executed originals of IRS Form W-9 (or successor
form) certifying that such Agent is exempt from United States federal backup
withholding tax and such other documentation as will enable the Borrowers and
the Administrative Agent, as applicable, to determine whether or not such Agent
is subject to United States federal backup withholding tax or information
reporting requirements.

Each Lender and Agent agrees that if any form or certification it previously
delivered expires or becomes obsolete or inaccurate in any respect, it shall
promptly (1) update such form or certification or (2) notify the Borrowers and
the Administrative Agent in writing of its legal inability to do so. Each Lender
shall promptly (x) notify the Borrowers and the Administrative Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction, and (y) take such steps as shall not be disadvantageous
to it, in the sole reasonable judgment of such Lender, and as may be reasonably
necessary to avoid any requirement of applicable laws of any jurisdiction that
the Borrowers or the Administrative Agent make any withholding or deduction for
Taxes from amounts payable to such Lender.

 

 

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(g) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 5.04 (including by
the payment of additional amounts pursuant to this Section 5.04) it shall pay to
the indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, under this Section 5.04
with respect to the Taxes giving rise to such refund), net of all out-of-pocket
expenses (including Taxes) incurred by such indemnified party and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund). Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid over
pursuant to this clause (g) (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event that such
indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this clause (g), in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this clause (g) the payment of which would place
the indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the Tax subject to indemnification and
giving rise to such refund had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts with respect to such Tax
had never been paid. This clause (g) shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

(h) Survival. Each party’s obligations under this Section 5.04 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Revolving
Loan Commitments and the repayment, satisfaction or discharge of all obligations
under any Credit Document.

SECTION 6. Conditions Precedent to Credit Events on the Effective Date. The
occurrence of the Effective Date and the obligation of each Lender to make
Loans, and the obligation of each Issuing Lender to issue Letters of Credit, on
the Effective Date, are subject at the time of the making of such Loans or the
issuance of such Letters of Credit to the satisfaction or waiver (in accordance
with Section 13.12) of the following conditions:

6.01 Effective Date; Notes. On or prior to the Effective Date, (a) this
Agreement shall have been executed and delivered as provided in Section 13.10
and (b) there shall have been delivered to the Administrative Agent for the
account of each of the Lenders that has requested same in writing, the
appropriate Revolving Notes executed by the Borrowers and if requested by the
Swingline Lender, the appropriate Swingline Notes executed by the Borrowers, in
each case, in the amount, maturity and as otherwise provided herein.

6.02 Officer’s Certificate. On the Effective Date, the Administrative Agent
shall have received a certificate, dated the Effective Date and signed on behalf
of the Borrowers by an Authorized Officer of the Company, certifying on behalf
of the Borrowers, that all of the conditions in Sections 6.07, 6.12, 6.15, 6.16,
7.01 and 7.03 have been (or will be concurrently with the funding of the
Existing Term Loans and any Loans on the Effective Date) satisfied on such date.

6.03 Opinion of Counsel. On the Effective Date, the Administrative Agent shall
have received from Paul, Weiss, Rifkind, Wharton & Garrison LLP, special counsel
to the Credit Parties, an opinion addressed to the Administrative Agent, the
Collateral Agent and the Lenders and dated the Effective Date in form reasonably
acceptable to the Administrative Agent.

6.04 Company Documents; Proceedings; etc. (a) On the Effective Date, the
Administrative Agent shall have received a certificate from each Credit Party,
dated the Effective Date, signed by an Authorized Officer of such Credit Party,
and attested to by the secretary or any assistant secretary of such Credit
Party, in the form of Exhibit E with appropriate insertions, together with
certified copies of the certificate or articles of incorporation and by-laws (or
other equivalent organizational documents), as applicable, of such Credit Party
and the resolutions of such Credit Party referred to in such certificate, and
each of the foregoing shall be in form and substance reasonably acceptable to
the Administrative Agent.

 

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(b) On or prior to the Effective Date, the Administrative Agent shall have
received all records of Company proceedings, good standing certificates and
bring down letters, if any, which the Administrative Agent reasonably may have
requested, such documents and papers where appropriate to be certified by proper
Company or Governmental Authorities.

6.05 Reserved.

6.06 Financial Statements; Pro Forma Balance Sheet; Projections. The Joint Lead
Arrangers shall have received the Annual Financial Statements, the Quarterly
Financial Statements and the Pro Forma Financial Statements.

6.07 Consummation of the Equity Contribution and Acquisition. On the Effective
Date and substantially concurrently with the incurrence of the Existing Term
Loans and any Loans, (a) the Equity Contribution shall have been consummated,
and (b) the Acquisition shall have been consummated in accordance with the terms
of the Purchase Agreement; there shall have been no modifications or waivers of,
or consents under the Purchase Agreement which are materially adverse to the
interests of the Lenders without the consent of the Joint Lead Arrangers (such
consent not to be unreasonably withheld, conditioned or delayed); it is hereby
understood and agreed that (i) any modification, amendment, or waiver to the
definition of Material Adverse Effect (as defined in the Purchase Agreement as
in effect on the Effective Date) and (ii) any reduction in the Acquisition
Consideration shall, in each case, be deemed to be materially adverse to the
interests of the Lenders, unless, in the case of clause (ii), such reduction of
the purchase price (A) does not exceed 20% of the original consideration and
(B) is applied as follows: (1) 25% to reduce the Equity Contribution and (2) 75%
to reduce the amount of the Existing Term Loan to be funded under the Existing
Term Loan Credit Agreement on the Effective Date.

6.08 Reserved.

6.09 Fees, etc. On the Effective Date, the Company shall have paid to the
Administrative Agent (and its relevant affiliates), the Collateral Agent and the
Joint Lead Arrangers all costs, fees and expenses (including, without
limitation, reasonable and documented legal fees and expenses) and other
compensation contemplated hereby payable to the Administrative Agent (and/or its
relevant affiliates), the Collateral Agent or any Joint Lead Arranger to the
extent presented for payment at least three Business Days prior to the Effective
Date and for which reasonably detailed invoices have been provided.

6.10 Intercreditor Agreement. On the Effective Date, each Credit Party, the
Collateral Agent (for and on behalf of the Secured Creditors) and the Existing
Term Loan Agent (for and on behalf of the Existing Term Loan Secured Creditors)
shall have duly authorized, executed and delivered the Intercreditor Agreement
(as amended, restated, amended and restated, modified and/or supplemented prior
to the Fourth Amendment Effective Date, the “Initial Intercreditor Agreement”).

6.11 Security Agreements. On the Effective Date, each Credit Party shall have
duly authorized, executed and delivered (a) the Security Agreement in the form
of Exhibit F (as amended, restated, amended and restated, modified and/or
supplemented from time to time, the “Security Agreement”) covering all of such
Credit Party’s Security Agreement Collateral, (b) to the extent applicable, the
Copyright Security Agreement for filing with the United States Copyright Office,
(c) to the extent applicable, the Patent Security Agreement for filing with the
United States Patent and Trademark Office and (d) to the extent applicable, the
Trademark Security Agreement for filing with the United States Patent and
Trademark Office, together with:

 

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(i) proper financing statements (Form UCC-1 or the equivalent) for filing under
the UCC or other appropriate filing offices of each jurisdiction as may be
necessary or, in the reasonable opinion of the Collateral Agent, desirable, to
perfect the security interests purported to be created by the foregoing Security
Documents;

(ii) (A) any certificates representing Pledged Interests (as defined in the
Security Agreement), together with executed and undated endorsements of transfer
and (B) any promissory notes endorsed in blank; provided, that 100% of the total
outstanding non-voting stock and not more than 65% of the total outstanding
voting stock in or of any Excluded Subsidiary of the type referred to in clauses
(c) and (d) of the definition thereof shall be pledged or similarly hypothecated
to guarantee or support any Loan;

(iii) reports as of a recent date listing all effective financing statements
that name Parent or any of its domestic Subsidiaries as debtor and that are
filed in the jurisdictions referred to in clause (i) above, none of which shall
evidence any Lien other than (A) Permitted Liens or (B) Liens in respect of
which the Collateral Agent shall have received satisfactory termination or other
release documentation; and

(iv) evidence of the completion of all other recordings and filings of, or with
respect to, each such Security Document as may be necessary or, in the
reasonable opinion of the Collateral Agent, desirable, to perfect and protect
the security interests intended to be created by each such Security Document;

and each such Security Document shall be in full force and effect; provided,
that (A) to the extent any security interest under a Security Document (other
than any Collateral the security interest in which may be perfected by the
filing of a UCC financing statement or the delivery or possession of certified
securities) is not perfected on the Effective Date (1) due to undue burden or
expense or (2) after the Borrowers have used commercially reasonable efforts to
do so, such perfection shall not be a condition to Borrowing on the Effective
Date, and (B) any such unperfected security shall be perfected promptly after
the Effective Date, and in no event later than 90 days after the Effective Date
or such later date as the Administrative Agent may agree pursuant to
Section 13.23.

 

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6.12 Existing Term Loan Agreement; Other Indebtedness.

(a) On the Effective Date, the Administrative Agent shall have received a true
and correct copy of the Existing Term Loan Credit Agreement, which shall be in
full force and effect.

(b) On the Effective Date, after giving effect to the Transaction, Parent, the
Company and its Subsidiaries shall have outstanding no Indebtedness for borrowed
money or Preferred Equity other than (i) the Existing Term Loans (not to exceed
$400,000,000) and (ii) the Loans.

(c) The Administrative Agent shall have received reasonably satisfactory pay off
letters for all existing Indebtedness to be repaid from the proceeds of the
initial Borrowing, confirming that all Liens upon any of the property of the
Credit Parties constituting Collateral will be terminated concurrently with such
payment and all letters of credit issued or guaranteed as part of such
Indebtedness shall have been cash collateralized or supported by a Letter of
Credit.

(d) The Administrative Agent shall have received a “pay-off” letter (or other
documentation of termination or unwinding) in form and substance reasonably
satisfactory to the Administrative Agent with respect to all Existing Credit
Documents, and the Administrative Agent shall have received, or been given
reasonable assurance of receiving contemporaneous with the closing, from any
person holding any Lien securing any such Existing Credit Documents, such UCC
(or equivalent) termination statements, mortgage releases, releases of
assignments of leases and rents, releases of security interests in intellectual
property and other instruments, in each case in proper form for recording or
filing, as the Administrative Agent shall have reasonably requested to release
and terminate of record the Liens securing such Existing Credit Documents.

6.13 Solvency Certificate; Insurance Certificates. On the Effective Date, the
Administrative Agent shall have received:

(a) a solvency certificate from the chief financial officer (or other officer
with reasonably equivalent duties) of the Company in the form of Exhibit G; and

(b) certificates of insurance and related policy endorsements, each in form
reasonably satisfactory to the Collateral Agent complying with the requirements
of Section 9.03 for the business and properties of the Company and its
Subsidiaries and naming the Collateral Agent as an additional insured and/or as
loss payee, as applicable.

6.14 Patriot Act. The Administrative Agent shall have received at least five
days prior to the Effective Date (or such shorter period as may be agreed to by
the Administrative Agent) all documentation and other information about Parent
and the other Credit Parties required under applicable “know your customer” and
anti-money laundering rules and regulations, including the Patriot Act that has
been requested by the Administrative Agent at least 10 days prior to the
Effective Date.

6.15 No Company Material Adverse Effect. Since March 30, 2015, there have not
have occurred a Company Material Adverse Effect.

6.16 Purchase Agreement Representations and Specified Representations. The
Purchase Agreement Representations and the Specified Representations shall be
true and correct in all material respects (it being understood and agreed that
(a) any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only as
of such specified date and (b) any representation or warranty that is qualified
as to “materiality,” “Material Adverse Effect” or similar language shall be true
and correct in all respects).

 

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In determining the satisfaction of the conditions specified in this Section 6,
to the extent any item is required to be satisfactory to any Lender or the
Administrative Agent, such item shall be deemed satisfactory to each Lender
which has not notified the Administrative Agent in writing prior to the
occurrence of the Effective Date that the respective item or matter does not
meet its satisfaction.

SECTION 7. Conditions Precedent to All Credit Events. The obligation of each
Lender to make Loans (including Loans made on the Effective Date), and the
obligation of each Issuing Lender to issue Letters of Credit (including Letters
of Credit issued on the Effective Date), are subject, at the time of each such
Credit Event (except as hereinafter indicated), to the satisfaction of the
following conditions:

7.01 No Default; Representations and Warranties. Immediately prior to such
Borrowing and also immediately after giving effect thereto (a) no Default or
Event of Default shall have occurred and be continuing and (b) all
representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on the date
of such Borrowing (it being understood and agreed that (i) any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date and
(ii) any representation or warranty that is qualified as to “materiality,”
“Material Adverse Effect” or similar language shall be true and correct in all
respects on such date); provided, that, notwithstanding anything to the contrary
contained herein, (A) preceding clause (b) shall not apply to Borrowings on the
Effective Date and (B) the only representations relating to Parent, the Company
and its Subsidiaries and their businesses the truth and correctness of which
shall be conditions to the borrowing of Loans on the Effective Date, shall be as
provided in Section 6.16.

7.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the making of
each Loan (other than a Swingline Loan or a Revolving Loan made pursuant to a
Mandatory Borrowing), the Administrative Agent shall have received a Notice of
Borrowing meeting the requirements of Section 2.03(a); it being understood and
agreed that, with respect to the initial Loan made hereunder, the Administrative
Agent shall have also received, concurrently with the delivery of a Notice of
Borrowing, an initial Borrowing Base Certificate meeting the requirements of
Section 9.01(f). Prior to the making of each Swingline Loan, the Swingline
Lender shall have received the notice referred to in Section 2.03(b)(i).

(b) Prior to the issuance of each Letter of Credit, the Administrative Agent and
the respective Issuing Lender shall have received a Letter of Credit Request
meeting the requirements of Section 3.03(a).

7.03 Borrowing Base Limitations. Notwithstanding anything to the contrary set
forth herein (but subject to Section 2.01(e)), it shall be a condition precedent
to each Credit Event that after giving effect thereto (and the use of the
proceeds thereof):

(a) the Aggregate Exposure would not exceed 100% (or, during an Agent Advance
Period, 110% to the extent the excess above 100% is attributable to one or more
Agent Advances) of the Borrowing Base at such time; and

(b) the Aggregate Exposure at such time would not exceed the Total Revolving
Loan Commitment at such time.

 

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7.04 Borrower Status. Other than in connection with a Borrower Release pursuant
to Section 13.22, no Borrower shall have revoked, limited or otherwise modified,
or shall have purported to revoke, limit or otherwise modify the authority of
the Company to act on its behalf as provided in Section 2.14.

7.05 Available Cash Threshold. After giving effect to each Borrowing (and pro
forma effect to any anticipated use of such proceeds within the next five
(5) Business Days), Borrower shall not have Available Cash in excess of the
Available Cash Threshold.

The acceptance of the benefits of the Credit Events shall constitute a
representation and warranty by the Borrowers to the Administrative Agent and
each of the Lenders that all the conditions specified in Sections 6.07, 6.12,
6.15 and 6.16 (with respect to the occurrence of the Effective Date and Credit
Events on the Effective Date) and in this Section 7 (with respect to the
occurrence of the Effective Date and Credit Events on or after the Effective
Date) and applicable to such Credit Event are satisfied as of that time. All of
the Notes, certificates, legal opinions and other documents and papers referred
to in Section 6 and in this Section 7, unless otherwise specified, shall be
delivered to the Administrative Agent at the Notice Office.

SECTION 8. Representations, Warranties and Agreements. In order to induce the
Lenders to enter into this Agreement and to make the Loans, and issue (or
participate in) the Letters of Credit as provided herein, each of Parent, the
Company and each of its Subsidiaries makes the following representations,
warranties and agreements, in each case after giving effect to the Transaction
and the Transaction 2020, all of which shall survive the execution and delivery
of this Agreement and the Notes and the making of the Loans and the issuance of
the Letters of Credit, on the Effective Date and each Credit Event on or after
the Effective Date being deemed to constitute a representation and warranty that
the matters specified in this Section 8 are true and correct in all material
respects and on the date of each such Credit Event (it being understood and
agreed that (a) any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date and (b) any representation or warranty
that is qualified by “materiality”, “Material Adverse Effect” or similar
language shall be true and correct in all respects):

8.01 Company Status. Parent, the Company and each of its Subsidiaries (a) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
own its property and assets and to transact the business in which it is engaged
and (c) is duly qualified and is authorized to do business and is in good
standing in each jurisdiction where the ownership, leasing or operation of its
property or the conduct of its business requires such qualifications except for
failures to be so qualified or authorized which, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

8.02 Power and Authority. Each Credit Party has the Organization power and
authority to execute, deliver and perform the terms and provisions of each of
the Credit Documents to which it is party and has taken all necessary
Organization action to authorize the execution, delivery and performance by it
of each of such Credit Documents. Each Credit Party has duly executed and
delivered each of the Credit Documents to which it is party, and each such
Credit Document constitutes its legal, valid and binding obligation enforceable
in accordance with its terms, except to the extent that the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws generally affecting creditors’ rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).

 

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8.03 No Violation. Neither the consummation of the Transaction, the consummation
of the Transaction 2020, nor the execution, delivery or performance by any
Credit Party of the Credit Documents to which it is a party, nor compliance by
it with the terms and provisions thereof, (a) will contravene any provision of
any law, statute, rule or regulation or any order, writ, injunction or decree of
any court or Governmental Authority, (b) will conflict with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except Permitted Liens) upon any of
the property or assets of any Credit Party or any of its Subsidiaries pursuant
to the terms of any indenture, mortgage, deed of trust, credit agreement or loan
agreement, or any other agreement, contract or instrument to which any Credit
Party or any of its Subsidiaries is a party or by which it or any of its
property or assets is bound or (c) will violate any provision of the certificate
or articles of incorporation, certificate of formation, limited liability
company agreement or by-laws (or equivalent organizational documents), as
applicable, of any Credit Party or any of its Subsidiaries, except with respect
to any violation or conflict referred to in clauses (a) and (b) to the extent
that such violation or conflict could not reasonably be expected to have
individually or in the aggregate a Material Adverse Effect.

8.04 Approvals. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except for (a) those
that have otherwise been obtained or made on or prior to the Effective Date and
which remain in full force and effect on the Effective Date and (b) filings
which are necessary to perfect the security interests created or intended to be
created under the Security Documents), or exemption by, any Governmental
Authority or third party is required to be obtained or made by, or on behalf of,
any Credit Party to authorize, or is required to be obtained or made by, or on
behalf of, any Credit Party in connection with, (i) the execution, delivery and
performance of any Credit Document or (ii) the legality, validity, binding
effect or enforceability of any such Credit Document which in the case of
clauses (i) and (ii), if not obtained, could reasonably be expected to result in
a Material Adverse Effect.

8.05 Financial Statements; Financial Condition; Projections.

(a) The Annual Financial Statements, the Quarterly Financial Statements and the
Monthly Financial Statements fairly present in all material respects the
consolidated financial condition of Parent and its consolidated 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, (A) except as otherwise expressly noted therein and
(B) subject, in the case of the Quarterly Financial Statements, to changes
resulting from normal year-end audit adjustments and the absence of footnotes.

(b) [Reserved].

(c) [Reserved].

(d) (i) After giving effect to the Transaction 2020, since February 1, 2020,
nothing has occurred that has had, or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.

8.06 Litigation. There are no actions, suits or proceedings pending or, to the
knowledge of Parent and the Company, threatened (a) with respect to the
Transaction, the Transaction 2020 or any Credit Document or (b) that has had, or
could reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.

 

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8.07 True and Complete Disclosure. All factual information (taken as a whole)
furnished by or on behalf of Parent or the Company in writing to the
Administrative Agent (including, without limitation, information contained in
the Credit Documents) for purposes of or in connection with this Agreement is
true and accurate in all material respects as of the date furnished and does not
fail to state any material fact necessary to make such information (taken as a
whole) not materially misleading at such time in light of the circumstances
under which such information was provided, it being understood and agreed that
for purposes of this Section 8.07, such factual information shall not include
the Projections, any pro forma financial information or other forward-looking
information or information relating generally to the economy or the industry in
which Parent and its Subsidiaries operate.

8.08 Use of Proceeds; Margin Regulations. (a)(i) All proceeds of the Loans will
be used by the Borrowers for lawful corporate purposes including, but not
limited to, financing, in part, the Transaction and paying Transaction Costs, in
each case, on the Effective Date (in an aggregate principal amount, subject to
Availability, not to exceed $10,000,000), debt refinancing, acquisitions and
distributions and dividends (in each case, to the extent permitted under this
Agreement); provided, that the proceeds of Swingline Loans shall not be used to
refinance then outstanding Swingline Loans, and (ii) Letters of Credit will be
used for lawful corporate purposes, excluding support of payment obligations
with respect to Indebtedness for borrowed money.

(b) No part of the proceeds of any Credit Event will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan, nor the issuance of
any Letter of Credit, nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Regulation T, U or X.

8.09 Tax Returns and Payments. Except as would not reasonably be expected to
have, either individually, or in the aggregate, a Material Adverse Effect,
(a) there are no ongoing actions, suits, proceedings, investigations, audits.
proposed or pending tax assessments, deficiencies or claims, to the best
knowledge of Parent, the Company or any of its Subsidiaries, being asserted by
any Governmental Authority regarding any Taxes relating to Parent, the Company
or any of its Subsidiaries; (b) each of Parent, the Company or each of its
Subsidiaries has paid or caused to be paid all Taxes and assessments payable by
it which have become due, other than those that are being contested in good
faith and for which Parent, the Company or any of its Subsidiaries (as the case
may be) has adequately disclosed and fully provided for on its financial
statements in accordance with GAAP; (c) as of the Effective Date, (i) neither
Parent, the Company nor any of its Subsidiaries has entered into a written
agreement or waiver or been requested in writing to enter into an agreement or
waiver extending any statute of limitations relating to the payment or
collection of Taxes of Parent, the Company or any of its Subsidiaries, and (ii),
to the best knowledge of Parent, the Company or any of its Subsidiaries, the
taxable years or other taxable periods of Parent, the Company or any of its
Subsidiaries are subject to the normally applicable statute of limitations; and
(d) each of Parent, the Company and each of its Subsidiaries has timely filed or
caused to be timely filed with the appropriate taxing authority all returns,
statements, forms and reports for Taxes (the “Returns”) required to be filed by,
or with respect to the income, properties, or operations of, it. Except as would
not reasonably be expected to have, either individually, or in the aggregate, a
Material Adverse Effect, each such Return accurately reflects all liability for
Taxes of Parent, the Company and its Subsidiaries, as applicable, for the
periods covered thereby.

8.10 Compliance with ERISA. (a) None of Parent, the Company, any Subsidiary of
the Company or any ERISA Affiliate maintains or contributes to (or is obligated
to contribute to) any Plan, or has within five calendar years immediately
preceding the date this assurance is given, maintained or contributed to (or
been obligated to contribute to) any Plan. No ERISA Event has occurred, or is
reasonably expected to occur, other than as would not, individually or in the
aggregate, result in a Material Adverse Effect.

 

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(b) None of Parent, the Company, any Subsidiary of the Company or any ERISA
Affiliate is making or accruing an obligation to make any contributions, or has
within any of the five calendar years immediately preceding the date this
assurance is given, made or accrued an obligation to make contributions to any
Multiemployer Plan.

(c) Except as would not reasonably be expected to result in a Material Adverse
Effect, (i) each Foreign Pension Plan has been maintained in compliance with its
terms and with the requirements of any and all applicable laws, statutes, rules,
regulations and orders and has been maintained, where required, in good standing
with applicable regulatory authorities, except as would not reasonably be
expected to result in a material liability; (ii) all contributions required to
be made with respect to a Foreign Pension Plan have been timely made, and
(iii) neither Parent nor any of its Subsidiaries has incurred any obligation in
connection with the termination of, or withdrawal from, any Foreign Pension
Plan.

8.11 Security Documents. The provisions of the Security Agreement are effective
to create in favor of the Collateral Agent for the benefit of the Secured
Creditors a legal and valid security interest in all right, title and interest
of the Credit Parties in all of the Security Agreement Collateral, and the
Collateral Agent, for the benefit of the Secured Creditors, has (or upon the
filing of financing statements and intellectual property filings, entry into of
Control Agreements and the taking of possession by the Collateral Agent (or its
agent, bailee or designee, including the Collateral Agent under the Priming Term
Loan Agreement in accordance with the ABL Intercreditor Agreement) of the
Security Agreement Collateral with respect to which a security interest may be
perfected only by possession will have) (x) a First Priority (subject to the ABL
Intercreditor Agreement) perfected security interest in all right, title and
interest in all of the Security Agreement Collateral described therein that is
ABL Facility Priority Collateral and (y) a Second Priority (subject to the ABL
Intercreditor Agreement) perfected security interest in all right, title and
interest in all of the Security Agreement Collateral described therein that is
Term Loan Priority Collateral (in each case, except for Excluded Deposit
Accounts and Securities Accounts over which Control Agreements are not required
pursuant to Section 5.03(b) or 10.12, or for Collateral for which possession or
control is required for perfection and such possession or control is not
otherwise required by the Security Agreement), subject to no other Liens other
than Permitted Liens (it being understood that the Permitted Liens described in
Section 10.01(d) are subject to the terms of the ABL Intercreditor Agreement and
the Permitted Liens described in Section 10.01(g) are subject to the ABL
Intercreditor Agreement and the Subordination Agreement, as applicable). The
recordation of (a) the Grant of Security Interest in U.S. Patents and (b) the
Grant of Security Interest in U.S. Trademarks in the respective forms attached
to the Security Agreement, in each case in the United States Patent and
Trademark Office, together with filings on Form UCC-1 made pursuant to the
Security Agreement, will create, as may be perfected by such filings and
recordation, a perfected security interest in the United States trademarks and
patents covered by the Security Agreement, and the recordation of the Grant of
Security Interest in U.S. Copyrights in the form attached to the Security
Agreement with the United States Copyright Office, will create, as may be
perfected by such filings and recordation, a perfected security interest in the
United States copyrights covered by the Security Agreement.

8.12 Properties. All Real Property owned or leased by Parent, the Company or any
of its Subsidiaries as of the Effective Date, and the nature of the interest
therein, is correctly set forth in Schedule 8.12. Each of Parent, the Company
and each of its Subsidiaries has good and marketable title to all material
property owned by such entity free and clear of all Liens, other than Permitted
Liens, except such property (other than Real Property required to be subject to
a Mortgage) where the failure to have such title could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
Each of Parent, the Company and each of its Subsidiaries have a valid leasehold
interest in the material properties leased by it free and clear of all Liens
other than Permitted Liens, except where the failure to have such valid, free
and clear interest could not reasonably be expected to have individually or in
the aggregate, a Material Adverse Effect.

 

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8.13 OFAC. Neither Parent, the Company nor any of their respective Subsidiaries
(a) is a Person whose property or interest in property is blocked or that has
been determined to be subject to blocking pursuant to Section 1 of Executive
Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)), (b) does knowingly engage in any dealings or transactions
prohibited by Section 2 of such executive order, or otherwise knowingly
associate with any such person in any manner violative of Section 2, and (c) is
a Person on the list of Specially Designated Nationals and Blocked Persons
published by OFAC on June 24, 2003, as updated from time to time, or the subject
of the limitations or prohibitions under any other OFAC regulation or executive
order.

8.14 Patriot Act/FCPA. Parent, the Company and their respective Subsidiaries are
in compliance with the Patriot Act. No part of the proceeds of the Loans will be
used, directly or indirectly, in violation of the laws of the United States or
other jurisdiction, for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the FCPA.

8.15 Compliance with Statutes. Each of Parent, the Company and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all Governmental
Authorities in respect of the conduct of its business and the ownership of its
property (including, without limitation applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls), except such
non-compliances as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

8.16 Investment Company Act. No Credit Party nor any of its Subsidiaries is an
“investment company” or a company “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940, as amended.

8.17 Environmental Matters. (a) Each of Parent, the Company and each of its
Subsidiaries is in compliance with all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws; there are no
pending or, to the knowledge of Parent and the Company, threatened Environmental
Claims against Parent, the Company or any of its Subsidiaries or any Real
Property owned, leased or operated by Parent, the Company or any of its
Subsidiaries (including any such claim arising out of the ownership, lease or
operation by Parent, the Company or any of its Subsidiaries of any Real Property
formerly owned, leased or operated by Parent, the Company or any of its
Subsidiaries but no longer owned, leased or operated by Parent, the Company or
any of its Subsidiaries); there are no facts, circumstances, conditions or
occurrences with respect to the business or operations of Parent, the Company or
any of its Subsidiaries, or any Real Property owned, leased or operated by
Parent, the Company or any of its Subsidiaries (including, to the knowledge of
Parent and the Company, any Real Property formerly owned, leased or operated by
Parent, the Company or any of its Subsidiaries but no longer owned, leased or
operated by Parent, the Company or any of its Subsidiaries) or, to the knowledge
of Parent and the Company, any property adjoining or adjacent to any such Real
Property that could be reasonably expected (i) to form the basis of an
Environmental Claim against Parent, the Company or any of its Subsidiaries or
any Real Property owned, leased or operated by Parent, the Company or any of its
Subsidiaries or (ii) to cause any Real Property owned, leased or operated by
Parent, the Company or any of its Subsidiaries to be subject to any restrictions
on the ownership, lease, occupancy or transferability of such Real Property by
Parent, the Company or any of its Subsidiaries under any applicable
Environmental Law.

 

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(b) Hazardous Materials have not at any time been generated, used, treated or
stored on, or transported to or from, or Released on or from, any Real Property
currently owned, leased or operated by Parent, the Company or any of its
Subsidiaries or, to the knowledge of Parent and the Company, any Real Property
formerly owned, leased or operated by Parent, the Company or any of its
Subsidiaries or property adjoining or adjacent to any Real Property, where such
generation, use, treatment, storage, transportation or Release has violated any
applicable Environmental Law or could reasonably be expected to give rise to an
Environmental Claim.

(c) Notwithstanding anything to the contrary in this Section 8.17, the
representations and warranties made in Section 8.17(a) and (b) shall be untrue
only if the effect of any or all conditions, violations, claims, restrictions,
failures and noncompliances of the types described above could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

8.18 Employment and Labor Relations. Neither Parent, the Company nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected, either individually or in the aggregate, to have a Material Adverse
Effect. There is (a) no unfair labor practice complaint pending against Parent,
the Company or any of its Subsidiaries or, to the knowledge of Parent and the
Company, threatened against any of them, before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against Parent, the Company or any
of its Subsidiaries or, to the knowledge of Parent and the Company, threatened
against any of them, (b) no strike, labor dispute, slowdown or stoppage pending
against Parent, the Company or any of its Subsidiaries or, to the knowledge of
Parent and the Company, threatened against Parent, the Company or any of its
Subsidiaries, (c) no equal employment opportunity charges or other claims of
employment discrimination are pending or, to the knowledge of Parent and the
Company, threatened against Parent, the Company or any of its Subsidiaries, and
(d) no wage and hour department investigation has been made of Parent, the
Company or any of its Subsidiaries, except (with respect to any matter specified
in clauses (a) through (d) above, either individually or in the aggregate) such
as would not reasonably be expected to have a Material Adverse Effect.

8.19 Intellectual Property, Etc. Each of Parent, the Company and each of its
Subsidiaries owns or has the right to use all the patents, trademarks, domain
names, service marks, trade names, copyrights, inventions, trade secrets,
proprietary information and know-how of any type, whether or not written
(including, but not limited to, rights in computer programs and databases) and
formulas, or rights with respect to the foregoing, and has obtained all
necessary licenses for the use of any of the foregoing used in the present
conduct of its business, without any known conflict with the rights of others
which, or the failure to own or have which, as the case may be, could reasonably
be expected, either individually or in the aggregate, to have a Material Adverse
Effect.

