Certain portions of this exhibit (indicated by “[*****]”) have been omitted
pursuant to Item 601(b)(10) of Regulation S-K

Exhibit 10.2

PRIMING TERM LOAN CREDIT AGREEMENT

among

J.JILL, INC.,

JILL ACQUISITION LLC,

THE VARIOUS LENDERS PARTY HERETO FROM TIME TO TIME

and

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as ADMINISTRATIVE AGENT and as COLLATERAL AGENT

 

 

Dated as of September 30, 2020

 

 

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TABLE OF CONTENTS

 

 

            Page  

SECTION 1. Definitions and Accounting Terms

     1  

1.01

    

Defined Terms

     1  

1.02

    

Other Definitional Provisions

     46  

SECTION 2. Amount and Terms of Credit

     47  

2.01

    

The Initial Term Loan Commitments

     48  

2.02

    

Minimum Amount of Each Borrowing

     48  

2.03

    

Notice of Borrowing

     48  

2.04

    

[Reserved]

     48  

2.05

    

Notes

     48  

2.06

    

Conversions/Continuations

     49  

2.07

    

Pro Rata Borrowings

     50  

2.08

    

Interest

     50  

2.09

    

Interest Periods

     52  

2.10

    

Increased Costs, Illegality, etc.

     52  

2.11

    

Compensation

     56  

2.12

    

Change of Lending Office

     56  

2.13

    

Replacement of Lenders

     56  

2.14

    

[Reserved]

     57  

2.15

    

Term Loan Repurchases

     58  

SECTION 3. Fees; Reductions of Commitment

     61  

3.01

    

Fees

     61  

3.02

    

Mandatory Reduction of Commitments

     61  

SECTION 4. Prepayments; Payments; Taxes

     61  

4.01

    

Voluntary Prepayments

     61  

4.02

    

Mandatory Repayments

     62  

4.03

    

Method and Place of Payment

     66  

4.04

    

Net Payments

     66  

SECTION 5. Conditions Precedent to the Initial Borrowing

     71  

5.01

    

Counterparts; Notes

     71  

5.02

    

Officer’s Certificate

     71  

5.03

    

Opinions of Counsel

     71  

5.04

    

Company Documents; Proceedings; etc.

     72  

5.05

    

Notice of Borrowing

     72  

5.06

    

Sponsor Equity Consideration

     72  

5.07

    

Equity Consideration; Interest

     72  

5.08

    

Guaranty

     72  

5.09

    

Fees, Expenses, etc.

     72  

 

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5.10

    

Transaction Support Agreement; Minimum Condition; Cancellation of Existing Term
Loans

     73  

5.11

    

Security Agreements

     73  

5.12

    

ABL Amendment and Waiver; Existing Term Loan Amendment and Waiver; Subordinated
Facility Loan Documents

     73  

5.13

    

Financial Statements

     74  

5.14

    

Insurance Certificates

     74  

5.15

    

Patriot Act

     74  

5.16

    

No Material Adverse Effect

     74  

5.17

    

No Default; Representations and Warranties

     74  

5.18

    

Initial Budget

     74  

SECTION 6. [Reserved]

     75  

SECTION 7. Representations, Warranties and Agreements

     75  

7.01

    

Company Status

     75  

7.02

    

Power and Authority

     75  

7.03

    

No Violation

     75  

7.04

    

Approvals

     76  

7.05

    

Financial Statements; Financial Condition

     76  

7.06

    

Litigation

     76  

7.07

    

True and Complete Disclosure

     76  

7.08

    

Use of Proceeds; Margin Regulations

     76  

7.09

    

Tax Returns and Payments

     77  

7.10

    

Compliance with ERISA

     77  

7.11

    

Security Documents

     78  

7.12

    

Properties

     78  

7.13

    

OFAC

     78  

7.14

    

Patriot Act/FCPA

     79  

7.15

    

Compliance with Statutes

     79  

7.16

    

Investment Company Act

     79  

7.17

    

Environmental Matters

     79  

7.18

    

Employment and Labor Relations

     80  

7.19

    

Intellectual Property, Etc.

     80  

SECTION 8. Affirmative Covenants

     80  

8.01

    

Information Covenants

     81  

8.02

    

Books, Records and Inspections; Quarterly Conference Calls

     84  

8.03

    

Maintenance of Property; Insurance

     84  

8.04

    

Existence; Franchises

     85  

8.05

    

Compliance with Statutes, etc.

     85  

8.06

    

Compliance with Environmental Laws

     85  

8.07

    

ERISA

     86  

8.08

    

[Reserved]

     86  

8.09

    

Ratings

     87  

8.10

    

Payment of Taxes

     87  

8.11

    

Use of Proceeds

     87  

 

-ii-

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8.12

    

Additional Security; Further Assurances; etc.

     87  

8.13

    

[Reserved]

     89  

8.14

    

Ownership of Subsidiaries

     89  

8.15

    

Post-Closing Refunds

     89  

8.16

    

Equity Consideration

     89  

8.17

    

Cash Flow Reporting; Variance Reporting; Liquidity Reporting; Store Closure
Reporting

     91  

SECTION 9. Negative Covenants

     92  

9.01

    

Liens

     92  

9.02

    

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

     96  

9.03

    

Dividends

     99  

9.04

    

Indebtedness

     101  

9.05

    

Advances, Investments and Loans

     104  

9.06

    

Transactions with Affiliates

     107  

9.07

    

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

     108  

9.08

    

Limitation on Certain Restrictions on Subsidiaries

     109  

9.09

    

Business; etc.

     110  

9.10

    

Minimum Liquidity Covenant

     111  

9.11

    

First Lien Net Leverage Ratio

     111  

9.12

    

Limitation on Capital Expenditures

     111  

9.13

    

Change of Fiscal Year

     111  

SECTION 10. Events of Default and Remedies

     111  

10.01

    

Events of Default. Upon the occurrence of any of the following specified events
(each, an “Event of Default”):

     111  

10.02

    

Rescission

     115  

10.03

    

Application of Funds

     115  

10.04

    

Leverage Covenant Cure Right

     116  

10.05

    

Minimum Liquidity Cure Right

     118  

SECTION 11. The Administrative Agent

     118  

11.01

    

Appointment

     119  

11.02

    

Nature of Duties

     120  

11.03

    

Lack of Reliance on the Administrative Agent; Etc.

     120  

11.04

    

Certain Rights of the Agents

     121  

11.05

    

Reliance

     123  

11.06

    

Indemnification

     123  

11.07

    

The Administrative Agent in its Individual Capacity

     125  

11.08

    

[Reserved]

     125  

11.09

    

Resignation by the Administrative Agent

     125  

11.10

    

Collateral Matters

     126  

11.11

    

Delivery of Information

     128  

11.12

    

Withholding

     128  

11.13

    

Administrative Agent May File Bankruptcy Disclosure and Proofs of Claim

     129  

 

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SECTION 12. Miscellaneous

     130  

12.01

    

Payment of Expenses, etc.

     130  

12.02

    

Right of Set-off

     132  

12.03

    

Notices

     132  

12.04

    

Benefit of Agreement; Assignments; Participations

     135  

12.05

    

No Waiver; Remedies Cumulative

     138  

12.06

    

Payments Pro Rata

     138  

12.07

    

Calculations; Computations

     139  

12.08

    

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

     140  

12.09

    

Counterparts

     142  

12.10

    

Effectiveness

     142  

12.11

    

Headings Descriptive

     142  

12.12

    

Amendment or Waiver; etc.

     142  

12.13

    

Survival

     145  

12.14

    

Domicile of Term Loans

     145  

12.15

    

Register

     145  

12.16

    

Confidentiality

     146  

12.17

    

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

     146  

12.18

    

Patriot Act

     147  

12.19

    

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

     147  

12.20

    

Interest Rate Limitation

     148  

12.21

    

No Fiduciary Duty

     148  

12.22

    

Post-Closing Actions

     149  

12.23

    

Revival and Reinstatement of Obligations

     149  

12.24

    

Lender Action

     150  

12.25

    

Hedging Creditors

     150  

12.26

    

Acknowledgement and Consent to Bail-In of Affected Financial Institutions

     150  

12.27

    

Electronic Records

     151  

12.28

    

Severability

     152  

12.29

    

Integration

     152  

 

SCHEDULE 1.01(a)        

  

Commitments

SCHEDULE 1.01(b)

  

Immaterial Subsidiaries

SCHEDULE 4.04

  

Lender Information

SCHEDULE 7.04

  

Approvals

SCHEDULE 7.12

  

Real Property

SCHEDULE 9.01

  

Existing Liens

SCHEDULE 9.04

  

Existing Indebtedness

SCHEDULE 9.08

  

Restrictive Agreements

SCHEDULE 12.03

  

Notice Addresses

SCHEDULE 12.22

  

Post-Closing Actions

 

-iv-

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EXHIBIT A-1

  

Form of Notice of Borrowing

EXHIBIT A-2

  

Form of Notice of Conversion/Continuation

EXHIBIT B

  

Form of Note

EXHIBIT C-1

  

Form of U.S. Tax Compliance Certificate

EXHIBIT C-2

  

Form of U.S. Tax Compliance Certificate

EXHIBIT C-3

  

Form of U.S. Tax Compliance Certificate

EXHIBIT C-4

  

Form of U.S. Tax Compliance Certificate

EXHIBIT D

  

Form of Officers’ Certificate

EXHIBIT E

  

Form of Guaranty

EXHIBIT F

  

Form of Security Agreement

EXHIBIT G

  

[Reserved]

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 Term Loan Intercreditor Agreement

EXHIBIT L

  

Form of Subordination Agreement

EXHIBIT M

  

Auction Procedures

EXHIBIT N

  

Secured Party Designation Notice

 

 

-v-

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PRIMING TERM LOAN CREDIT AGREEMENT, dated as of September 30, 2020, among
J.JILL, INC., a Delaware corporation (“Holdings”), Jill Acquisition LLC, a
Delaware limited liability company (the “Borrower”), the Lenders party hereto
from time to time and Wilmington Trust, National Association (“Wilmington
Trust”), as Administrative Agent and as Collateral Agent. All capitalized terms
used herein and defined in Section 1 are used herein as therein defined.

W I T N E S E T H:

WHEREAS, on the Closing Date, the Borrower intends to consummate the
Transactions;

WHEREAS, the Borrower has requested that the Lenders party hereto provide a
senior secured priming term loan facility as set forth in this Agreement;

WHEREAS, subject to and upon the terms and conditions set forth herein, the
Lenders are willing to make available to the Borrower the senior secured priming
term loan facility provided for herein; and

WHEREAS, in connection with the Transactions, and in partial consideration of
their making available to the Borrower the senior secured priming term loan
facility provided for herein, the Lenders will receive newly issued equity
interests in Holdings.