8.20 Insurance. Schedule 8.20 sets forth a listing of all insurance maintained
by Parent, the Company and its Subsidiaries as of the Effective Date, with the
amounts insured (and any deductibles) set forth therein.

8.21 Borrowing Base Calculation. Each calculation by the Borrowers of the
Borrowing Base as shown in any Borrowing Base Certificate and the valuation
thereunder is complete and accurate in all material respects.

 

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SECTION 9. Affirmative Covenants. Each of Parent, the Company and each of its
Subsidiaries hereby covenants and agrees that on and after the Effective Date
and until the Total Revolving Loan Commitment has been terminated and all
Letters of Credit have been terminated (unless fully cash collateralized in a
manner reasonably satisfactory to the Administrative Agent and the Issuing
Lenders), and the Loans, Notes and Unpaid Drawings (in each case together with
interest thereon), Fees and all other Obligations (other than indemnities
described in Section 13.13 and reimbursement obligations under Section 13.01
which are, in either case, not then due and payable), are paid in full:

9.01 Information Covenants. The Borrowers will furnish to the Administrative
Agent for delivery to each Lender:

(a) Quarterly Financial Statements. Within 45 days after the close of each of
the first three Fiscal Quarters in each Fiscal Year of the Borrowers, or, in the
case of the first Fiscal Quarter ending after the Fourth Amendment Effective
Date, within 60 days after the close of such Fiscal Quarter, commencing with the
Fiscal Quarter ending on or about October 31, 2020, (i) the consolidated balance
sheet of the Borrowers and their Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated statements of income and retained earnings
and statement of cash flows for such Fiscal Quarter and for the elapsed portion
of the Fiscal Year ended with the last day of such Fiscal Quarter, in each case,
setting forth comparative figures for the corresponding Fiscal Quarter in the
prior Fiscal Year, all of which shall be certified by the chief financial
officer or principal accounting officer of the Company as fairly presenting in
all material respects in accordance with GAAP the consolidated financial
condition of the Borrowers and their Subsidiaries as of the dates indicated and
the consolidated results of their operations for the periods indicated, subject
to normal year-end audit adjustments and the absence of footnotes, and
(ii) management’s discussion and analysis of the important operational and
financial developments during such Fiscal Quarter.

(b) Annual Financial Statements. Within 120 days after the close of each Fiscal
Year of the Borrowers, commencing with the Fiscal Year ended on January 30,
2016, (i) the consolidated balance sheet of the Borrowers and their Subsidiaries
as at the end of such Fiscal Year and the related consolidated statements of
income and retained earnings and statement of cash flows for such Fiscal Year
setting forth comparative figures for the preceding Fiscal Year and certified by
PriceWaterhouseCoopers LLP or other independent certified public accountants of
recognized national standing reasonably acceptable to the Administrative Agent,
accompanied by an opinion of such accounting firm (which opinion, beginning with
the Fiscal Year ended January 29, 2022, shall be without a “going concern” or
like qualification or exception and without any qualification or exception as to
scope of audit, other than Permitted Audit Opinion Qualifications), and
(ii) management’s discussion and analysis of the important operational and
financial developments during such Fiscal Year.

(c) Monthly Reports. Within 20 days after the end of each Fiscal Month,
commencing with the first full month following the Fourth Amendment Effective
Date, the consolidated balance sheet of the Borrowers and their Subsidiaries as
at the end of such Fiscal Month and the related consolidated statements of
income and retained earnings and statement of cash flows for such Fiscal Month
and for the elapsed portion of the Fiscal Year ended with the last day of such
Fiscal Month, in each case setting forth comparative figures for the
corresponding Fiscal Month in the prior Fiscal Year, all of which shall be
certified by the chief financial officer or principal accounting officer of the
Company as fairly presenting in all material respects in accordance with GAAP
the consolidated financial condition of the Borrowers and their Subsidiaries as
of the dates indicated and the consolidated results of their operations for the
periods indicated, subject to normal year-end audit adjustments and the absence
of footnotes; provided, that such information required by this clause (c) shall
only be required to be delivered to the Administrative Agent for distribution to
the private-side Lenders.

 

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In the event that (A) Parent is not engaged in any business or activity, and
does not own any assets or have other liabilities, other than those incidental
to its ownership directly or indirectly of the Equity Interests of Parent (and,
without limitation on the foregoing, does not have any subsidiaries other than
the Company and the Company’s Subsidiaries or (B) in connection with any
reporting requirements described in clauses (a), (b) and (c) of this
Section 9.01, the Borrowers deliver consolidating financial information that
explains, at a level of detail reasonably acceptable to the Administrative
Agent, the differences between the information relating to Parent, on the one
hand, and the information relating to the Borrowers and their Subsidiaries on a
standalone basis, on the other hand, then such consolidated reporting at Parent
in a manner consistent with that described in clauses (a), (b) and (c) of this
Section 9.01 for the Borrowers will satisfy the requirements of such clauses.

(d) Budgets. No later than the 90th day of each Fiscal Year of the Borrowers
(beginning with its Fiscal Year ended closest to January 31, 2016), a budget in
form and detail reasonably satisfactory to the Administrative Agent (including
budgeted statements of income, cash flow statement and balance sheets for the
Borrowers and their Subsidiaries on a consolidated basis) for such Fiscal Year
setting forth, with appropriate discussion, the principal assumptions upon which
such budget is based.

(e) Officer’s Certificates. At the time of the delivery of the financial
statements provided for in Sections 9.01(a), (b) or (c), a compliance
certificate from an Authorized Officer of the Company in the form of Exhibit H
certifying on behalf of the Company that, to such officer’s knowledge, no
Default or Event of Default has occurred and is continuing or, if any Default or
Event of Default has occurred and is continuing, specifying the nature and
extent thereof, which certificate shall, in the case of financial statements
provided for in Sections 9.01(a) or (b), set forth in reasonable detail the
calculations required to establish whether the Borrowers were (or would have
been) in compliance with (1) the provisions of Section 10.11 at the end of such
Fiscal Year or Fiscal Quarter, as the case may be (setting forth, for the
purposes of such certificate, calculations of the Fixed Charge Coverage Ratio
for the Test Period ended on the last day of such fiscal period irrespective of
whether a Financial Covenant Compliance Period exists at such time) and (2) the
provisions of Section 9.01(h) at the end of such Fiscal Year or Fiscal Quarter.

(f) Borrowing Base Certificate. (i) Unless clause (ii) below applies, not later
than (A) so long no Monthly Reporting Period is in effect, 5:00 P.M. (New York
City time) on or before the 15th day after the close of each Fiscal Quarter, or
(B) during any period in which a Monthly Reporting Period is in effect, 5:00
P.M. (New York City time) on or before the 20th day of each Fiscal Month
thereafter, (ii) during any period in which a Dominion Period is in effect, not
later than 5:00 P.M. (New York City time) on or before Friday of each week with
respect to the business week ended the previous Saturday, (iii) [reserved] and
(iv) at the time of the consummation of any Asset Sale involving ABL Facility
Priority Collateral, a borrowing base certificate setting forth the Borrowing
Base (in each case with supporting calculations in reasonable detail)
substantially in the form of Exhibit M (each, a “Borrowing Base Certificate”),
which shall be (A) prepared as of the last Business Day of the preceding Fiscal
Month in the case of each Borrowing Base Certificate delivered after the
Effective Date pursuant to clause (i)(B) above (or, if (x) any such Borrowing
Base Certificate is delivered pursuant to clause (i)(A) above, as of the last
Business Day of the preceding Fiscal Quarter or (y) any such Borrowing Base
Certificate is delivered more frequently than monthly, as of the last Business
Day of the week preceding such delivery), (B) in the case of preceding clause
(iv), prepared as of the date most recently required above, but on a Pro Forma
Basis for any relevant events described in clause (iv) above and (C) accompanied
by the supporting documentation required in connection

 

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therewith as set forth on Schedule 9.01(f). Each such Borrowing Base Certificate
shall include such supporting information as may be reasonably requested from
time to time by the Administrative Agent. In addition to the delivery of a
Borrowing Base Certificate provided for in this Sections 9.01(f), the Borrowers
shall provide an updated spreadsheet including information on the leased
locations, such locations’ designation as “approved but not papered locations”,
“unapproved and passive locations”, “unapproved and resistant locations” and
“approved and papered locations”, related rent information and such other
information as the Administrative Agent may reasonably request for purposes of
determining the Past-Due Rent Reserves.

(g) Notice of Dominion Period or Financial Covenant Compliance Period. Promptly,
and in any event within two Business Days after any officer of Parent, the
Company or any of its Subsidiaries obtains knowledge thereof, notice of the
commencement of a Dominion Period or a Financial Covenant Compliance Period.

(h) Field Examinations; Appraisals. As of the Fourth Amendment Effective Date,
the Administrative Agent may request (i) an appraisal of the Inventory of the
Borrowers (an “Appraisal”) or (ii) a collateral examination of the Inventory and
Accounts and related accounts of the Borrowers (a “Field Exam”), in each case,
in scope, and from a third-party appraiser and a third-party consultant,
respectively, reasonably satisfactory to the Administrative Agent and the
Company and at the sole cost and expense of the Borrowers, and the results of
such appraisal and collateral examination shall be in form, scope and substance
reasonably satisfactory to the Administrative Agent. The Administrative Agent
may request any such Appraisal or Field Exam as frequently as set forth in the
table below, based on the most recent calculation of the applicable levels as
set forth in the compliance certificates delivered to the Administrative Agent
pursuant to Section 9.01(e):

 

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Field Exam requests
per 12-month period
following the Fourth
Amendment
Effective Date

  

Appraisal requests
per 12-month period
following the Fourth
Amendment
Effective Date

Level 1:

 

For the 12-month period following the Fourth Amendment Effective Date; or, at
any time thereafter, if the Borrowers fail to achieve Level 2 or Level 3 based
on the most recently delivered compliance certificate.

   2    3

Level 2:

 

After the one-year anniversary of the Fourth Amendment Effective Date, if
(1) Excess Availability taken as an average over the preceding 6-month period is
greater than 50% of the Total Revolving Loan Commitment and (2) the Fixed Charge
Coverage Ratio for the most recent Test Period is greater than or equal to
1.05:1.00; provided, that Level 3 does not apply.

   1    2

Level 3:

 

After the one-year anniversary of the Fourth Amendment Effective Date, if
(1) Excess Availability taken as an average over the preceding 12-month period
is greater than 75% of the Total Revolving Loan Commitment and (2) the Fixed
Charge Coverage Ratio for the most recent Test Period is greater than or equal
to 1.10:1.00

   1    1 At any time Excess Availability or the Fixed Charge Coverage Ratio
decreases below the foregoing thresholds, the Level 1, Level 2 or Level 3 terms
shall reapply, as applicable.      

provided that, at any time that any Default or Event of Default exists,
Administrative Agent may request a Field Exam or an Appraisal at any time
without limitation, at the sole cost and expense of the Borrowers, and such
Field Exams and Appraisals will not be counted against the permitted number of
requests in the table above.

 

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(i) Other Reporting. Upon the occurrence and during the continuance of any Event
of Default, in each case, as soon as available, but in any event no later than
five Business Days after the end of each Fiscal Month of the Borrowers or such
longer time period as the Administrative Agent may agree: (i) an Inventory
report with respect to the Borrowers by type, location and department as of the
last day of such Fiscal Month (and including the amounts of Inventory and value
thereof at any leased locations and at premises of warehouses, consignees,
processors or other third parties); (ii) a detailed aged trial balance for such
period and a detailed summary of all Accounts indicating which Accounts are
thirty, sixty and ninety days past due and listing the names of all Account
Debtors, accompanied by such supporting detail and documentation as shall be
reasonably requested by the Administrative Agent; (iii) a detailed listing and a
detailed summary of the Borrowers’ accounts payable in form and scope reasonably
acceptable to the Administrative Agent, in each case accompanied by such
supporting detail and documentation as shall be reasonably requested by the
Administrative Agent (and with all of the foregoing reports and information to
be in form and scope reasonably satisfactory to the Administrative Agent); and
(iv) the most recently available monthly management report consistent with the
form of monthly management reports provided to the Administrative Agent prior to
the Effective Date. In addition, upon the request of the Administrative Agent
(regardless of whether an Event of Default is in existence), the Company shall
furnish the Administrative Agent, as soon as available, but in any event no
later than 10 Business Days after the respective request or such longer time
period as the Administrative Agent may agree, reports as described in the
preceding sentence for the Fiscal Month most recently ended (to the extent not
already delivered to the Administrative Agent). For the avoidance of doubt,
nothing in clause (iv) hereof shall be deemed a requirement to deliver monthly
management reports prior to the date such reports are required to be delivered
pursuant to clause (c) of this Section 9.01.

(j) Notice of Default; Litigation and Material Adverse Effect. Promptly, and in
any event within five Business Days after any officer of Parent, the Company or
any of its Subsidiaries obtains knowledge thereof, notice of (i) the occurrence
of any event which constitutes a Default or an Event of Default, (ii) any
litigation or governmental investigation or proceeding pending against Parent,
the Company or any of its Subsidiaries which, either individually or in the
aggregate, has had, or could reasonably be expected to have, a Material Adverse
Effect or (iii) any other event, change or circumstance that has had, or could
reasonably be expected to have, a Material Adverse Effect.

(k) Other Reports and Filings. Promptly after the filing or delivery thereof,
copies of all financial information, proxy materials and reports, if any, which
Parent, the Company or any of its Subsidiaries publicly filed with the SEC.

(l) Cancellation of Insurance. Promptly (but in any event within five Business
Days of receipt thereof) inform the Administrative Agent if any Credit Party
receives notice of cancellation of any insurance policy required to be
maintained pursuant to Section 9.03.

(m) Environmental Matters. Promptly after any officer of Parent, the Company or
any of its Subsidiaries obtains knowledge thereof, notice of one or more of the
following environmental matters to the extent that such environmental matters,
either individually or when aggregated with all other such environmental
matters, could reasonably be expected to have a Material Adverse Effect:

 

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(i) any pending or threatened Environmental Claim against Parent, the Company or
any of its Subsidiaries or any Real Property owned, leased or operated by
Parent, the Company or any of its Subsidiaries;

(ii) any condition or occurrence on or arising from any Real Property owned,
leased or operated by Parent, the Company or any of its Subsidiaries that
(A) results in noncompliance by Parent, the Company or any of its Subsidiaries
with any applicable Environmental Law or (B) could reasonably be expected to
form the basis of an Environmental Claim against Parent, the Company or any of
its Subsidiaries or any such Real Property;

(iii) any condition or occurrence on any Real Property owned, leased or operated
by Parent, the Company or any of its Subsidiaries that could reasonably be
expected to cause such Real Property to be subject to any restrictions on the
ownership, lease, occupancy, use or transferability by Parent, the Company or
any of its Subsidiaries of such Real Property under any Environmental Law; and

(iv) taking of any removal or remedial action in response to the actual or
alleged presence of any Hazardous Material on any Real Property owned, leased or
operated by Parent, the Company or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative agency; provided,
that in any event the Company shall deliver to the Administrative Agent all
notices received by Parent, the Company or any of its Subsidiaries from any
government or governmental agency under, or pursuant to, CERCLA which identify
Parent, the Company or any of its Subsidiaries as potentially responsible
parties for remediation costs or which otherwise notify Parent, the Company or
any of its Subsidiaries of potential liability under CERCLA.

All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and Parent’s,
the Company’s or such Subsidiary’s response thereto.

(n) Material Real Property. Promptly upon, and in any event within 10 Business
Days after, Parent or any other Credit Party acquires any fee interest in Real
Property the fair market value of which is equal to or greater than $2,000,000,
notice of such acquisition, together with the Company’s good faith determination
of the fair market value thereof.

 

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(o) Priming Term Loan Information; Subordinated Loan Information. All written
reports required to be delivered to (i) the Priming Term Loan Agent and/or
lenders under the Priming Term Loan Agreement and (ii) the Subordinated Facility
Agent and/or lenders under the Subordinated Facility Credit Agreement; provided,
that such information required by this clause (o) shall only be required to be
delivered to the Administrative Agent for distribution to the private-side
Lenders.

(p) Other Information. From time to time, such other information or documents
(financial or otherwise) with respect to Parent, the Company or any of its
Subsidiaries as the Administrative Agent may reasonably request.

9.02 Books, Records and Inspections; Quarterly Conference Calls. (a) Parent and
the Company will, and will cause each of the Company’s Subsidiaries to, keep
proper books of record and accounts in which true and correct entries in
conformity with GAAP and all requirements of law shall be made. Parent and the
Company will, and will cause each of the Company’s Subsidiaries to, permit
officers and designated representatives of the Administrative Agent and the
Collateral Agent (i) to visit and inspect, under guidance of officers of Parent,
the Company or such Subsidiary, any of the properties of Parent, the Company or
such Subsidiary and (ii) to examine the books of account of Parent, the Company
or such Subsidiary and discuss the affairs, finances and accounts of Parent, the
Company or such Subsidiary with, and be advised as to the same by, its and their
officers and independent accountants, all upon reasonable prior notice and at
such reasonable times (during normal business hours) and intervals and to such
reasonable extent as the Administrative Agent or any such other Agent may
reasonably request; provided, that so long as no Default or Event of Default has
occurred and is continuing, no more than one such visitation and inspection
referred to in preceding clause (i) may occur in any Fiscal Year; provided,
further, that, in no event shall Parent, the Company or any of its Subsidiaries
be required pursuant to the terms of this Section 9.02 to allow any Person to
inspect or examine, or be required to discuss, any records, documents or other
information (A) with respect to which Parent, the Company or any of its
Subsidiaries has obligations of confidentiality that would be violated as a
result thereof (whether pursuant to law, contract or otherwise) (it being
understood that Parent, the Company or any of its Subsidiaries shall, following
a reasonable request from the Administrative Agent or a Lender, (1) use
commercially reasonable efforts to request consent from the applicable
contractual counterparty to disclose such information (but shall not be required
to incur any cost or expense or pay any consideration of any type to such party
in order to obtain such consent) and (2) permit the Administrative Agent or the
respective Lender at its option, to enter into a confidentiality agreement if
same will allow it access to such information) or (B) that is subject to
attorney-client privilege. Any Lender may accompany the Administrative Agent on
any such inspection.

(b) At the request of the Administrative Agent, within 10 days following the
date of the delivery of the quarterly and annual financial information pursuant
to Sections 9.01(a) and (b), the Borrowers will hold a conference call or
teleconference, at a time selected by the Company and reasonably acceptable to
the Administrative Agent, with all of the Lenders that choose to participate, to
review the financial results of the previous Fiscal Year or Fiscal Quarter, as
the case may be, and the financial condition of Parent and its Subsidiaries and
the budgets presented for the current Fiscal Year or Fiscal Quarter, as the case
may be, of Parent and its Subsidiaries if applicable.

9.03 Maintenance of Property; Insurance. (a) Parent and the Company will, and
will cause each of the Company’s Subsidiaries to, (i) keep all property
necessary to the business of Parent, the Company and its Subsidiaries in good
working order and condition, ordinary wear and tear excepted and subject to the
occurrence of casualty events, (ii) maintain with financially sound and
reputable insurance companies insurance on all such property and against all
such risks as is consistent and in accordance with industry practice for
companies similarly situated owning similar properties and engaged in similar
businesses as Parent, the Company and its Subsidiaries, and (iii) furnish to the
Administrative Agent, upon its request therefor, information as to the insurance
carried. Such insurance shall include physical damage insurance on all material
real and tangible personal property (whether now owned or hereafter acquired) on
an all risk basis and business interruption insurance.

 

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(b) Parent and the Company will, and will cause each of the Company’s
Subsidiaries to, cause Collateral Agent to be listed as a loss payee on property
and casualty policies maintained pursuant to the preceding clause (a) and as an
additional insured on liability policies maintained pursuant to the preceding
clause (a).

(c) If at any time any portion of a Mortgaged Property is located in an area
identified as a special flood hazard area by the Federal Emergency Management
Agency or any successor thereto or other applicable agency, the Borrowers or the
relevant Credit Party, as applicable, shall keep and maintain at all times flood
insurance in an amount sufficient to comply with the rules and regulations
promulgated under the National Flood Insurance Act of 1968 and Flood Disaster
Protection Act of 1973, each as amended from time to time.

(d) If Parent, the Company or any of its Subsidiaries shall fail to maintain
insurance in accordance with this Section 9.03, or if Parent, the Company or any
of its Subsidiaries shall fail to so endorse all policies or certificates with
respect thereto, the Administrative Agent shall have the right (but shall be
under no obligation) to procure such insurance and Parent, the Company and each
of its Subsidiaries jointly and severally agree to reimburse the Administrative
Agent for all costs and expenses of procuring such insurance.

9.04 Existence; Franchises. Parent and the Company will, and will cause each of
the Company’s Subsidiaries to, do or cause to be done, all things necessary to
preserve and keep in full force and effect its existence and its rights (charter
and statutory), franchises, licenses, permits, copyrights, trademarks, patents
and approvals; provided, however, that nothing in this Section 9.04 shall
prevent (a) sales of assets and other transactions by Parent, the Company or any
of its Subsidiaries in accordance with Section 10.02 or (b) the withdrawal or
lapse by Parent, the Company or any of its Subsidiaries of its qualification as
a foreign Organization in any jurisdiction or the failure to preserve or keep in
full force and effect any other right, license, franchise, intellectual property
or approval if such withdrawal, lapse or failure could not, either individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

9.05 Compliance with Statutes, etc. Parent and the Company will, and will cause
each of the Company’s Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
Governmental Authorities in respect of the conduct of its business and the
ownership of its property (including, without limitation, FCPA, OFAC (including
sanctions administered and enforced thereunder) applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such non-compliances as could not, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

9.06 Compliance with Environmental Laws.

(a) Parent and the Company will comply, and will cause each of the Company’s
Subsidiaries to comply, with all Environmental Laws and permits applicable to,
or required by, the ownership, lease or use of its Real Property now or
hereafter owned, leased or operated by Parent, the Company or any of its
Subsidiaries, and will promptly pay or cause to be paid all costs and expenses
incurred in connection with such compliance, and will keep or cause to be kept
all such Real Property free and clear of any Liens imposed pursuant to such
Environmental Laws other than Permitted Liens, in each case except such
noncompliances and non-payments as could not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

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(b) (i) After the receipt by the Administrative Agent or any Lender of any
notice of the type described in Section 9.01(m), (ii) at any time that Parent,
the Company or any of its Subsidiaries are not in compliance with
Section 9.06(a) or (iii) in the event that the Administrative Agent or the
Lenders have exercised any of the remedies pursuant to the last paragraph of
Section 11.01, Parent and the Company will (in each case) provide, at the sole
expense of Parent, the Company and its Subsidiaries, upon the reasonable request
of the Administrative Agent, an environmental site assessment report concerning
any relevant Real Property owned, leased or operated by Parent or any of its
Subsidiaries, prepared by an environmental consulting firm reasonably approved
by the Administrative Agent, indicating the presence or absence of Hazardous
Materials and the potential cost of any removal or remedial action in connection
with such Hazardous Materials on such Real Property. If Parent and the Company
fail to provide the same within 30 days after such request was made, the
Administrative Agent may order the same, the cost of which shall be borne by
Parent, the Company and its Subsidiaries, and Parent, the Company and its
Subsidiaries shall grant and hereby grant to the Administrative Agent and the
Lenders and their respective agents access to such Real Property and
specifically grant the Administrative Agent and the Lenders an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment at any reasonable time upon reasonable notice to Parent or the
Company, all at the sole expense of Parent, the Company and its Subsidiaries.

9.07 ERISA. Parent and the Company shall supply to the Administrative Agent:

(a) promptly and in any event within 30 days after Parent, any Subsidiary of
Parent or any ERISA Affiliate receives any notice from a Multiemployer Plan
sponsor concerning an ERISA Event, a copy of such notice;

(b) promptly and in any event within 30 days after Parent, the Company, any
Subsidiary of Company or any ERISA Affiliate knows of the occurrence of any
ERISA Event, a certificate of the chief financial officer of the Company
describing such ERISA Event, what action Parent, the Company, any Subsidiary of
the Company or any ERISA Affiliate has taken, is taking or proposes to take with
respect to such ERISA Event and a copy of any notice filed with the PBGC or the
IRS pertaining to such ERISA Event and any notices received by Parent, the
Company, any Subsidiary of the Company or any ERISA Affiliate from the PBGC or
any other governmental agency with respect thereto; provided, that in the case
of ERISA Events under clause (b) of the definition thereof, in no event shall
notice be given later than five Business Days following the occurrence of the
ERISA Event; and

(c) promptly, and in any event within 30 days, after becoming aware that there
has been (i) a material increase in Unfunded Pension Liabilities (taking into
account only Plans with positive Unfunded Pension Liabilities) since the date
the representations hereunder are given or from any prior notice, as applicable;
(ii) the adoption of, or the commencement of contributions to, any Plan subject
to Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA by
Parent, the Company, any Subsidiary of the Company or any ERISA Affiliate; or
(iii) the adoption of any amendment to a Plan subject to Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA which results in a material
increase in contribution obligations of Parent, the Company, any Subsidiary of
the Company or any ERISA Affiliate, a detailed written description thereof from
the chief financial officer of the Company.

9.08 End of Fiscal Years; Fiscal Quarters. Other than as reasonably agreed to by
the Administrative Agent, Parent and the Company will cause (a) its and each of
its Subsidiaries’ Fiscal Years to end on a date specified for such Fiscal Year
end in the definition of “Fiscal Year” and (b) its and each of its Subsidiaries’
Fiscal Quarters to end on a date specified for such Fiscal Quarter end in the
definition of “Fiscal Quarter”; provided, that any Acquired Entity or Business
may have a different fiscal year and fiscal quarter ends for a period not
exceeding 270 days following the acquisition thereof.

 

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9.09 [Reserved].

9.10 Payment of Taxes. Parent and the Company will pay and discharge, and will
cause each of the Company’s Subsidiaries to pay and discharge, all material
Taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or upon any properties belonging to it, prior to the date
on which penalties attach thereto, and all material lawful claims which, if
unpaid, might become a Lien or charge upon any material properties of Parent,
the Company or any of its Subsidiaries not otherwise permitted under
Section 10.01(a); provided, that neither Parent, the Company nor any of the
Company’s Subsidiaries shall be required to pay or discharge any such Tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves with respect thereto
in accordance with GAAP.

9.11 Use of Proceeds. The Borrowers will use the proceeds of the Loans only as
provided in Section 8.08.

9.12 Additional Security; Further Assurances; etc. (a) Subject to clause (e) of
this Section 9.12, Parent and the Company will, and will cause each of the
Company’s Subsidiaries to, grant to the Collateral Agent for the benefit of the
Secured Creditors, at the expense of the Borrowers, security interests and
Mortgages (not to exceed 110% of the Fair Market Value of the Real Property
being mortgaged) in the assets and Real Property of Parent, the Company and such
other Subsidiary as are not covered by the original Security Documents, as may
be reasonably requested from time to time by the Administrative Agent (or
otherwise required at such time pursuant to the Intercreditor Agreements)
(collectively, the “Additional Security Documents”). All such security interests
and Mortgages shall be granted pursuant to documentation reasonably satisfactory
in form and substance to the Administrative Agent and shall constitute valid and
enforceable (i) First Priority (subject to the terms of the Intercreditor
Agreements) perfected security interests, hypothecations and Mortgages with
respect to ABL Facility Priority Collateral and (ii) Second Priority (subject to
the terms of the Intercreditor Agreements) perfected security interests,
hypothecations and Mortgages with respect to Term Loan Priority Collateral. The
Additional Security Documents or instruments related thereto shall, at the
expense of the Borrowers, be duly recorded or filed in such manner and in such
places as are required by law to establish, perfect, preserve and protect the
Liens in favor of the Collateral Agent required to be granted pursuant to the
Additional Security Documents and all taxes, fees and other charges payable in
connection therewith shall be paid in full. Notwithstanding the foregoing, this
Section 9.12(a) shall not apply to (and Parent, the Company and its Subsidiaries
shall not be required to grant a security interest or Mortgage in) (A) any owned
Real Property the Fair Market Value of which is less than $2,000,000 or any
Leasehold unless, in either case, a Mortgage is granted (or required to be
granted) in respect of such Real Property pursuant to the terms of the Priming
Term Loan Documents or the documents governing any secured Indebtedness incurred
or issued in reliance on Section 10.04(r), (B) any motor vehicles, (C)
[reserved] or (D) any other assets expressly excluded from Security Agreement
Collateral or any other Collateral under any of the Security Documents,
including any Excluded Assets (as defined in the Security Agreement).

(b) Subject to clause (e) of this Section 9.12, Parent and the Company will, and
will cause each of the Company’s Subsidiaries to, at the expense of Parent and
the Company, make, execute, endorse, acknowledge, file and/or deliver to the
Collateral Agent from time to time such schedules, confirmatory assignments,
financing statements (including, but not limited to, UCC fixture filings to be
filed along with the applicable Mortgages), transfer endorsements, powers of
attorney, certificates, collateral access agreements, control agreements and
other assurances or instruments and take such further steps relating to the
Collateral covered by any

 

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of the Security Documents as the Collateral Agent may reasonably require,
subject to the terms of the ABL Intercreditor Agreement; provided, that in the
case of any such agreements, assurances or instruments that require the consent
of, or any action by, a third party, Parent, the Company and its Subsidiaries
shall only be required to use commercially reasonable efforts to obtain the
same; provided, further, that in no event shall any bailee agreements, landlord
lien waivers, collateral access agreements or similar agreements, or the
execution of any local law pledge and/or security agreements or taking other
actions with respect thereto be required. Furthermore, in the case of additional
Real Property Collateral, Parent and the Company will, and will cause each of
the Company’s Subsidiaries to, deliver to the Collateral Agent such opinions of
counsel in each jurisdiction in which the mortgaged Real Property is located,
surveys or survey updates or ExpressMaps, as required to the extent necessary to
allow the issuer of the Mortgage Policy to issue such policy without exception.
Mortgage Policies and other related documents as may be reasonably requested by,
and in form and substance reasonably satisfactory to, the Collateral Agent to
assure itself that this Section 9.12 has been complied with.

(c) If the Administrative Agent reasonably determines that the Lenders are
required by law or regulation to have appraisals prepared in respect of any Real
Property of Parent, the Company and its Subsidiaries constituting Collateral,
subject to clause (e) of this Section 9.12, Parent, the Company and its
Subsidiaries will, at their own expense, provide to the Administrative Agent
appraisals which satisfy the applicable requirements of the Real Estate
Appraisal Reform Amendments of the Financial Institution Reform, Recovery and
Enforcement Act of 1989, as amended.

(d) Subject to clause (e) of this Section 9.12, the Credit Parties shall deliver
to the Collateral Agent a “Life-of-Loan” Federal Emergency Management Agency
Standard Flood Hazard Determination with respect to each parcel of Mortgaged
Property (together with notice about special flood hazard area status and flood
disaster assistance, duly executed by the Borrowers or the relevant Credit
Party, as applicable, and evidence of flood insurance, in the event any such
parcel of Mortgaged Property is located in a special flood hazard area).

(e) Parent, the Company and its Subsidiaries agree that each action required by
clauses (a) through (d), or by clauses (f) and (g) of this Section 9.12 shall be
completed as soon as reasonably practicable, but in no event later than 60 days
(or 30 days in the case of clauses (f) and (g) of this Section 9.12) after such
action is requested to be taken by the Administrative Agent (or such longer
period of time as may be agreed to by the Administrative Agent in its
discretion); provided, that in no event will Parent, the Company or any of its
Subsidiaries be required to take any action, other than using its commercially
reasonable efforts, to obtain consents from, or actions by, third parties with
respect to its compliance with this Section 9.12.