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 Agent” shall mean CIT Finance LLC and any successor or replacement agent
under the ABL Credit Agreement or any other ABL Loan Document.

“ABL Amendment and Waiver” shall mean Amendment No. 4 to ABL Credit Agreement
and Waiver, dated as of the date hereof, by and among Holdings, the Borrower,
certain of its Subsidiaries, the lenders party thereto and the ABL Agent.

“ABL Credit Agreement” shall mean the ABL Credit Agreement, dated as of May 8,
2015, by and among Holdings, the Borrower, certain of its Subsidiaries from time
to time party thereto, the lenders party thereto from time to time and the ABL
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 ABL Credit Agreement hereunder shall be deemed a
reference to any ABL Credit Agreement then in existence.

“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 the date hereof, among Holdings, the
Borrower and the other Grantors party thereto from time to time, the ABL 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 Loan Documents” shall mean the “Credit Documents” as defined in the ABL
Credit Agreement, including any amendments, restatements, amendments and
restatements, supplements, modifications, or replacements thereto to the extent
same are permitted by the ABL Intercreditor Agreement.

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

“ABL Obligations” shall mean the “Obligations” as such term is defined in the
ABL Credit Agreement or any equivalent term used to describe the obligations
arising thereunder and in connection therewith.

“ABL Secured Parties” shall mean the “Secured Creditors” as defined in the ABL
Credit Agreement or any equivalent term used to describe secured parties
thereunder.

“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 Borrower, 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 Borrower
(or shall be merged with and into the Borrower or a Subsidiary).

“Accredited Investor” shall have the meaning provided in Section 12.30.

“Additional PIK Interest” shall have the meaning provided in Section 2.08(c).

“Additional Security Documents” shall have the meaning provided in
Section 8.12(a).

“Additional Shared Tax Proceeds” shall have the meaning provided in
Section 4.02(j).

“Additional Shares” shall have the meaning provided in Section 8.16(d).

“Adjusted Consolidated Net Income” shall mean, for any period, Consolidated Net
Income for such period plus the sum of the amount of all net non-cash charges
(including, without limitation, depreciation, amortization, deferred tax expense
and non-cash interest expense) and net non-cash losses which were included in
arriving at Consolidated Net Income for such period, less the amount of all net
non-cash gains and non-cash credits (in each case, excluding accruals in the
ordinary course) which were included in arriving at Consolidated Net Income for
such period.

 

-2-

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“Adjusted Consolidated Working Capital” shall mean, at any time, Consolidated
Current Assets (but excluding therefrom all cash and Cash Equivalents) less
Consolidated Current Liabilities at such time.

“Administrative Agent” shall mean Wilmington Trust, 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 11.09.

“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 Holdings or any
Subsidiary thereof.

“Affiliated Lender” shall have the meaning provided in Section 2.15(a).

“Affiliated Persons” shall have the meaning provided in Section 2.15(a).

“Affiliated Sponsor Lender” shall have the meaning provided in Section 2.15(a).

“Agent Fee Letter” means that certain Fee Letter, dated as of the date hereof,
by and between the Borrower and Wilmington Trust.

“Agents” shall mean and include the Administrative Agent and the Collateral
Agent.

“Agreement” shall mean this Priming Term Loan 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 Holdings and its Subsidiaries as of February 1, 2020 and related statements
of operations, member’s equity and cash flows of Holdings and its Subsidiaries
for the Fiscal Year ended February 1, 2020.

“Anticipated Leverage Cure Deadline” shall have the meaning assigned to such
term in Section 10.04.

“Anticipated Liquidity Cure Deadline” shall have the meaning assigned to such
term in Section 10.05.

 

-3-

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“Applicable Budget” shall have the meaning assigned to such term in
Section 8.17(a).

“Applicable Margin” shall mean a percentage per annum equal to, in the case of
Term Loans maintained as (i) Base Rate Loans, 4.00%, and (ii) LIBOR Loans,
5.00%.

“Approved Fund” shall mean any Person (other than a natural person) that is (or
will be) engaged in making, purchasing, holding or investing in bank and other
commercial loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) a Lender, (b) an Affiliate
of a Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.

“Asset Sale” shall mean any sale, transfer or other disposition by Holdings or
any of its Subsidiaries to any Person other than to the Borrower or a
Wholly-Owned Subsidiary of the Borrower that is a Credit Party of any asset
(including, without limitation, any capital stock or other securities of, or
Equity Interests in, another Person, other than Holdings) pursuant to
Section 9.02(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 or any other form (including
electronic documentation generated by MarkitClear or other electronic platform)
approved by the Administrative Agent.

“Auction Manager” shall have the meaning provided in Section 2.15(a).

“Auction Notice” shall mean an auction notice given by the Borrower in
accordance with the Auction Procedures with respect to a Dutch Auction Purchase
Offer.

“Auction Procedures” shall mean the auction procedures with respect to Dutch
Auction Purchase Offers set forth in Exhibit M hereto.

“Authorized Officer” shall mean, with respect to (a) delivering the Notice of
Borrowing (other than the Notice of Borrowing required pursuant to
Section 5.05), Notices of Conversion/Continuation and similar notices, the chief
executive officer, chief financial officer, treasurer, chief operating officer
of the Borrower or any person or persons that are designated in writing by one
or more Authorized Officers described above to the Administrative Agent as being
authorized by the Borrower 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 Borrower.

“Available Cash Netting Amount” means, as of any date, (x) unrestricted cash and
Cash Equivalents of the Credit Parties subject to a Lien securing the
Obligations on such date minus (y) an amount (not less than zero) equal to
Post-Closing Refunds received by the Credit Parties up to $30,000,000 less the
aggregate principal amount of Loans repaid as a PIK Increase Paydown or as a
result of receipt of Additional Shared Tax Proceeds pursuant to Section 4.02(j);
provided, that such amount set forth in this clause (y) shall be reduced by an
amount equal to two times the aggregate principal amount of Loans repaid from
Additional Shared Tax Proceeds.

 

-4-

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“Available Liquidity Cash Amount” means, as of any date, (x) unrestricted cash
and Cash Equivalents of the Credit Parties subject to a Lien securing the
Obligations on such date minus (y) the Excluded Liquidity Cash Amount.

“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 10.01(e).

“Base Rate” shall mean, at any time, the highest of (i) the Prime Rate at such
time, (ii) 1/2 of 1% per annum in excess of the overnight Federal Funds
Effective Rate at such time, (iii) the LIBO Rate for a LIBOR Loan denominated in
Dollars with a one-month Interest Period commencing on such day plus 1.00% and
(iv) 2.00%. For purposes of this definition, the LIBO Rate shall be determined
using the LIBO Rate as otherwise determined by the Administrative Agent in
accordance with the definition of “LIBO Rate”, except that (x) if a given day is
a Business Day, such determination shall be made on such day (rather than two
Business Days prior to the commencement of an Interest Period) or (y) if a given
day is not a Business Day, the LIBO Rate for such day shall be the rate
determined by the Administrative Agent pursuant to preceding clause (x) for the
most recent Business Day preceding such day. 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 (ii) 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 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 LIBO Rate, respectively.

“Base Rate Loan” shall mean each Term Loan designated or deemed designated as
such by the Borrower at the time of the incurrence thereof or conversion
thereto.

“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate
(which may include SOFR) that has been selected by the Administrative Agent
(acting at the direction of the Required Lenders) 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

 

-5-

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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 (acting at the direction of the
Required Lenders) 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 (acting at the direction of the Required Lenders) 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
(acting at the direction of the Required Lenders) 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 (acting
at the direction of the Required Lenders and with the consent of the Borrower)
is reasonably necessary in connection with the administration of this Agreement)
and (y) determines is administratively feasible in its sole discretion.

“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

 

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(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).

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

“Borrower” shall have the meaning provided in the first paragraph of this
Agreement.

 

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“Borrower Materials” shall have the meaning provided in Section 12.03(c).

“Borrower Restricted Information” shall mean material non-public information
with respect to Holdings, the Borrower or their Subsidiaries or with respect to
the securities of any such Person (or, if Holdings is not at the time of the
making of a representation with respect to Borrower Restricted Information a
public reporting company, material information of a type that would not
reasonably be expected to be publicly available if Holdings were a public
reporting company).

“Borrowing” shall mean the borrowing (or deemed borrowing) of one Type of Term
Loan, from all the Lenders of such Term Loan 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 Date” shall mean the date of the incurrence of any Term Loans.

“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 5.13 or Section 8.01(a) or (b), as
applicable.

“Capital Expenditures” shall mean, with respect to any Person, for any period,
(i) 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 (ii) 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.

 

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“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
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, (x) such local currencies in those countries in
which such Foreign Subsidiary transacts business from time to time in the
ordinary course of business and (y) 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 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.

 

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“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 Holdings having
the right to vote for the election of members of the board of directors of
Holdings 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) Holdings ceases to own and control, directly, 100% of the Equity Interests
of the Borrower, or (c) a “change of control” or similar event shall occur as
provided in the ABL Credit 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.

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

“Closing Date” shall have the meaning provided in Section 12.10.

“Closing Date Open Market Purchase Agreements” shall mean those certain Open
Market Purchase Agreements, dated as the date hereof, by and between the
Borrower, as the purchaser, and each of the Participating Term Lenders (as
defined therein) party thereto.

“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 Wilmington Trust, in its capacity as collateral
agent for the Secured Creditors hereunder and under the other Credit Documents,
and shall include any successor to the Collateral Agent appointed pursuant to
Section 11.09.

“Commitment” shall mean, for each Lender, its Initial Term Loan Commitment, as
same may be terminated, reduced or provided pursuant to the terms of this
Agreement.

“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 12.03(b).

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

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

 

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“Consolidated Current Liabilities” shall mean, at any time, the consolidated
current liabilities of the Holdings and its Subsidiaries at such time, but
excluding (i) the current portion of any Indebtedness under this Agreement, the
ABL Credit Agreement (or any refinancing or replacement thereof), the Existing
Term Loan Credit Agreement, the Subordinated Facility Credit Agreement and the
current portion of any other long-term Indebtedness which would otherwise be
included therein (including Capitalized Lease Obligations), (ii) current
interest and (iii) current taxes (including current deferred tax liabilities).

“Consolidated EBITDA” shall mean, as of any date for the applicable period
ending on such date with respect to the Borrower 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)
for, without duplication,

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

(ii) provision for Taxes based on income, profits or capital of the Borrower 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 Holdings, the Borrower or any Subsidiary pursuant to a
written plan or agreement (including expenses arising from the grant of stock
and stock options prior to the Closing 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 Holdings 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 Borrower or the Net Cash Proceeds of any issuance of Equity
Interests (other than Disqualified Equity Interests) of Holdings or the Borrower
(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,

 

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(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),

(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 Borrower 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 Term Loans, Existing
Term Loans or Subordinated Facility 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 (x) accrual of revenue in
the ordinary course, (y) 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 (z) 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 Holdings or any parent entity of
Holdings for operating expenses or (ii) as fees to and indemnities to directors
of Holdings or any parent entity of Holdings, or of the Borrower or its
Subsidiaries, to the extent (x) such amount, if paid directly by the Borrower,
would have reduced Consolidated Net Income (assuming such amount was paid by the
Borrower) and would not otherwise have been required to be added back pursuant
to preceding clause (b) of this definition or (y) such Dividend payment is paid
by the Borrower 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 (i) Indebtedness, or
(ii) obligations under any Interest Rate Protection Agreement.

“Consolidated Indebtedness” means 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 Holdings, the Borrower 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 Borrower 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

 

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(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).

“Consolidated Net Income” shall mean, as of any date for the applicable period
ending on such date, with respect to the Borrower and its Subsidiaries on a
consolidated basis, net income, determined in accordance with GAAP, but
excluding, without duplication, (i) solely for purposes of the calculation of
Excess Cash Flow, extraordinary items (including for the avoidance of doubt any
Post-Closing Refunds), (ii) any amounts attributable to Investments in any joint
venture to the extent that such amounts have not been distributed in cash to the
Borrower and its Subsidiaries during such applicable period; (iii)(x) any net
unrealized gains and losses resulting from fair value accounting required by
FASB ASC 815 and (y) 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, (iv) the income (or loss) of any Person accrued prior
to the date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any Subsidiary (except to the extent required
for any calculation of Consolidated EBITDA on a Pro Forma Basis), (v) 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 Borrower and its
Subsidiaries, except to the extent of cash actually distributed during such
period to the Borrower or to a Subsidiary of the Borrower that is not itself
subject to any such encumbrance or restriction, (vi) 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 (vii) the
cumulative effect of a change in GAAP or the Borrower’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 Borrower and the Subsidiaries), as a result of any acquisition
consummated prior to the Closing Date, any Investment permitted hereunder or the
amortization or write-off of any amounts thereof.

“Consolidated Total Assets” shall mean as of any date of determination, the
amount that would, in conformity with GAAP, be set forth opposite the caption
“total assets” (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date.

“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

 

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(“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 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 and the Required Lenders,
executed and delivered by the 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.

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

“Credit Documents” shall mean (i) this Agreement, the Guaranty, the
Intercreditor Agreements, the Agent Fee Letter, any Intercompany Subordination
Agreement, each Note and each Security Document and (ii) 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 Party” shall mean Holdings, the Borrower and each Subsidiary Guarantor.

“Cure Amount” shall mean the Liquidity Cure Amount and/or the Leverage Cure
Amount, as the context requires.

“Cure Right” shall mean the Liquidity Cure Right and/or the Leverage Cure Right,
as the context requires.

“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).

 

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“Designated Non-Cash Consideration” means the fair market value (as determined
by the Borrower in good faith) of non-cash consideration received by the
Borrower 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.

“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 Term
Loans and all other Obligations that are accrued and payable and the termination
of the 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 ninety-one (91) days after the 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 Holdings, the Borrower 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 Holdings, the Borrower 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 (i) those competitors of Holdings 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 Administrative
Agent on the Closing Date, as such list may be updated by written notice to the
Administrative Agent from time to time and (ii) those certain banks, financial
institutions and other entities that, in each case, were specified in writing to
the Administrative Agent on the Closing Date; provided, that, to the extent the
Borrower updates 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 Closing 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

 

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Person outstanding on or after the Closing 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.

“Dutch Auction Purchase Offer” shall have the meaning provided in
Section 2.15(a).

“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

(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.

“Eligible Equity Proceeds” shall mean the Net Cash Proceeds received by Holdings
after the Closing Date (and not to finance the Transactions) and no earlier than
45 days prior to the application pursuant to Section 9.07 from the sale or
issuance (but not to any of its Subsidiaries)

 

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of any of its Qualified Equity Interests or from any capital contribution in
respect of any of its Qualified Equity Interests, in each case to the extent
such Net Cash Proceeds or capital contributions are actually received by the
Borrower as cash common equity; provided, that any Cure Amount shall not
constitute Eligible Equity Proceeds.

“Eligible Transferee” shall mean and include any Person that is eligible to
become a Lender pursuant to Section 12.04 but in any event excluding (x) the
Sponsor, the Borrower, Holdings and their respective Affiliates and
Subsidiaries, (y) natural persons and (z) any Disqualified Lender, other than
with respect to assignments to Affiliated Persons to the extent expressly
provided for under Section 2.15.

“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, 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 Consideration” shall mean shares of common stock of Holdings issued to
the Lenders with an aggregate value equal to the lesser of (x) $2,000,000 (based
on the VWAP of the common stock of Holdings for the Trading Day following the
public announcement of the closing of the Transactions (which shall be the same
day as such announcement if such announcement occurs prior to the open of
trading on the New York Stock Exchange for such day, or otherwise shall be the
next Trading Day)) and (y) 10% of the fully diluted (for the avoidance of doubt,
assuming the exercise of the Sponsor Investment Warrants (without giving effect
to any anti-dilution adjustment under the Sponsor Investment Warrants) and the
issuance of the Equity Consideration (but not the Additional Shares), but which
shall not be diluted by “out-of-the-money” options or shares reserved under
Holdings’ equity compensation plans not subject to an outstanding equity awards)
shares of common stock of Holdings on the Closing Date.

 

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“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.

“ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA)
which together with Holdings or a Subsidiary of Holdings 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;

(e) 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;

(f) 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 Holdings, any
Subsidiary of Holdings 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;

(g) the failure to make any required contribution to a Multiemployer Plan;

(h) 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;

 

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(i) the complete or partial withdrawal of Holdings, any Subsidiary of Holdings
or any ERISA Affiliate from a Multiemployer Plan that results in a material
liability to Holdings or any Subsidiary;

(j) the insolvency under Title IV of ERISA of any Multiemployer Plan that
results in a material liability to Holdings or any Subsidiary;

(k) the receipt by Holdings, any Subsidiary of Holdings 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

(l) Holdings, any Subsidiary of Holdings 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 10.01.

“Excess Cash Flow” shall mean, for any Excess Cash Payment Period, the remainder
of:

(a) the sum of, without duplication,

(i) Adjusted Consolidated Net Income for such period,

(ii) the decrease, if any, in Adjusted Consolidated Working Capital from the
first day to the last day of such period,

(iii) the aggregate amount of cash payments received by the Borrower and its
Subsidiaries on a consolidated basis during such period in respect of non-cash
income or gains included in prior periods,

(iv) the aggregate amount deducted in the calculation of Excess Cash Flow
pursuant to clause (b)(i)(B) below in the immediately preceding Excess Cash
Payment Period not used to make Capital Expenditures by the end of the following
Excess Cash Payment Period,

(v) [reserved],

(vi) the aggregate amount deducted in the calculation of Excess Cash Flow
pursuant to clause (b)(vii)(B) below in the immediately preceding Excess Cash
Payment Period not used to make Investments by the end of the following Excess
Cash Payment Period, and

(vii) to the extent same reduced Adjusted Consolidated Net Income for such
period, all amounts paid or expensed by the Borrower in such period as described
in, or with respect to the items described in, Sections 9.06(c) (only with
respect to fees paid to directors who are employees of Sponsor), minus

 

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(b) the sum of, without duplication (and to the extent the items described below
have not already reduced Adjusted Consolidated Net Income),

(i) (A) the aggregate amount of all Capital Expenditures made by the Borrower
and its Subsidiaries during such period and (B) amounts designated by the
Borrower as being committed during such period to be used to make Capital
Expenditures no later than the end of the immediately succeeding Excess Cash
Payment Period which have been actually made or consummated or for which a
binding agreement exists as of the time of determination, in the case of both
clause (A) and (B), other than Capital Expenditures to the extent (x) financed
with the proceeds of asset sales, sales or issuances of Equity Interests,
capital contributions, insurance (other than business interruption insurance to
the extent included in Consolidated Net Income) or Indebtedness (other than ABL
Loans or advances under any other revolving credit facility outstanding pursuant
to Section 9.04(j)(x)), (y) made as tenant in leasehold improvements to the
extent reimbursed by landlords or (z) related to sale-leaseback transactions,

(ii) the aggregate amount of permanent principal payments, redemptions or
repurchases (in an amount equal to the cash paid therefor and not the principal
thereof retired) of Indebtedness of the Borrower and its Subsidiaries
(accompanied by permanent commitment reductions in the case of revolving
Indebtedness) and the cash used for permanent repayment of the principal
component of Capitalized Lease Obligations of the Borrower and its Subsidiaries
(and the aggregate amount of any premium or penalty actually paid in cash that
is required to be paid in connection with either of the foregoing) during such
period (other than (1) repayments made with the proceeds of asset sales, sales
or issuances of Equity Interests, capital contributions, insurance (other than
business interruption insurance to the extent included in Consolidated Net
Income) or Indebtedness (other than ABL Loans or advances under any other
revolving credit facility outstanding pursuant to Section 9.04(j)(x)) and
(2) payments of Term Loans (or Indebtedness secured equally and ratably
therewith) or ABL Loans (or advances under any other revolving credit facility
outstanding pursuant to Section 9.04(j)(x)); provided, that repayments of Term
Loans (and Indebtedness secured equally and ratably therewith) shall be deducted
in determining Excess Cash Flow to the extent such payments were required as a
result of a Scheduled Repayment pursuant to Section 4.02(a) (or the analogous
provision providing for scheduled repayments of any Indebtedness secured equally
and ratably with the Term Loans) or a mandatory repayment of Term Loans pursuant
to Section 4.02(c) or (d) (or the analogous provision applicable to any
Indebtedness secured equally and ratably with the Term Loans) to the extent
required due to an Asset Sale that resulted in an increase to Consolidated Net
Income and not in excess of the amount of such increase),

(iii) the increase, if any, in Adjusted Consolidated Working Capital from the
first day to the last day of such period,

(iv) fees and expenses paid in cash in connection with any acquisition permitted
pursuant to the Credit Documents, incurrence of Indebtedness, issuance of Equity
Interests or asset sale (whether or not consummated) during such period,

(v) purchase price adjustments paid in cash by the Borrower and its Subsidiaries
on a consolidated basis in connection with any acquisition permitted pursuant to
the Credit Documents or any asset sale during such period,

 

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(vi) [Reserved],

(vii) (A) the aggregate amount of cash used by the Borrower or any of its
Subsidiaries to make Investments pursuant to Section 9.05(e), (p) and (s) during
such period and (B) amounts designated by the Borrower as being committed during
such period to be used to make any such Investments no later than the end of the
immediately succeeding Excess Cash Payment Period which have been actually made
or consummated or for which a binding agreement exists as of the time of
determination, in the case of both clause (A) and (B), (x) other than
intercompany Investments made in the Borrower or any of its Subsidiaries and
Investments to the extent financed with proceeds of asset sales, sales or
issuances of Equity Interests, capital contributions, insurance (other than
business interruption insurance to the extent included in Consolidated Net
Income) or Indebtedness (other than ABL Loans or advances under any other
revolving credit facility outstanding pursuant to Section 9.04(j)(x)) and
(y) net of any amounts received by the Borrower or any of its Subsidiaries in
connection with the returns, interest, profits, distributions and similar
amounts, in each case received in respect of any Investment made pursuant to
Section 9.05(e), (p) and (s) during such period,

(viii) the aggregate amount of cash payments made during such period in respect
of non-cash charges or non-cash losses taken in prior periods,

(ix) Dividends paid by the Borrower in cash in such period under Sections
9.03(c), (d), (e), (i) and (k) to the extent not expensed, other than Dividends
made with the proceeds of asset sales, sales or issuances of Equity Interests,
capital contributions, insurance (other than business interruption insurance to
the extent included in Consolidated Net Income) or Indebtedness, and

(x) cash payments by the Borrower and its Subsidiaries during such period in
respect of long-term liabilities of the Borrower and its Subsidiaries other than
Indebtedness, to the extent such payments are not deducted in calculating
Consolidated Net Income.