(f) Parent and the Company will cause each Person that becomes a Subsidiary
(other than an Excluded Subsidiary) of the Company after the Effective Date to
(i) promptly pledge the capital stock or other Equity Interests owned by it
pursuant to, and to the extent required by, the Security Agreement and deliver
to the Collateral Agent (or to its agent, bailee or designee, including the
Collateral Agent under the Priming Term Loan Agreement in accordance with the
terms of the Intercreditor Agreement) the certificates, if any, representing
such stock or other Equity Interests, together with stock or other appropriate
powers duly executed in blank, (ii) (A) execute a Joinder Agreement or such
comparable documentation to become a Borrower or Guarantor hereunder and a
joinder agreement to the applicable Security Agreement, substantially in the
form annexed thereto, (B) take all actions reasonably necessary or advisable in
the reasonable opinion of, and requested by, the Administrative Agent or the

 

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Collateral Agent to cause the Lien created by the applicable Security Agreement
to be duly perfected to the extent required by such agreement in accordance with
all applicable Requirements of Law, including the filing of financing statements
in such jurisdictions as may be reasonably requested by the Administrative Agent
or the Collateral Agent and (C) become a party to the ABL Intercreditor
Agreement, the Subordination Agreement or any other intercreditor or
subordination arrangement entered into pursuant to the terms hereof (if required
thereby) and, if applicable, execute Control Agreements, a Patent Security
Agreement, a Trademark Security Agreement and a Copyright Security Agreement,
(iii) to the extent reasonably requested by the Administrative Agent or the
Required Lenders, take all actions required pursuant to this Section 9.12 and
(iv) at least five days prior to the effective date of any new Subsidiary of the
Company becoming a Borrower or Guarantor hereunder pursuant to clause (ii),
provide to all Lenders all documentation and other information required by bank
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations including, without limitation, the Patriot Act
and the information described in Section 13.18. In addition, to the extent
reasonably requested by the Collateral Agent, each new Subsidiary of the Company
that is required to execute any Credit Document shall execute and deliver, or
cause to be executed and delivered, all other relevant documentation (including
opinions of counsel) of the type described in Section 6 as such new Subsidiary
of the Company would have had to deliver if such new Subsidiary were a Credit
Party on the Effective Date. Notwithstanding the foregoing in this clause (f),
(a) no Foreign Subsidiary shall be required to enter into security documentation
governed by the laws of the local jurisdiction of organization of such Foreign
Subsidiary and (b) no Credit Party that owns capital stock any Foreign
Subsidiary shall be required to pledge the capital stock of such Foreign
Subsidiary pursuant to security documentation governed by the laws of the local
jurisdiction of organization of such Foreign Subsidiary; provided, that such
Foreign Subsidiary shall execute the Guaranty and Security Agreement and such
Credit Party shall pledge such capital stock pursuant to the Security Agreement.

(g) In addition, promptly after any Subsidiary of Company ceases to constitute
an “Excluded Subsidiary”, Company shall cause such Subsidiary to take all
actions required by this Section 9.12 as if such Subsidiary were then
established, created or acquired. Each Borrower and each other Credit Party
shall, within 90 days following the Effective Date (as such date may be extended
from time to time by the Administrative Agent in its sole discretion), enter
into one or more Control Agreements as, and to the extent, required by
Section 5.03(b).

9.13 Certain Matters Regarding Collateral. Parent, the Company and its
Subsidiaries shall not effect any change (a) in any Credit Party’s legal name,
(b) in any Credit Party’s identity or organizational structure, (c) in any
Credit Party’s Federal Taxpayer Identification Number or organizational
identification number, if any, or (d) in any Credit Party’s jurisdiction of
organization (in each case, including by merging with or into any other entity,
dissolving, liquidating, reorganizing or organizing in any other jurisdiction)
unless it provides at least five Business Days’ prior written notice of such
change to the Administrative Agent. Each Credit Party agrees (i) to promptly
provide the Collateral Agent with certified organizational documents reflecting
any of the changes described in the preceding sentence and with such other
information in connection therewith as the Collateral Agent or the
Administrative Agent may reasonably request and (ii) to promptly take all action
reasonably requested by the Collateral Agent to maintain the perfection and
priority of the security interest of the Collateral Agent for the benefit of the
Secured Creditors in the Collateral, if applicable.

 

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9.14 Landlords’ Agreements, Mortgagee Agreements, Bailee Letters and Real Estate
Purchases. With respect to locations in the United States only, each Credit
Party shall use its commercially reasonable efforts to obtain a landlord waiver,
collateral access agreement, mortgagee agreement or bailee letter, as
applicable, from the lessor of each leased property, mortgagee of owned property
or bailee with respect to any warehouse, processor or converter facility or
other location where Inventory of a Credit Party with a book value in excess of
$1,000,000 is stored or located (other than any retail store operated by the
Borrowers or its Subsidiaries), which agreement or letter shall (unless
otherwise agreed to in writing by the Administrative Agent) contain a waiver or
subordination of all Liens or claims that the landlord, mortgagee or bailee may
assert against the Collateral at that location, and shall otherwise be
reasonably satisfactory in form and substance to the Administrative Agent. With
respect to such locations or warehouse space leased or owned as of the Effective
Date and thereafter in the United States, if the Collateral Agent has not
received a landlord, collateral access or mortgagee agreement or bailee letter
as of the Effective Date (or, if later, as of the date such location is acquired
or leased), any Eligible Inventory at that location shall be subject to such
Reserves as may be established by the Administrative Agent in its Permitted
Discretion in accordance with clause (f) of the definition of “Eligible
Inventory”. Each Credit Party shall timely and fully pay and perform its
obligations under all leases and other agreements with respect to each leased
location or public warehouse in the United States where any Collateral is or may
be located, except to the extent that the same are being contested in good
faith; provided, that, the Credit Parties’ failure to comply with the foregoing
shall not constitute a Default or Event of Default under this Section 9.14
unless such failure of compliance with the foregoing is with respect to leased
locations or public warehouses (a) where, individually or in the aggregate,
Inventory of the Credit Parties (or any of them) with a book value in excess of
$1,000,000, is stored or located, or (b) where any Credit Party’s books and
records are kept or maintained, and such failure results in (x) the termination
of the leases or other agreements with respect to any such leased locations or
public warehouses, (y) the termination of a Credit Party’s access rights with
respect to any such leased locations or public warehouses, or (z) the
commencement of any other enforcement action by the lessors or bailees, as
applicable, with respect to any such leased locations or public warehouses.

9.15 Inventory. With respect to the Inventory:

(a) each Borrower will at all times maintain records (in all material respects)
of Inventory consistent with past practices, keep correct and accurate records
itemizing and describing the kind, type, quality and quantity of Inventory, the
cost therefore and daily withdrawals therefrom and additions thereto;

(b) each Borrower will conduct cyclical or physical counts of its Inventory
consistent with past practices, and (ii) upon the reasonable request of the
Administrative Agent shall supply the Administrative Agent with a report in the
form and with such specificity as may be reasonably satisfactory to the
Administrative Agent concerning such count; and

(c) each Borrower will keep the Inventory (other than any immaterial portion
thereof) in good and marketable condition (damage by any casualty event
excepted).

9.16 Ownership of Subsidiaries. Except as otherwise permitted pursuant an
Investment or an asset disposition pursuant to Section 10.02(d), in each case
consummated in accordance with the terms hereof, Parent and the Company will,
and will cause each of the Company’s Subsidiaries to, own 100% of the Equity
Interests of each of their Subsidiaries (other than directors’ qualifying shares
and other nominal amounts of shares to the extent required by applicable law).

9.17 Cash Flow Reporting; Variance Reporting; Liquidity Reporting; Store Closure
Reporting.

(a) The Company shall prepare and deliver to the Administrative Agent for
distribution to the private-side Lenders, on Thursday of each fiscal week of
Parent occurring after the Fourth Amendment Effective Date (each an “Applicable
Budget”), a 13-week budget and cash flow forecast, in a form substantially
similar to the Initial Budget, which shall (x) reflect, on a line-item basis,
the projected receipts and disbursements of Parent, the Company and their
Subsidiaries (including all necessary and required expenses that such Persons
expect to incur) on a weekly basis, and (y) cover the 13-week period that
commences with the fiscal week of Parent ending on the first Saturday occurring
after the date on which the Applicable Budget is delivered and including the
subsequent twelve (12) fiscal weeks.

 

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(b) On Thursday of each fiscal week, commencing with the Thursday following the
first full fiscal week after the Fourth Amendment Effective Date (each such
Thursday, a “Variance Report Date”), the Borrower shall deliver to the
Administrative Agent for distribution to the private-side Lenders a variance
report (each, a “Variance Report”) in form substantially similar to the variance
reports delivered by the Company to the lenders under the Existing Term Loan
Credit Agreement prior to the Fourth Amendment Effective Date and setting forth,
in reasonable detail, on a line-by-line basis any differences between actual
receipts and disbursements for each line item for the prior fiscal week versus
projected receipts and disbursements set forth in the Applicable Budget for each
such line item for such prior fiscal week.

(c) On Thursday of each fiscal week, commencing with Thursday following the
first full fiscal week after the Fourth Amendment Effective Date, the Company
shall deliver to the Administrative Agent for distribution to the private-side
Lenders a report certifying the liquidity (including the component parts
thereof) of the Credit Parties as of the last Business Day of the prior fiscal
week and certifying as to compliance or failure to comply, as applicable, with
Section 10.10 hereof.

(d) On Thursday of each fiscal week during any Temporary Store Closure Period,
the Company shall deliver to the Administrative Agent for distribution to the
private-side Lenders a report certifying the stores of Parent and its
Subsidiaries that are closed and open.

SECTION 10. Negative Covenants. Each of Parent, the Company and each of its
Subsidiaries hereby covenants and agrees that on and after the Effective Date
and until the Revolving Loan Commitment has been terminated and all Letters of
Credit have been terminated (unless fully cash collateralized in a manner
reasonably satisfactory to the Administrative Agent and the Issuing Lenders),
and the Loans, Notes and Unpaid Drawings (in each case, together with interest
thereon), Fees and all other Obligations (other than any indemnities described
herein and reimbursement obligations under Section 13.01 which, in either case,
are not then due and payable), are paid in full:

10.01 Liens. Parent will not, and will not permit any of its Subsidiaries to,
create, incur, assume or suffer to exist any Lien upon any property or assets
(real or personal, tangible or intangible) of Parent, the Company or any of its
Subsidiaries, whether now owned or hereafter acquired, or assign (as security)
any right to receive income; provided, that the provisions of this Section 10.01
shall not prevent the creation, incurrence, assumption or existence of the
following (Liens described below are herein referred to as “Permitted Liens”):

(a) inchoate Liens for Taxes, assessments or governmental charges or levies not
yet due or Liens for Taxes, assessments or governmental charges or levies being
contested in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP;

 

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(b) Liens in respect of property or assets of Parent, the Company or any of its
Subsidiaries, which were incurred in the ordinary course of business and do not
secure Indebtedness for borrowed money, such as carriers’, warehousemen’s,
materialmen’s and mechanics’ or construction liens and other similar Liens
arising in the ordinary course of business, so long as, in each case, such Liens
secure amounts not overdue for a period of more than 30 days, or if more than 30
days overdue, are unfiled and no action has been taken to enforce such Liens or
are being contested in good faith by appropriate actions, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

(c) Liens in existence on the Fourth Amendment Effective Date which are listed,
and the property subject thereto described, in Schedule 10.01, plus renewals,
replacements and extensions of such Liens; provided, that (i) the aggregate
principal amount of the Indebtedness, if any, secured by such Liens does not
increase from that amount outstanding at the time of any such renewal,
replacement or extension (except by the amount associated with costs, fees,
expenses and premiums) and (ii) any such renewal, replacement or extension does
not encumber any additional assets or properties of Parent, the Company or any
of its Subsidiaries other than (a) after-acquired property that is affixed to or
incorporated into the property covered by such Lien and (b) proceeds and
products thereof;

(d) (i) Liens created by or pursuant to this Agreement and the Security
Documents and (ii) Liens created by or pursuant to the Priming Term Loan
Documents (including any Permitted Refinancing Indebtedness in respect thereof)
outstanding pursuant to Section 10.04(j), subject to the terms of the ABL
Intercreditor Agreement;

(e) (i) licenses, sublicenses, leases or subleases (including with respect to
any intellectual property, to the extent such license, sublicense, lease or
sublease is non-exclusive) granted by Parent, the Company or any of its
Subsidiaries to other Persons not materially interfering with the conduct of the
business of Parent, the Company or any of its Subsidiaries and (ii) any interest
or title of a lessor, sublessor or licensor under any lease, sublease or license
agreement existing as of the date hereof or otherwise permitted by this
Agreement to which Parent, the Company or any of its Subsidiaries is a party;

(f) Liens securing Indebtedness permitted by Section 10.04(d); provided, that
such Liens encumber only the assets financed thereby, the proceeds thereof and
improvements and accessions thereto;

(g) (x) Liens created by or pursuant to the Existing Term Loan Documents;
provided, that such Liens shall not extend to any assets or property other than
Collateral and shall be subject to the terms of the ABL Intercreditor Agreement;
(y) Liens created by or pursuant to the Subordinated Facility Loan Documents;
provided, that such Liens shall not extend to any assets or property other than
Collateral and shall be subject to the terms of the Subordination Agreement; and
(z) Liens securing Indebtedness incurred pursuant to Section 10.04(s); provided,
that such Liens shall extend solely to the Post-Closing Refunds;

(h) easements, servitudes, rights-of-way, restrictions, encroachments,
covenants, licenses and other similar charges or encumbrances, and minor title
deficiencies, in each case not securing Indebtedness and not materially
interfering with the ordinary conduct of the business of Parent, the Company or
any of its Subsidiaries, taken as a whole;

 

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(i) Liens arising out of the existence of judgments to the extent and so long as
such judgments do not individually or in the aggregate constitute an Event of
Default under Section 11.01(j);

(j) statutory and common law landlords’ liens under leases to which the Company
or any of its Subsidiaries is a party;

(k) (i) Liens (other than Liens imposed under ERISA) incurred in the ordinary
course of business in connection with workers compensation claims, unemployment
insurance and social security benefits and Liens securing the performance of
bids, tenders, leases and contracts in the ordinary course of business,
statutory obligations, surety bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money) and (ii) Liens on
pledges or deposits in the ordinary course securing liability for reimbursement
or indemnification obligations of (including obligations in respect of letters
of credit and bank guarantees for the benefit of) insurance carriers providing
property, casualty or liability insurance to Parent, the Company or any of its
Subsidiaries;

(l) Permitted Encumbrances and Liens arising in the ordinary course in
connection with Investments permitted pursuant to Section 10.05(n), (o) or (u);

(m) Liens on property or assets (other than on ABL Facility Priority Collateral,
unless junior and subordinated in priority to the Liens thereon securing the
Secured Obligations) acquired pursuant to a permitted Investment, or on property
or assets of a Subsidiary of the Company in existence at the time such
Subsidiary is acquired pursuant to a permitted Investment; provided, that
(i) any Indebtedness that is secured by such Liens is permitted to exist under
Section 10.04, and (ii) such Liens are not incurred in connection with, or in
contemplation or anticipation of, such acquisition and do not attach to any
asset of Parent or any other asset of the Company or any of its Subsidiaries
other than proceeds thereof and improvements and accessions thereto;

(n) Liens arising out of any conditional sale, title retention, consignment or
other similar arrangements for the sale of goods entered into by the Company or
any of its Subsidiaries in the ordinary course of business to the extent such
Liens do not attach to any assets other than the goods subject to such
arrangements;

(o) Liens (i) incurred in the ordinary course of business in connection with the
purchase or shipping of goods or assets (or the related assets and proceeds
thereof), which Liens are in favor of the seller or shipper of such goods or
assets and only attach to such goods or assets, and (ii) 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;

(p) bankers’ Liens, rights of setoff and other similar Liens existing solely
with respect to cash and Cash Equivalents on deposit in one or more accounts
maintained by Parent, the Company or any of its Subsidiaries, in each case
granted in the ordinary course of business in favor of the bank or banks or
other entity with which such accounts are maintained;

(q) Liens granted in the ordinary course of business on the unearned portion of
insurance premiums securing the financing of insurance premiums to the extent
the financing is permitted under Section 10.04;

 

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(r) Liens on earnest money deposits made in connection with any permitted
Investment or in respect of any permitted Investment and Liens that may be
deemed to exist by reason of any agreement to sell assets;

(s) Liens on cash and Cash Equivalents of the Company and its Subsidiaries
deposited as collateral in favor of a hedging counterparty to secure obligations
under Interest Rate Protection Agreements and/or Other Hedging Agreements
otherwise permitted to be entered into by this Agreement;

(t) Liens securing obligations in respect of Indebtedness permitted under
Section 10.04(t) (other than on ABL Facility Priority Collateral, unless junior
and subordinated in priority to the Liens thereon securing the Secured
Obligations);

(u) [reserved];

(v) additional Liens (other than on ABL Facility Priority Collateral, unless
junior and subordinated in priority to the Liens thereon securing the Secured
Obligations) on assets of the Company or any Subsidiary of the Company not
otherwise permitted by this Section 10.01, so long as the aggregate amount of
obligations secured by such additional Liens (other than, in the case of
obligations constituting Indebtedness, accrued but unpaid interest and fees
thereon not paid in kind or capitalized as principal) at any time outstanding
does not exceed $7,500,000; provided, that if such Liens secure Indebtedness for
borrowed money, such Liens shall not extend to any assets or property other than
Collateral and shall be subject to the terms of an intercreditor or
subordination arrangement in form and substance reasonably acceptable to the
Administrative Agent (at the direction of Required Lenders) and the Company;

(w) Liens arising from precautionary UCC financing statements or consignments
entered into in connection with any transaction otherwise permitted under this
Agreement;

(x) (i) Liens on Equity Interests in joint ventures securing obligations of such
joint ventures and (ii) customary rights of first refusal and tag, drag and
similar rights in joint venture agreements entered into in the ordinary course
of business;

(y) [reserved];

(z) Liens on securities that are the subject of repurchase agreements
constituting Cash Equivalents under clause (f) of the definition thereof;

(aa) Liens in favor of any Borrower or any other Credit Party; provided, that if
any Lien covers the Collateral, the holder thereof shall execute a subordination
agreement reasonably satisfactory to the Administrative Agent; and

(bb) Liens with respect to property or assets of any Subsidiary that is not a
Guarantor, so long as such Liens secure obligations of such Subsidiaries that
are otherwise permitted by this Agreement.

In connection with the granting of Liens of the type described in clauses (f),
(m), (s) or (x) of this Section 10.01 by the Company or any of its Subsidiaries,
the Administrative Agent and the Collateral Agent shall be authorized to
subordinate its Liens on property subject to such

 

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Liens and take any other actions reasonably requested by the Company in
connection therewith (including, without limitation, by executing appropriate
lien subordination agreements in favor of the holder or holders of such Liens
solely with respect to the item or items of equipment or other assets subject to
such Liens); provided, that the Company has provided to the Administrative Agent
and the Collateral Agent a certificate executed by an Authorized Officer of the
Company certifying that (x) the Lien is permitted under the applicable clause of
this Section 10.01 and (y) the Administrative Agent and the Collateral Agent are
authorized to subordinate its Lien on the specified property (and the Lenders
hereby authorize and direct the Administrative Agent and the Collateral Agent to
conclusively rely on such certificate in performing their obligations under this
paragraph).

10.02 Consolidation, Merger, Purchase or Sale of Assets, etc. Parent and the
Company will not, and will not permit any of the Company’s Subsidiaries to, wind
up, liquidate or dissolve its affairs or merge or consolidate into or with any
Person, or convey, sell, lease or otherwise dispose of any of its property or
assets, or enter into any sale-leaseback transactions, or purchase or otherwise
acquire an Acquired Entity or Business; except, that:

(a) each of the Company and its Subsidiaries may sell inventory in the ordinary
course of business;

(b) each of the Company and its Subsidiaries may liquidate or otherwise dispose
of obsolete or worn-out property in the ordinary course of business;

(c) Investments may be made to the extent permitted by Section 10.05;

(d) each of the Company and its Subsidiaries may sell assets (including by way
of merger or consolidation or in connection with sale-leaseback transactions) so
long as (i) no Default or Event of Default has occurred and is continuing or
would result therefrom, (ii) the Company or the respective Subsidiary receives
at least Fair Market Value as determined in good faith by the Company,
(iii) with respect to any such transaction in which the purchase price is in
excess of $3,000,000, the consideration received by the Company or such
Subsidiary consists of at least 75% cash or Cash Equivalents paid at the time of
the closing of such sale; provided, however, that for the purposes of this
clause (iii), (A) the amount of any Indebtedness or other liabilities (other
than Indebtedness or other liabilities that are subordinated to the Obligations
or that is secured by Liens that are subordinated to the Liens securing the
Obligations or that are owed to the Company or any Subsidiary) of the Company or
any Subsidiary (as shown on such Person’s most recent balance sheet or statement
of financial position (or the notes thereto) that are assumed by the transferee
of any such assets and for which the Company and/or its applicable Subsidiary
have been validly released by all relevant creditors in writing, (B) the amount
of any trade-in value applied to the purchase price of any replacement assets
acquired in connection with such disposition, (C) any securities received by the
Company or any Subsidiary from such transferee that are converted by such Person
into Cash or Cash Equivalents (to the extent of the Cash or Cash Equivalents
received) within 180 days following the closing of the applicable disposition
and (D) any Designated Non-Cash Consideration received by the Company or any of
its Subsidiaries in such sale having an aggregate Fair Market Value, taken
together with all other Designated Non-Cash Consideration received pursuant to
this clause (D) that is at such time outstanding, not to exceed $3,750,000 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, and (iv) the Net Sale Proceeds therefrom are

 

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applied and/or reinvested as (and to the extent) required by Section 5.02;
provided, that no capital stock or other Equity Interests of any Subsidiary
shall be sold pursuant to this clause (d), unless (A) all of the capital stock
or other Equity Interests of such Subsidiary are sold in accordance with this
clause (d) or (B) such sale is a sale of less than 100% of the capital stock or
other Equity Interests of an Excluded Subsidiary; provided, that the aggregate
Fair Market Value of all such sales of capital stock or other Equity Interests
pursuant to this clause (B) does not exceed 2.5% of Consolidated Total Assets of
the Company and its Subsidiaries as of the date of any such sale;

(e) each of the Company and its Subsidiaries may lease (as lessee), sublease (as
sublessee) or license (as licensee) real or personal property (so long as any
such lease or license does not create a Capitalized Lease Obligation except to
the extent permitted by Section 10.04(d)); provided, that Parent and its
Subsidiaries may not exclusively license any of their intellectual property;

(f) each of the Company and its Subsidiaries may sell or discount, in each case
without recourse and in the ordinary course of business, accounts receivable
arising in the ordinary course of business, but only in connection with the
compromise or collection thereof and not as part of any financing transaction;

(g) each of the Company and its Subsidiaries may grant licenses, sublicenses,
leases or subleases (including with respect to intellectual property, to the
extent such license, sublicense, lease or sublease is non-exclusive) to other
Persons in the ordinary course of business not materially interfering with the
conduct of the business of the Company or any of its Subsidiaries;

(h) the Company or any Subsidiary of the Company may convey, sell or otherwise
transfer all or any part of its business, properties and assets to any Borrower,
so long as any security interests granted to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Security Documents in the
assets so transferred shall remain in full force and effect (including, as the
case may be, as same may be replaced by the transferee Borrower) and perfected
(to at least the same extent as in effect immediately prior to such transfer)
and all actions required to maintain or renew said perfected status have been
taken;

(i) any Subsidiary of the Company may merge or consolidate with and into, or be
dissolved or liquidated into, any Borrower, so long as (i) in the case of any
such merger, consolidation, dissolution or liquidation involving the Company,
the Company is the surviving or continuing entity of any such merger,
consolidation, dissolution or liquidation, (ii) in the case of any such merger,
consolidation, dissolution or liquidation involving a Borrower, a Borrower is
the surviving or continuing entity of any such merger, consolidation,
dissolution or liquidation, and (iii) all actions required to create or maintain
perfected Liens in respect of assets required to be Collateral have been taken;

(j) [reserved];

(k) each of the Company and its Subsidiaries may liquidate or otherwise dispose
of Cash Equivalents, in each case for cash or Cash Equivalents;

(l) Liens may be granted to the extent permitted by Section 10.01;

(m) any involuntary loss, damage or destruction of property and the disposition
of the assets so damaged or destroyed shall be permitted;

 

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(n) any involuntary condemnation, seizure or taking, by exercise of the power of
eminent domain or otherwise, or confiscation or requisition of use of property
shall be permitted;

(o) the lapse, abandonment or cancellation of registered or pending patents,
trademarks and other intellectual property of the Company and its Subsidiaries
shall be permitted in the reasonable business judgment of the Company or such
Subsidiary;

(p) any Subsidiary of the Company that is not a Credit Party may be merged,
consolidated or amalgamated with and into, or be dissolved or liquidated into,
or transfer any of its assets to, any Subsidiary of the Company that is not a
Credit Party, so long as any security interests required to be granted to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the
Security Documents or Section 9.12 in the Equity Interests of such Subsidiary
shall remain in full force and effect, or as the case may be, be granted, and
perfected and enforceable and all actions required to maintain or create said
perfected status have been taken;

(q) Dividends may be paid to the extent permitted by Section 10.03;

(r) the discount of Inventory, accounts receivable or notes receivable in the
ordinary course of business or the conversion of accounts receivable to notes
receivable may be made, in each case, consistent with past practices prior to
the Effective Date;

(s) dispositions of receivables in connection with the compromise, settlement or
collection thereof in the ordinary course of business or in bankruptcy or
similar proceedings may be made; and

(t) Parent may merge or consolidate with and into, or be dissolved or liquidated
into, any direct or indirect parent of Parent (“New Parent”) so long as (i) as a
result of such merger, consolidation, liquidation or dissolution, New Parent
shall directly own 100% of the Equity Interests of the Company and
(ii) concurrently with such merger, New Parent signs a Joinder Agreement (and
pursuant to which New Parent agrees to become “Parent” hereunder and subject to
all of the rights and obligations of Parent hereunder) along with such other
security documents as may be reasonably requested by the Agents or the Required
Lenders, and otherwise complies with Section 9.12; provided, that, for the
avoidance of doubt, concurrent with such merger, consolidation or liquidation,
all actions required to give the Collateral Agent a perfected security interest
in the Equity Interests of the Company shall have been taken, including, without
limitation, that New Parent has delivered to the Collateral Agent certificates,
together with undated powers (or other documents of transfer acceptable to the
Collateral Agent) endorsed in blank by New Parent, representing the Equity
Interests of the Company. For the avoidance of doubt, such transaction shall not
be deemed a “Change of Control”.

To the extent the Required Lenders waive the provisions of this Section 10.02
with respect to the sale, transfer or disposition of any Collateral, or any
Collateral is sold, transferred or disposed of as permitted by this
Section 10.02 (other than to a Credit Party), such Collateral shall be sold,
transferred or disposed of free and clear of the Liens created by the Security
Documents, and the Administrative Agent and the Collateral Agent are hereby
authorized and directed to take any actions reasonably requested by the
Borrowers in order to effect or evidence the foregoing; provided, that the
Company has provided to the Administrative Agent and the Collateral Agent a
certificate executed by an Authorized Officer of the Company certifying that the
applicable sale, transfer or disposition is permitted by this Section 10.02 (and
the Lenders hereby authorize and direct the Administrative Agent and the
Collateral Agent to conclusively rely on such certificate in performing their
obligations under this paragraph).

 

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10.03 Dividends. Parent and the Company will not, and will not permit any of the
Company’s Subsidiaries to, authorize, declare or pay any Dividends with respect
to Parent, the Company or any of its Subsidiaries; except, that:

(a) any Subsidiary of the Company may pay Dividends to the Company or to any
Subsidiary of the Company that owns Equity Interests therein;

(b) any Non-Wholly-Owned Subsidiary of the Company may pay Dividends to its
shareholders, members or partners generally, so long as the Company or its
respective Subsidiary which owns the Equity Interest in the Subsidiary paying
such Dividends receives at least its proportionate share thereof (based upon its
relative holding of the Equity Interest in the Subsidiary paying such Dividends
and taking into account the relative preferences, if any, of the various classes
of Equity Interests of such Subsidiary);

(c) the Company may pay cash Dividends to Parent, and Parent may pay cash
Dividends to any parent entity of Parent, for the purpose of enabling Parent (or
any parent entity of Parent) to redeem, repurchase or otherwise acquire for
value outstanding Equity Interests of Parent (or such parent entity) originally
issued to (or for the benefit of), and following the death, disability,
resignation or termination of employment of, officers, directors or employees of
Parent, the Company or any of its Subsidiaries (so long as Parent (or any parent
holding company) promptly uses the proceeds therefrom for such purposes);
provided, that (i) the aggregate amount of Dividends paid by the Company in
reliance on this clause (c) shall not exceed $2,000,000 in any Fiscal Year of
the Company, and (ii) at the time of any Dividend, purchase or payment permitted
to be made pursuant to this clause (c), no Event of Default shall have occurred
and be continuing or would result therefrom;

(d) the Company may pay cash Dividends to Parent and Parent may pay cash
Dividends to any parent entity of Parent that serves as the common parent of an
affiliated, consolidated or unitary group that includes the Company at the times
and in the amounts necessary to enable Parent or such parent holding company to
pay its tax obligations, to the extent attributable solely to the business of
the Company and its Subsidiaries; provided, that (i) the amount of cash
Dividends paid by the Company pursuant to this clause (d) to enable Parent to
pay Federal and state income and franchise taxes at any time shall not exceed
the amount of such Federal and state income and franchise taxes actually owing
by Parent at such time for the respective period as determined in good faith by
Parent and (ii) the proceeds of such Dividends shall be used promptly by Parent
and/or any parent holding company for the purposes described above in this
clause (d);

(e) the Company may pay cash Dividends to Parent and Parent may pay cash
Dividends to any parent entity of Parent, so long as the proceeds thereof are
promptly used by Parent or such parent entity to pay operating expenses of
Parent or such parent entity incurred in the ordinary course of business
(including, without limitation, outside directors and professional fees,
expenses and indemnities) and other similar corporate overhead costs and
expenses, in each case, to the extent attributable solely to the business of the
Company and its Subsidiaries; provided, that the aggregate amount of all
Dividends paid by the Company or Parent pursuant to this clause (e) to one or
more parent entities of Parent shall not exceed $2,000,000 in any Fiscal Year of
the Company;

 

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(f) Parent may pay regularly scheduled Dividends on its Qualified Preferred
Stock pursuant to the terms thereof solely through the issuance of additional
shares of Qualified Preferred Stock (but not in cash); provided, that in lieu of
issuing additional shares of such Qualified Preferred Stock as Dividends, Parent
may increase the liquidation preference of the shares of Qualified Preferred
Stock in respect of which such Dividends have accrued;

(g) the Company may, in lieu of making direct cash payments to Sponsor and its
Affiliates as otherwise permitted by Sections 10.06(g), pay cash Dividends to
Parent and Parent may pay such cash Dividends to any parent holding company
thereof to enable Parent or such parent holding company to make such payments,
so long as Parent or such parent holding company promptly uses the proceeds of
such Dividends to make the payments permitted by such Sections; provided, that
all payments pursuant to this clause (g) shall be treated as having been made
pursuant to the relevant clauses of Section 9.06 for purposes of determining
compliance therewith;

(h) [reserved];

(i) Dividends deemed to occur upon the cashless exercise of stock options and
warrants or similar equity incentive awards of Parent shall be permitted;

(j) the Company may pay dividends to Parent and Parent may pay Dividends to its
equity holders or the equity holders of any parent holding company to make
payments in cash in lieu of the issuance of fractional shares upon the exercise
of warrants or upon the conversion or exchange of Equity Interests of any such
Person; provided, that the aggregate amount of all dividends paid by Parent
pursuant to this clause (j) shall not exceed $3,000,000;

(k) Parent and its Subsidiaries may pay other Dividends in an aggregate amount,
together with all other Dividends made pursuant to this Section 10.03(k), not to
exceed $250,000; and

(l) Parent and its Subsidiaries may make additional Dividends so long as the
Payment Conditions are satisfied both before and after giving effect to the
respective Dividend.

10.04 Indebtedness. Parent and the Company will not, and will not permit any of
the Company’s Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness, except:

(a) Indebtedness incurred pursuant to this Agreement and the other Credit
Documents;

(b) Indebtedness outstanding on the Effective Date and listed on Schedule 10.04
and any Permitted Refinancing Indebtedness in respect thereof;

(c) (i) Indebtedness under Interest Rate Protection Agreements entered into with
respect to other Indebtedness permitted under this Section 10.04 and (ii) under
Other Hedging Agreements, in either case so long as the entering into of such
Interest Rate Protection Agreements or Other Hedging Agreements are bona fide
hedging activities and are not for speculative purposes;

(d) Indebtedness of the Company and its Subsidiaries evidenced by Capitalized
Lease Obligations and purchase money Indebtedness and any Permitted Refinancing
in respect thereof not to exceed $5,000,000 in aggregate principal amount for
all such Indebtedness incurred pursuant to this clause (d) at any time;

 

 

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(e) Indebtedness constituting Intercompany Loans to the extent permitted by
Sections 10.05(h) and (q);

(f) Indebtedness consisting of guaranties (i) by the Borrowers of each other’s
Indebtedness and lease and other contractual obligations permitted under this
Agreement and (ii) by non-Credit Parties of each other’s Indebtedness and lease
and other contractual obligations permitted under this Agreement;

(g) [Reserved];

(h) 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, so long as such Indebtedness is
extinguished within three Business Days of its incurrence;

(i) Indebtedness of the Company and its Subsidiaries with respect to performance
bonds, surety bonds, appeal bonds, customs bonds, worker’s compensation claims
and similar obligations, required in the ordinary course of business or in
connection with the enforcement of rights or claims of the Company or any of its
Subsidiaries or in connection with judgments that do not result in a Default or
an Event of Default (including guarantees or obligations of the Company or any
Subsidiary with respect to letters of credit supporting such performance,
appeal, customs or surety bonds or workers’ compensation claims);

(j) (x) Indebtedness of the Credit Parties under the Priming Term Loan Documents
(and any Permitted Refinancing Indebtedness incurred in respect thereof) in an
aggregate principal amount not to exceed $231,142,125.05 plus any Additional PIK
Interest (as defined in the Priming Term Loan Agreement) at the rate provided in
the Priming Term Loan Agreement, as in effect on the Fourth Amendment Effective
Date, and/or PIK Payment (as defined in the Priming Term Loan Agreement) that is
capitalized and added to such principal amount (plus, in the case of any
Permitted Refinancing Indebtedness, unpaid accrued interest, fees, expenses and
premium thereon and any make-whole payments applicable thereto) at any time
outstanding; and (y) Indebtedness of the Credit Parties under the Existing Term
Loan Documents in an aggregate principal amount not to exceed $5,037,224.35 at
any time outstanding;

(k) Indebtedness of the Company or any of its Subsidiaries which may be deemed
to exist in connection with agreements providing for indemnification, purchase
price adjustments, earnouts and similar obligations in connection with the
acquisition or disposition of assets in accordance with the requirements of this
Agreement, so long as any such obligations are those of the Person making the
respective acquisition or sale, and are not guaranteed by any other Person
except as permitted by Section 10.04(f);

(l) Indebtedness owed to any Person providing property, casualty, liability, or
other insurance to the Company or any of its Subsidiaries, so long as the amount
of such Indebtedness is not in excess of the amount of the unpaid cost of, and
shall be incurred only to defer the cost of, such insurance for the period in
which such Indebtedness is incurred and such Indebtedness is outstanding only
for a period not exceeding twelve months;

 

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(m) Indebtedness in respect of treasury, depositary and cash management services
or automated clearinghouse transfer of funds, including without limitation the
Cash Management Obligations, in the ordinary course of business;

(n) [Reserved];

(o) [Reserved];

(p) Indebtedness of the Credit Parties under the Subordinated Facility Loan
Documents in an aggregate principal amount not to exceed $15,000,000 at any time
outstanding (as increased pursuant to payments of interest in-kind pursuant to
the terms thereof); provided, that Subordinated Facility Loans in excess of
$15,000,000 may be incurred (on the same terms as those incurred on the Fourth
Amendment Effective Date, including with respect to the interest rate thereon,
maturity thereof and guarantors and collateral) for cash (without any cash fees
or other cash payments made in connection therewith) (x) to the extent that the
Post-Closing Refunds received by the Company prior to the PIK Increase Date (as
defined in the Priming Term Loan Agreement) total less than $25,000,000, in an
amount equal to the excess of (1) $25,000,000 plus the amount of legal costs and
expenses incurred in connection therewith over (2) the actual amount of
Post-Closing Refunds received by the Company prior to the PIK Increase Date (as
defined in the Priming Term Loan Agreement), solely for the purpose of making
the PIK Increase Paydown (as defined in the Priming Term Loan Agreement) and
paying reasonable expenses incurred in connection therewith and the proceeds
therefrom are used solely therefor, (y) to fund a Cure Right in accordance with
Section 11.04 of this Agreement or with Section 10.04 or 10.05 of the Priming
Term Loan Agreement or (z) in an amount not in excess of the aggregate principal
amount of Indebtedness permitted to be incurred by the Company pursuant to
clause (t) at the time of such incurrence, such incurrence pursuant to this
clause (p)(z) reducing the amount of Indebtedness permitted to be in incurred
pursuant to clause (t); provided, further, that only the Sponsor and the lenders
under the Subordinated Facility Credit Agreement as of the Closing Date may
provide, directly or indirectly, the additional Subordinated Facility Loans
described in clauses (x) and (y) of the foregoing proviso;

(q) Permitted Unsecured Ratio Debt and any Permitted Refinancing Indebtedness in
respect thereof; provided, that (i) such Indebtedness may not be incurred or
guaranteed by any Persons other than the Credit Parties, (ii) such Indebtedness
shall be incurred on market terms (as reasonably determined by the Company),
(iii) such Indebtedness shall have a final stated maturity date equal to or
later than the 91 days after the Priming Term Loan Maturity Date and have a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of the Priming Term Loans and (iv) such Indebtedness shall not
have covenants or defaults or events of default more restrictive than those set
forth in the Priming Term Loan Agreement as in effect on the date of incurrence
(unless applying solely after the Priming Term Loan Maturity Date);

(r) Indebtedness of the Borrower that is secured on a junior basis to the
Obligations (and which may be guaranteed by the other Credit Parties) so long as
(i) after giving effect to the incurrence and application of proceeds thereof,
the Secured Net Leverage Ratio for the Calculation Period most recently ended
does not exceed 3.50:1.00; provided, that with respect to Indebtedness incurred
pursuant to this clause (r), (i) such Indebtedness shall not be guaranteed by
any Person other than the Credit Parties, (ii) such Indebtedness is not secured
by any asset of Parent, the Company or any Subsidiary other than the Collateral,
(iii) such Indebtedness shall not mature and is not subject to mandatory
redemption, repurchase, repayment or sinking fund obligation (other than
customary offers to repurchase on a change of control, asset sale or

 

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casualty event and customary acceleration rights after an event of default, and
prepayment requirements substantially similar to the Priming Term Loans), in
each case, prior to the date that is 90 days after the then latest Final
Maturity Date then in effect and, until the 91st day after such then latest
Final Maturity Date, scheduled amortization or prepayments thereof shall not
exceed 1% per annum of the original principal amount thereof, and (iv) the Liens
securing such Indebtedness shall be junior to the Liens securing the Obligations
pursuant to a subordination arrangement in form and substance reasonably
acceptable to the Administrative Agent (at the direction of Required Lenders)
and the Company; (v) such Indebtedness shall not have covenants or defaults or
events of defaults more restrictive than those set forth in the Priming Term
Loan Agreement (unless applying solely after the Priming Term Loan Maturity
Date);

(s) additional Indebtedness in an aggregate principal amount not to exceed
$25,000,000 plus the amount of all reasonable fees, legal costs and other
expenses incurred in connection therewith; provided, (i) such Indebtedness may
be secured solely pursuant to Section 10.01(g)(z), (ii) such Indebtedness may
not be incurred or guaranteed by any Persons other than the Credit Parties,
(iii) the proceeds from such Indebtedness must be used to repay the Priming Term
Loans at par and (iv) the all-in-cost of such Indebtedness reflects market rates
and customary terms for a tax-receivables financing and the Borrower shall have
provided the Lenders under the Priming Term Loan Agreement an opportunity to
provide such Indebtedness (on market terms for a tax-receivables financings);
provided, further, that upon receipt of any Post-Closing Refunds that secure
such Indebtedness, such Indebtedness shall be promptly (and no later than seven
(7) Business Days after such receipt) repaid;

(t) so long as no Default or Event of Default has occurred and is continuing at
the time of the incurrence thereof, or would result therefrom, additional
Indebtedness of the Company and its Subsidiaries in an aggregate principal
amount not to exceed $15,000,000; provided, that (i) such Indebtedness shall not
be guaranteed by any Person other than the Guarantors, (ii) no such Indebtedness
shall be secured by any asset of the Company or any of its Subsidiaries other
than the Collateral (other than ABL Facility Priority Collateral, unless junior
and subordinated in priority to the Liens thereon securing the Secured
Obligations), (iii) such Indebtedness shall not mature or require any scheduled
amortization or scheduled payments of principal and is not subject to mandatory
redemption, repurchase, repayment or sinking fund obligation (other than
customary offers to repurchase on a change of control, asset sale or casualty
event and customary acceleration rights after an event of default and prepayment
requirements substantially similar to those applicable to the Priming Term
Loans), in each case, prior to the date that is 91 days after the Final Maturity
Date then in effect, (iv) such Indebtedness shall be incurred on market terms
(as reasonably determined by the Company), and (v) such Indebtedness shall not
have covenants or defaults or events of default more restrictive than those set
forth in the Priming Term Loan Agreement (unless applying solely after the
Priming Term Loan Maturity Date);

(u) unsecured Indebtedness in respect of obligations of the Company or any
Subsidiary to pay the deferred purchase price of goods or services or progress
payments in connection with such goods and services; provided, that such
obligations are incurred in connection with open accounts extended by suppliers
on customary trade terms in the ordinary course of business and not in
connection with the borrowing of money;

(v) Indebtedness issued by the Company or a Subsidiary to future, present or
former officers, directors, employees, members of management or consultants
thereof or any direct or indirect parent thereof, their respective estates,
spouses, former spouses, domestic partners or former domestic partners, in each
case to finance the purchase or redemption of Equity Interests of Parent, the
Company, a Subsidiary of the Company or any of their direct or indirect parent
companies permitted by Section 10.03(c) hereof; and

 

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(w) (i) Indebtedness of Subsidiaries that are not Credit Parties in an aggregate
principal amount outstanding at any time not to exceed $1,000,000 and
(ii) letters of credit issued for the account of Subsidiaries that are not
Borrowers in an aggregate principal amount outstanding at any time not to exceed
$1,000,000.

10.05 Advances, Investments and Loans. Parent and the Company will not, and will
not permit any of the Company’s Subsidiaries to, directly or indirectly, lend
money or credit or make advances to any Person, or purchase or acquire any
stock, obligations or securities of, or any other Equity Interest in, or make
any capital contribution to, any other Person, or hold any cash or Cash
Equivalents (each of the foregoing, an “Investment” and, collectively,
“Investments”); except, that the following shall be permitted:

(a) the Company and its Subsidiaries may acquire and hold accounts receivables
owing to any of them, if created or acquired in the ordinary course of business;

(b) Parent, the Company and its Subsidiaries may acquire and hold cash and Cash
Equivalents; provided, that from and after the date required therefor under
Section 5.03 (and to the extent required thereunder), all such cash and Cash
Equivalents of the Company and its Subsidiaries that are Credit Parties are held
or credited to Deposit Accounts or Securities Accounts set forth in Parts A
through D of Schedule 10.12;

(c) Parent, the Company and its Subsidiaries may hold the Investments held by
them on the Fourth Amendment Effective Date, and any modification, replacement,
renewal or extension thereof that does not increase the amount thereof unless
any additional Investments made with respect thereto are permitted under the
other provisions of this Section 10.05;

(d) the Company and its Subsidiaries may acquire and own investments (including
debt obligations and Equity Interests) received in connection with the
bankruptcy or reorganization of suppliers and customers and in good faith
settlement of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;

(e) the Company and its Subsidiaries may make loans and advances to their
officers and employees for moving, relocation and travel expenses and other
similar expenditures, in each case in the ordinary course of business in an
aggregate amount not to exceed $1,000,000 outstanding at any time (determined
without regard to any write-downs or write-offs of such loans and advances but
taking into account any return of capital, repayment, dividend or distribution
in respect thereof);

(f) Parent, the Company and its Subsidiaries may acquire and hold obligations of
their officers and employees in connection with such officers’ and employees’
acquisition of Equity Interests of Parent (so long as no cash is actually
advanced by Parent, the Company or any of its Subsidiaries in connection with
the acquisition of such obligations);

(g) the Company may enter into Interest Rate Protection Agreements and Other
Hedging Agreements to the extent permitted by Section 10.04(c);

(h) (i) Parent and any Borrower may make intercompany loans and advances to any
Borrower, (ii) any Subsidiary of the Company which is not a Borrower may make
intercompany loans and advances to any Borrower, (iii) Subsidiary of the Company
which is not

 

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a Borrower may make intercompany loans and advances to any other Subsidiary of
the Company which is not a Borrower and (iv) any Borrower may make intercompany
loans and advances to any Subsidiary of the Company which is not a Borrower not
to exceed at any time outstanding $1,000,000 (such intercompany loans and
advances referred to in preceding clauses (i) through (iv), collectively, the
“Intercompany Loans”); provided, that (A) each Intercompany Note owed to a
Credit Party (which may, at the Company’s discretion, be in the form of one or
more global intercompany notes) shall be pledged by such Credit Party to the
Collateral Agent pursuant to the Security Agreement, (B) each Intercompany Loan
made to a Borrower by a Person that is not a Borrower shall be subject to an
intercompany subordination agreement (an “Intercompany Subordination Agreement”)
in form and substance reasonably satisfactory to the Required Lenders, pursuant
to which the obligations in respect of such Intercompany Loan shall be
subordinated to the Obligations, and (C) at no time shall the aggregate
outstanding principal amount of all Intercompany Loans made pursuant to
preceding subclause (iv) of this clause (h) when added to the amount of
contributions and acquisitions of Equity Interests theretofore made and then
outstanding pursuant to subclause (i)(iv) of this Section 10.05 (for this
purpose taking the Fair Market Value of any property (other than cash) so
contributed at the time of such contributions) exceed $1,000,000 (determined
without regard to any write-downs or write-offs of such loans, advances and
other Investments referenced above but taking into account any return of
capital, repayment, dividend or distribution in respect thereof); provided,
further, that no Investment by any Credit Party in any Specified Foreign
Guarantor may be made or held pursuant to this clause (h);

(i) (i) Parent may make capital contributions to, or acquire Equity Interests
of, the Company, (ii) the Borrowers may make capital contributions to, or
acquire Equity Interests of, any other Borrower (other than the Company), (iii)
any Subsidiary of the Company that is not a Borrower may make capital
contributions to, or acquire Equity Interests of, any other Subsidiary of the
Company which is not a Borrower and (iv) any Borrower may make capital
contributions to, or acquire Equity Interests of, any Subsidiary of the Company
which is not a Borrower not to exceed at any time outstanding $1,000,000;
provided, that the aggregate amount of contributions and acquisitions of Equity
Interests on and after the Effective Date made and outstanding pursuant to
preceding subclause (iv) (for this purpose, taking the Fair Market Value of any
property (other than cash) so contributed at the time of such contribution),
when added to the aggregate outstanding principal amount of Intercompany Loans
made to any Subsidiary of the Company which is not a Borrower pursuant to
subclause (iv) of Section 10.05(h) (determined without regard to any write-downs
or write-offs thereof but taking into account any return of capital, repayment,
dividend or distribution in respect thereof), shall not exceed $1,000,000;
provided, further, that no Investment by any Credit Party in any Specified
Foreign Guarantor may be made or held pursuant to this clause (i);

(j) Parent, the Company and its Subsidiaries may own the Equity Interests of
their respective Subsidiaries created or acquired in accordance with the terms
of this Agreement (so long as all amounts invested in such Subsidiaries are
independently permitted under another provision of this Section 10.05);

(k) Contingent Obligations permitted by Section 10.04, to the extent
constituting Investments;

(l) [Reserved];

 

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(m) the Company and its Subsidiaries may receive and hold promissory notes and
other non-cash consideration received in connection with any asset sale
permitted by Section 10.02(d);

(n) the Company and its Subsidiaries may make advances (i) of payroll to
employees of the Company and its Subsidiaries in the ordinary course of business
and (ii) in the form of a prepayment of expenses to vendors, suppliers,
distributors and trade creditors, so long as such prepayments are made, and
expenses will be incurred in the ordinary course of business of the Company or
such Subsidiary;

(o) the Company and its Subsidiaries may make advances in connection with
purchases of goods or services in the ordinary course of business;

(p) so long as no Default or Event of Default has occurred and is continuing at
the time of the making of such Investment or would result therefrom, the
Borrowers and their Subsidiaries may from time to time make Investments not
otherwise permitted by this Section 10.05; provided, that the aggregate amount
of Investments made and outstanding pursuant to this clause (p) shall not exceed
$12,500,000 (determined without regard to any write downs or write offs thereof
but taking into account any return of capital, repayments, dividend or
distribution in respect thereof);

(q) [Reserved].

(r) additional Investments (excluding acquisitions of an Acquired Entity or
Business) at any time so long as the Payment Conditions are satisfied both
before and after giving effect thereto;

(s) Investments in joint ventures in an aggregate amount not to exceed
$5,000,000 outstanding at any time;

(t) [Reserved];

(u) Investments in the nature of pledges or deposits with respect to leases or
utilities provided to third parties in the ordinary course of business;

(v) Investments in the ordinary course of business consisting of (i) UCC Article
3 endorsements for collection or deposit and (ii) customary trade arrangements
with customers consistent with past practices;

(w) to the extent that they constitute Investments, purchases and acquisitions
of inventory, supplies, materials and equipment or purchases of contract rights
or licenses or leases of intellectual property, in each case in the ordinary
course of business; and

(x) so long as no Default or Event of Default is then in existence, the
forgiveness or conversion to equity of any Indebtedness owed to a Credit Party
and otherwise permitted by this Section 10.05.

10.06 Transactions with Affiliates. Parent and the Company will not, and will
not permit any of the Company’s Subsidiaries to, enter into any transaction or
series of related transactions with any Affiliate of Parent or any of its
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Company), except (x) on terms and conditions substantially as favorable to
Parent, the Company or such Subsidiary as would reasonably be obtained by
Parent, the Company or such Subsidiary at that time in a comparable arm’s-length
transaction with a Person other than an Affiliate and (y) in the case of any
such transaction or series of related transactions involving one or more
payments by Parent, the Company or its Subsidiaries in excess of $1,000,000, to
the extent same has been disclosed to the Administrative Agent prior to the
consummation thereof; provided, that the following in any event shall be
permitted:

(a) Dividends may be paid to the extent provided in Section 10.03;

(b) loans may be made and other transactions may be entered into by Parent, the
Company and its Subsidiaries to the extent permitted by Section 10.05(e), (f)
and (s);

(c) customary fees, indemnities and reimbursements may be paid to directors of
Parent, the Company and its Subsidiaries;

(d) Parent may issue Parent Common Stock (and options, warrants and rights with
respect thereto) and Qualified Preferred Stock;

(e) Parent, the Company and its Subsidiaries may enter into, and may make
payments under, employment agreements, employee benefits plans, stock option
plans, indemnification provisions and other similar compensatory arrangements
with officers, employees and directors of Parent, the Company and its
Subsidiaries in the ordinary course of business;

(f) payments of principal, interest and fees under the Priming Term Loan
Documents and the Existing Term Loan Documents to Affiliated Persons that are
lenders thereunder solely in their capacities as such lenders;

(g) Parent and/or the Company may reimburse the Sponsor and its Affiliates for
their (i) reasonable out-of-pocket expenses and in an amount not to exceed
$100,000 in any Fiscal Year and (ii) indemnification claims, in each case,
incurred in connection with their providing management services to Parent, the
Company and its Subsidiaries; and

(h) transactions pursuant to the Subordinated Facility Credit Agreement and the
other Subordinated Facility Loan Documents.

Notwithstanding anything to the contrary contained herein or in any other Credit
Documents, in no event shall Parent, Company or any of its Subsidiaries pay to
Sponsor (including in its capacity as a lender under the Subordinated Facility
Credit Agreement) (i) any expenses pursuant to any financial advisory,
financing, underwriting, or placement agreement (other than for the avoidance of
doubt, the Subordinated Facility Loan Documents and the Subordination Agreement)
or in respect of other investment banking activities, (ii) fees for any
transaction-based financial advisory, financing, underwriting or placement
services or in respect of other investment banking activities, (iii) any
management fees (whether pursuant to a contract currently in existence or
hereafter created) or (iv) any out-of-pocket expenses (including reimbursement
therefor) except in amounts that would be permitted by clause (g) of this
Section 10.06, amounts paid to directors or officers affiliated with the Sponsor
pursuant to clause (c) and (e) in this Section 9.06 or in amounts permitted as
Permitted Payments pursuant to and as defined in the Subordination Agreement.

 

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10.07 Modifications of Certificate of Incorporation, By-Laws and Certain Other
Agreements; Limitations on Voluntary Payments, etc. Parent and the Company will
not, and will not permit any of the Company’s Subsidiaries to:

(a) except in connection with a Permitted Refinancing thereof or, for the
avoidance of doubt, regularly scheduled principal or interest payments thereon
and mandatory prepayments from asset sales, insurance and condemnation events,
debt issuances and excess cash flow of the type required by the Term Loans, make
any voluntary or optional payment or prepayment on or redemption or acquisition
for value of, or any prepayment, repayment or redemption as a result of any
asset sale, insurance or condemnation event, debt issuance, equity issuance,
capital contribution, change of control or similar required “repurchase” event
(including, in each case without limitation, by way of depositing with any agent
or trustee with respect thereto or any other Person money or securities before
due for the purpose of paying when due) any Indebtedness for borrowed money
(other than Indebtedness under this Agreement and the other Credit Documents)
(collectively, “Restricted Junior Payments”); provided, that the Company or the
applicable Subsidiary may make voluntary or optional prepayments of any such
Indebtedness, so long as both before and after giving effect to the respective
prepayment, the Payment Conditions shall be satisfied;

(b) amend, modify, change or waive any term or provision of any Priming Term
Loan Document or any Existing Term Loan Document in a manner which is prohibited
by the terms of the ABL Intercreditor Agreement;

(c) amend or modify, or permit the amendment or modification of, any provision
of any Subordinated Indebtedness in any manner that is, or could reasonably be
expected to be, adverse in any material respect to the interests of any Agent or
Lender;

(d) amend, modify or change its certificate or articles of incorporation,
articles of designation, certificate of formation, limited liability company
agreement, by-laws or equivalent organizational documents, as applicable, unless
such amendment, modification, change or other action contemplated by this clause
(d) would not be adverse in any material respect to the interests of the Lenders
and the terms of any such amendment, modification, change or other action will
not violate any of the other provisions of this Agreement or any other Credit
Document (it being understood and agreed that any amendments, modifications,
changes or other actions relating solely to stock splits, reverse stock splits
or similar corporate transactions are not adverse in any material respect to the
interests of the Lenders and the terms of any such amendment, modification,
change or other action do not violate any of the other provisions of this
Agreement or any other Credit Document);

(e) notwithstanding clause (a) above, make any payment with respect to any
principal of the Existing Term Loans, except on or after the date that is five
(5) Business Days prior to the stated maturity thereof (as of the Fourth
Amendment Effective Date), so long as (i) no Default or Event of Default shall
have occurred and be continuing and (ii) the Company (x) is in compliance with
Section 9.10 of the Priming Term Loan Agreement on a Pro Forma Basis immediately
following such payment and (y) reasonably expects to be in compliance with
Section 9.10 of the Priming Term Loan Agreement on a Pro Forma Basis for the
full calendar month immediately succeeding such payment (based on reasonable
projections of the Company delivered to the Administrative Agent for delivery to
private-side Lenders), in each case, as certified by a Responsible Officer of
the Company in a certificate delivered to the Administrative Agent and
private-side Lenders prior to such payment; or

 

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(f) notwithstanding clause (a) above, make (x) any cash payments in respect of
principal, interest or fees or otherwise in respect of the Subordinated Facility
Loans, other obligations under the Subordinated Facility Loan Documents or any
other Indebtedness of Parent or its Subsidiaries held by the Sponsor or
(y) consent to any amendment, waiver or modification to the terms of the
Subordinated Facility Loan Documents that are adverse to the Lenders or in a
manner that is prohibited by the terms of the Subordination Agreement.

10.08 Limitation on Certain Restrictions on Subsidiaries. Parent and the Company
will not, and will not permit any of the Company’s Subsidiaries to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
Equity Interest or participation in its profits, in each case owned by the
Company or any of its Subsidiaries, or pay any Indebtedness owed to the Company
or any of its Subsidiaries, (b) make loans or advances to the Company or any of
its Subsidiaries that are Borrowers or (c) transfer any of its properties or
assets to the Company or any of its Subsidiaries that are Borrowers, except for
such encumbrances or restrictions existing under or by reason of (i) any
agreement in effect on the Effective Date and described on Schedule 10.08, (ii)
applicable law, (iii) this Agreement and the other Credit Documents (and
restrictions applicable to other Indebtedness so long as not more restrictive in
any material respect than those contained in this Agreement and the other Credit
Documents), (iv) the Priming Term Loan Agreement and the other Priming Term Loan
Documents (and restrictions applicable to other Indebtedness so long as not more
restrictive in any material respect than those contained in the Priming Term
Loan Agreement and the other Priming Term Loan Documents), (v) customary
provisions restricting subletting or assignment of any lease governing any
leasehold interest of the Company or any of its Subsidiaries, (vi) [reserved],
(vii) customary provisions restricting assignment, sublicensing or subletting of
any licensing or leasing agreement (in which the Company or any of its
Subsidiaries is the licensee or lessee), any acquisition or sale agreement
permitted by this Agreement or any other contract entered into by Parent, the
Company or any of its Subsidiaries in the ordinary course of business,
(viii) restrictions on the transfer of any asset or Subsidiary or the conduct of
business related thereto pending the close of the sale of such asset or
Subsidiary, (ix) restrictions on the transfer of any asset subject to a Lien
permitted by Sections 10.01(c), (e), (f), (m), (n), (r), (s), (t), (v) or (x);
(x) any agreement or instrument in effect at the time any entity becomes a
Subsidiary of the Company or any assets are acquired by a Credit Party, which
encumbrance or restriction is not applicable to any Person or the properties or
assets of any Person, other than the Person or the properties or assets of the
Person so acquired and so long as the respective encumbrances or restrictions
were not created (or made more restrictive) in connection with or in
anticipation of the acquisition of such Subsidiary or assets by a Credit Party;
(xi) restrictions applicable to any joint venture that is a Subsidiary,
(xii) customary restrictions on the transfer of joint venture interests,
(xiii) restrictions and conditions on any Foreign Subsidiary imposed by the
terms of any Indebtedness of such Foreign Subsidiary permitted to be incurred
pursuant to Section 10.04, (xiv) customary net worth provisions contained in
real property leases entered into by the Company and the Subsidiaries in the
ordinary course of business, so long as the Company has determined in good faith
that such net worth provisions would not reasonably be expected to impair the
ability of the Company and Subsidiaries to meet their ongoing obligations,
(xv) any restrictions regarding licenses or sublicenses by the Company and the
Subsidiaries of intellectual property rights in the ordinary course of business
(in which case such restrictions shall relate only to such intellectual property
rights); and (xvi) any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of the
contracts, instruments or obligations referred to in the foregoing clauses
(i) through (xv); provided, that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings are,
in the good faith judgment of the Company, no more restrictive with respect to
such encumbrance or restriction than those contained in the encumbrance or
restriction prior to such amendment, modification, restatement, renewal,
increase, supplement, refunding, replacement or refinancing.

 

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10.09 Business; etc. (a) Parent and the Company will not, and will not permit
any of the Company’s Subsidiaries to, engage directly or indirectly in any
business other than the businesses engaged in by Parent, the Company and its
Subsidiaries as of the Effective Date and businesses reasonably related,
ancillary or complimentary thereto.

(b) Notwithstanding the foregoing or anything else in this Agreement to the
contrary, Parent will not engage in any business or own any significant assets
or have any material liabilities other than (i) its ownership of the capital
stock of the Company, cash and Cash Equivalents, (ii) holding intercompany loans
made to the Company, (iii) other activities attributable to or ancillary to its
role as a holding company, including making contributions to the capital of the
Company, guaranteeing the obligations of the Subsidiaries solely to the extent
such obligations are not prohibited hereunder, making Dividends and Investments
permitted to be made by this Agreement, and providing indemnification to
officers and directors, and (iv) those liabilities which it is responsible for
under this Agreement and the other Credit Documents to which it is a party and
those related to its ownership of the capital stock of the Company; provided,
that Parent may engage in those activities and have liabilities that are
incidental to (A) the maintenance of its existence in compliance with applicable
law and (B) legal, tax and accounting matters in connection with any of the
foregoing activities.

10.10 [Reserved].

10.11 Fixed Charge Coverage Ratio. During each Financial Covenant Compliance
Period, the Company shall not permit the Fixed Charge Coverage Ratio for (a) the
last Test Period ended prior to the beginning of such Financial Covenant
Compliance Period for which financial statements are available (or were required
to be made available), or (b) any Test Period ended before or during such
Financial Covenant Compliance Period for which financial statements become
available (or were required to be made available) during such Financial Covenant
Compliance Period, to be less than 1.00:1.00.

10.12 No Additional Deposit Accounts; etc. No Credit Party will, directly or
indirectly, open, acquire, maintain or otherwise have any checking, savings,
deposit, securities or other accounts at any bank or other financial institution
where cash or Cash Equivalents are or may be deposited or maintained with any
Person, other than (a) the Concentration Accounts set forth on Part A of
Schedule 10.12, (b) the Collection Accounts set forth on Part B of Schedule
10.12, (c) the Disbursement Accounts set forth on Part C of Schedule 10.12, (d)
the other Deposit Accounts set forth on Part D of Schedule 10.12 and (e) the
Excluded Deposit Accounts set forth on Part E of Schedule 10.12; provided, that
the Company or any other Credit Party may (i) open a new Concentration Account,
Collection Account, Disbursement Account, other Deposit Account or Excluded
Deposit Account not set forth in such Schedule 10.12 or (ii) deposit funds into
an Excluded Deposit Account that would result in such account ceasing to be an
Excluded Deposit Account, so long as (A) the Borrowers have delivered an updated
Schedule 10.12 to the Administrative Agent reflecting same and (B) a Control
Agreement reasonably acceptable to the Administrative Agent is executed and
delivered in accordance with Section 5.03(b). Unless consented to in writing by
the Administrative Agent, no Credit Party will enter into any agreements with
credit card or debit card issuers or processors other than the ones set forth on
Part F of Schedule 10.12 unless (1) the Borrowers have delivered an updated
Schedule 10.12 to the Administrative Agent describing such arrangement and (2) a
Credit Card Notification is executed and delivered in accordance with
Section 5.03(b).