Notwithstanding anything to the contrary contained above, payments of amounts
described in clause (a)(vii) above shall in no event be deducted pursuant to any
of the above categories of clause (b) in determining Excess Cash Flow for any
Excess Cash Payment Period.

“Excess Cash Payment Date” shall mean the date that is 95 days after the last
day of the Fiscal Year of the Borrower ending on January 30, 2021, and each date
that is 95 days after the last day of each subsequent Fiscal Year of the
Borrower.

“Excess Cash Payment Period” shall mean, with respect to the repayment required
on each Excess Cash Payment Date, the immediately preceding Fiscal Year of the
Borrower.

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

 

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“Excluded Deposit Accounts” shall mean (i) Deposit Accounts and Securities
Accounts established (or otherwise maintained) by Holdings or any of its
Subsidiaries the balance of which consists exclusively of (A) withheld income
taxes and federal, state or local employment taxes in such amounts as are
required in the reasonable judgment of the Borrower to be paid to the Internal
Revenue Service or state or local government agencies with respect to employees
of any of the Credit Parties and (B) amounts required to be paid over to an
employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or for
the benefit of employees of one or more Credit Parties, (ii) all segregated
Deposit Accounts and Securities Accounts established (or otherwise maintained)
by Holdings 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, (iii) all zero
balance accounts and (iv) all other Deposit Accounts established (or otherwise
maintained) by Holdings or any of its Subsidiaries (excluding collection
accounts and concentration accounts) that do not have cash balances at any time
exceeding $250,000 for any individual Deposit Account and $250,000 in the
aggregate for all such Deposit Accounts.

“Excluded Liquidity Cash Amount” means, as of any date of determination, an
amount (not less than zero) equal to:

(a) as of such date, Post-Closing Refunds received by the Credit Parties up to
$30,000,000 less the aggregate principal amount of Loans repaid as a PIK
Increase Paydown or as a result of receipt of Additional Shared Tax Proceeds
pursuant to Section 4.02(j); provided, that such amount shall be reduced by an
amount equal to two times the aggregate principal amount of Loans repaid from
Additional Shared Tax Proceeds, plus

(b) cash proceeds from any, direct or indirect, incurrence of Indebtedness by,
issuance of Equity Interests (including Preferred Equity or Disqualified Equity
Interests or any capital contribution) from or other Investment in the Borrower
or any of its Subsidiaries received at any time from any Person within the four
(4) calendar weeks prior to such date (other than any Liquidity Cure Amount or
Leverage Cure Amount).

“Excluded Subsidiary” shall mean (i) any Immaterial Subsidiary, (ii) 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 Closing 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
(iii) any Subsidiary to the extent that the Borrower and the Required Lenders
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 Subsidiary Guarantor,
any Swap Obligation if, and to the extent that, all or a portion of the Guaranty
of such Subsidiary Guarantor of, or the grant by such Subsidiary 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 Subsidiary 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 Subsidiary 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 Term Loans (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 the 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 4.04, 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 4.04(f) and
(d) any U.S. federal withholding Taxes imposed under FATCA.

“Existing Term Loan Agent” shall mean Wilmington Trust, 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 the date hereof, by and
among Holdings, the Borrower, certain of its Subsidiaries, the lenders party
thereto and the Existing Term Loan Agent.

“Existing Term Loan Credit Agreement” shall mean that certain Term Loan Credit
Agreement, dated as of May 8, 2015, by and among Holdings, the Borrower, the
lenders party thereto from time to time and the Existing Term Loan Agent, 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 Term Loan 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 permitted by the Term Loan Intercreditor 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.

 

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“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 Borrower.

“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.

“Fees” shall mean all amounts payable pursuant to or referred to in Sections
3.01.

“First Lien Net Leverage Ratio” means, on any date of determination, with
respect to Holdings, the Borrower and its Subsidiaries on a consolidated basis,
the ratio of (a) secured Consolidated Indebtedness (excluding Indebtedness
secured only by the Collateral on a junior Lien basis to the Term Loans, and
which is subject to the terms of the Term Loan Intercreditor Agreement, the
Subordination Agreement or any other intercreditor or subordination arrangement
in form and substance reasonably acceptable to the Administrative Agent (at the
direction of Required Lenders) and the Borrower) of Holdings, the Borrower and
its Subsidiaries on such date (less the Leverage Covenant Cash Netting Amount as
of such date) to (b) Consolidated EBITDA of Holdings, the Borrower and its
Subsidiaries for the four Fiscal Quarter period most recently ended for which
financial statements have been (or were required to have been) delivered,
determined on a Pro Forma Basis.

“First Priority” shall have the meaning set forth 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.

 

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

“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 Holdings or any one or more of its Subsidiaries
primarily for the benefit of employees of Holdings 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.

“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 Section 9, including defined terms as used therein, and for
all purposes of determining the First Lien Net Leverage Ratio, the Secured Net
Leverage Ratio and the Interest Coverage Ratio, are subject (to the extent
provided therein) to Section 12.07(a).

“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.

“Guarantor” shall mean each of Holdings and each Subsidiary Guarantor.

“Guaranty” shall have the meaning provided in Section 5.08.

“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
a Term Secured Hedging Agreement.

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

 

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

“Immaterial Subsidiary” shall mean any Subsidiary of the Borrower (that, except
for purposes of Section 10.01(e), is not a Guarantor) that the Borrower 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 Borrower 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 Holdings, the Borrower and their Subsidiaries, in each case, on a
consolidated basis as of such date, and (b) taken together with all Immaterial
Subsidiaries as of the last day of the Fiscal Quarter of the Borrower most
recently ended, does not have assets with a value in excess of 5.0% of total
assets or revenues representing in excess of 5.0% of total revenues of Holdings,
the Borrower and their Subsidiaries, in each case, on a consolidated basis as of
such date. Each Immaterial Subsidiary as of the Closing Date is set forth in
Schedule 1.01(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), (g) or (h) 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 clauses (g) and (h) below, (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 and (h) for purposes of
Section 9.04 hereof, Disqualified Equity Interests and, solely with respect to
Subsidiaries that are not Guarantors, Preferred Equity. Notwithstanding the
foregoing, Indebtedness shall not include (A) trade and other ordinary course
payables, accrued expenses and intercompany liabilities arising in the ordinary
course of business, (B) prepaid or deferred revenue, (C) purchase price
holdbacks in respect of assets pending the satisfaction by the seller of such
assets of unperformed obligations, (D) accrued expenses and deferred tax and
other credits incurred by any Person in the ordinary course of business of such
Person or (E) in the case of the Borrower and its Subsidiaries, (I) 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
(II) intercompany liabilities in connection with the cash management, tax and
accounting operations of the Borrower and its Subsidiaries).

 

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“Indemnified Liabilities” shall have the meaning provided in
Section 12.01(a)(ii).

“Indemnified Person” shall have the meaning provided in Section 12.01(a).

“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.

“Independent Financial Advisor” means an accounting, appraisal, investment
banking firm or consultant of nationally recognized standing; provided, however,
that such firm or consultant shall not be an Affiliate of Holdings and shall be
reasonably acceptable to the Required Lenders.

“Initial Budget” shall have the meaning provided in Section 5.18.

“Initial Term Loan Commitment” shall mean, for each Initial Term Loan Lender,
the amount set forth opposite such Initial Term Loan Lender’s name in Schedule
1.01(a) directly below the column entitled “Initial Term Loan Commitment”.

“Initial Term Loan Lender” shall mean each financial institution listed on
Schedule 1.01(a) directly below the column entitled “Initial Term Loan
Commitment”.

“Initial Term Loans” shall have the meaning provided in Section 2.01.

“Intercompany Loans” shall have the meaning provided in Section 9.05(h).

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

“Intercompany Subordination Agreement” shall have the meaning provided in
Section 9.05(h).

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

“Interest Coverage Ratio” means, with respect to any Person for any period, the
ratio of Consolidated EBITDA of such Person for such period, determined on a Pro
Forma Basis, to the Consolidated Interest Expense of such Person for such
period.

“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.

 

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

“Investments” shall have the meaning provided in Section 9.05.

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

“Junior Financing” shall mean, collectively, Permitted Unsecured Ratio Debt (and
any Permitted Refinancing in respect of any of the foregoing or any such
Permitted Refinancing), and any other Indebtedness for borrowed money that is
unsecured or contractually subordinated or secured on a junior basis to the
Obligations. Notwithstanding the foregoing, the following shall not be
considered to be “Junior Financing”: (i) the ABL Credit Agreement and the ABL
Loans (and any Permitted Refinancing of the ABL Credit Agreement and the ABL
Loans); (ii) any Indebtedness of a Subsidiary that is not a Credit Party; and
(iii) Indebtedness incurred pursuant to any of Sections 9.04(c), 9.04(d),
9.04(e), 9.04(k) and 9.04(u).

“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
12.04(b), in each case, (other than with respect to Section 11.06 or 12.01) for
so long as such Person holds Term Loans or Commitments hereunder.

“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).