SECTION 11. Events of Default.

11.01 Events of Default. Upon the occurrence of any of the following specified
events (each, an “Event of Default”):

 

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(a) Payments. The Borrowers shall (i) default in the payment when due of any
principal of any Loan or any Note or any Unpaid Drawing, or (ii) default in the
payment when due of any interest on any Loan or any Note or any Unpaid Drawing
or any Fees or any other amounts owing hereunder or under any other Credit
Document, and such default pursuant to this clause (ii) shall continue
unremedied for five or more Business Days; or

(b) Representations, etc. Any representation, warranty or statement made,
confirmed or deemed made by any Credit Party herein or in any other Credit
Document or in any certificate delivered to the Administrative Agent or any
Lender pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made, confirmed or deemed made; or

(c) Covenants. Parent, the Company or any of its Subsidiaries shall (i) default
in the due performance or observance by it of any term, covenant or agreement
contained in Section 5.03, 9.01(f), (g), (h), (i) or (j)(i), 9.04 (with respect
to company existence) or Section 10, (ii) default in the due performance or
observance by it of any other term, covenant or agreement contained in this
Agreement or any other Credit Document (other than those set forth in Sections
11.01(a) and (b) and clauses (i) or (iii) of this Section 11.01(c)) and such
default shall continue unremedied for a period of 30 days after the date on
which written notice thereof is given to the Borrowers by the Administrative
Agent or the Required Lenders or (iii) default in the due performance or
observance of Section 9.01(j)(ii) or (iii) or Section 9.17 and such default
shall remain unremedied for a period of three Business Days after such default
(regardless of whether notice thereof is given to the Company by the by the
Administrative Agent or the Required Lenders); or

(d) Default Under Other Agreements. (i) Parent, the Company or any of its
Subsidiaries shall (A) default in any payment of any Indebtedness (other than
the Obligations and the Indebtedness described in clause (ii) below) beyond the
period of grace, if any, provided in an instrument or agreement under which such
Indebtedness was created or (B) default in the observance or performance of any
agreement or condition relating to any Indebtedness (other than the Obligations
and the Indebtedness described in clause (ii) below) beyond any period of grace,
if any, provided therein if the effect of such default (however denominated) 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) to cause (determined without
regard to whether any notice is required), any such Indebtedness to become due
prior to its stated maturity; provided, that it shall not be a Default or an
Event of Default under clause (i) of this Section 11.01(d) unless the aggregate
principal amount of all Indebtedness as described above with respect to which
such default, other event or condition, has occurred and is continuing is at
least $15,000,000 (other than Indebtedness incurred under the Priming Term Loan
Documents, the Existing Term Loan Documents or the Subordinated Facility Loan
Documents), or (ii) Parent, the Company or any of its Subsidiaries shall
(A) default in any payment of any Indebtedness under the Priming Term Loan
Documents, Existing Term Loan Documents or the Subordinated Facility Loan
Documents, in each case, beyond the period of grace, if any, provided therein or
(B) default in the observance or performance of any agreement or condition
relating to the Indebtedness under, or contained in, the Priming Term Loan
Documents, Existing Term Loan Documents or the Subordinated Facility Loan
Documents, in each case, beyond any period of grace, if any, provided therein,
if the effect of such default (however denominated) is to cause, or to permit
the holder or holders of commitments or Indebtedness under the Priming Term Loan
Documents (or an agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such commitments or
Indebtedness to be terminated or become due, as applicable, prior to its stated
expiration or maturity, as the case may be; provided, that, notwithstanding the
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with respect to any breach or default with respect to Section 9.11 and/or
Section 9.12 of the Priming Term Loan Agreement (or any other financial
covenant(s) subsequently added to the Priming Term Loan Agreement or contained
in any Permitted Refinancing of the Priming Term Loan Agreement), such breach or
default shall constitute an Event of Default under this Agreement only if the
maturity of the obligations under the Priming Term Loan Agreement are
accelerated as a result of such breach or default; or

(e) Bankruptcy, etc. Parent, the Company or any of its Subsidiaries (other than
an Immaterial Subsidiary) shall commence a voluntary case concerning itself
under Title 11 of the United States Code entitled “Bankruptcy,” as now or
hereafter in effect, or any successor thereto (the “Bankruptcy Code”); or an
involuntary case is commenced against Parent, the Company or any of its
Subsidiaries (other than an Immaterial Subsidiary), and the petition is not
controverted within 10 days, or is not dismissed within 60 days after the filing
thereof; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of Parent, the Company
or any of its Subsidiaries (other than an Immaterial Subsidiary), to operate all
or any substantial portion of the business of Parent, the Company or any of its
Subsidiaries (other than an Immaterial Subsidiary), or Parent, the Company or
any of its Subsidiaries (other than an Immaterial Subsidiary) commences any
other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Parent, the Company
or any of its Subsidiaries (other than an Immaterial Subsidiary), or there is
commenced against Parent, the Company or any of its Subsidiaries any such
proceeding which remains undismissed for a period of 60 days after the filing
thereof, or Parent, the Company or any of its Subsidiaries (other than an
Immaterial Subsidiary) is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or
Parent, the Company or any of its Subsidiaries (other than an Immaterial
Subsidiary) makes a general assignment for the benefit of creditors; or Parent,
the Company or any of its Subsidiaries (other than an Immaterial Subsidiary)
shall fail generally to pay its debts as they become due; or

(f) ERISA. (i)(A) one or more ERISA Events shall have occurred, or

(B) there is or arises an Unfunded Pension Liability (taking into account only
Plans with positive Unfunded Pension Liability); or

(C) there is or arises any withdrawal liability under Section 4201 of ERISA, if
Parent, the Company, any Subsidiary of the Company or any of the ERISA
Affiliates withdraws completely from any and all Multiemployer Plans; and

(ii) there shall result from any such event or events described in clause
(a) the imposition of a lien, the granting of a security interest or a
liability; and such lien, security interest or liability, individually, and/or
in the aggregate, has had, or would reasonably be expected to have, a Material
Adverse Effect; or

(g) Security Documents. Any of the Security Documents shall cease to be in full
force and effect, or shall cease to give the Collateral Agent for the benefit of
the Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including,

 

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without limitation, a perfected security interest in, and Lien on, all of the
Collateral, in favor of the Collateral Agent, prior (on a First Priority basis
with respect to the ABL Facility Priority Collateral and on a Second Priority
basis with respect to Term Loan Priority Collateral and prior in all respects to
the Subordinated Loans) to the rights of all third Persons (except for Liens
permitted by Section 10.01), and subject to no other Liens (except for Liens
permitted by Section 10.01); provided, that the failure to have such a perfected
and enforceable Lien on Collateral in favor of the Collateral Agent shall not
give rise to an Event of Default under this Section 11.01(g), if either (A) the
aggregate fair market value of all Collateral over which the Collateral Agent
fails to have such a perfected and enforceable Lien is less than $3,000,000, (B)
such lack of perfection or enforceability results from any act or omission of
the Collateral Agent or the Administrative Agent (so long as such act or
omission does not result from the breach or non-compliance by a Credit Party
with the terms of any Credit Document), (C) the lack of perfection or
enforceability is with respect to a Mortgaged Property and is covered by a
lender’s title insurance policy for the benefit of the Collateral Agent and the
Required Lenders shall be reasonably satisfied with the credit of such insurer
and the amount insured, or (D) the lack of perfection results from limitations
of foreign laws, rules or regulations as they apply to pledges of Equity
Interests in Foreign Subsidiaries or applications thereof); or

(h) Guaranties. Any Guaranty or any material provision thereof shall cease to be
in full force or effect as to any Guarantor (except as a result of a release of
any Guarantor in accordance with the terms thereof), or any Guarantor or any
Person acting for or on behalf of such Guarantor shall deny or disaffirm in
writing such Guarantor’s obligations under the Guaranty to which it is a party;
or

(i) [Reserved]; or

(j) Judgments. One or more judgments or decrees shall be entered against Parent,
the Company or any Subsidiary of the Company and such judgments and decrees
shall be final and non-appealable and shall not be vacated, satisfied,
discharged or stayed, covered by a reputable and solvent insurance company or
bonded pending appeal for any period of 30 consecutive days, and the aggregate
amount of all such judgments equals or exceeds $15,000,000, or any action shall
be legally taken by a judgment creditor to attach or levy upon any assets of
Parent, the Company or any of its Subsidiaries to enforce any such judgment
equal to or in excess of $15,000,000; or

(k) Change of Control. A Change of Control shall occur; or

(l) Intercreditor Agreements. Any Intercreditor Agreement, or any provision of
any thereof shall cease to be in full force or effect (except in accordance with
its terms) or, any Credit Party shall deny or disaffirm in writing its
obligations thereunder;

then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Lenders, shall by written notice to the Borrowers, take any or all
of the following actions, without prejudice to the rights of the Administrative
Agent to enforce its claims against any Credit Party, or the rights of any
Lender or the holder of any Note to enforce its claims against the Borrowers
(provided, that if an Event of Default specified in Section 11.01(e) shall occur
with respect to any Borrower, the result of which would occur upon the giving of
written notice by the Administrative Agent as specified in clauses (a) and (b)
below, shall occur automatically without the giving of any such notice): (a)
declare the Total Revolving Loan Commitment terminated, whereupon the Revolving

 

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Loan Commitment of each Lender shall forthwith terminate immediately and any
accrued Commitment Commission shall forthwith become due and payable without any
other notice of any kind; (b) declare the principal of and any accrued interest
in respect of all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Credit Party; (c) terminate any Letter of Credit which
may be terminated in accordance with its terms; (d) direct the Borrowers to pay
(and the Borrowers jointly and severally agree that upon receipt of such notice,
or upon the occurrence of an Event of Default specified in clause (e) above with
respect to any Borrower, they will pay) to the Collateral Agent at the Payment
Office, such additional amount of cash or Cash Equivalents, to be held as
security by the Collateral Agent, as is equal to the aggregate Stated Amount of
all Letters of Credit issued for the account of the Borrowers and then
outstanding; (e) apply any cash collateral held by the Administrative Agent
pursuant to Section 5.02 to the repayment of the Obligations; (f) subject to the
terms of the Intercreditor Agreements, enforce, as Collateral Agent, all of the
Liens and security interests created pursuant to the Security Documents in
accordance with the terms thereof; and (g) enforce each Guaranty.

11.02 Rescission. If (1) at any time after termination of the Revolving Loan
Commitments or acceleration of the maturity of the Loans, the Borrowers shall
have paid all arrears of interest and all payments on account of principal of
the Loans and reimbursement obligations with respect to Letters of Credit owing
by them that shall have become due otherwise than by acceleration (with interest
on principal and, to the extent permitted by law, on overdue interest, at the
rates specified herein) and (2) all Defaults (in each case, other than
non-payment of principal of and accrued interest on the Loans due and payable
solely by virtue of acceleration) shall have been remedied or waived pursuant to
Section 13.12 and all Events of Default (in each case, other than non-payment of
principal of and accrued interest on the Revolving Loans due and payable solely
by virtue of acceleration) shall have been waived (it being understood that
Events of Default may not be remedied, except pursuant to Section 11.04)
pursuant to Section 13.12, then upon the written consent of the Required Lenders
and written notice to the Borrowers, the termination of the Revolving Loan
Commitments or the acceleration and its consequences may be rescinded and
annulled. For the avoidance of doubt, such action shall not affect any
subsequent Default or Event of Default or impair any right or remedy consequent
thereon. The provisions of the first sentence of this Section 11.02 do not give
any Borrower the right to require the Lenders to rescind or annul any
acceleration hereunder, even if the conditions set forth herein are met.

11.03 Application of Proceeds. Subject to the Intercreditor Agreements, the
proceeds received by the Collateral Agent in respect of any sale of, collection
from or other realization upon all or any part of the Collateral pursuant to the
exercise by the Collateral Agent of its remedies during the continuation of an
Event of Default shall be applied, together with any other sums then held by the
Collateral Agent pursuant to this Agreement, promptly by the Collateral Agent as
follows:

(a) First, to the payment of all reasonable costs and expenses, fees,
commissions and taxes of such sale, collection or other realization and all
expenses, liabilities and advances made or incurred by the Collateral Agent in
connection therewith and all amounts for which the Collateral Agent is entitled
to indemnification pursuant to the provisions of any Credit Document;

(b) Second, in the order, and to the amounts, specified in clauses (i) through
(iv) of Section 5.03(d);

 

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(c) Third, to repay all outstanding principal of Swingline Loans;

(d) Fourth, to pay all outstanding principal of Revolving Loans (whether or not
due and payable);

(e) Fifth, to pay an amount to the Administrative Agent equal to 105% of the
Stated Amount of outstanding Letters of Credit on such date, to be held in a
cash collateral account to be established by, and under the sole dominion and
control of, the Administrative Agent;

(f) Sixth, to the payment in full (on a ratable basis) of all other outstanding
Obligations then due and payable to the Administrative Agent, the Collateral
Agent and the Lenders under any of the Credit Documents;

(g) Seventh, to the payment of all amounts due and payable under ABL Secured
Cash Management Agreements and ABL Secured Hedging Agreements and any interest
accrued thereon, in each case equally and ratably in accordance with the
respective amounts thereof then due and owing; and

(h) Eighth, the balance, if any, to the Person lawfully entitled thereto
(including the applicable Credit Party or its successors or assigns) or as a
court of competent jurisdiction may direct.

In the event that any such proceeds are insufficient to pay in full the items
described in clauses First through Seventh of this Section 11.03, the Credit
Parties shall remain liable, jointly and severally, for any deficiency.

11.04 Cure Right.

(a) Notwithstanding anything to the contrary contained in this Section 11, in
the event that the Borrowers fail to comply with the requirements of the
covenant under Section 10.11, until the expiration of the 10th Business Day
subsequent to the date financial statements are required to be delivered
pursuant to Section 9.01(a) or Section 9.01(b) (the “Anticipated Cure
Deadline”), in respect of the period ending on the last day of such Fiscal
Quarter, the Borrowers shall have the right to request Parent to issue Qualified
Preferred Stock, obtain a contribution to its common equity or borrow additional
Subordinated Facility Loans pursuant to Section 10.04(p), in each case, for cash
and to be contributed to the equity capital of the Company as common equity (the
“Cure Right”), in each case following the end of such Fiscal Quarter and on or
prior to the Anticipated Cure Deadline, in each case in an aggregate amount not
to exceed the amount necessary to cure the relevant failure to comply with such
covenant may, at the election of the Borrowers be included in the calculation of
Consolidated EBITDA for purposes of determining compliance with such covenant,
and upon the earlier of (x) the delivery by the Borrowers of written notice to
the Administrative Agent that they intend to exercise the Cure Right hereunder
(it being understood that to the extent such notice is provided in advance of
delivery of a compliance certificate for the applicable period, the amount of
such net cash proceeds that are received as the Cure Amount may be lower than
specified in such notice to the extent that the amount necessary to cure such
failure to comply with the requirements of the covenant under Section 10.11 is
less than the full amount of any originally designated amount) and (y) receipt
by the Company of such cash proceeds (the “Cure Amount”), such covenant shall be
recalculated giving effect to the following pro forma adjustments:

 

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(i) solely for purpose of determining the existence of a failure to comply with
the requirements of the covenant under Section 10.11, Consolidated EBITDA for
the Fiscal Quarter of the Borrowers for which such certificate is required to be
delivered shall be increased by an amount equal to the Cure Amount, and such
increase shall be effective for all periods that include the Fiscal Quarter of
the Borrowers for which such Cure Right was exercised and not for any other
purpose under this Agreement; provided, that (A) the receipt by the Company of
the Cure Amount pursuant to the Cure Right shall be deemed to have no other
effect whatsoever under this Agreement (including determining the availability
or amount of any covenant baskets or carve-outs) and (B) no Cure Amount shall
reduce Indebtedness (whether on a Pro Forma Basis or otherwise and whether by
netting (including with respect to the calculation of Consolidated Indebtedness
or otherwise) for any period in which the Cure Amount is included in the
calculation of Consolidated EBITDA for purposes of calculating the financial
covenant set forth in Section 10.11; provided, further, that the proceeds of any
Cure Amount may be used, at the Borrowers’ option, to prepay the Loans (it being
understood and agreed that such prepayments shall not be given effect in
determining compliance with the financial covenant set forth in Section 10.11
for any period in which the Cure Amount is included in the calculation of
Consolidated EBITDA); and

(ii) if, after giving effect to the foregoing recalculations (but not giving
effect to any payment of Indebtedness made with such Cure Amount when
calculating compliance with Section 10.11 at the end of such (but no other)
Fiscal Quarter), the Borrowers shall then be in compliance with the requirements
of the covenant under Section 10.11 at the end of such Fiscal Quarter, the
Borrowers shall be deemed to have satisfied the requirements of the covenant
under Section 10.11 as of the last day of such Fiscal Quarter with the same
effect as though there had been no failure to comply therewith at such date, and
the applicable breach or Default or Event of Default of the covenant under
Section 10.11 that had occurred shall be deemed cured for this purpose under
this Agreement and the other Credit Documents; provided, that if the Cure Amount
is not received by the Company prior to the Anticipated Cure Deadline, such
Default or Event of Default shall be deemed reinstated.

 

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(b) Notwithstanding anything herein to the contrary, (i) in each consecutive
four-fiscal-quarter period of the Borrowers there shall be at least two Fiscal
Quarters in which the Cure Right is not exercised, (ii) the Cure Right shall not
be exercised more than five times during the term of this Agreement, (iii) the
Cure Amount shall not exceed the amount required to cause the Borrowers to be in
compliance with the covenant under Section 10.11; (iv) neither the
Administrative Agent nor any Lender or Secured Creditor shall exercise any
remedy under the Credit Documents or applicable law on the basis of an Event of
Default caused by the failure to comply with Section 10.11 until after the
Borrowers’ ability to cure has lapsed and the Borrowers have not exercised the
Cure Right; (v) prior to the Company’s receipt of the Cure Amount in accordance
with the terms hereof, any Event of Default that has occurred as a result of a
breach the covenant under Section 10.11 shall be deemed to be continuing and, as
a result, the Lenders shall have no obligation to make additional loans
(including providing the Incremental Facility) or otherwise extend additional
credit hereunder; and (vi) ) the Cure Right shall not be exercised if, at the
time of the Company’s receipt of the Cure Amount, an Event of Default (other
than the Event of Default that has occurred as a result of a breach the covenant
under Section 10.11) has occurred and is continuing.

SECTION 12. The Administrative Agent and the Collateral Agent.

12.01 Appointment. (a) The Lenders hereby irrevocably designate and appoint CIT
as Administrative Agent and Collateral Agent (for purposes of this Section 12
and Section 13.01, the term “Administrative Agent” also shall include CIT in its
capacity as Collateral Agent pursuant to the Security Documents, the
Intercreditor Agreements and the other Credit Documents) to act as specified
herein and in the other Credit Documents and CIT hereby accepts such designation
and appointment. Each Lender hereby irrevocably authorizes, and each holder of
any Note by the acceptance of such Note shall be deemed irrevocably to
authorize, the Administrative Agent to take such action on its behalf under the
provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Administrative Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The
Administrative Agent may perform any of its duties and exercise its rights and
powers hereunder by or through its officers, directors, agents, sub-agents,
employees or affiliates. Any sub-agent may perform any and all its duties and
exercise its rights and powers by or through its directors, trustees, officers,
employees, agents, advisors or affiliates. The exculpatory and indemnification
provisions contained in this Section 12 shall apply to the Administrative Agent
and any sub-agent and to their respective directors, trustees, officers,
employees, agents, advisors and affiliates, and shall apply to their respective
activities in connection with the syndication of the Loans, as well as
activities as Agent or sub-agent, and shall apply, without limiting the
foregoing, to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as Agent. The
Agents shall not be responsible for the negligence or misconduct of any
sub-agent except to the extent that a court of competent jurisdiction determines
in a final and nonappealable judgment that such Agent acted with gross
negligence or willful misconduct in the selection of such sub-agent. The
provisions of this Section 12 are solely for the benefit of the Agents and the
Lenders, and no Credit Party shall have rights as a third party beneficiary of
any such provisions.

(b) Each Lender irrevocably appoints each other Lender as its agent and bailee
for the purpose of perfecting Liens (whether pursuant to Section 8-301(a)(2) of
the UCC or otherwise), for the benefit of the Secured Creditors, in assets in
which, in accordance with the UCC or any other applicable legal requirement a
security interest can be perfected by possession or control. Should any Lender
(other than the Collateral Agent) obtain possession or control of any such
Collateral, such Lender shall notify the Collateral Agent thereof, and, promptly
following the Collateral Agent’s request therefor, shall deliver such Collateral
to the Collateral Agent or otherwise deal with such Collateral in accordance
with the Collateral Agent’s instructions.    The Lenders hereby acknowledge and
agree that the Collateral Agent may act, subject to and in accordance with the
terms of the Intercreditor Agreements, as the collateral agent for the Lenders.

 

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(c) Any corporation or association into which the Administrative Agent or the
Collateral Agent may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer all or substantially all of
its corporate trust business and assets as a whole or substantially as a whole,
or any corporation or association resulting from any such conversion, sale,
merger, consolidation or transfer to which the Administrative Agent or the
Collateral is a party, will be and become the successor Administrative Agent or
Collateral Agent, as applicable, under this Agreement and will have and succeed
to the rights, powers, duties, immunities and privileges as its predecessor,
without the execution or filing of any instrument or paper or the performance of
any further act.

12.02 Nature of Duties. (a) The Administrative Agent shall not have any duties
or responsibilities except those expressly set forth in this Agreement and in
the other Credit Documents. Neither the Administrative Agent nor any of its
officers, directors, agents, employees or affiliates shall be liable for any
action taken or omitted by it or them hereunder or under any other Credit
Document or in connection herewith or therewith (i) with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 11.01 or Section 13.12) or (ii) in the absence of its or their gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision). The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Credit Document a fiduciary relationship in respect of any Lender or the holder
of any Note; and nothing in this Agreement or in any other Credit Document,
expressed or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement or any
other Credit Document except as expressly set forth herein or therein.

(b) Notwithstanding any other provision of this Agreement or any provision of
any other Credit Document, each of the Joint Lead Arrangers, the Joint
Book-Running Managers and the Co-Syndication Agents are named as such for
recognition purposes only, and in its capacity as such shall have no powers,
duties, responsibilities or liabilities with respect to this Agreement or the
other Credit Documents or the transactions contemplated hereby and thereby; it
being understood and agreed that each of the Joint Lead Arrangers, the Joint
Book-Running Managers and the Co-Syndication Agents shall be entitled to all
indemnification and reimbursement rights in favor of the Administrative Agent
as, and to the extent, provided for under Sections 12.06 and 13.01. Without
limitation of the foregoing, none of the Joint Lead Arrangers, the Joint
Book-Running Managers or the Co-Syndication Agents shall, solely by reason of
this Agreement or any other Credit Documents, have any fiduciary relationship in
respect of any Lender or any other Person.

12.03 Lack of Reliance on the Administrative Agent. (a) Independently and
without reliance upon the Administrative Agent, each Lender and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of Parent and its Subsidiaries in connection with the making and the
continuance of the Loans, the issuance of any Letter of Credit and the taking or
not taking of any action in connection herewith and (ii) its own appraisal of
the creditworthiness of Parent and its Subsidiaries and, except as expressly
provided in this Agreement, the Administrative Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or
the issuance of any Letter of Credit, or at any time or times thereafter. The
Administrative Agent shall not be responsible to any Lender or the holder of any
Note for any recitals, statements, information, representations or warranties
herein or in any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
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priority or sufficiency of this Agreement or any other Credit Document or the
financial condition of Parent or any of its Subsidiaries or be required to make
any inquiry concerning the financial condition of Parent or any of its
Subsidiaries or the existence or possible existence of any Default or Event of
Default. The Administrative Agent shall be deemed to have no knowledge of any
Default or Event of Default unless and until written notice thereof is given to
the Administrative Agent by Parent, the Borrowers or a Lender. No Agent shall be
responsible for or have any duty to ascertain or inquire into (A) any statement,
warranty or representation made in or in connection with any Credit Document,
(B) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (C) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Credit Document or the occurrence of any Default,
(D) the validity, enforceability, effectiveness or genuineness of any Credit
Document or any other agreement, instrument or document, (E) the value or the
sufficiency of any Collateral or (F) the satisfaction of any condition set forth
in Sections 6 and 7 or elsewhere in any Credit Document. Each party to this
Agreement acknowledges and agrees that the Administrative Agent may from time to
time use one or more outside service providers for the tracking of all UCC
financing statements (and/or other collateral related filings and registrations
from time to time) required to be filed or recorded pursuant to the Credit
Documents and the notification to the Administrative Agent, of, among other
things, the upcoming lapse or expiration thereof, and that each of such service
providers will be deemed to be acting at the request and on behalf of the
Borrowers and the other Credit Parties. No Agent shall be liable for any action
taken or not taken by any such service provider.

(b) Each Lender, by delivering its signature page to this Agreement or an
Assignment and Assumption Agreement and funding its initial Revolving Loan,
shall be deemed to have acknowledged receipt of, and consented to and approved,
each Credit Document and each other document required to be approved by any
Agent, the Required Lenders or the Lenders, as applicable, on the Effective
Date.

12.04 Certain Rights of the Agents. If any Agent shall request instructions from
the Required Lenders (or such other Lenders as may be required to give such
instructions under Section 13.12) with respect to any act or action (including
failure to act) in connection with this Agreement or any other Credit Document,
such Agent shall be entitled to refrain from such act or taking such action
unless and until such Agent shall have received instructions from the Required
Lenders (or such other Lenders, as the case may be); and such Agent shall not
incur liability to any Lender by reason of so refraining. Without limiting the
generality of the foregoing, (a) no Agent shall be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, and (b) no Agent (nor any of their officers, partners, directors,
employees or agents) shall have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Credit Documents that such Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 12.01 or13.12); provided, that no Agent shall be required to take any
action that, in its opinion or the opinion of its counsel, may expose such Agent
to liability, if the Agent is not indemnified to its satisfaction, or that is
contrary to any Credit Document or applicable Legal Requirements including, for
the avoidance of doubt any action that may be in violation of the automatic stay
under the Bankruptcy Code and any and all other insolvency, bankruptcy,
receivership, liquidation, conservatorship, assignment for the benefit of
creditors, moratorium, rearrangement, reorganization, or similar Legal
Requirements of the United States or other applicable jurisdictions from time to
time in effect and affecting the rights of creditors generally or that may
affect a foreclosure, modification or termination of property of a Defaulting
Lender under the Bankruptcy Code, and all other liquidation, conservatorship,
bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief laws of the
United States or other applicable jurisdictions from time to time in effect.

 

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The Administrative Agent does not warrant or accept responsibility for, and
shall not have any liability with respect to (a) the administration of,
submission of, calculation of or any other matter related to SOFR or any
component definition thereof or rates referenced in the definition thereof or
any alternative, comparable or successor rate thereto (including any
then-current Benchmark or any Benchmark Replacement), including whether the
composition or characteristics of any such alternative, comparable or successor
rate (including any Benchmark Replacement) will be similar to, or produce the
same value or economic equivalence of, or have the same volume or liquidity as,
SOFR or any other Benchmark Replacement, or (b) the effect, implementation or
composition of any Benchmark Replacement Conforming Changes (including, but not
limited to, determining whether any Benchmark Replacement Conforming Changes, if
any, are necessary or advisable).    The Administrative Agent shall be under no
duty or obligation (i) to monitor, determine or verify the availability,
cessation or replacement of any Benchmark, or the occurrence of any Benchmark
Transition Event or Benchmark Replacement Date, or (ii) to identify, determine
or select any Benchmark Replacement, any Benchmark Replacement Adjustment, or
other replacement benchmark or any replacement or successor index. The
Administrative Agent shall not have any liability for any interest rate
published on any publicly available source (including but not limited to the
Federal Reserve Bank of New York’s Website), by any publication or other source
for determining any interest rates applicable to any Loan, including, without
limitation, any inaccuracy or error relating to the publication of any such
interest rates. The Administrative Agent shall not be liable for any delay or
failure in performing its duties under this Agreement directly or indirectly as
a result of the unavailability of any Benchmark or the absence of a designated
replacement Benchmark, including as a result of any delay or error on the part
of any other Person, or whether as a result of any other Person providing or
failing to provide the Administrative Agent with any information or direction
pursuant to the terms of this Agreement or any Credit Document other than, in
each case, to the extent of the Administrative Agent’s gross negligence or
willful misconduct as determined by a court of competent jurisdiction in a final
and non-appealable decision. Nothing in this Section shall constitute a
representation or warranty by Parent, the Company or any of their Subsidiaries
nor can it constitute the basis of any Default or Event of Default.

12.05 Reliance. The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing (including any electronic
message, Internet or intranet website posting or other distribution),
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made or otherwise authenticated by any Person that the
Administrative Agent believed to be the proper Person, and each Agent also may
rely upon any statement made to it orally and believed by it to be made by a
proper person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Loan that
by its terms must be fulfilled to the satisfaction of a Lender, each Agent may
presume that such condition is satisfactory to such Lender unless each Agent
shall have received written notice to the contrary from such Lender prior to the
making of such Loan. The Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon, with respect to all legal matters
pertaining to this Agreement and any other Credit Document and its duties
hereunder and thereunder, upon advice of counsel (who may be counsel for the
Borrowers), independent accountants and other experts selected by the
Administrative Agent and shall not be liable for any action taken or not taken
in good faith by it in accordance with the advice of any such counsel,
accountants or experts.

 

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12.06 Indemnification. To the extent each Agent, and each of the officers,
directors, partners, trustees, employees, affiliates, shareholders, legal
counsel (including local, foreign and in-house counsel), auditors, accountants,
consultants, appraisers, engineers or other advisors, agents, attorneys-in-fact
and controlling persons of each of the foregoing and each other person
designated, nominated or otherwise mandated by or assisting such Agent pursuant
to Section 12.01 or any comparable provision of any Credit Document
(collectively, the “Related Persons”), is not reimbursed and indemnified by the
Borrowers (without limiting the obligation of the Borrowers to do so), the
Lenders will reimburse, indemnify and hold harmless such Agent (or such Related
Persons) (IN ALL CASES, WHETHER OR NOT CAUSED OR ARISING, IN WHOLE OR IN PART,
OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF ANY AGENT OR RELATED
PERSON); provided, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements resulting from the such
Agent’s (or such Related Person’s) gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and non-appealable
decision) (provided, that no action taken in accordance with the directions of
the Required Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section). In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Liabilities, this
Section applies whether any such investigation, litigation or proceeding is
brought by any Lender or any other Person. Without limitation of the foregoing,
the Lenders shall reimburse each Agent upon demand in proportion to the Lenders’
respective Pro Rata Shares (determined at the time such reimbursement is sought
(or, if such reimbursement is sought after the date upon which all Revolving
Loan Commitments shall have terminated and the Revolving Loans shall have been
paid in full, ratably in accordance with such Pro Rata Shares as in effect
immediately prior to such date)) for any costs or reasonable and documented
out-of-pocket expenses (including the fees, disbursements and other charges of
(x) one primary counsel to the Administrative Agent and the Collateral Agent
taken as a whole and (y) one firm of local counsel to the Administrative Agent
and the Collateral Agent taken as a whole in each appropriate jurisdiction)
incurred by the Administrative Agent and the Collateral Agent in connection with
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights and responsibilities under, this Agreement,
any other Credit Document, or any document contemplated by or referred to
herein, to the extent that the Administrative Agent or the Collateral Agent, as
applicable, is not reimbursed for such costs or expenses by or on behalf of the
Company. Each Lender hereby authorizes the Administrative Agent and Collateral
Agent to set off and apply any and all amounts at any time owing to such Lender
under any Credit Document or otherwise payable by the Administrative Agent or
the Collateral Agent to such Lender from any source against any amount due to
the Administrative Agent or the Collateral Agent under this Section 12.06. The
undertaking in this Section 12.06 shall survive termination of the Revolving
Loan Commitments, the payment of all other Obligations and the resignation
and/or replacement of the Administrative Agent or the Collateral Agent, as the
case may be. For purposes of this Section 12.06, (a) “Pro Rata Share” shall
mean, with respect to any Lender at any time, the percentage obtained by
dividing (i) the sum of the aggregate outstanding principal amount of the
Revolving Loans of such Lender at such time and its unused Revolving Loan
Commitments at such time by (ii) the sum of the aggregate outstanding principal
amount of the Revolving Loans of all Lenders at such time and the aggregate
unused Revolving Loan Commitments of all Lenders at such time.

12.07 The Administrative Agent in its Individual Capacity. With respect to its
obligation to make Loans or issue or participate in Letters of Credit under this
Agreement, the Administrative Agent shall have the rights and powers specified
herein for a “Lender” and may exercise the same rights and powers as though it
were not performing the duties specified herein; and the term “Lender”,
“Required Lenders”, “holders of Notes”, “Supermajority Lenders” or any similar
terms shall, unless the context clearly indicates otherwise, include the
Administrative Agent in its individual capacity. The Administrative Agent and
its affiliates may accept deposits from, lend money to, and generally engage in
any kind of banking, investment banking, trust or other business with, or
provide debt financing, equity capital or other services (including financial
advisory services) to any Credit Party or any Affiliate of any Credit Party (or
any Person engaged in a similar business with any Credit Party or any Affiliate
thereof) as if they were not performing the duties specified herein, and may
accept fees and other consideration from any Credit Party or any Affiliate of
any Credit Party for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.

 

 

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12.08 Holders. Any Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof unless and until a written notice of the
assignment, transfer or endorsement thereof, as the case may be, shall have been
filed with the Administrative Agent. Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee, assignee or endorsee, as the case may be, of such
Note or of any Note or Notes issued in exchange therefor.

12.09 Resignation by the Administrative Agent. (a) The Administrative Agent may
resign from the performance of all of its respective functions and duties
hereunder and/or under the other Credit Documents at any time by notifying the
Lenders and, unless a Default or an Event of Default under Section 11.01(e) has
occurred and is continuing, the Borrowers. Any such resignation by the
Administrative Agent hereunder shall also constitute its resignation as an
Issuing Lender and the Swingline Lender, in which case the resigning
Administrative Agent (i) shall not be required to issue any further Letters of
Credit or make any additional Swingline Loans hereunder and (ii) shall maintain
all of its rights as Issuing Lender or Swingline Lender, as the case may be,
with respect to any Letters of Credit issued by it, or Swingline Loans made by
it, prior to the date of such resignation. Such resignation shall take effect
upon the appointment of a successor Administrative Agent pursuant to clauses
(b) and (c) below or as otherwise provided below.

(b) Upon any such notice of resignation by the Administrative Agent, the
Required Lenders shall appoint a successor Administrative Agent hereunder or
thereunder who shall be a commercial bank or trust company reasonably acceptable
to the Borrowers, which acceptance shall not be unreasonably withheld or
delayed; provided, that the Borrowers’ approval shall not be required if an
Event of Default has occurred and is continuing.

(c) If no successor Administrative Agent shall have been so appointed and shall
have accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, with the consent of the Borrowers (which
consent shall not be unreasonably withheld or delayed) (provided, that the
Borrowers’ approval shall not be required if an Event of Default has occurred
and is continuing), then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a commercial
banking institution organized under the laws of the United States (or any State
thereof) or a United States branch or agency of a commercial banking
institution, in each case, having combined capital and surplus of at least
$500,000,000, who shall serve as Administrative Agent hereunder or thereunder
until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided above.

(d) If no successor Administrative Agent has been appointed pursuant to clause
(b) or (c) above by such 30th day after the date such notice of resignation was
given by such Administrative Agent, such Administrative Agent’s resignation
shall become effective and the Required Lenders shall thereafter perform all the
duties of such Administrative Agent hereunder and/or under any other Credit
Document until such time, if any, as the Required Lenders appoint a successor
Administrative Agent.

(e) Upon a resignation of the Administrative Agent pursuant to this
Section 12.09, the Administrative Agent shall remain indemnified to the extent
provided in this Agreement and the other Credit Documents and the provisions of
this Section 12 (and the analogous provisions of the other Credit Documents) and
Sections 13.01, 13.08 and 13.24 shall continue in effect for the benefit of the
Administrative Agent, its sub-agents and their respective Affiliates for each of
their actions and inactions while serving as the Administrative Agent.

 

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(f) Upon the acceptance of its appointment as Administrative Agent hereunder by
a successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder (unless discharged earlier as provided above). The fees
payable by the Borrowers to a successor Administrative Agent shall be the same
as those payable to its predecessor unless otherwise agreed among the Borrowers
and such successor.

12.10 Collateral Matters. (a) Each Secured Creditor hereby authorizes and
directs the Administrative Agent or the Collateral Agent, as applicable, to
enter into the Security Documents, the Intercreditor Agreements for the benefit
of the Lenders and the other Secured Creditors (and any amendments, amendments
and restatements, restatements or waivers of or supplements to or other
modifications to, such agreements in connection with the incurrence by any
Credit Party of any Indebtedness permitted hereby, in order to permit such
Indebtedness to be secured by a valid, perfected lien (with such priority as is
expressly permitted hereby)); provided, that neither the Administrative Agent
nor the Collateral Agent shall owe any fiduciary duty, duty of loyalty, duty of
care, duty of disclosure or any other obligation whatsoever to any holder of
Obligations with respect to any ABL Secured Hedging Agreement. Each Lender
hereby agrees, and each holder of any Note by the acceptance thereof will be
deemed to agree, that, except as otherwise set forth herein, any action taken by
the Required Lenders in accordance with the provisions of this Agreement or the
Security Documents, and the exercise by the Required Lenders of the powers set
forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the Lenders. The
Collateral Agent is hereby authorized on behalf of all of the Lenders, without
the necessity of any notice to or further consent from any Lender, from time to
time prior to an Event of Default, to take any action with respect to any
Collateral or Security Documents which may be necessary to perfect and maintain
perfected the security interest in and liens upon the Collateral granted
pursuant to the Security Documents.

(b) The Lenders hereby authorize the Collateral Agent to release or subordinate,
as applicable, any Lien granted to or held by the Collateral Agent upon any
Collateral (without notice to, or vote or consent of, any Lender, or any
affiliate of any Lender that is a party to any ABL Secured Hedging
Agreement) (i) upon termination of the Total Commitment and payment and
satisfaction of all of the Obligations (other than inchoate indemnification and
reimbursement obligations and other than obligations in respect of any ABL
Secured Hedging Agreement) at any time arising under or in respect of this
Agreement or the Credit Documents or the transactions contemplated hereby or
thereby, whether or not on the date of such release there may be outstanding
Obligations in respect of ABL Secured Hedging Agreements, (ii) constituting
property being sold or otherwise disposed of (to Persons other than Parent and
the Credit Parties) upon the sale or other disposition thereof in compliance
with Section 10.02, (iii) if approved, authorized or ratified in writing by the
Required Lenders (or all of the Lenders hereunder, to the extent required by
Section 13.12), (iv) as otherwise may be expressly provided in the relevant
Security Documents, in the Intercreditor Agreements or the last sentence of each
of Sections 10.01 (so long as the Priming Term Loan Agent has released or
concurrently releases its Lien on such Collateral) and 10.02, (v) constituting
property following or concurrently with a sale or other disposition (to Persons
other than Parent and the other Credit Parties) of a Subsidiary of Parent in
compliance with Section 10.02, constituting property owned by such Subsidiary or
(vi) constituting property subject to (or which will become subject to promptly
following such release) Liens pursuant to Section 9.01(f) or (m), and the
Collateral Agent shall promptly, at the written request of the Borrowers,
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such property; provided, that the Borrowers have delivered to the Agents a
certificate executed by an Authorized Officer of the Borrowers certifying that
the applicable transaction is permitted under the Credit Documents (and the
Required Lenders hereby authorize and direct the Agents to conclusively rely on
such certificate in performing their obligations under this sentence).
Notwithstanding anything to the contrary contained herein or any other Credit
Document, when all Obligations (other than inchoate indemnification and
reimbursement obligations and obligations in respect of any ABL Secured Hedging
Agreement) have been paid in full and all Commitments have terminated or
expired, in each case, in accordance with the terms of this Agreement, upon
request of the Borrowers, the Administrative Agent shall (without notice to, or
vote or consent of, any Lender, or any affiliate of any Lender that is a party
to any ABL Secured Hedging Agreement) take such actions as shall be required to
release all guarantee obligations provided for in any Credit Document, whether
or not on the date of such release there may be outstanding Obligations in
respect of ABL Secured Hedging Agreements. Any such release of guarantee
obligations shall be deemed subject to the provision that such guarantee
obligations shall be reinstated if after such release any portion of any payment
in respect of the Obligations guaranteed thereby shall be rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Borrower or any Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, any Borrower or any Guarantor or any substantial
part of its or their property, or otherwise, all as though such payment had not
been made.

(c) Upon request by the Administrative Agent at any time, the Lenders will
confirm in writing the Collateral Agent’s authority to release particular types
or items of Collateral pursuant to this Section 12.10.

(d) The Collateral Agent shall have no obligation whatsoever to the Lenders or
to any other Person to assure that the Collateral exists or is owned by any
Credit Party or is cared for, protected or insured or that the Liens granted to
the Collateral Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise or to continue exercising at
all or in any manner or under any duty of care, disclosure or fidelity any of
the rights, authorities and powers granted or available to the Collateral Agent
in this Section 12.10 or in any of the Security Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission or event
related thereto, the Collateral Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Collateral Agent’s own interest
in the Collateral as one of the Lenders and that the Collateral Agent shall have
no duty or liability whatsoever to the Lenders, except for its gross negligence
or willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision).

(e) Anything contained in any of the Credit Documents to the contrary
notwithstanding, Parent, the other Credit Parties, the Administrative Agent, the
Collateral Agent and each other Secured Creditor hereby agree that (i) no
Secured Creditor other than the Administrative Agent or Collateral Agent, as
applicable, shall have any right individually to realize upon any of the
Collateral or to enforce the Guaranty; it being understood and agreed that all
powers, rights and remedies hereunder and under any of the Credit Documents may
be exercised solely by the Administrative Agent or the Collateral Agent, as
applicable, for the benefit of the Secured Creditors in accordance with the
terms hereof and thereof and all powers, rights and remedies under the Security
Documents may be exercised solely by the Collateral Agent for the benefit of the
Secured Creditors in accordance with the terms thereof, and (ii) in the event of
a foreclosure or similar enforcement action by the Collateral Agent on any of
the Collateral pursuant to a public or private sale or other disposition
(including, without limitation, pursuant to Section

 

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363(k), Section 1129(b)(2)(a)(ii) or otherwise of the Bankruptcy Code), the
Collateral Agent (or any Lender, except with respect to a “credit bid” pursuant
to Section 363(k), Section 1129(b)(2)(a)(ii) or otherwise of the Bankruptcy
Code) may be the purchaser or licensor of any or all of such Collateral at any
such sale or other disposition and the Collateral Agent, as agent for and
representative of the Secured Creditors (but not any Lender or Lenders in its or
their respective individual capacities) shall be entitled, upon instructions
from the Required Lenders, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Collateral sold at
any such sale or disposition, to use and apply any of the Obligations as a
credit on account of the purchase price for any collateral payable by the
Collateral Agent at such sale or other disposition.

12.11 Delivery of Information. The Administrative Agent shall not be required to
deliver to any Lender originals or copies of any documents, instruments,
notices, communications or other information received by the Administrative
Agent from any Credit Party, any Subsidiary thereof, the Required Lenders, any
Lender or any other Person under or in connection with this Agreement or any
other Credit Document except (a) as specifically provided in this Agreement or
any other Credit Document and (b) as specifically requested from time to time in
writing by any Lender with respect to a specific document, instrument, notice or
other written communication received by and in the possession of the
Administrative Agent at the time of receipt of such request and then only in
accordance with such specific request.

12.12 Withholding. To the extent required by any applicable law, the
Administrative Agent may withhold from any payment to any Lender an amount
equivalent to any withholding tax applicable to such payment. If the IRS or any
other Governmental Authority asserts a claim that the Administrative Agent did
not properly withhold tax from amounts paid to or for the account of any Lender
for any other reason, or the Administrative Agent has paid over to the IRS
applicable withholding tax relating to a payment to a Lender but no deduction
has been made from such payment, such Lender shall indemnify the Administrative
Agent fully for all amounts paid, directly or indirectly, by the Administrative
Agent as tax or otherwise, including any penalties or interest and together with
any and all expenses incurred (including legal expenses, allocated internal
costs and out-of-pocket expenses), unless such amounts have been indemnified by
any Credit Party or the relevant Lender.

12.13 Administrative Agent May File Bankruptcy Disclosure and Proofs of Claim.
In case of the pendency of any proceeding under any the Bankruptcy Code, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief laws of the United States or other applicable
jurisdictions from time to time in effect relative to any Credit Party, the
Administrative Agent (irrespective of whether the principal of any Revolving
Loans 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 Borrowers) shall be entitled and empowered (but not obligated)
by intervention in such proceeding or otherwise:

(a) to file a verified statement pursuant to rule 2019 of the Federal Rules of
Bankruptcy Procedure that, in its sole opinion, complies with such rule’s
disclosure requirements for entities representing more than one creditor;

(b) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Revolving 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 Administrative Agent and its respective agents
and counsel and all other amounts due the Administrative Agent under the Credit
Documents) allowed in such judicial proceeding;

 

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

(d) any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under this Agreement. To the extent that the payment of any
such compensation, expenses, disbursements and advances of the Administrative
Agent, its agents and counsel, and any other amounts due the Administrative
Agent under this Agreement out of the estate in any such proceeding, shall be
denied for any reason, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties that the Lenders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise.

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 13. Miscellaneous.

13.01 Expenses; Indemnity; Damage Waiver; Costs and Expenses. (a) The Borrowers
hereby jointly and severally agree to:

(i) whether or not the transactions herein contemplated are consummated, pay all
reasonable and documented out-of-pocket costs and expenses of (A) the
Administrative Agent and its Affiliates (including, without limitation, (1) the
reasonable fees and disbursements of Proskauer Rose LLP and of a single separate
firm of local counsel in each appropriate jurisdiction, and (2) the costs and
expenses of consultants and fees and expenses in connection with appraisals and
collateral examinations required pursuant to Section 9.01(h) and all reasonable
third party administrative, audit and monitory expenses incurred in connection
with the Borrowing Base and determinations thereunder) in connection with the
preparation, execution, delivery and administration of this Agreement and the
other Credit Documents and the documents and instruments referred to herein and
therein and any amendment, waiver or consent relating hereto or thereto, (B) the
Administrative Agent and its Affiliates in connection with its or their
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Agent and each of the Issuing Lenders and the Lenders in connection with the
enforcement (or amendment) of this Agreement and the other Credit Documents and
the documents and instruments referred to herein and therein or in connection
with any refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a “work-out” or pursuant to any insolvency or
bankruptcy proceedings (including, in each case without limitation, the
reasonable and documented fees and disbursements of (1) counsel for the Agents
(taken as a whole) and (2) counsel and consultants or financial advisors for the
Issuing Lenders and the Lenders (taken as a whole)); provided, that reasonable
fees and disbursements of counsel shall be limited to (x) one counsel for the
Agents taken as a whole and, if reasonably required by the Administrative Agent
or Collateral Agent, local or specialist counsel and (y) one additional counsel
for the Issuing Lenders and the Lenders taken as a whole (unless there is a
conflict of interest that requires separate representation for any Issuing
Lender or Lender, in which case those Issuing Lenders or Lenders similarly
affected shall, as a whole, be entitled to one separate counsel) and, to the
extent reasonably necessary, local or specialist counsel; provided, further,
that fees with respect to any financial advisor or similar consultant shall be
limited to one such financial advisor or consultant (for the Agents, the Issuing
Lenders and the Lenders taken as a whole);

(ii) pay all reasonable and documented out-of-pocket costs and expenses of the
Administrative Agent, each Issuing Lender and the Swingline Lender in connection
with the Back-Stop Arrangements entered into by such Persons; and

(iii) indemnify the Administrative Agent, each Joint Lead Arranger, each Issuing
Lender and each Lender, and each of their respective officers, directors,
employees, representatives, attorneys, agents, Affiliates, trustees and
investment advisors (each, an “Indemnified Person”) from and hold each of them
harmless against any and all liabilities, obligations (including removal or
remedial actions), losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable and documented
attorneys’ and consultants’ fees and disbursements, but limited, in the case of
legal fees, to the reasonable fees, disbursements and other charges of (x) one
counsel for the Agents and their Related Persons (taken as a whole) and, if
necessary, of a single separate firm of local counsel to the Agents and their
Related Persons (taken as a whole) in each appropriate jurisdiction (which may
include a single special counsel acting in multiple jurisdictions) and (y) one
counsel for all other Indemnified Persons and, if necessary, of a single
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firm of local counsel in each appropriate jurisdiction (which may include a
single special counsel acting in multiple jurisdictions) for all such other
Indemnified Persons (and, in the case of an actual or perceived conflict of
interest (as reasonably determined by the Indemnified Person affected by such
conflict) where such Indemnified Person informs the Borrowers of such conflict
and thereafter retains its own counsel, of another firm or counsel (and local
counsel in each appropriate jurisdiction) for such affected Indemnified Person))
incurred by, imposed on or assessed against any of them as a result of, or
arising out of or by reason of, (A) any investigation, litigation or other
proceeding (whether or not the Administrative Agent, any Joint Lead Arranger,
any Issuing Lender or any Lender is a party thereto and whether or not such
investigation, litigation or other proceeding is brought by or on behalf of any
Credit Party) related to the entering into and/or performance of this Agreement
or any other Credit Document or the use of the proceeds of any Loans or Letters
of Credit hereunder or the consummation of the Transaction, the Transaction 2020
or any other transactions contemplated herein or in any other Credit Document or
the exercise of any of their rights or remedies provided herein or in the other
Credit Documents, or (B) the actual or alleged presence of Hazardous Materials
in the air, surface water or groundwater or on the surface or subsurface of any
Real Property at any time owned, leased or operated by Parent or any of its
Subsidiaries, the generation, storage, transportation, handling or disposal of
Hazardous Materials by Parent or any of its Subsidiaries at any location,
whether or not owned, leased or operated by Parent or any of its Subsidiaries,
the non-compliance by Parent or any of its Subsidiaries with any Environmental
Law (including applicable permits thereunder) applicable to any Real Property,
or any Environmental Claim asserted against Parent, the Company, any of its
Subsidiaries or any Real Property at any time owned, leased or operated by
Parent, the Company or any of its Subsidiaries, (including, in each case,
without limitation, the reasonable and documented fees and disbursements of
counsel and other consultants incurred in connection with any such
investigation, litigation or other proceeding) (all of the foregoing,
collectively, the “Indemnified Liabilities”), but excluding any losses,
liabilities, claims, damages or expenses to the extent (1) found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from (x) the gross negligence, bad faith (other than in the case of the Agents
and their Related Persons) or willful misconduct of the Indemnified Person to be
indemnified or (y) other than in the case of the Agents and their Related
Persons, any material breach of the obligations under the Credit Documents of
the Indemnified Person to be indemnified or (2) relating to any dispute solely
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against the Administrative Agent or any Joint Lead Arranger or their respective
Affiliates in their capacity or in fulfilling their role as the Administrative
Agent or arranger or any other similar role under the Credit Documents and (bb)
claims arising out of any act or omission on the part of Parent, the Company or
its Subsidiaries); provided, further, that clause (ii) of this Section 13.01(a)
shall not apply with respect to Taxes other than any Taxes that represent
losses, claims, damages, etc. arising from any non-Tax claim. To the extent that
the undertaking to indemnify, pay or hold harmless the Administrative Agent,
Joint Lead Arrangers, any Issuing Lender or any Lender set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Borrowers shall make the maximum contribution to the payment
and satisfaction of each of the indemnified liabilities which is permissible
under applicable law.

(b) To the full extent permitted by applicable law, each of Parent and the
Borrowers shall not assert, and hereby waives, any claim against any Indemnified
Person, on any theory of liability, for special, indirect, consequential or
incidental damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or thereby,
any Loan, any Letter of Credit or the use of the proceeds thereof. No
Indemnified Person shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Credit Documents or the
transactions contemplated hereby or thereby, except to the extent the liability
of such Indemnified Person results from such Indemnified Person’s gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision).

13.02 Right of Setoff. (a) In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default,
the Administrative Agent, each Issuing Lender and, subject to Section 13.25,
each Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to any Credit Party or
to any other Person, any such notice being hereby expressly waived, to set off
and to appropriate and apply any and all deposits (general or special, other
than accounts used exclusively for payroll, payroll taxes, fiduciary and trust
purposes and employee benefits) and any other Indebtedness at any time held or
owing by the Administrative Agent or such Lender (including, without limitation,
by branches and agencies of the Administrative Agent or such Lender wherever
located) to or for the credit or the account of Parent or any of the other
Credit Parties against and on account of the Obligations, irrespective of
whether or not the Administrative Agent or such Lender shall have made any
demand hereunder and although said Obligations, liabilities or claims, or any of
them, shall be unmatured.

(b) NOTWITHSTANDING THE FOREGOING SUBSECTION (a), AT ANY TIME THAT THE LOANS,
ANY LETTER OF CREDIT OR ANY OTHER OBLIGATION SHALL BE SECURED BY REAL PROPERTY
LOCATED IN CALIFORNIA, NO LENDER SHALL EXERCISE A RIGHT OF SETOFF, LIEN OR
COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY
PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY NOTE UNLESS IT IS
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CONSENT OF THE REQUIRED LENDERS OR APPROVED IN WRITING BY THE ADMINISTRATIVE
AGENT, IF SUCH SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT (PURSUANT TO
SECTIONS 580a, 580b, 580d AND 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE OR
SECTION 2924 OF THE CALIFORNIA CIVIL CODE, IF APPLICABLE, OR OTHERWISE) AFFECT
OR IMPAIR THE VALIDITY, PRIORITY OR ENFORCEABILITY OF THE LIENS GRANTED TO THE
COLLATERAL AGENT PURSUANT TO THE SECURITY DOCUMENTS OR THE ENFORCEABILITY OF THE
NOTES AND OTHER OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY LENDER
OF ANY SUCH RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE REQUIRED LENDERS OR THE
ADMINISTRATIVE AGENT SHALL BE NULL AND VOID. THIS SUBSECTION (b) SHALL BE SOLELY
FOR THE BENEFIT OF EACH OF THE ISSUING LENDERS, THE LENDERS AND THE
ADMINISTRATIVE AGENT HEREUNDER.

13.03 Notices. (a) Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telegraphic, telecopier, cable communication or other electronic image
transmission) and mailed, telegraphed, telecopied, cabled or delivered: if to
any Credit Party, at the address specified on Schedule 13.03; and if to the
Administrative Agent or the Collateral Agent, at the Notice Office; or, as to
any Credit Party or the Administrative Agent, at such other address as shall be
designated by such party in a written notice to the other parties hereto and, as
to each Lender, at such other address as shall be designated by such Lender in a
written notice to the Borrowers and the Administrative Agent. All such notices
and communications shall, when mailed, telegraphed, telecopied, or cabled or
sent by overnight courier, be effective when deposited in the mails, delivered
to the telegraph company, cable company or overnight courier, as the case may
be, or sent by telecopier; except, that notices and communications to the
Administrative Agent, and the Company shall not be effective until received by
the Administrative Agent or the Company, as the case may be.

(b) Notwithstanding Section 13.03(a), unless directed otherwise by the
Administrative Agent, Parent and the Company will, or will cause its respective
Subsidiaries to, provide to the Administrative Agent all information, documents
and other materials that it is obligated to furnish to the Administrative Agent
or to the Lenders pursuant to the Credit Documents, including all notices,
requests, financial statements, financial and other reports, certificates and
other information materials, but excluding any such communication that is or
relates to a Notice of Borrowing or a notice pursuant to Section 2.06 or the
delivery of a Letter of Credit Request (all such non-excluded communications
being referred to herein collectively as “Communications”), by transmitting the
Communications in an electronic/soft medium in a format acceptable to the
Administrative Agent to an electronic mail address as directed by the
Administrative Agent. In addition, each of Parent and the Company agrees, and
agrees to cause its respective Subsidiaries, to continue to provide the
Communications to the Administrative Agent or the Lenders, as the case may be,
in the manner specified in Section 13.03(a) but only to the extent specifically
requested by the Administrative Agent in a particular instance.

(c) Each of the Borrowers and the Guarantors hereby acknowledges that (a) the
Administrative Agent will make available to the Lenders materials and/or
information provided by or on behalf of Parent and/or the Borrowers hereunder
(collectively, the “Borrower Materials”) by posting the Borrower Materials on
Intralinks or another similar electronic system (the “Platform”) and (b) certain
of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to
receive information of a type that would constitute material non-public
information with respect to the Borrowers or its securities (each, a “Public
Lender”)). Each of Parent and the Borrowers hereby agrees that (w) at the
request of the Administrative Agent, Borrower Materials that are to be made
available to Public Lenders shall be clearly and conspicuously marked “PUBLIC”
which shall mean that the word “PUBLIC” shall appear prominently on the first
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thereof; (x) by marking Borrower Materials “PUBLIC,” Parent and the Borrowers
shall be deemed to have authorized the Administrative Agent and the Lenders to
treat such Borrower Materials as not containing any information of a type that
would constitute material non-public information with respect to Parent or the
Borrowers or its securities for purposes of United States federal securities
laws (provided, however, that to the extent such Borrower Materials constitute
confidential information, they shall be treated as such as set forth in
Section 12.16); (y) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated as “Public
Investor;” and (z) the Administrative Agent shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not marked as “Public Investor.”
Notwithstanding the foregoing, the following Borrower Materials shall be marked
“PUBLIC”, unless the Borrowers notify the Administrative Agent promptly that any
such document contains material non-public information: (1) the Credit Documents
and (2) notification of changes in the terms of the Term Loans. Each Public
Lender agrees to cause at least one individual at or on behalf of such Public
Lender to at all times have selected the “Private Side Information” or similar
designation on the content declaration screen of the Platform in order to enable
such Public Lender or its delegate, in accordance with such Public Lender’s
compliance procedures and applicable law, including United States Federal and
state securities laws, to make reference to Communications that are not made
available through the “Public Side Information” portion of the Platform and that
may contain information of a type that would constitute material non-public
information with respect to Parent or the Borrowers or their securities for
purposes of United States Federal or state securities laws.

(d) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. NEITHER THE
ADMINISTRATIVE AGENT NOR ANY OF ITS AFFILIATES WARRANTS THE ACCURACY OR
COMPLETENESS OF THE COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND EACH
EXPRESSLY DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO
WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS IS MADE BY THE
ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES IN CONNECTION WITH THE
COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR
ANY OF ITS AFFILIATES HAVE ANY LIABILITY TO ANY CREDIT PARTY, ANY LENDER OR ANY
OTHER PERSON FOR DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT LIABILITY
AND INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY
CREDIT PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS
THROUGH THE PLATFORM, EXCEPT TO THE EXTENT THE LIABILITY OF ANY SUCH PERSON IS
FOUND IN A FINAL RULING BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
PRIMARILY FROM SUCH PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

(e) Notwithstanding Section 13.03(a), the Administrative Agent, Issuing Lenders
and Lenders agree that the receipt of the Communications by the Administrative
Agent at its electronic mail address shall constitute effective delivery of the
Communications to the Administrative Agent for purposes of the Credit Documents.
Each Issuing Lender and Lender agrees that receipt of notice to it (as provided
in the next sentence) specifying that the Communications have been posted to the
Platform shall constitute effective delivery of the Communications to such
Lender for purposes of the Credit Documents. Each Issuing Lender and Lender
agrees to notify the Administrative Agent in writing (including by electronic
communication) from time to time of such Lender’s electronic mail address to
which the foregoing notice may be sent by electronic transmission and that the
foregoing notice may be sent to such electronic mail address.

 

 

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13.04 Benefit of Agreement; Assignments; Participations. (a) This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto; provided, however, that
neither Parent nor the Borrowers may assign or transfer any of its rights,
obligations or interest hereunder without the prior written consent of the
Lenders (and any purported assignment or transfer without such consent shall be
null and void); provided, further, that, although any Lender may grant
participations to Eligible Transferees (each a “Participant”) in its rights
hereunder, such Lender shall remain a “Lender” for all purposes hereunder (and
may not transfer or assign all or any portion of its Revolving Loan Commitment,
Loans, Letters of Credit, Note or other Obligations hereunder except as provided
in Sections 2.13 and 13.04(b)) and the Participant shall not constitute a
“Lender” hereunder; provided, further, that 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 no Lender shall
transfer or grant any participation under which the Participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan, Letter of Credit or Note (unless such
Letter of Credit is not extended past the Final Maturity Date) in which such
participant is participating, or reduce the rate or extend the time of payment
of interest thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the amount of the Participant’s participation over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of a mandatory reduction in the Total Revolving Loan
Commitment or a mandatory repayment of the Loans shall not constitute a change
in the terms of such participation, and that an increase in any Revolving Loan
Commitment (or the available portion thereof) or Loan (or the addition of
additional Revolving Loan Commitments or Loans) shall be permitted without the
consent of any Participant if the Participant’s participation is not increased
as a result thereof), (ii) consent to the assignment or transfer by Parent or
the Borrowers of any of its rights and obligations under this Agreement or
(iii) release all or substantially all of the Collateral under all of the
Security Documents (except as expressly provided in the Credit Documents)
supporting the Loans and Letters of Credit hereunder in which such Participant
is participating. In the case of any such participation, except as otherwise set
forth below in this Section 13.04(a), the Participant shall not have any rights
under this Agreement or any of the other Credit Documents (the Participant’s
rights against such Lender in respect of such participation to be those set
forth in the agreement executed by such Lender in favor of the Participant
relating thereto) and all amounts payable by the Borrowers hereunder shall be
determined as if such Lender had not sold such participation.

The Borrowers agree that each Participant shall be entitled to the benefits of
Sections 2.10, 2.11, 3.06 and 5.04 (subject to the requirements and limitations
therein, including the requirements under Section 5.04(f) (it being understood
that the documentation required under Section 5.04(f) shall be delivered to the
participating Lender)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to clause (b) of this
Section 13.04; provided, that such Participant (A) agrees to be subject to the
provisions of Sections 2.12 and 2.13 as if it were an assignee under clause
(b) of this Section 13.04; and (B) shall not be entitled to receive any greater
payment under Sections 2.10, 2.11, 3.06 and 5.04, with respect to any
participation, than its participating Lender would have been entitled to
receive. A participant shall not be entitled to the benefits of Section 5.04 to
the extent such Participant fails to comply with Section 5.04(f) as though it
were a Lender (it being understood that the documentation required under
Section 5.04(f) shall be delivered to the participating Lender). Each Lender
that sells a participation agrees, at the Company’s request and expense, to use
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with the Borrowers to effectuate the provisions of Section 2.13 with respect to
any Participant. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 13.02 as though it were a Lender; provided,
that such Participant agrees to be subject to Section 13.06 as though it were a
Lender. Each Lender that sells a participation shall, acting solely for this
purpose as an agent of the Borrowers, maintain a register on which it enters the
name and address of each Participant and the principal amounts (and stated
interest) of each Participant’s interest in the Loans or other obligations under
the Credit Documents (the “Participant Register”); provided, that no Lender
shall have any obligation to disclose all or any portion of the Participant
Register (including the identity of any Participant or any information relating
to a Participant’s interest in any commitments, loans, letters of credit or its
other obligations under any Credit Document) to any Person except to the extent
that such disclosure is necessary to establish that such commitment, loan,
letter of credit or other obligation is in registered form under
Section 5f.103-1(c) of the Treasury Regulations. The entries in the Participant
Register shall be conclusive absent manifest error, and such Lender shall treat
each Person whose name is recorded in the Participant Register as the owner of
such participation for all purposes of this Agreement notwithstanding any notice
to the contrary. For the avoidance of doubt, the Administrative Agent (in its
capacity as Administrative Agent) shall have no responsibility for maintaining a
Participant Register.