 

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“Lender Default” shall mean (a) the wrongful refusal (which has not been
retracted) or the failure of a Lender to make available its portion of any
Borrowing that is required to be funded hereunder, (b) a Lender having notified
in writing to the Borrower and/or the Administrative Agent that such Lender does
not intend to comply with its obligations under Section 2.01 or has made a
public statement to that effect, (c) a Lender having failed, within three
Business Days after written request by the Administrative Agent or the Borrower
to confirm in writing to the Administrative Agent and the Borrower 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 Borrower), (d) a Lender or any parent company
of such having become the subject of a bankruptcy or insolvency proceeding, or
having a receiver, conservator, trustee, custodian, administrator, assignee for
the benefit of creditors or similar Person charged with the reorganization or
liquidation of its business, appointed for it, or having taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment or (e) such Lender becomes subject the subject of
a Bail-In Action.

“Leverage Covenant Cash Netting Amount” means, as of any date, the Available
Cash Netting Amount not to exceed an amount equal to the aggregate principal
amount of ABL Loans outstanding as of such date plus $25,000,000.

“Leverage Cure Amount” shall have the meaning assigned to such term in
Section 10.04.

“Leverage Cure Right” shall have the meaning assigned to such term in
Section 10.04.

“LIBO Rate” shall mean, with respect to any Borrowing of LIBOR Loans for any
Interest Period, the higher of:

(i) (a) the rate per annum equal to the arithmetic mean (rounded to the nearest
1/100th of 1%) of the offered rates for deposits in Dollars with a term
comparable to such Interest Period that appears on the applicable Bloomberg
screen page (or any successor to such service, or such other commercially
available source which displays the rates at which Dollar deposits are offered
by leading banks in the London interbank deposit market as designated by the
Administrative Agent from time to time) at approximately 11:00 a.m., London,
England time, on the second full Business Day preceding the first day of such
Interest Period, divided by (b) 1 minus the then stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves required by applicable law) applicable
to any member bank of the Federal Reserve System in respect of Eurocurrency
funding or liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D), and

(ii) 1.00% per annum.

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

 

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“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).

“Liquidity” means, as of any date of determination, the sum of the Available
Liquidity Cash Amount plus “Availability” under and as defined in the ABL Credit
Agreement (on the date hereof). Unless the context otherwise requires, Liquidity
shall be a reference to the Liquidity of the Credit Parties.

“Liquidity Cure Amount” shall have the meaning assigned to such term in
Section 10.05.

“Liquidity Cure Right” shall have the meaning assigned to such term in
Section 10.05.

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

“Market Disruption Event” means, with respect to any date, the occurrence or
existence, during the one-half hour period ending at the scheduled close of
trading on such date on the New York Stock Exchange or other market on which the
common stock of Holdings is listed for trading or trades (or for purposes of
determining the VWAP per share of such common stock, any period or periods
aggregating one half-hour or longer during the regular trading session on the
relevant day), of any material suspension or limitation imposed on trading (by
reason of movements in price exceeding limits permitted by the relevant exchange
or otherwise) in the common stock of Holdings or in any options contracts or
futures contracts relating to such common stock.

“Material Adverse Effect” shall mean (a) a material adverse effect on the
business, operations, property, assets, liabilities or financial condition of
Holdings, the Borrower and their respective Subsidiaries taken as a whole 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, in each case, other than as a direct result of the
impact of the COVID-19 pandemic.

“Maturity Date” shall mean May 8, 2024; provided, that if such day is not a
Business Day, the Maturity Date shall be the Business Day immediately succeeding
such day.

“Maximum Rate” shall have the meaning provided in Section 12.20.

“Minimum Borrowing Amount” shall mean $5,000,000.

“Minimum Liquidity Amount” shall mean (I) prior to the Trigger Payment, (x) from
any time that more than 50% of the stores of Holdings 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 Holdings and its
Subsidiaries are closed (excluding any stores that have been permanently closed)
(such period, the “Temporary Store Closure Period”), $10,000,000 and (y) at all
other times, $15,000,000 and (II) following the Trigger Payment, $25,000,000.

 

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

“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 Collateral Agent and the Required Lenders.

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

“Mortgaged Property” shall mean any Real Property owned by the Borrower 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) Holdings
or a Subsidiary of Holdings or an ERISA Affiliate, or to which Holdings, a
Subsidiary of Holdings or an ERISA Affiliate has any liability, contingent or
otherwise.

“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 Taxes (including distributions permitted under Section 9.03(d)),
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 Insurance Proceeds” shall mean, with respect to any Recovery Event, the
cash proceeds received by the respective Person in connection with such Recovery
Event, net of (a) costs and taxes incurred in connection with such Recovery
Event and (b) required payments of Indebtedness secured by the assets subject to
such Recovery Event (other than Indebtedness secured by such assets on a junior
or pari passu basis relative to the Obligations).

“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

 

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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, including any distributions
permitted under Section 9.03(d); provided, however, that such gross proceeds
shall not include any portion of such gross cash proceeds which the Borrower
determines in good faith should be reserved for post-closing adjustments or
indemnities (to the extent the Borrower 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 Holdings or any of its Subsidiaries shall
constitute Net Sale Proceeds on such date received by Holdings 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.

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

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

“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 50
South Sixth Street, Suite 1290, Minneapolis, MN 55402, 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 Term Loans 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 (or allowable)
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 Borrower 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.

“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).

“Participant” shall have the meaning provided in Section 12.04(a).

“Participant Register” shall have the meaning provided in Section 12.04(a).

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

“Patriot Act” shall have the meaning provided in Section 12.18.

“Paydown Amount” shall have the meaning provided in Section 2.08.

“Payment Account” shall mean the Administrative Agent’s account as the
Administrative Agent may from time to time notify the Borrower and the Lenders.

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

“Permitted Audit Opinion Qualifications” shall mean (i) with respect to the
Fiscal Year of Holdings ending January 29, 2022, a qualification or exception
that relates solely to any potential inability to satisfy the covenant set forth
in Section 9.10 hereof on a future date or in a future period, and (ii) with
respect to the Fiscal Year of Holdings ending January 28, 2023 and thereafter,
none.

“Permitted Encumbrance” shall mean, with respect to any Mortgaged Property,
easements, zoning restrictions, right-of-way restrictions and other similar
encumbrances permitted under Section 9.01(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 9.01.

“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

 

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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 Borrower delivered
to the Administrative Agent at least five Business Days prior to the incurrence
of such Indebtedness, together with a reasonably detailed description of the
material terms and conditions of such Indebtedness or drafts of the
documentation relating thereto, stating that the Borrower has determined in good
faith that such terms and conditions satisfy the requirements of this clause
(f) shall be conclusive evidence that such terms and conditions satisfy such
requirement unless the Administrative Agent (acting at the direction of the
Required Lenders) notifies the Borrower within five Business Days following
receipt of such certificate that the Required Lenders disagree with such
determination (including a reasonable description of the basis upon which they
disagree), and (g) in the case of any Permitted Refinancing in respect of the
ABL Obligations, subject to the ABL Intercreditor Agreement or in respect of the
Existing Term Loans subject to the Term Loan Intercreditor Agreement. “Permitted
Refinancing” of ABL Obligations shall be deemed to include the full amount of
Indebtedness that may be incurred pursuant to Section 9.04(j)(x) regardless of
the amount of outstanding principal in respect of the ABL Obligations at the
time of such refinancing thereof, in each case, so long as the Indebtedness of
the Credit Parties under the ABL Loan Documents and any Permitted Refinancing
Indebtedness incurred in the respect thereof does not exceed at any time
outstanding the aggregate limitations provided in Section 9.04(j)(x) and such
Permitted Refinancing is a customary asset-based revolving facility on terms not
more restrictive (including eligibility criteria and advance rates) to the
Borrower than the ABL Obligations on the Closing Date, taken as a whole, as
certified to the Administrative Agent (and the Lenders) by a Responsible Officer
of the Borrower in connection with such Permitted Refinancing.

 

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“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 the
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 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 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 after giving effect to the occurrence of
such Indebtedness, the Interest Coverage Ratio 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 herein.

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

“PIK Payment” shall have the meaning provided in Section 2.08(c).

“PIK Increase Date” shall have the meaning provided in Section 2.08(c).

“PIK Increase Paydown” shall have the meaning provided in Section 2.08(c).

“PIK Interest Rate” shall have the meaning provided in Section 2.08(c).

“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) Holdings or a Subsidiary of Holdings or an ERISA Affiliate, or to
which Holdings, a subsidiary of Holdings 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 12.03(c).

“Post-Closing Refunds” shall mean the proceeds of refunds of federal or state
income taxes received by the Credit Parties following the Closing Date on
account of the carryback by the Credit Parties of any tax attributes from the
2020 taxable year pursuant to the Coronavirus Aid, Relief, 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
Holdings 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 prime rate published in The Wall
Street Journal for such day; provided, that if The Wall Street Journal ceases to
publish for any reason such rate of interest, “Prime Rate” shall mean the prime
lending rate as set forth on the Bloomberg page PRIMBB Index (or successor page)
for such day (or such other service as determined by the Administrative Agent
from time to time for purposes of providing quotations of prime lending interest
rates).

“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) 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 Borrower 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
Borrower 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), (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 then 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 Borrower and
(B) any such calculation shall be subject to the applicable limitations set
forth in the definition of “Consolidated EBITDA”.

“Public Lender” shall have the meaning provided in Section 12.03(c).

“Purchase Offers” shall have the meaning provided in Section 2.15(a).

“Qualified Credit Party” shall mean the Borrower and each Subsidiary Guarantor.

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

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

 

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“Quarterly Financial Statements” shall mean the unaudited consolidated balance
sheets and related statements of operations and cash flows of Holdings 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 Closing 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.

“Recovery Event” shall mean the receipt by Holdings or any of its Subsidiaries
of any cash insurance proceeds (other than business interruption insurance
proceeds) or condemnation awards payable by reason of theft, loss, physical
destruction, damage, taking or any other similar event with respect to any
property or assets of Holdings or any of its Subsidiaries.

“Register” shall have the meaning provided in Section 12.15.

“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 11.06.

“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.

“Relevant Reinvestment Period” shall mean, with respect to any Asset Sale or
Recovery Event, the earlier of: (a)(x) 12 months following the receipt of the
related Net Sale Proceeds or Net Insurance Proceeds, as the case may be or
(y) if the Borrower or any of its Subsidiaries have contractually committed to
reinvest such Net Sale Proceeds or Net Insurance Proceeds, as the case may be,
within 12 months of the date of receipt thereof, 18 months following the receipt
of such Net Sale Proceeds or Net Insurance Proceeds, as the case may be, and
(b) the date upon which the Borrower or the relevant Subsidiary determines not
to reinvest the related Net Sale Proceeds or Net Insurance Proceeds, as the case
may be.

 

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“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 (other than
Affiliated Lenders) the sum of whose outstanding Term Loans at such time
represents at least a majority of the sum of all outstanding Term Loans of
Non-Defaulting Lenders that are not Affiliated Lenders at such time.

“Resolution Authority” means an EEA Resolution Authority or, with respect to any
UK Financial Institution, a UK Resolution Authority.

“Restricted Junior Payments” shall have the meaning provided in Section 9.07(a).

“Returns” shall have the meaning provided in Section 7.09.

“S&P” shall mean Standard & Poor’s Ratings Services, a division of McGraw-Hill,
Inc., or any successor to its rating agency business.

“Scheduled Repayment Date” shall have the meaning provided in Section 4.02(a).

“Scheduled Repayment” shall have the meaning provided in Section 4.02(a).

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

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

“Secured Creditors” shall mean collectively, the Administrative Agent, the
Collateral Agent, the Lenders and each Hedging Creditor.

“Secured Net Leverage Ratio” means, on any date of determination, with respect
to Holdings, the Borrower and its Subsidiaries on a consolidated basis, the
ratio of (a) secured Consolidated Indebtedness of Holdings, the Borrower and its
Subsidiaries on such date (less the Leverage Covenant Cash Netting Amount as of
such date) to (b) Consolidated EBITDA of Holdings and its Subsidiaries for the
four Fiscal Quarter period most recently ended for which financial statements
have been (or are required to have been) delivered, determined on a Pro Forma
Basis.

 

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“Secured Obligations” shall mean all (x) Obligations and (y) obligations of any
Credit Party arising under any Term Secured Hedging Agreement or the guarantee
thereof pursuant to the Credit Documents (other than Excluded Swap Obligations).

“Secured Party Designation Notice” means a notice from the Borrower
substantially in the form of Exhibit N.

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

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

“Security Agreement” shall have the meaning provided in Section 5.11.

“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 Holdings 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.

“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 Common Equity” means Qualified Equity Interests of Holdings, issued
for cash at a purchase price no less than the Fair Market Value thereof (as
determined based on the five (5) Trading Day VWAP thereof as of the date of
determination, as certified in good faith by the Borrower to the Administrative
Agent and the Lenders) in connection with the Leverage Cure Right or the
Liquidity Cure Right.

“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 and the Required Lenders.

“Specified Interest Payment Date” shall have the meaning provided in
Section 2.08(e).

“Specified Transaction” shall mean (x) any incurrence or repayment of
Indebtedness (excluding Indebtedness incurred for working capital purposes other
than pursuant to this Agreement), any Investment that results in a Person
becoming a Subsidiary of the Borrower, any disposition that results in a
Subsidiary ceasing to be a Subsidiary of the Borrower, any Investment

 

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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 Borrower or any Subsidiary, in each case
whether by merger, consolidation, amalgamation or otherwise or any material
restructuring of the Borrower or implementation of any initiative not in the
ordinary course of business or (y) 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.

“Sponsor Investment Warrants” shall have the meaning provided in Section 8.18.

“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 the date hereof, by and among the
Borrower, Holdings, 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 the Borrower or any Guarantor which is by its terms subordinated
in right of payment to the Obligations (including, in the case of a Guarantor,
Obligations of such Guarantor under its Guaranty). 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 the date hereof, by and among the Credit
Parties, the Subordinated Facility Agent, the ABL Agent, the Existing Term Loan
Agent and the Administrative Agent and Collateral Agent, in the form of Exhibit
L 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
Holdings. For the avoidance of doubt, the Borrower shall at all times constitute
a Subsidiary of Holdings.

“Subsidiary Guarantor” shall mean each Subsidiary of the Borrower (other than
any Excluded Subsidiary) that is or becomes a Credit Party pursuant to
Section 8.12, whether existing on the Closing Date or established, created or
acquired after the Closing Date, unless and until such time as the respective
Subsidiary is released from all of its obligations under the Guaranty in
accordance with the terms and provisions thereof.

“Swap Obligation” shall mean, with respect to any Subsidiary Guarantor, any
obligations under any Interest Rate Protection Agreement or Other Hedging
Agreement that constitutes a “swap” within the meaning of the Commodity Exchange
Act.

“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 have the meaning provided to such term in
the definition of Minimum Liquidity Amount.

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

“Term Loans” shall mean the Initial Term Loans or any other term loans issued
pursuant to the terms hereof.

“Term Loan Intercreditor Agreement” shall mean that certain Term Loan
Intercreditor Agreement, dated as of the date hereof, by and among the Borrower,
the Administrative Agent, the Collateral Agent, the Existing Term Loan Agent,
and the other parties party thereto, in the form of Exhibit K hereto and as
amended, restated, amended and restated modified and/or supplemented from time
to time.

“Term Secured Hedging Agreement” shall mean each Interest Rate Protection
Agreement and/or Other Hedging Agreement entered into by one or more Credit
Parties with any Lender Counterparty designated in writing by the Borrower to
the Administrative Agent as a “Term Secured Hedging Agreement” for purposes of
this Agreement and the other Credit Documents

 

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pursuant to a Secured Party Designation Notice within 30 days of entering into
such agreement (or in the case of any Interest Rate Protection Agreement and/or
Other Hedging Agreement existing on the Closing Date, within 30 days after the
Closing Date); provided, that (x) an Interest Rate Protection Agreement and/or
Other Hedging Agreement may not be so designated, and will not constitute a Term
Secured Hedging Agreement, if it is secured by any ABL Facility Priority
Collateral on a basis prior to the Obligations pursuant to this Agreement
(whether secured on a pari passu basis with the ABL Obligations or otherwise)
and (y) such Interest Rate Protection Agreement and/or Other Hedging Agreement
(and related obligations) shall be permitted in accordance with the terms of
this Agreement.

“Test Period” shall mean each period of four consecutive Fiscal Quarters of the
Borrower (calculated, for any period beginning prior to the Closing 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.

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

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

“Trading Day” means a day on which the New York Stock Exchange is open for the
transaction of business and on which there has not occurred a Market Disruption
Event.

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

“Transaction Support Agreement” shall mean that certain Transaction Support
Agreement, dated as of August 31, 2020, by and among the Borrower, Holdings and
their direct and indirect subsidiaries, certain lenders under the Existing Term
Loan Credit Agreement and the Sponsor (including all schedules, exhibits and
other attachments thereto, and as may be amended from time to time in accordance
therewith).

“Transactions” 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 Initial Term Loans on the Closing Date, (b) the execution and delivery by
each Credit Party of the ABL Amendment and Waiver, (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 and (e) the payment of all Transaction Costs.

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

“Trigger Payment” shall have the meaning provided in Section 8.16(d).

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

 

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

“UK Financial Institution” means any BRRD Undertaking (as such term is defined
under the PRA Rulebook (as amended form time to time) promulgated by the United
Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6
of the FCA Handbook (as amended from time to time) promulgated by the United
Kingdom Financial Conduct Authority, which includes certain credit institutions
and investment firms, and certain affiliates of such credit institutions or
investment firms.

“UK Resolution Authority” means the Bank of England or any other public
administrative authority having responsibility for the resolution of any UK
Financial Institution.

“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).

“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. Tax Compliance Certificate” shall have the meaning provided in
Section 4.04(f)(ii)(B)(iii).

“Variance Report” shall have the meaning assigned to such term in
Section 8.17(a).

“VWAP” per share of common stock of Holdings on any Trading Day means the per
share volume-weighted average price as displayed under the heading Bloomberg
VWAP on Bloomberg (or, if Bloomberg ceases to publish such price, any successor
service reasonably chosen by Holdings) page “JILL US <equity>” (or its
equivalent successor if such page is not available) in respect of the period
from the open of trading on the relevant Trading Day until the close of trading
on such Trading Day (or if such volume-weighted average price is unavailable,
the market price of one (1) share of such common stock on such Trading Day
determined, using a volume-weighted average method, by an Independent Financial
Advisor retained by Holdings for such purpose).

“Warrant Agreement” shall have the meaning assigned to such term in
Section 8.18.

“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.

 

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“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 Borrower 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 Borrower and its Subsidiaries under applicable law).

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

“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.

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 Borrower or any
other Credit Party shall be construed to include the Borrower or such Credit
Party as debtor and debtor-in-possession and any receiver or trustee for the
Borrower or any other Credit

 

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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 9.01, 9.02,
9.3, 9.04, 9.05, 9.06 or 9.07, 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 Borrower, in its
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 9.01, 9.02, 9.03,
9.04, 9.05, 9.06 or 9.07, 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.

(f) Any provision of this Agreement that contains a requirement for the Borrower
to be in compliance with the financial covenant in Section 9.11 on a date that
is prior to the time that such financial covenant is otherwise applicable shall
be deemed to require compliance with the levels applicable to such financial
covenant for the fiscal quarter ending January 31, 2022.

(g) Any references to the number of shares of common stock of Holdings
(including, but not limited to, in connection with the definitions and uses of
“Additional Shares”, “Equity Consideration” and “VWAP”) shall automatically be
adjusted to reflect the effect of any applicable stock split, reverse stock
split or similar corporate transaction.

1.03 Divisions. For all purposes under the Loan 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.

 

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SECTION 2. Amount and Terms of Credit.

2.01 The Initial Term Loan Commitments. Subject to and upon the terms and
conditions set forth herein, concurrently with the settlement of the
transactions contemplated by the Closing Date Open Market Purchase Agreements
and in satisfaction of the purchase price due from the Borrower thereunder to
each Lender (or Affiliate of such Lender thereunder as specified on Schedule
1.01(a)), each Lender shall be deemed to make to the Borrower on the Closing
Date, and the Borrower shall be deemed to issue to each Lender on the Closing
Date, a term loan (each, an “Initial Term Loan” and, collectively, the “Initial
Term Loans”) in the principal amount equal to the aggregate principal amount of
the Existing Term Loans of such Lender (or Affiliate of such Lender as specified
on Schedule 1.01(a)) purchased pursuant to the applicable Closing Date Open
Market Purchase Agreement, which is set forth opposite such Lender’s name on
Schedule 1.01(a), which Initial Term Loans (i) shall be incurred pursuant to a
single drawing on the Closing Date, (ii) shall be denominated in Dollars and
(iii) except as hereinafter provided, shall, at the option of the Borrower, 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 Initial Term Loans shall at all times be of the same Type.
Once repaid, Initial Term Loans incurred hereunder may not be reborrowed. For
the avoidance of doubt, notwithstanding that no cash is exchanged, the Borrower
shall owe the aggregate principal amount of the Initial Term Loans to the
Lenders under this Agreement.

2.02 Minimum Amount of Each Borrowing; Maximum Number of Interest Periods. The
aggregate principal amount of each Borrowing of Term Loans shall not be less
than the Minimum Borrowing Amount. Notwithstanding anything to the contrary
contained herein, at no time shall there be outstanding more seven
(7) Borrowings of LIBOR Loans in the aggregate for all Term Loans.