(b) Notwithstanding the foregoing, any Lender may (in each case below, excluding
any assignments to any of Parent, any Borrower, the Sponsor or any of their
respective Affiliates (each an “Affiliated Person”)) (i) assign (in each case
pursuant to this clause (i) to an Eligible Transferee) all or a portion of its
Revolving Loan Commitment and related outstanding Obligations (or, if the
Revolving Loan Commitment has terminated, outstanding Obligations) hereunder to
(A) (1) any Lender Affiliate of such Lender or (2) to one or more other Lenders
or any Lender Affiliate of any such other Lender (provided, that any fund that
invests in loans and is managed or advised by the same investment advisor of
another fund which is a Lender (or by an Affiliate of such investment advisor)
shall be treated as a Lender Affiliate of such other Lender for the purposes of
this subclause (i)(A)(2)), or (B) in the case of any Lender that is a fund that
invests in loans, any other fund that invests in loans and is managed or advised
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor or (ii) assign all, or if less than all, a portion equal to
at least $5,000,000 (or such lesser amount as the Administrative Agent and, so
long as no Event of Default has occurred and is continuing, the Company may
otherwise agree, which agreement shall not be unreasonably withheld or delayed)
in the aggregate for the assigning Lender, of such Revolving Loan Commitment and
related outstanding Obligations (or, if the Revolving Loan Commitment has
terminated, outstanding Obligations) hereunder to one or more Eligible
Transferees (treating any fund that invests in loans and any other fund that
invests in loans and is managed or advised by the same investment advisor of
such fund or by an Affiliate of such investment advisor as a single assignor or
Eligible Transferee (as applicable) (if any) for purposes of the dollar
limitation set forth above), each of which assignees shall become a party to
this Agreement as a Lender by execution of an Assignment and Assumption
Agreement; provided, that (v) at such time, Schedule 1.01(a) shall be deemed
modified to reflect the Revolving Loan Commitments and/or outstanding Loans, as
the case may be, of such new Lender and of the existing Lenders, (w) upon the
surrender of the relevant Notes (if any) by the assigning Lender (or, upon such
assigning Lender’s indemnifying the Borrowers for any lost Note pursuant to a
customary indemnification agreement) new Notes will be issued, at the Borrowers’
expense, to such new Lender and to the assigning Lender upon the request of such
new Lender or assigning Lender, such new Notes to be in conformity with the
requirements of Section 2.05 (with appropriate modifications) to the extent
needed to reflect the revised Revolving Loan Commitments and/or outstanding
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Agent, the Swingline Lender and each Issuing Lender shall be required in
connection with any assignment pursuant to clause (i) or (ii) above (such
consent, in each case, not to be unreasonably withheld, delayed or conditioned)
and, so long as no Event of Default has occurred and is continuing, the consent
of the Company (such consent deemed to have been made with respect to any
assignment if the Company has not responded within 10 Business Days after
delivery of notice of such assignment) shall be required in connection with any
such assignment pursuant to clause (ii) above (such consent, in any case, not to
be unreasonably withheld, delayed or conditioned), (y) the Administrative Agent
shall receive at the time of each such assignment, from the assigning or
assignee Lender, the payment of a non-refundable assignment fee of $3,500
(provided, that only one such fee shall be payable in the case of one or more
concurrent assignments by or to investment funds managed or advised by the same
investment advisor or an affiliated investment advisor and which fee may be
waived or reduced in the sole discretion of the Administrative Agent), and
(z) no such transfer or assignment will be effective until recorded by the
Administrative Agent on the Register pursuant to Section 13.15. To the extent of
any assignment pursuant to this Section 13.04(b), the assigning Lender shall be
relieved of its obligations hereunder with respect to its assigned Revolving
Loan Commitment and outstanding Loans. At the time of each assignment pursuant
to this Section 13.04(b) to a Person which is not already a Lender hereunder,
the respective assignee Lender shall, (aa) to the extent legally entitled to do
so, provide to the Company the appropriate IRS Forms described in
Section 5.04(f), and (bb) deliver to the Administrative Agent an Administrative
Questionnaire (in which the assignee Lender shall designate one or more credit
contacts to whom all syndicate-level information (which may contain material
non-public information about the Credit Parties and their Affiliates or their
respective securities) will be made available and who may receive such
information in accordance with the assignee Lender’s compliance procedures and
applicable laws, including Federal and state securities laws). To the extent
that an assignment of all or any portion of a Lender’s Revolving Loan Commitment
and related outstanding Obligations pursuant to Section 2.13 or this
Section 13.04(b) would, at the time of such assignment, result in increased
costs under Section 2.10 or 5.04 from those being charged by the respective
assigning Lender prior to such assignment, then the Company shall not be
obligated to pay such increased costs (although the Company shall be obligated
to pay increased costs, as and to the extent provided in Section 2.10 and 5.04
(excluding for the avoidance of doubt Excluded Taxes), after the date of the
respective assignment).

(c) Nothing in this Agreement shall prevent or prohibit any Lender from pledging
its Loans and Notes hereunder to a Federal Reserve Bank in support of borrowings
made by such Lender from such Federal Reserve Bank, and any Lender which is a
fund may pledge all or any portion of its Loans and Notes to its trustee or to a
collateral agent providing credit or credit support to such Lender in support of
its obligations to such trustee, such collateral agent or a holder of such
obligations, as the case may be. In the case of any Lender that is a fund that
invests in bank loans, such Lender may, without the consent of the Company or
the Administrative Agent, collaterally assign or pledge all or any portion of
its rights under this Agreement, including the Loans, Letters of Credit and
Notes or any other instrument evidencing its rights as a Lender under this
Agreement, to any holder of, trustee for, or any other representative of holders
of, obligations owed or securities issued by, such fund, as security for such
obligations or securities. No pledge pursuant to this clause (c) shall release
the transferor Lender from any of its obligations hereunder.

(d) Any Lender which assigns all of its Revolving Loan Commitment and/or Loans
hereunder in accordance with Section 13.04(b) shall cease to constitute a
“Lender” hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 2.10, 2.11, 3.06, 5.04,
12.06, 13.01 and 13.06), which shall survive as to such assigning Lender.

 

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(e) The Administrative Agent shall not be responsible or have any liability for,
or have any duty to ascertain, inquire into, monitor or enforce, compliance with
the provisions hereof relating to Disqualified Lenders. Without limiting the
generality of the foregoing, the Administrative Agent shall not (i) be obligated
to ascertain, monitor or inquire as to whether any Lender or Participant or
prospective Lender or Participant is a Disqualified Lender or (ii) have any
liability with respect to or arising out of any assignment or participation of
Revolving Loans, or disclosure of confidential information, to any Disqualified
Lender.

(f) Notwithstanding anything to the contrary contained in this Agreement, any
Lender may exchange, continue or rollover all or a portion of its Revolving
Loans in connection with any refinancing, extension, loan modification or
similar transaction permitted by the terms of this Agreement, pursuant to a
cashless settlement mechanism approved by the Borrowers, the Administrative
Agent and such Lender.

13.05 No Waiver; Remedies Cumulative. No failure or delay on the part of the
Administrative Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
the Borrowers or any other Credit Party and the Administrative Agent or any
Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Credit Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent or any Lender would otherwise have. No notice to or demand
on any Credit Party in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Administrative Agent or any Lender to any other or
further action in any circumstances without notice or demand.

13.06 Payments Pro Rata. (a) Except as otherwise provided in this Agreement, the
Administrative Agent agrees that promptly after its receipt of each payment from
or on behalf of any Borrower in respect of any Obligations hereunder, the
Administrative Agent shall distribute such payment to the Lenders entitled
thereto (other than any Lender that has consented in writing to waive its pro
rata share of any such payment) pro rata based upon their respective shares, if
any, of the Obligations with respect to which such payment was received.

(b) Each of the Lenders agrees that, if it should receive any amount hereunder
(whether by voluntary payment, by realization upon security, by the exercise of
the right of setoff or banker’s lien, by counterclaim or cross action, by the
enforcement of any right under the Credit Documents, or otherwise), but
excluding amounts received from sales of assignments or participations in
accordance with the provisions of this Agreement, which is applicable to the
payment of the principal of, or interest on, the Loans, Unpaid Drawings,
Commitment Commission or Letter of Credit Fees, of a sum which constitutes a
greater proportion of the total of such Obligation then owed and due to such
Lender than the related sum or sums received by other Lenders constitutes of
such Obligation then owed and due to all of the Lenders immediately prior to
such receipt, then such Lender receiving such excess payment shall purchase for
cash without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Credit Party to such Lenders in such amount as
shall result in a proportional participation by all the Lenders in such amount;
provided, that if all or any portion of such excess amount is thereafter
recovered from such Lenders, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.

 

 

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(c) Notwithstanding anything to the contrary contained herein, the provisions of
the preceding Sections 13.06(a) and (b) shall be subject to the express
provisions of this Agreement which require, or permit, differing payments to be
made to Non-Defaulting Lenders as opposed to Defaulting Lenders.

13.07 Calculations; Computations. (a) The financial statements to be furnished
to the Lenders pursuant hereto shall be made and prepared in accordance with
GAAP consistently applied throughout the periods involved (except as set forth
in the notes thereto); provided, that (i) except as otherwise specifically
provided herein, all computations and all definitions (including accounting
terms) used in determining compliance with Sections 9.16 and 10 and calculations
of the Fixed Charge Coverage Ratio and the Secured Net Leverage Ratio, shall
utilize GAAP and policies in conformity with those used to prepare the Pro Forma
Financial Statements (subject to purchase accounting and other adjustments
reasonably satisfactory to the Administrative Agent as a result of the
Acquisition); provided, that if the Borrowers notify the Administrative Agent
that the Borrowers request an amendment to any provision hereof to eliminate the
effect of any change occurring in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrowers that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change becomes effective until such notice shall have been withdrawn
or such provision amended in accordance herewith; provided, further, that if
such an amendment is requested by the Borrowers or the Required Lenders, then
the Borrowers and the Administrative Agent shall negotiate in good faith to
enter into an amendment of the relevant affected provisions (without the payment
of any amendment or similar fee to the Lenders) to preserve the original intent
thereof in light of such change in GAAP or the application thereof, (ii) except
as otherwise expressly provided herein, for purposes of calculating financial
terms, all covenants and related definitions, all such calculations shall be
based on the operations, assets and results of the Company and its Subsidiaries
on a consolidated basis, (iii) notwithstanding anything to the contrary
contained herein, all covenants and financial ratios contained herein or in any
other Credit Document shall be calculated, in each case, without giving effect
to any election under FASB ASC 825 (or any similar accounting principle)
permitting a Person to value its financial liabilities at the fair value
thereof, (iv) all financial statements delivered to the Administrative Agent in
accordance with the terms of this Agreement after the date of any accounting
change shall contain a schedule showing the adjustments, in any, necessary to
reconcile such financial statements with GAAP as in effect immediately prior to
such accounting changes, and (v) all references in this Agreement to a
four-Fiscal Quarter period of the Company referring to a period prior to the
Effective Date shall refer to the applicable period prior to the Effective Date
as if the Company had existed and the Transaction has occurred on the first day
of said period.

(b) All computations of interest, Commitment Commission and other Fees hereunder
shall be made on the basis of a year of 360 days (except for interest calculated
by reference to the Prime Rate in the case of Base Rate Loans, which shall be
based on a year of 365 or 366 days, as applicable) for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest are payable.

(c) Notwithstanding anything to the contrary herein, to the extent that the
terms of this Agreement require (i) compliance with any financial ratio or test
(including, without limitation, any Fixed Charge Coverage Ratio and/or the
amount of Consolidated EBITDA) or (ii) the absence of a Default or Event of
Default (or any type of Default or Event of Default) as a condition to (A) the
making of any Dividend and/or (B) the making of any Restricted Junior

 

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Payment, the determination of whether the relevant condition is satisfied may be
made, at the election of the Borrowers, (1) in the case of any Dividend, at the
time of (or on the basis of the financial statements for the most recently ended
Test Period at the time of) (A) the declaration of such Dividend or (B) the
making of such Dividend and (2) in the case of any Restricted Junior Payment, at
the time of (or on the basis of the financial statements for the most recently
ended Test Period at the time of) (1) delivery of irrevocable (which may be
conditional) notice with respect to such Restricted Junior Payment or (2) the
making of such Restricted Junior Payment, in each case, after giving effect to
the relevant acquisition, Dividend and/or Restricted Junior Payment on a Pro
Forma Basis.

(d) For purposes of determining the permissibility of any action, change,
transaction or event that requires a calculation of any financial ratio or test
(including, without limitation, Section 10.11, any Fixed Charge Coverage Ratio
test and/or the amount of Consolidated EBITDA), such financial ratio or test
shall be calculated at the time such action is taken, such change is made, such
transaction is consummated or such event occurs, as the case may be, and no
Default or Event of Default shall be deemed to have occurred solely as a result
of a change in such financial ratio or test occurring after the time such action
is taken, such change is made, such transaction is consummated or such event
occurs, as the case may be.

(e) Notwithstanding anything to the contrary contained in paragraph (a) above or
in the definition of “Capitalized Lease Obligations”, in the event of an
accounting change requiring all leases to be capitalized, only those leases
(assuming for purposes hereof that such leases were in existence on the date
hereof) that would constitute Capitalized Lease Obligations in conformity with
GAAP on the date hereof shall be considered Capitalized Lease Obligations, and
all calculations and deliverables under this Agreement or any other Credit
Document shall be made or delivered, as applicable, in accordance therewith
(provided, that together with all financial statements delivered to the
Administrative Agent in accordance with the terms of this Agreement after the
date of any such accounting change, the Borrowers shall deliver a schedule
showing the adjustments necessary to reconcile such financial statements with
GAAP as in effect immediately prior to such accounting change).

13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE PROVIDED IN
ANY SECURITY DOCUMENT, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK
SITTING IN THE BOROUGH OF MANHATTAN, IN EACH CASE WHICH ARE LOCATED IN THE
COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT, EACH BORROWER AND EACH GUARANTOR HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS (INCLUDING
ANY APPELLATE COURTS THEREOF). EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH
PARTY, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE
AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH
PARTY. EACH PARTY HERETO FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH

 

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ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO SUCH PARTY AT THE ADDRESS REFERENCED IN SECTION 13.03,
SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH PARTY HERETO
HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING
COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS
WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE ADMINISTRATIVE AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY BORROWER OR ANY GUARANTOR IN ANY OTHER
JURISDICTION.

(b) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

13.09 Counterparts. This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrowers and the Administrative
Agent. Delivery of an executed counterpart hereof by facsimile or by other
electronic method of transmission shall be as effective as delivery of any
original executed counterpart hereof. Any party delivering an executed
counterpart of this Agreement by facsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this
Agreement but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement. The
foregoing shall apply to each other Credit Document mutatis mutandis.

13.10 Effectiveness. This Agreement shall become effective on the date (the
“Effective Date”) on which (a) Parent, the Borrowers, the Administrative Agent,
the Collateral Agent and each of the Lenders shall have signed a counterpart
hereof (whether the same or different counterparts) and shall have delivered the
same to the Administrative Agent at the Notice Office or, in the case of the
Lenders, shall have given to the Administrative Agent telephonic (confirmed in
writing), written or telex notice (actually received) at such office that the
same has been signed and mailed to it, and (b) the conditions contained in
Section 6 have been met to the reasonable satisfaction of the Administrative
Agent, which date is May 8, 2015.

13.11 Headings Descriptive. The headings of the several sections and subsections
of this Agreement are inserted for convenience only and shall not in any way
affect the meaning or construction of any provision of this Agreement.

 

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13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any other Credit
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated (other than upon payment in full of the Obligations or as expressly
provided herein or therein) unless such change, waiver, discharge or
termination, in the case of this Agreement, is in writing signed by the Credit
Parties party hereto or thereto and signed or consented to in writing by the
Required Lenders and acknowledged by the Administrative Agent or, in the case of
any other Credit Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent and/or the Collateral Agent, as
applicable (with the consent of the Required Lenders) and the Credit Party or
Credit Parties that are parties thereto (although additional parties may be
added to (and annexes may be modified to reflect such additions), and
Subsidiaries of the Company and Collateral may be released from, the Security
Documents and the Intercreditor Agreements in accordance with the provisions
hereof and thereof, additional Borrowers may be added to this Agreement and the
Security Documents in accordance with the provisions of Section 9.12(f), and
Borrowers which are Subsidiaries of the Company may be released as Borrowers
hereunder (and as parties to the relevant Security Documents) as provided in
Section 13.22, without the consent of the other Credit Parties party thereto or
the Required Lenders); provided, that no such change, waiver, discharge or
termination shall, without the consent of each Lender (with Obligations being
directly affected in the case of following clauses (i) and (iv)), (i) extend the
final scheduled maturity of any Loan or Note, or extend the stated expiration
date of any Letter of Credit beyond the Final Maturity Date (except as
contemplated herein), or reduce the rate or extend the time of payment of
interest or Fees thereon (except in connection with the waiver of applicability
of any post-default increase in interest rates), or reduce (or forgive) the
principal amount thereof (it being understood that any amendment or modification
to the financial definitions in this Agreement or to Section 13.07(a) shall not
constitute a reduction in the rate of interest for the purposes of this clause
(i)), or amend Section 2.09 to permit the Borrowers to select Interest Periods
for any Loans in excess of six months at any time when such longer Interest
Periods is not available to all Lenders, (ii) release all or substantially all
of the Collateral under the Security Documents or release all or substantially
all of the value of the Guaranty provided by any Guarantor (except as expressly
provided in the Credit Documents), (iii) amend, modify or waive any provision of
this Section 13.12(a) (except for technical amendments with respect to
additional extensions of credit pursuant to this Agreement which afford the
protections to such additional extensions of credit of the type provided to the
Revolving Loan Commitments and the Loans on the Effective Date), (iv) reduce the
“majority” voting threshold specified in the definition of “Required Lenders”,
(v) consent to the assignment or transfer by Parent or the Borrowers of any of
its rights and obligations under this Agreement, (vi) amend, modify or waive the
application of payments set forth in Section 5.03(d), 11.03 or Section 13.06
hereof, or (vii) contractually subordinate the payment of Obligations to any
other Indebtedness, or except as permitted herein or as provided in the
Intercreditor Agreement, contractually subordinate the priority of any of the
Administrative Agent’s Liens to the Liens securing other Indebtedness; provided
further, that no such change, waiver, discharge or termination shall
(A) increase the Revolving Loan Commitment of any Lender over the amount thereof
then in effect without the consent of such Lender (it being understood that
waivers or modifications of conditions precedent, covenants, Defaults or Events
of Default or of a mandatory reduction in the Total Revolving Loan Commitment or
a mandatory repayment of Loans shall not constitute an increase of the Revolving
Loan Commitment of any Lender, and that an increase in the available portion of
the Revolving Loan Commitment of any Lender shall not constitute an increase of
the Revolving Loan Commitment of such Lender), (B) without the consent of
(x) the Administrative Agent, amend, modify or waive any provision of Section 12
or any other provision of this Agreement or any other Credit Document as same
relates to, or affects, the rights or obligations of the Administrative Agent or
(y) the Collateral Agent, amend, modify or waive any provision of Section 12 or
any other provision of this Agreement or any other Credit Document as same
relates to, or affects, the rights or obligations of the Collateral Agent,
(C) without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent,
(D) without the consent of each Issuing Lender, amend, modify or waive any
provision of Section 3 or alter its rights or obligations with respect to
Letters of Credit, (E) without the consent of the Swingline Lender, alter the
Swingline Lender’s rights or obligations with respect

 

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to Swingline Loans or (F) without the consent of the Supermajority Lenders,
(1) amend the definition of “Supermajority Lenders” (it being understood that,
with the consent of the Required Lenders, additional extensions of credit
pursuant to this Agreement may be included in the determination of the
Supermajority Lenders on substantially the same basis as the extensions of Loans
and Revolving Loan Commitments are included on the Effective Date), (2) increase
the advance rates applicable to the Borrowing Base over those in effect on the
Effective Date (it being understood that the establishment, modification or
elimination of Reserves and adjustment, establishment and elimination of
criteria for Eligible Accounts, Eligible Credit Card Receivables, Eligible
Inventory and or Eligible In Transit Inventory, in each case by the
Administrative Agent in accordance with the terms hereof, will not be deemed
such an increase in advance rates) or (3) amend or expand any of the following
definitions, in each case the effect of which would be to increase the amounts
available for borrowing hereunder: Borrowing Base, Eligible Accounts, Eligible
Credit Card Receivables, Eligible Inventory and or Eligible In Transit Inventory
(including, in each case, the defined terms used therein) (it being understood
that the establishment, modification or elimination of Reserves and adjustment,
establishment and elimination of criteria for Eligible Accounts, Eligible Credit
Card Receivables, Eligible Inventory and or Eligible In Transit Inventory, in
each case by the Administrative Agent in accordance with the terms hereof, will
not be deemed to require a Supermajority Lender consent).

(b) If, in connection with any proposed change, waiver, discharge or termination
of or to any of the provisions of this Agreement as contemplated by clauses
(i) through (vii), inclusive, of the first proviso to Section 13.12(a), the
consent of the Required Lenders is obtained but the consent of one or more of
such other Lenders whose consent is required is not obtained, then the Borrowers
shall have the right, so long as all non-consenting Lenders whose individual
consent is required are treated as described in either clause (i) or (ii) below,
to either (i) replace each such non-consenting Lender or Lenders with one or
more Replacement Lenders pursuant to Section 2.13 so long as at the time of such
replacement, each such Replacement Lender consents to the proposed change,
waiver, discharge or termination or (ii) repay all outstanding Loans and
terminate all Revolving Loan Commitments of such Lender in accordance with
Section 4.02(b); provided, that unless the Loans which are repaid or Revolving
Loan Commitments which are terminated pursuant to preceding clause (ii) are
immediately replaced in full at such time through the addition of new Lenders or
the increase of the outstanding Loans or Revolving Loan Commitments of existing
Lenders (who in each case must specifically consent thereto), then in the case
of any action pursuant to preceding clause (ii), (A) the calculation of Required
Lenders shall be determined after giving effect to any such repayment or
termination, (B) the Required Lenders (determined after giving effect to the
proposed action) shall specifically consent thereto and (C) by the terms of such
agreement the Revolving Loan Commitment of each Lender not consenting to the
amendment provided for therein shall terminate upon the effectiveness of such
amendment and all Loans of any such non-consenting Lender (with accrued and
unpaid interest and any breakage costs or other amounts owing to such Lender)
shall be repaid in full at such time; provided further, that the Borrowers shall
not have the right to replace a Lender, terminate its Revolving Loan Commitment
or repay its Loans solely as a result of the exercise of such Lender’s rights
(and the withholding of any required consent by such Lender) pursuant to the
second proviso to Section 13.12(a).

(c) Notwithstanding anything to the contrary in this Section 13.12, no Lender
consent is required (although the consent of the Administrative Agent shall be
required (such consent not to be unreasonably withheld, conditioned or delayed))
to effect any amendment or supplement to an Intercreditor Agreement that is for
the purpose of adding the holders of secured Indebtedness permitted hereunder
and having priority expressly permitted hereby (or a representative agent or
trustee with respect thereto) (it being understood that any such amendment or
supplement may make such other changes to the applicable intercreditor

 

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agreement as, in the good faith determination of the Administrative Agent, are
required to effectuate the foregoing; provided, that such other changes are not
adverse, in any material respect, to the interests of the Lenders); provided,
further, that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent or the Collateral Agent hereunder
or under any other Credit Document without the prior written consent of the
Administrative Agent or the Collateral Agent, as applicable.

(d) If Indebtedness is incurred pursuant to Section 10.04 hereof that is secured
by a Lien on any Collateral, the Administrative Agent and/or the Collateral
Agent is authorized to enter into any amendment to the Intercreditor Agreements
(and the Administrative Agent and the Collateral Agent shall enter into such
amendment) if reasonably requested to do so by the Borrowers in order to reflect
the incurrence of such Indebtedness and the Lien priority intended by the
express terms hereof to be created therefor.

(e) [Reserved].

(f) Notwithstanding anything to the contrary in this Section 13.12, guarantees,
collateral security documents and related documents executed by Foreign
Subsidiaries in connection with this Agreement may be in a form reasonably
determined by the Collateral Agent and may be amended and waived with the
consent of the Collateral Agent at the request of the Borrowers without the need
to obtain the consent of any other Lenders if such amendment or waiver is
delivered in order (i) to reflect local law or advice of local counsel, (ii) to
cure ambiguities or defects or (iii) to cause such guaranty, collateral security
document or other document to be consistent with this Agreement and the other
Credit Documents.

(g) Further, notwithstanding anything to the contrary contained in this
Section 13.12, (i) (A) Security Documents and related documents executed by the
Credit Parties in connection with this Agreement may be in a form reasonably
determined by the Collateral Agent, (B) [reserved], and (C) such Security
Documents and related documents and the Intercreditor Agreements may be amended,
supplemented and waived with the consent of the Collateral Agent, the
Administrative Agent and the Borrowers without the need to obtain the consent of
any other Person if such amendment, supplement or waiver is delivered (1) in
order to comply with local law or advice of local counsel, (2) in order to cause
such Security Document or other document to be consistent with this Agreement
and the other Credit Documents or (3) in connection with the incurrence of any
Indebtedness under Sections 10.04(j) or (s) (and the addition of any collateral
as Collateral in connection therewith) and the entry by the Administrative Agent
and the Collateral Agent into any amendment, amendment and restatement or
supplement to the ABL Intercreditor Agreement pursuant to Section 8.3 of the ABL
Intercreditor Agreement or amendment or modification thereof) in connection
therewith (and the Administrative Agent and Collateral Agent agree to enter into
such agreements, amendments and modifications if reasonably requested by the
Borrowers in connection with the transactions described above) and (ii) if,
following the Effective Date, the Administrative Agent and the Borrowers shall
have jointly identified an obvious error or any error or omission of a
typographical, technical or immaterial nature, in each case, in any provision of
any Credit Document, then the Administrative Agent and the Borrowers shall be
permitted to amend such provision and such amendment shall become effective
without any further action or consent of any other party to any Credit Document
if the same is not objected to in writing by the Required Lenders within five
Business Days following receipt of notice thereof.

 

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13.13 Survival. All indemnities set forth herein including, without limitation,
in Sections 2.10, 2.11, 3.06, 5.04, 12.06 and 13.01 shall survive the execution,
delivery and termination of this Agreement and the Notes and the making and
repayment of the Obligations.

13.14 Domicile of Loans. Each Lender may transfer and carry its Loans at, to or
for the account of any office, Subsidiary or Affiliate of such Lender.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 2.10, 2.11, 3.06 or 5.04 from
those being charged by the respective Lender prior to such transfer, then the
Borrowers shall not be obligated to pay such increased costs (although the
Borrowers shall be obligated to pay any other increased costs of the type
described above resulting from changes in law after the date of the respective
transfer).

13.15 Register. The Borrowers hereby designate the Administrative Agent to serve
as its non-fiduciary agent, solely for purposes of this Section 13.15 and such
agency being solely for Tax purposes, to maintain a register (the “Register”) on
which it will record the names and addresses of the Lenders, and the Revolving
Loan Commitments of, and the principal amounts (and stated interest) of the
Loans made by each of the Lenders pursuant to the terms hereof from time to
time. Failure to make any such recordation, or any error in such recordation,
shall not affect the Borrower’s obligations in respect of such Loans. With
respect to any Lender, the transfer of the Revolving Loan Commitment of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Revolving Loan Commitment shall not be effective until such
transfer is recorded on the Register maintained by the Administrative Agent with
respect to ownership of such Revolving Loan Commitment and Loans and prior to
such recordation all amounts owing to the transferor with respect to such
Revolving Loan Commitment and Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Revolving Loan
Commitments and Loans shall be recorded by the Administrative Agent on the
Register upon and only upon the acceptance by the Administrative Agent of a
properly executed and delivered Assignment and Assumption Agreement pursuant to
Section 13.04(b), an Administrative Questionnaire completed in respect of the
assignee Lender (unless the assignee Lender shall already be a Lender
hereunder), the appropriate IRS Forms, if applicable, the processing and
recordation fee referred to in Section 13.04(b), if applicable, and the consent
of the Administrative Agent and, if required, the Borrowers. Upon such
acceptance and recordation, the assignee specified therein shall be treated as a
Lender for all purposes of this Agreement. Coincident with the delivery of such
an Assignment and Assumption Agreement to the Administrative Agent for
acceptance and registration of assignment or transfer of all or part of a
Revolving Loan Commitment or Loan, or as soon thereafter as practicable, the
assigning or transferor Lender shall surrender the Note (if any) evidencing such
Revolving Loan Commitment or Loan, and thereupon one or more new Notes in the
same aggregate principal amount shall be issued to the assigning or transferor
Lender and/or the new Lender at the request of any such Lender. The Borrowers
agree to indemnify the Administrative Agent from and against any and all losses,
claims, damages and liabilities of whatsoever nature which may be imposed on,
asserted against or incurred by the Administrative Agent in performing its
duties under this Section 13.15, except to the extent incurred by reason of its
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final, non-appealable decision). The entries in the Register
shall be conclusive absent manifest error. The Register shall be available for
inspection by the Borrowers, the Collateral Agent, and any Lender (with respect
to its interests only), at any reasonable time and from time to time upon
reasonable prior notice.

13.16 Confidentiality. Each Lender agrees that it will not disclose without the
prior written consent of the Borrowers (other than to its affiliates, and its
and their partners, directors, officers, employees, agents, representatives,
auditors, advisors or counsel if such Lender or such Lender’s holding or parent
company in its sole discretion determines that any such party should have access
to such information; provided such Persons shall be subject to the provisions of
this Section 13.16 to the same extent as such Lender) any information with
respect to Parent or any of its Subsidiaries which is now or in

 

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the future furnished pursuant to this Agreement or any other Credit Document;
provided, that any Lender may disclose any such information (a) as has become
generally available to the public other than by virtue of a breach of this
Section 13.16 by the respective Lender, (b) as may be required or requested by
any municipal, state or Federal regulatory body or self-regulatory body having
or claiming to have jurisdiction over such Lender or to the Federal Reserve
Board or the Federal Deposit Insurance Corporation or similar organizations
(whether in the United States or elsewhere) or their successors, (c) as may be
required or appropriate in respect to any summons or subpoena or in connection
with any litigation, (d) in order to comply with any law, order, regulation or
ruling applicable to such Lender, (e) to the Administrative Agent or the
Collateral Agent or any other Lender, (f) to any direct or indirect contractual
(actual or prospective) counterparty in any cash management, swap, hedge or
similar agreement (and/or to any such contractual counterparty’s professional
advisor) relating to the Obligations, so long as such contractual counterparty
(or such professional advisor) agrees to be bound by the provisions of this
Section 13.16 and no such disclosure shall be made to a Disqualified Lender and
(g) to any prospective or actual transferee, pledgee or participant in
connection with any contemplated transfer, pledge or participation of any of the
Notes, Letters of Credit. Revolving Loan Commitments, Revolving Loans or any
interest therein by such Lender; provided, that such prospective transferee,
pledgee or participant agrees to be bound by the confidentiality provisions
contained in this Section 13.16.