2.03 Notice of Borrowing. When the Borrower desires to incur Term Loans
hereunder, the Borrower shall give the Administrative Agent at the Notice Office
(i) at least three Business Days’ prior notice thereof in the case of LIBOR
Loans and (ii) at least one Business Day’s prior notice thereof in the case of
Base Rate Loans; provided, that (in each case) any such notice shall be deemed
to have been given on a certain day only if given before 2:30 P.M. (New York
City time) on such day. Such notice (the “Notice of Borrowing”), except as
otherwise expressly provided in Section 2.10, shall be irrevocable and shall be
in writing in the form of Exhibit A-1, appropriately completed to specify:
(A) the aggregate principal amount of the Term Loans to be incurred pursuant to
such Borrowing, (B) the date of such Borrowing (which shall be a Business Day),
(C) whether the Term 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 (D) in the case of a borrowing of Term Loans (other than Initial
Term Loans), the account of the Borrower to which the proceeds of such Term
Loans are to be remitted. The Administrative Agent shall, promptly following its
receipt of a Notice of Borrowing, 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.

2.04 [Reserved].

 

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2.05 Notes. (a) The Borrower’s obligation to pay the principal of, and interest
on, the Term Loans made by each Lender shall be evidenced in the Register
maintained by the Administrative Agent pursuant to Section 12.15 and shall, if
requested by such Lender, also be evidenced by a promissory note duly executed
and delivered by the Borrower to such Lender substantially in the form of
Exhibit B, with blanks appropriately completed in conformity herewith (each, a
“Note” and, collectively, the “Notes”).

(b) Each Lender will note on its internal records the amount of each Term 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 Term Loans evidenced thereby. Failure to make any such notation or any
error in such notation shall not affect the Borrower’s obligations in respect of
such Term Loans. The entries made in its internal records and any notes by a
Lender pursuant to this paragraph (b) and by the Administrative Agent in the
Register shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, that the failure of any Lender to
maintain such records or any error in such records by a Lender or by the
Administrative Agent in the Register shall not in any manner affect the
obligation of the Borrower to repay the Term Loans and pay interest thereon in
accordance with the terms of this Agreement; provided, further, that in the
event of any inconsistency between the Register maintained by the Administrative
Agent and any Lender’s records, the Register of the Administrative Agent shall
govern

(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 Term Loans to the Borrower shall affect, or in any manner impair, the
obligations of the Borrower to repay the Term Loans (and all related
Obligations) incurred by the Borrower 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 Term
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 Term Loans, the Borrower shall reasonably promptly
execute and deliver to the respective Lender the requested Note in the
appropriate amount or amounts to evidence such Term Loans.

2.06 Conversions/Continuations. The Borrower shall have the option to convert
(or continue), on any Business Day, all (but not less than all) of the
outstanding principal amount of Term Loans into a Borrowing of another Type of
Term Loan (or to continue all (but not less than all) of any LIBOR Loan as a
LIBOR Loan); provided, that 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 Term Loans being converted (or continued), (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 Borrower by 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),

 

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three Business Days’ prior notice; provided, however, that if the Borrower
wishes to request LIBOR Loans having an Interest Period of other than one, two,
three or six months in duration as provided in the definition of “Interest
Period,” (A) the applicable notice from the Borrower must be received by the
Administrative Agent not later than 1:00 p.m. (New York City time) four
(4) Business Days prior to the requested date of such conversion or
continuation, whereupon the Administrative Agent shall give prompt notice to the
Lenders of such request and determine whether the requested Interest Period is
acceptable to them and (B) not later than 1:00 p.m. (New York City time) three
(3) Business Days before the requested date of such conversion or continuation,
the Administrative Agent shall notify the Borrower whether or not the requested
Interest Period is available to the Lenders 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 Term Loans to be so converted (or
continued), the Borrowing or Borrowings pursuant to which such Term 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
Term Loans.

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

2.08 Interest. (a) Subject to Sections 2.08(c) below, Borrower 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) Subject to Sections 2.08(c) below, Borrower 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 Applicable Margin plus the LIBO Rate for such Interest Period.

(c) (i) On and after August 30, 2021 (the “PIK Increase Date”), the interest
rate on the Term Loans shall be increased by 5.00% per annum (the “PIK Interest
Rate”), which additional interest shall be paid in-kind on each Specified
Interest Payment Date by being capitalized and added to the aggregate principal
amount of the Initial Term Loans on such Specified Interest Payment Date (such
interest, the “Additional PIK Interest”), and (ii) on the PIK Increase Date, the
Borrower shall make a one-time payment to the Lenders on a pro rata basis in an
amount equal to 7.50% of the aggregate principal amount of Term Loans
outstanding on such date, which amount shall be payable in-kind on the PIK
Increase Date by being capitalized and added to the aggregate principal amount
of Term Loans outstanding on the PIK Increase Date (the

 

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“PIK Payment”). Upon payment of any Additional PIK Interest and/or PIK Payment,
such Additional PIK Interest and/or PIK Payment shall be deemed to be principal
of the Initial Term Loans, and shall accrue interest pursuant to the terms
hereof, for all purposes hereunder. Notwithstanding the foregoing in this clause
(c), the Borrower may reduce the amount of the PIK Interest Rate and the PIK
Payment by making (i) a voluntary prepayment of Term Loans pursuant to
Section 4.01 on or before the PIK Increase Date in an aggregate principal amount
of not less than $15,000,000 and (ii) up to two additional voluntary prepayments
of Term Loans pursuant to Section 4.01 on or before the PIK Increase Date in
aggregate principal amounts of not less than $5,000,000 each (any such voluntary
prepayment under clause (i) or (ii) collectively, a “PIK Increase Paydown” and,
the aggregate amount thereof, the “Paydown Amount”). If the Borrower makes a PIK
Increase Paydown on or before the PIK Increase Date, the amount of the PIK
Interest Rate and amount of the PIK Payment shall be adjusted as set forth below
based on the aggregate Paydown Amount set forth below.

 

Paydown Amount

  

PIK Payment

  

PIK Interest Rate

$15,000,000 or more, but less than $20,000,000    5.00% of the aggregate
outstanding principal amount of the Initial Term Loans    2.00% per annum
$20,000,000 or more, but less than $25,000,000    2.00% of the aggregate
outstanding principal amount of the Initial Term Loans    1.00% per annum
$25,000,000 or more    None    None

(d) Overdue amounts of principal and interest on any Term Loan shall bear
interest (including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy laws), to the extent permitted by
law, at a rate per annum equal to the rate which is 2% in excess of the rate
then borne by such Term Loan, in the case of principal, and, in the case of
interest, the rate then borne by the applicable Term Loan to which such interest
relates. Interest that accrues under this Section 2.08(d) shall be payable on
demand.

(e) Accrued (and theretofore unpaid) interest shall be payable (i) in respect of
each Base Rate Loan, (x) quarterly in arrears on each Quarterly Payment Date,
(y) on the date of any repayment or prepayment (on the amount repaid or
prepaid), and (z) at maturity (whether by acceleration or otherwise) and, after
such maturity, on demand, and (ii) in respect of each LIBOR Loan, (x) in arrears
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, (y) on the date of
any repayment or prepayment (on the amount repaid or prepaid), and (z) at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand (each such interest payment date specified in clause (i)(x) (in respect
of Base Rate Loans) or clause (ii)(x) (in respect of LIBOR Loans) being referred
to herein as a “Specified Interest Payment Date”).

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

 

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2.09 Interest Periods. At the time the Borrower gives the Notice of Borrowing or
any Notice of Conversion/Continuation in respect of the making of, continuation
as or conversion into any LIBOR Loan, the Borrower 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 Borrower, be (x) a one, two,
three or six month period, (y) to the extent agreed to by all Lenders with Term
Loans, a twelve month period or (z) if agreed by the Administrative Agent in its
discretion and each Lender with Term Loans, 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 (or deemed 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;

(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 (and therefore no LIBOR Loan may be continued and no Base Rate Loan may
be converted into a LIBOR Loan) 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 of Term Loans shall be
selected which extends beyond the Maturity Date for such Term Loans.

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
Borrower has failed to elect, or is not permitted to elect, a new Interest
Period to be applicable to such LIBOR Loans as provided above, the Borrower
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.

 

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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 Closing 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: (1) 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 (2) 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

(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 Closing 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 in writing to the Borrower
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 (x) in the case of clause (i) above,
LIBOR Loans shall not be available until such time as the Administrative Agent
notifies the Borrower 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 the Borrower with respect to
LIBOR Loans which have not yet been incurred (including by way of conversion)
shall be deemed rescinded by the Borrower, (y) in the case of clause (ii) above,
the Borrower agrees 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 Borrower by such Lender (with a copy to
the Administrative Agent) shall, absent manifest error, be final and conclusive
and binding on all the parties hereto) and (z) in the case of clause
(iii) above, the Borrower 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.

 

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(b) At any time that any LIBOR Loan is affected by the circumstances described
in Section 2.10(a)(ii), the Borrower may, and in the case of a LIBOR Loan
affected by the circumstances described in Section 2.10(a)(iii), the Borrower
shall, either (i) if the affected LIBOR Loan is then being made initially or
pursuant to a conversion, cancel such Borrowing by giving the Administrative
Agent written notice on the same date that the Borrower 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 Borrower 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).

(c) If any Lender determines that after the Closing 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 Commitment hereunder or its obligations hereunder, then the
Borrower agrees 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
Borrower (with a copy to the Administrative Agent), 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, (x) 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 (y) 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 Closing 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.

 

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(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 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

 

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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.

(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. The Borrower agrees to compensate each Lender, upon its
written request (which request shall set forth in reasonable detail the basis
for requesting such compensation), 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 the Notice of
Borrowing or in a Notice of Conversion/Continuation (whether or not withdrawn by
the Borrower 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 4.01, Section 4.02 or as a result of an acceleration of the
Term Loans pursuant to Section 10) 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 the Borrower; or (d) as a
consequence of (i) any other default by the 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) or Section 4.04 with respect to such Lender, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Term
Loans 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 the Borrower or the right of any Lender provided in Sections 2.10
and 4.04.