13.17 Special Notice Regarding Pledges of Equity Interests in, and Promissory
Notes Owed by, Persons Not Organized in the United States. The parties hereto
acknowledge and agree that the Security Documents require that certain
promissory notes, and certain capital stock and other Equity Interests owned by
the respective Credit Party be pledged, and, in certain cases, delivered for
pledge, to the Collateral Agent. The parties hereto further acknowledge and
agree that, except to the extent requested by the Administrative Agent pursuant
to Section 9.12(b), each Credit Party shall only be required to take actions
under the laws of the United States and any State thereof to perfect the
security interests in the pledged capital stock and other Equity Interests of,
and promissory notes issued by, any Person regardless of where organized (and in
each case, to the extent said capital stock, other Equity Interests or
promissory notes are owned by any Credit Party). To the extent any Security
Document requires or provides for the pledge of promissory notes issued by, or
capital stock or other Equity Interests in, any Foreign Subsidiary of the
Borrowers or any other Person organized under the laws of a jurisdiction other
than those specified in the immediately preceding sentence, it is acknowledged
that no actions have been required or will be taken to perfect, under local law
of the jurisdiction of the Person who issued the respective promissory notes or
whose capital stock or other Equity Interests are pledged, under the Security
Documents. All conditions and representations (other than with respect to
Investments in such Foreign Subsidiaries) contained in this Agreement and the
other Credit Documents shall be deemed modified to the extent necessary to
effect the foregoing and so that same are not violated by reason of the failure
to take actions (unless otherwise requested pursuant to Section 9.12(b)) under
local law of any non-U.S. jurisdiction (but only with respect to capital stock
of, other Equity Interests in, and promissory notes issued by, a Foreign
Subsidiary of the Borrowers or any other Persons organized under laws of
jurisdictions other than the United States and any State thereof).

13.18 Patriot Act. Each Lender and Agent subject to the USA PATRIOT Improvement
and Reauthorization Act (Pub. L. 109-177 (signed into law March 9, 2009)) (the
“Patriot Act”) hereby notifies Parent and the other Credit Parties that pursuant
to the requirements of the Patriot Act, it is required to obtain, verify and
record information that identifies Parent, the Borrowers and the other Credit
Parties and other information that will allow such Lender or Agent, as
applicable, to identify the Borrowers and the other Credit Parties in accordance
with the Patriot Act.

 

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13.19 OTHER LIENS ON COLLATERAL; TERMS OF INTERCREDITOR AGREEMENTS; ETC.
(a) EACH LENDER UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT LIENS SHALL BE CREATED
ON THE COLLATERAL PURSUANT TO THE PRIMING TERM LOAN DOCUMENTS, WHICH LIENS SHALL
BE SUBJECT TO TERMS AND CONDITIONS OF THE ABL INTERCREDITOR AGREEMENT. PURSUANT
TO THE EXPRESS TERMS OF THE ABL INTERCREDITOR AGREEMENT, IN THE EVENT OF ANY
CONFLICT BETWEEN THE TERMS OF THE ABL INTERCREDITOR AGREEMENT AND ANY OF THE
CREDIT DOCUMENTS, THE PROVISIONS OF THE ABL INTERCREDITOR AGREEMENT SHALL GOVERN
AND CONTROL.

(b) EACH LENDER AUTHORIZES AND INSTRUCTS THE ADMINISTRATIVE AGENT AND THE
COLLATERAL AGENT TO ENTER INTO THE ABL INTERCREDITOR AGREEMENT ON BEHALF OF THE
LENDERS, AND TO TAKE ALL ACTIONS (AND EXECUTE ALL DOCUMENTS) REQUIRED (OR DEEMED
ADVISABLE) BY IT IN ACCORDANCE WITH THE TERMS OF THE ABL INTERCREDITOR
AGREEMENT.

(c) THE PROVISIONS OF THIS SECTION 13.19 ARE NOT INTENDED TO SUMMARIZE ALL
RELEVANT PROVISIONS OF THE ABL INTERCREDITOR AGREEMENT, THE FORM OF WHICH IS
ATTACHED AS AN EXHIBIT TO THIS AGREEMENT. REFERENCE MUST BE MADE TO THE ABL
INTERCREDITOR AGREEMENT ITSELF TO UNDERSTAND ALL TERMS AND CONDITIONS THEREOF.
EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND REVIEW OF THE ABL
INTERCREDITOR AGREEMENT AND THE TERMS AND PROVISIONS THEREOF, AND NEITHER THE
ADMINISTRATIVE AGENT NOR ANY OF ITS AFFILIATES MAKES ANY REPRESENTATION TO ANY
LENDER AS TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN THE
ABL INTERCREDITOR AGREEMENT.

(d) EACH LENDER HEREBY AUTHORIZES AND INSTRUCTS THE ADMINISTRATIVE AGENT AND THE
COLLATERAL AGENT TO ENTER INTO THE ABL INTERCREDITOR AGREEMENT, THE
SUBORDINATION AGREEMENT AND ANY OTHER INTERCREDITOR OR SUBORDINATION ARRANGEMENT
ENTERED INTO PURSUANT TO THE TERMS HEREOF AND TO SUBJECT THE LIENS SECURING THE
SECURED OBLIGATIONS TO THE PROVISIONS THEREOF. EACH LENDER HEREUNDER
(A) ACKNOWLEDGES THAT IT HAS RECEIVED A COPY OF THE ABL INTERCREDITOR AGREEMENT
AND THE SUBORDINATION AGREEMENT, (B) CONSENTS TO THE SUBORDINATION OF LIENS
PROVIDED FOR IN THE ABL INTERCREDITOR AGREEMENT, AND (C) AGREES THAT IT WILL BE
BOUND BY AND WILL TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF THE ABL
INTERCREDITOR AGREEMENT AND THE SUBORDINATION AGREEMENT. IN THE EVENT OF ANY
CONFLICT OR INCONSISTENCY BETWEEN ANY OF THE PROVISIONS OF THE ABL INTERCREDITOR
AGREEMENT OR THE SUBORDINATION AGREEMENT AND THIS AGREEMENT, THE PROVISIONS OF
THE ABL INTERCREDITOR AGREEMENT OR THE SUBORDINATION AGREEMENT, AS APPLICABLE,
SHALL CONTROL.

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

 

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13.21 No Fiduciary Duty. Each Agent, each Lender and their respective Affiliates
(collectively, solely for purposes of this Section 13.21, the “Lenders”), may
have economic interests that conflict with those of the Credit Parties, their
stockholders and/or their respective affiliates. Each Credit Party agrees that
nothing in the Credit Documents or otherwise will be deemed to create an
advisory, fiduciary or agency relationship or fiduciary duty between any Lender,
on the one hand, and any Credit Party, its respective stockholders or its
respective affiliates, on the other. The Credit Parties acknowledge and agree
that: (a) the transactions contemplated by the Credit Documents (including the
exercise of rights and remedies hereunder and thereunder) are arm’s-length
commercial transactions between the Lenders, on the one hand, each Credit Party,
on the other, and (b) in connection therewith and with the process leading
thereto, (i) no Lender has assumed an advisory or fiduciary responsibility in
favor of any Credit Party, its respective stockholders or its respective
affiliates with respect to the transactions contemplated hereby (or the exercise
of rights or remedies with respect thereto) or the process leading thereto
(irrespective of whether any Lender has advised, is currently advising or will
advise any Credit Party, its respective stockholders or its respective
Affiliates on other matters) or any other obligation to any Credit Party except
the obligations expressly set forth in the Credit Documents and (ii) each Lender
is acting solely as principal and not as the agent or fiduciary of such Credit
Party, its respective management, stockholders, creditors or any other Person.
Each Credit Party acknowledges and agrees that such Credit Party has consulted
its own legal and financial advisors to the extent it deemed appropriate and
that it is responsible for making its own independent judgment with respect to
such transactions and the process leading thereto. Each Credit Party agrees that
it will not claim that any Lender has rendered advisory services of any nature
or respect, or owes a fiduciary or similar duty to such Credit Party, in
connection with such transaction or the process leading thereto.

13.22 Release of Borrowers. Upon the consummation of any Asset Sale permitted
under Section 10.02 of this Agreement as a result of which any Borrower (other
than the Company) ceases to be a Subsidiary of a Borrower, the Administrative
Agent may, without the consent of any Subsidiary other than the Company or any
Lender, release such Borrower from its obligations under the Credit Documents
and all security interests in the Collateral of such Borrower shall be
automatically released in connection therewith (a “Borrower Release”); provided,
that (a) the Administrative Agent shall have received a written request of the
Company with respect to such Borrower Release at least five Business Days prior
to the effective date of such requested Borrower Release and (b) no Default or
Event of Default shall have occurred or shall be continuing prior to, or would
occur after giving effect to, such Borrower Release. In connection with any
termination or release pursuant to this Section 13.22, the Administrative Agent
and/or the Collateral Agent, as the case may be, shall promptly execute and
deliver to the Company and any Borrower, as applicable, at the Company’s or such
Borrower’s expense, all documents that the Company or such Borrower shall
reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to this Section 13.22 shall be without recourse
to or warranty by the Administrative Agent or the Collateral Agent.

13.23 Post-Closing Actions. Notwithstanding anything to the contrary contained
in this Agreement or the other Credit Documents, the parties hereto acknowledge
and agree that Parent, the Company and its Subsidiaries shall be required to
take the actions specified in Schedule 13.23 attached hereto as promptly as
practicable, and in any event within the time periods set forth in Schedule
13.23, unless and then only to the extent extended by the Administrative Agent.

All conditions precedent and representations contained in this Agreement and the
other Credit Documents shall be deemed modified to the extent necessary to
effect the foregoing (and to permit the taking of the actions described above
within the time periods required above, rather than as elsewhere provided in the
Credit Documents); provided, that to the extent any representation and warranty
would not be true because the foregoing actions were not taken on the Effective
Date,

 

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the respective representation and warranty shall be required to be true and
correct in all material respects (or in all respects, to the extent such
representation or warranty is qualified as to “materiality,” “Material Adverse
Effect” or similar language) at the time the respective action is taken (or was
required to be taken) in accordance with the foregoing provisions of this
Section 13.23. The acceptance of the benefits of the Borrowing on the Effective
Date shall constitute a representation, warranty and covenant by the Borrowers
and Parent to each of the Secured Creditors that the actions required pursuant
to this Section 13.23 will be taken within the relevant time periods referred to
in this Section 13.23 and Schedule 13.23, and the parties hereto acknowledge and
agree that the failure to take any of the actions required above, within the
relevant time periods required above, shall give rise to an Event of Default
pursuant to this Agreement.

13.24 Revival and Reinstatement of Obligations. If the incurrence or payment of
the Secured Obligations by the Borrowers or any Guarantor or the transfer to the
Secured Creditors of any property should for any reason subsequently be
asserted, or declared, to be void or voidable under any state or federal law
relating to creditors’ rights, including provisions of the Bankruptcy Code
relating to fraudulent conveyances, preferences, or other voidable or
recoverable payments of money or transfers of property (each, a “Voidable
Transfer”), and if the Secured Creditors are required to repay or restore, in
whole or in part, any such Voidable Transfer, or elect to do so upon the
reasonable advice of their counsel, then, as to any such Voidable Transfer, or
the amount thereof that the Secured Creditors are required or elect to repay or
restore, and as to all reasonable costs, expenses, and attorneys’ fees of the
Secured Creditors related thereto, the liability of the Borrowers or the
Guarantors automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.

13.25 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 Credit Party or any other obligor under any of the Credit Documents
(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 Credit Party, unless
expressly provided for herein or in any other Credit Document, without the prior
written consent of the Administrative Agent (in respect of the exercise of any
set off, such consent not to be unreasonably withheld). The provisions of this
Section 13.25 are for the sole benefit of the Lenders and shall not afford any
right to, or constitute a defense available to, any Credit Party.

13.26 Cash Management Banks and Hedging Creditors. Each Cash Management Bank and
each Hedging Creditor shall be deemed a third party beneficiary hereof and of
the provisions of the other Credit Documents solely for purposes of and solely
with respect to any reference in a Credit Document to the parties for whom the
Collateral Agent is acting. The Collateral Agent hereby agrees to act as agent
for such Cash Management Banks and such Hedging Creditors and, by virtue of
being a counterparty to an ABL Secured Cash Management Agreement or ABL Secured
Hedging Agreement, as the case may be, each Cash Management Bank and each
Hedging Creditor shall be automatically deemed to have appointed the Collateral
Agent as its agent; it being understood and agreed that the rights and benefits
of each Cash Management Bank and each Hedging Creditor under the Credit
Documents consist exclusively of such Cash Management Bank’s or such Hedging
Creditor’s being a beneficiary of the Liens and security interests (and, if
applicable, guarantees) granted to the Collateral Agent and the right to share
in payments and collections out of the Collateral as more fully set forth
herein. In connection with any such distribution of payments and collections,
the Collateral Agent shall be entitled to assume no amounts are owing to any
Cash Management Bank or any Hedging Creditor unless such Cash Management Bank or
such Hedging Creditor, as the case may be, has provided written notification to
the Administrative Agent of the amount that is owing to it and such notification
is received by the Administrative Agent a reasonable period of time prior to the
making of such distribution.

 

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13.27 Acknowledgement and Consent to Bail-In of Affected Financial Institutions.
Notwithstanding anything to the contrary in any Credit Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any Affected Financial Institution
arising under any Credit Document, to the extent such liability is unsecured,
may be subject to the write-down and conversion powers of the applicable
Resolution Authority and agrees and consents to, and acknowledges and agrees to
be bound by:

(a) the application of any Write-Down and Conversion Powers by the applicable
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an Affected Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such Affected Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Credit Document; or

(c) the variation of the terms of such liability in connection with the exercise
of the write-down and conversion powers of the applicable Resolution Authority.

13.28 Electronic Records. This Agreement and any document, amendment, approval,
consent, information, notice, certificate, request, statement, disclosure or
authorization related to this Agreement (each a “Loan Communication”), including
Loan Communications required to be in writing, may be in the form of an
Electronic Record and may be executed using Electronic Signatures. The Borrowers
agree that any Electronic Signature on or associated with any Loan Communication
shall be valid and binding of the Borrowers to the same extent as a manual,
original signature, and that any Loan Communication entered into by Electronic
Signature, will constitute the legal, valid and binding obligation of each of
the Credit Parties enforceable against such in accordance with the terms thereof
to the same extent as if a manually executed original signature was
delivered. Any Loan Communication may be executed in as many counterparts as
necessary or convenient, including both paper and electronic counterparts, but
all such counterparts are one and the same Loan Communication. For the avoidance
of doubt, the authorization under this paragraph may include, without
limitation, use or acceptance by the Administrative Agent, the Collateral Agent
and each of the Lenders of a manually signed paper Loan Communication which has
been converted into electronic form (such as scanned into PDF format), or an
electronically signed Loan Communication converted into another format, for
transmission, delivery and/or retention. The Administrative Agent, the
Collateral Agent and each of the Lenders may, at its option, create one or more
copies of any Loan Communication in the form of an imaged Electronic Record
(“Electronic Copy”), which shall be deemed created in the ordinary course of
such Person’s business, and destroy the original paper document. All Loan
Communications in the form of an Electronic Record, including an Electronic
Copy, shall be considered an original for all purposes, and shall have the same
legal effect, validity and enforceability as a paper record. Notwithstanding
anything contained herein to the contrary, the Administrative Agent and the
Collateral Agent are under no obligation to accept an Electronic Signature

 

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in any form or in any format unless expressly agreed to by the Administrative
Agent and the Collateral Agent pursuant to procedures approved by it; provided,
further, without limiting the foregoing, (a) to the extent the Administrative
Agent and the Collateral Agent have agreed to accept such Electronic Signature,
the Administrative Agent, the Collateral Agent and each of the Lenders shall be
entitled to rely on any such Electronic Signature purportedly given by or on
behalf of any Credit Party without further verification and (b) upon the request
of the Administrative Agent, the Collateral Agent or any Lender, any Electronic
Signature shall be promptly followed by such manually executed counterpart. For
purposes hereof, “Electronic Record” and “Electronic Signature” shall have the
meanings assigned to them, respectively, by 15 USC §7006, as it may be amended
from time to time.

13.29 Severability. Any provision of this Agreement held to be invalid, illegal
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

13.30 Integration. This Agreement and the other Credit Documents constitute the
entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Company, the other Credit Parties, the
Administrative Agent, the Collateral Agent nor any Lender relative to the
subject matter hereof not expressly set forth or referred to herein or in the
other Credit Documents.

13.31 Acknowledgement Regarding any Supported QFCs. To the extent that the
Credit Documents provide support, through a guarantee or otherwise, for Other
Hedging Agreements or any other QFC (such support, “QFC Credit Support”, and
each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows
with respect to the resolution power of the Federal Deposit Insurance
Corporation under the Federal Deposit Insurance Act and Title II of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the
regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in
respect of such Supported QFC and QFC Credit Support, notwithstanding that the
Credit Documents and any Supported QFC may in fact be stated to be governed by
the laws of the State of NewYork and/or of the United States or any other state
of the United States:

(a) If a Covered Entity that is party to a Supported QFC (each, a “Covered
Party”): becomes subject to a proceeding under a U.S. Special Resolution Regime,
the transfer of such Supported QFC and the benefit of such QFC Credit Support
(and any interest and obligation therein or thereunder, and any rights in
property securing such Supported QFC or such QFC Credit Support) from such
Covered Party will be effective to the same extent as the transfer would be
effective under the U.S. Special Resolution Regime if the Supported QFC and such
QFC Credit Support (and any such interest, obligation and rights in property)
were governed by the laws of the United States or a state of the United States.
If a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to
a proceeding under a U.S. Special Resolution Regime, Default Rights under the
Loan Documents that might otherwise apply to such Supported QFC or any QFC
Credit Support that may be exercised against such Covered Party are permitted to
be exercised to no greater extent than such Default Rights could be exercised
under the U.S. Special Resolution Regime if the Supported QFC and the Loan
Documents were governed by the laws of the United States or a state of the
United States. Without limitation of the foregoing, it is understood and agreed
that rights and remedies of the parties with respect to a Defaulting Lender
shall in no event affect the rights of any Covered Party with respect to a
Supported QFC or any QFC Credit Support.

 

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(b) As used in this Section 12.23, the following terms have the following
meanings:

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined
under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Covered Entity” means any of the following: (i) a “covered entity” as defined
in, and interpreted in accordance with, 12 C.F.R. § 252.82(b), (ii) a “covered
bank” as defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI” as defined in, and interpreted in accordance with, 12
C.F.R. § 382.2(b).

“Default Right” has the meaning assigned to that term in, and interpreted in
accordance with, 12 C.F.R. § § 252.81, 47.2 or 382.1 as applicable

“QFC” has the meaning assigned to the term “qualified financial contract” in,
and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

SECTION 14. Nature of Borrower Obligations.

14.01 Nature of Borrower Obligations. Notwithstanding anything to the contrary
contained elsewhere in this Agreement, it is understood and agreed by the
various parties to this Agreement that all Obligations to repay principal of,
interest on, and all other amounts with respect to, all Loans, Letters of Credit
and all other Obligations pursuant to this Agreement and each other Credit
Document (including, without limitation, all fees, indemnities, taxes and other
Obligations in connection therewith or in connection with the related Revolving
Loan Commitments) shall constitute the joint and several obligations of each of
the Borrowers. In addition to the direct (and joint and several) obligations of
the Borrowers with respect to Obligations as described above, all such
Obligations shall be guaranteed pursuant to, and in accordance with the terms
of, the Guaranty.

14.02 Independent Obligation. The obligations of each Borrower with respect to
the Obligations are independent of one another and of the obligations of Parent
under the Guaranty of such Obligations, and a separate action or actions may be
brought and prosecuted against each Borrower and Parent (in its capacity as a
Guarantor), whether or not any other Borrower or Parent is joined in any such
action or actions. Each Borrower waives, to the fullest extent permitted by law,
the benefit of any statute of limitations affecting its liability hereunder or
the enforcement thereof. Any payment by any Borrower or other circumstance which
operates to toll any statute of limitations as to any Borrower shall, to the
fullest extent permitted by law, operate to toll the statute of limitations as
to each Borrower.

14.03 Authorization. Each of the Borrowers authorizes the Administrative Agent,
the Issuing Lenders and the Lenders without notice or demand (except as shall be
required by applicable statute and cannot be waived), and without affecting or
impairing its liability hereunder, from time to time to:

(a) exercise or refrain from exercising any rights against any other Borrower or
Parent or others or otherwise act or refrain from acting;

(b) release or substitute any other Borrower, endorsers, Parent, guarantors or
other obligors;

 

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(c) settle or compromise any of the Obligations of any other Borrower or any
other Credit Party, any security therefor or any liability (including any of
those hereunder) incurred directly or indirectly in respect thereof or hereof,
and may subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of any Borrower to its creditors other than the
Lenders;

(d) apply any sums paid by any other Borrower or any other Person, howsoever
realized, to any liability or liabilities of such other Borrower or other Person
regardless of what liability or liabilities of such other Borrower or other
Person remain unpaid; and/or

(e) consent to or waive any breach of, or act, omission or default under, this
Agreement or any of the instruments or agreements referred to herein, or
otherwise, by any other Borrower or any other Person.

14.04 Reliance. It is not necessary for the Administrative Agent, any Issuing
Lender or any Lender to inquire into the capacity or powers of any Borrower or
any of its Subsidiaries or the officers, directors, members, partners or agents
acting or purporting to act on its behalf, and any Obligations made or created
in reliance upon the professed exercise of such powers shall constitute the
joint and several obligations of the Borrowers hereunder.

14.05 Contribution; Subrogation. No Borrower shall exercise any rights of
contribution or subrogation with respect to any other Borrower as a result of
payments made by it hereunder, in each case unless and until the Total Revolving
Loan Commitment and all Letters of Credit have been terminated (or, in the case
of Letters of Credit, cash collateralized on terms reasonably satisfactory to
the Administrative Agent and the Issuing Lenders) and all Obligations, other
than contingent, indemnity and similar Obligations with respect to which no
claim has been made, have been paid in full in cash.

14.06 Waiver. Each Borrower waives, to the fullest extent permitted by
applicable law, any right to require the Administrative Agent, the Collateral
Agent, the Issuing Lenders or the Lenders to (a) proceed against any other
Borrower, Parent or any other party, (b) proceed against or exhaust any security
held from any Borrower, Parent or any other party or (c) pursue any other remedy
in the Administrative Agent’s, the Collateral Agent’s, any Issuing Lender’s or
Lender’s power whatsoever. Each Borrower waives, to the fullest extent permitted
by applicable law, any defense based on or arising out of suretyship or any
impairment of security held from any Borrower, Parent or any other party or on
or arising out of any defense of any other Borrower, Parent or any other party
other than payment in full in cash of the Obligations, including, without
limitation, any defense based on or arising out of the disability of any other
Borrower, Parent or any other party, or the unenforceability of the Obligations
or any part thereof from any cause, or the cessation from any cause of the
liability of any other Borrower, in each case other than as a result of the
payment in full in cash of the Obligations.

SECTION 15. Guaranty.

15.01 The Guaranty. (a) Parent hereby guarantees, as a primary obligor and not
as a surety, to each Secured Creditor and their respective successors and
assigns, the prompt payment in full when due (whether at stated maturity, by
required prepayment, declaration, demand, by acceleration or otherwise) of the
principal of and interest (including any interest, fees, costs or charges that
would accrue but for the provisions of the Bankruptcy Code after any bankruptcy
or insolvency petition under the Bankruptcy Code) on the Loans made by the
Lenders to, and the Notes held by each Lender of, any Borrower, and all other
Secured Obligations from time to time owing to the Secured Creditors by any
Credit Party under any Credit Document, any ABL Secured Cash Management
Agreement or any ABL Secured Hedging Agreement, in each

 

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case strictly in accordance with the terms thereof (such obligations being
herein collectively called the “Parent Guaranteed Obligations”) and (b) each
Borrower hereby guarantees, as a primary obligor and not as a surety, to each
Secured Creditor and their respective successors and assigns, the prompt payment
in full when due of Secured Obligations from time to time owing to the Secured
Creditors by any Credit Party under any ABL Secured Cash Management Agreement or
any ABL Secured Hedging Agreement, in each case strictly in accordance with the
terms thereof (such obligations being herein collectively called the “Borrower
Guaranteed Obligations” and, together with the Parent Guaranteed Obligations,
the “Guaranteed Obligations”). Parent hereby agrees that if any Borrower shall
fail to pay in full when due (whether at stated maturity, by acceleration or
otherwise) any of the Guaranteed Obligations, Parent will promptly pay the same
in cash, upon demand, and that in the case of any extension of time of payment
or renewal of any of the Parent Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal. Each
Borrower hereby agrees that if any Credit Party shall fail to pay in full when
due (whether at stated maturity, by acceleration or otherwise) any of the
Borrower Guaranteed Obligations, such Borrower will promptly pay the same in
cash, upon demand, and that in the case of any extension of time of payment or
renewal of any of the Borrower Guaranteed Obligations, the same will be promptly
paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.

15.02 Obligations Unconditional. The obligations of each Guarantor under
Section 15.01 shall constitute a guaranty of payment and not of collection and
to the fullest extent permitted by applicable Requirements of Law, are absolute,
irrevocable and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of the Guaranteed Obligations of any Borrower under
this Agreement, the Notes, if any, or any other agreement or instrument referred
to herein or therein, or any substitution, release or exchange of any other
guaranty of or security for any of the Guaranteed Obligations, and, irrespective
of any other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a surety or Guarantor (except for payment in
full (other than contingent indemnity obligations not then yet due and
payable)). Without limiting the generality of the foregoing and subject to
applicable law, it is agreed that the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute, irrevocable and unconditional under any and all
circumstances as described above:

(a) at any time or from time to time, without notice to any Guarantor, the time
for any performance of or compliance with any of the Guaranteed Obligations
shall be extended, or such performance or compliance shall be waived;

(b) any of the acts mentioned in any of the provisions of this Agreement or the
Notes, if any, or any other agreement or instrument referred to herein or
therein shall be done or omitted;

(c) the maturity of any of the Guaranteed Obligations shall be accelerated, or
any of the Guaranteed Obligations shall be amended in any respect, or any right
under the Credit Documents or any other agreement or instrument referred to
herein or therein shall be amended or waived in any respect or any other
guaranty of any of the Guaranteed Obligations or any security therefor shall be
released or exchanged in whole or in part or otherwise dealt with; or

(d) any Lien or security interest granted to, or in favor of, any Lender or
Agent as security for any of the Guaranteed Obligations shall fail to be
perfected.

 

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Each Guarantor hereby expressly waives, to the maximum extent permitted by law,
diligence, presentment, demand of payment, protest and all notices whatsoever,
and any requirement that any Secured Creditor exhaust any right, power or remedy
or proceed against any Borrower under this Agreement or the Notes, if any, or
any other agreement or instrument referred to herein or therein, or against any
other Person under any other guaranty of, or security for, any of the Guaranteed
Obligations. Each Guarantor waives any and all notice of the creation, renewal,
extension, waiver, termination or accrual of any of the Guaranteed Obligations
and notice of or proof of reliance by any Secured Creditor upon this Guaranty or
acceptance of this Guaranty, and the Guaranteed Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred in
reliance upon this Guaranty, and all dealings between any Borrower and the
Secured Creditors shall likewise be conclusively presumed to have been had or
consummated in reliance upon this Guaranty. This Guaranty shall be construed as
a continuing, absolute, irrevocable and unconditional guaranty of payment
without regard to any right of offset with respect to the Guaranteed Obligations
at any time or from time to time held by Secured Creditors, and the obligations
and liabilities of the Guarantor hereunder shall not be conditioned or
contingent upon the pursuit by the Secured Creditors or any other Person at any
time of any right or remedy against the Borrowers or against any other Person
which may be or become liable in respect of all or any part of the Guaranteed
Obligations or against any collateral security or guaranty therefor or right of
offset with respect thereto. This Guaranty shall remain in full force and effect
and be binding in accordance with and to the extent of its terms upon the
Guarantor and the successors and assigns thereof, and shall inure to the benefit
of the Lenders, and their respective successors and assigns, notwithstanding
that from time to time during the term of this Agreement there may be no
Guaranteed Obligations outstanding.

15.03 Reinstatement. The obligations of Parent and each Borrower under this
Section 15 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Borrower or other Credit Party in
respect of the Parent Guaranteed Obligations, on the one hand, or the Borrower
Guaranteed Obligations, on the other hand, is rescinded or must be otherwise
restored by any holder of any such Parent Guaranteed Obligations or Borrower
Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise.

15.04 Subrogation; Subordination. Each Guarantor hereby agrees that until the
payment and satisfaction in full in cash of all Guaranteed Obligations (other
than contingent indemnity obligations not then due and payable) and the
expiration or termination of the Revolving Loan Commitments of the Lenders under
this Agreement it shall waive any claim and shall not exercise any right or
remedy, direct or indirect, arising by reason of any performance by it of its
guaranty in Section 15.01, whether by subrogation or otherwise, against any
Borrower of any of the Guaranteed Obligations or any security for any of the
Guaranteed Obligations. Any Indebtedness of a Guarantor to any other Credit
Party shall be subordinated in right of payment to the payment in full in cash
of the Guaranteed Obligations and any proceeds of such Indebtedness collected or
received by any Credit Party during the continuance of an Event of Default
shall, at the request of the Administrative Agent, be paid over to the
Administrative Agent for application against the Guaranteed Obligations;
provided, that upon the indefeasible payment and satisfaction in full in cash of
all Guaranteed Obligations (other than contingent indemnity obligations not then
due and payable) and the expiration or termination of the Revolving Loan
Commitments of the Lenders under this Agreement, without any further action by
any Person, the respective Credit Party shall be automatically subrogated to the
rights of the Administrative Agent and the Lenders to the extent of any payment
hereunder.

 

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15.05 Remedies. Each Guarantor agrees that, as between such Guarantor and the
Lenders, the obligations of any Borrower under this Agreement and the Notes, if
any, may be declared to be forthwith due and payable as provided in
Section 11.01 (and shall be deemed to have become automatically due and payable
in the circumstances provided in Section 11.01) for purposes of Section 15.01,
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against any Borrower and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by any Borrower) shall forthwith
become due and payable by such Guarantor for purposes of Section 15.01.

15.06 Instrument for the Payment of Money. Each Guarantor hereby acknowledges
that the guaranty in this Section 15 constitutes an instrument for the payment
of money, and consents and agrees that any Lender or Agent, at its sole option,
in the event of a dispute by such Guarantor in the payment of any moneys due
hereunder, shall have the right to bring a motion-action under New York CPLR
Section 3213.

15.07 Continuing Guarantee. The guaranty in this Section 15 is a continuing
guaranty of payment, and shall apply to all Guaranteed Obligations whenever
arising.

15.08 Excluded Swap Obligations; Keepwell. Each Qualified ECP Guarantor hereby
jointly and severally absolutely, unconditionally and irrevocably undertakes to
provide such funds or other support as may be needed from time to time by each
other Guarantor to honor all of its obligations under this Guaranty in respect
of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall
only be liable under this Section 15 for the maximum amount of such liability
that can be hereby incurred without rendering its obligations under this
Section 15, or otherwise under this Guaranty, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount). The obligations of each Qualified ECP Guarantor under this
Section 15 shall remain in full force and effect until the Discharge of ABL
Facility Obligations (as defined in the ABL Intercreditor Agreement). Each
Qualified ECP Guarantor intends that this Section 15 constitute, and this
Section 15 shall be deemed to constitute, a “keepwell, support, or other
agreement” for the benefit of each other Loan Party for all purposes of
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

*    *    *

 

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