 

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2.13 Replacement of Lenders. (a) If any Lender becomes a Defaulting Lender,
(b) upon the occurrence of any event giving rise to the operation of
Section 2.10(a)(ii) or (iii), Section 2.10(c) or Section 4.04 with respect to
any Lender which results in such Lender charging to the Borrower increased costs
in excess of those being generally charged by the other Lenders or which results
in the 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 4.04 or (c) 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 12.12(a), the Borrower shall have the right, in accordance
with Section 12.04(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 or Lender
Affiliate) be reasonably acceptable to the Administrative Agent; 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 12.04(b) (and with all fees payable pursuant to
said Section 12.04(b) to be paid by the Borrower) pursuant to which the
Replacement Lender shall acquire all of the outstanding Term Loans of the
Replaced Lender and, in connection therewith, shall pay to the Replaced Lender
in respect thereof an amount equal to the sum of an amount equal to the
principal of, and all accrued interest on, all outstanding Term Loans of the
respective Replaced Lender;

(ii) the replacement may not be by an Affiliated Lender, other than an
Affiliated Sponsor Lender in accordance with the requirements of, and subject to
the limitations contained in, Sections 2.15(a)(vii) and (d); and

(iii) all obligations of the Borrower 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.

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 12.04. Upon the execution of the
respective Assignment and Assumption Agreement, the payment of amounts referred
to in clauses (i) and (iii) immediately above, recordation of the assignment on
the Register by the Administrative Agent pursuant to Section 12.15 and, if so
requested by the Replacement Lender, delivery to the Replacement Lender of the
appropriate Note or Notes executed by the Borrower, 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, 4.04, 11.06,
12.01 and 12.06), which shall survive as to such Replaced Lender.

2.14 [Reserved].

 

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2.15 Term Loan Repurchases. (a) Subject to the terms and conditions set forth or
referred to below, (x) each of Holdings, the Borrower, the Sponsor or any of
their respective Affiliates (including any of the Subsidiaries of Holdings or
the Borrower, collectively, the “Affiliated Lenders” and each an “Affiliated
Lender”) may from time to time, at its discretion, conduct modified Dutch
auctions in order to purchase Term Loans (each, a “Dutch Auction Purchase
Offer”), each such Dutch Auction Purchase Offer to be managed exclusively by the
Administrative Agent (to the extent agreed to by the Administrative Agent in
writing in its sole discretion) or an investment bank of recognized standing
selected by the Borrower following consultation with the Required Lenders (in
such capacity, the “Auction Manager”), and (y) each of the Sponsor or its
Affiliates (excluding Holdings, the Borrower and any Subsidiaries of Holdings or
the Borrower, collectively, the “Affiliated Sponsor Lenders” and each an
“Affiliated Sponsor Lender” and, together with any Affiliated Lenders, the
“Affiliated Persons”) may from time to time purchase Term Loans on the open
market (each, an “Open Market Purchase Offer” and together with a Dutch Auction
Purchase Offer, the “Purchase Offers”), so long as in each case the following
conditions (to the extent applicable) are satisfied:

(i) each Dutch Auction Purchase Offer shall be conducted in accordance with the
procedures, terms and conditions set forth in this Section 2.15 and the Auction
Procedures;

(ii) in the case of any Dutch Auction Purchase Offer, no Event of Default shall
have occurred and be continuing on the date of the delivery of the applicable
Auction Notice;

(iii) each Dutch Auction Purchase Offer shall be open and offered to all Lenders
on a pro rata basis;

(iv) the maximum principal amount (calculated on the face amount thereof) of
Term Loans that the Affiliated Persons offer to purchase in any such Dutch
Auction Purchase Offer shall be no less than $10,000,000 (unless another amount
is agreed to by the Administrative Agent);

(v) the purchase of Term Loans pursuant to this Section 2.15 shall not be
permitted to be funded with the proceeds of contemporaneous borrowings under the
ABL Credit Agreement;

(vi) the aggregate principal amount (calculated on the face amount thereof) of
all Term Loans purchased by Holdings, the Borrower or any of their Subsidiaries
pursuant to any Dutch Auction Purchase Offer shall automatically be cancelled
and retired by Holdings, the Borrower or the respective Subsidiary, as
applicable, on the settlement date of the relevant purchase (and may not be
resold);

(vii) notwithstanding anything to the contrary contained in this Agreement, the
Affiliated Sponsor Lenders shall not be permitted to hold an aggregate principal
amount of outstanding Term Loans that represents more than 25% of the aggregate
principal amount of all outstanding Term Loans at any time;

 

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(viii) each Affiliated Person that is purchasing loans in connection with a
Dutch Auction Purchase Offer shall represent and warrant (or shall disclose that
it cannot represent and warrant) as of the date of such purchase that such
Affiliated Person does not have any Borrower Restricted Information that (A) has
not been previously disclosed in writing to the assigning Lender(s) (other than
because such Lender does not wish to, or has elected not to, receive such
Borrower Restricted Information) prior to such time and (B) could reasonably be
expected to have a material effect upon, or otherwise be material to, a Lender’s
decision to assign Term Loans in such Purchase Offer; and

(ix) at the time of each purchase of Term Loans through a Dutch Auction Purchase
Offer, the Borrower shall have delivered to the Auction Manager an officer’s
certificate of an Authorized Officer certifying as to compliance with preceding
clauses (v) through (vii) in each case to the extent applicable.

(b) The relevant Affiliated Person must terminate any Purchase Offer if it fails
to satisfy one or more of the conditions set forth above at the scheduled time
of purchase of Term Loans pursuant to such Purchase Offer. Such Affiliated
Person shall have no liability to any Lender for any termination of such
Purchase Offer as a result of its failure to satisfy one or more of the
conditions set forth above at the scheduled time of consummation of such
Purchase Offer, and any such termination shall not, in and of itself, result in
any Default or Event of Default hereunder. With respect to all purchases of Term
Loans made by Holdings, the Borrower or any of their Subsidiaries pursuant to
this Section 2.15, (x) the applicable Affiliated Person shall pay on the
settlement date of each such purchase all accrued and unpaid interest (except to
the extent otherwise set forth in the relevant offering documents or assignment
documents relating to such Purchase Offer), if any, on the purchased Term Loans
up to the settlement date of such purchase and (y) such purchases (and the
payments made by such Affiliated Person and any cancellation of the purchased
Term Loans, in each case in connection therewith) shall not constitute voluntary
or mandatory payments or prepayments under Section 4.01 or Section 4.02 hereof.

(c) The Administrative Agent and the Lenders hereby consent to the Purchase
Offers and the other transactions effected pursuant to and in accordance with
the terms of this Section 2.15 (provided that no Lender shall have an obligation
to participate in any such Purchase Offer). For the avoidance of doubt, it is
understood and agreed that the provisions of Section 12.04 and Section 12.06
will not apply to the purchases of Term Loans pursuant to Purchase Offers made
pursuant to and in accordance with the provisions of this Section 2.15 or any
forgiveness or cancellation of Term Loans provided for in clause (b) above. The
Auction Manager acting in its capacity as such hereunder shall be entitled to
the benefits of the provisions of Section 11 and Section 12.02 to the same
extent as if each reference therein to the “Administrative Agent” were a
reference to the Auction Manager, and the Administrative Agent shall cooperate
with the Auction Manager as reasonably requested by the Auction Manager in order
to enable it to perform its responsibilities and duties in connection with each
Purchase Offer.

(d) Notwithstanding anything to the contrary contained in this Agreement or in
any other Credit Document, Holdings, the Borrower and each Affiliated Sponsor
Lender becoming a Lender hereby agree that (i) each Affiliated Sponsor Lender’s
voting rights as a Lender in respect of the Credit Documents are limited as, and
to the extent, set forth herein (including in the definition of “Required
Lenders” appearing in Section 1.01); provided, that no amendment,

 

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modification, waiver or consent in respect of Sections 10.03 or 12.06, to the
extent that such amendment, modification, waiver or consent disproportionately
and adversely affects such Affiliated Sponsor Lender, shall be effective without
the consent of such Affiliated Sponsor Lender (and no Affiliated Sponsor Lender
shall be bound to any amendment or waiver that requires the consent of each
Lender, or each affected Lender, pursuant to Section 12.12 without its consent),
(ii) each Affiliated Sponsor Lender waives its right in its capacity as a Lender
to receive information (other than administrative information such as
notifications under this Section 2) not prepared by (or on behalf of) Holdings
or the Borrower from the Administrative Agent, the Collateral Agent or any other
Lender under or in connection with the Credit Documents otherwise delivered or
required to be delivered to each Lender (and not delivered to Holdings or the
Borrower) and attend any meeting or conference call with the Administrative
Agent, the Collateral Agent or any Lender in respect of the Credit Documents but
in which neither Holdings nor the Borrower participates and to receive advice of
counsel to the Administrative Agent or the Lenders or challenge any related
attorney client privilege, (iii) at the time of each assignment to an assignee
that is an Affiliated Sponsor Lender, such assignee shall identify itself as an
Affiliate Lender by notifying the Administrative Agent thereof in writing in the
applicable Assignment and Assumption Agreement, (iv) no Affiliated Sponsor
Lender shall make or bring any claim, in its capacity as a Lender, against the
Administrative Agent, the Collateral Agent or any Lender with respect to the
duties and obligations of such Persons under the Credit Documents (except for
gross negligence or willful misconduct or failure to deliver to such Affiliated
Sponsor Lender its pro rata portion of distributions (including principal and
interest) received from a Credit Party in accordance with the terms of the
Credit Documents or (other than in the case of the Administrative Agent and
Collateral Agent) breach of provisions specifically impacting such Affiliated
Sponsor Lender in its capacity as such under the Credit Documents) and (v) no
Affiliated Sponsor Lender shall have any right to, and each Affiliated Lender
agrees that it shall not, vote the Term Loans held by such Affiliated Sponsor
Lender in connection with any plan of reorganization or similar dispositive
restructuring plan in any bankruptcy or insolvency proceeding or any other
proceeding of the nature described in Section 10.01(e).

(e) Subject to the terms and conditions set forth or referred to below, each of
Holdings and its Subsidiaries (collectively, the “Borrower Purchasing Parties”)
may from time to time purchase Term Loans on the open market (each, a “Borrower
Party Purchase Offer”), so long as in each case the following conditions are
satisfied:

(i) no Event of Default shall have occurred and be continuing on the date of
such purchase or would result therefrom;

(ii) the purchase of Term Loans pursuant to this Section 2.15(e) shall not be
permitted to be funded with the proceeds of contemporaneous borrowings under the
ABL Credit Agreement;

(iii) the aggregate principal amount (calculated on the face amount thereof) of
all Term Loans purchased by Holdings, the Borrower or any of their Subsidiaries
pursuant to such Borrower Party Purchase Offer shall automatically be cancelled
and retired by Holdings, the Borrower or the respective Subsidiary, as
applicable, on the settlement date of the relevant purchase (and may not be
resold); and

 

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(iv) each Borrower Purchasing Party that is purchasing loans in connection with
a Borrower Party Purchase Offer shall represent and warrant (or shall disclose
that it cannot represent and warrant) as of the date of such purchase that such
Affiliated Person does not have any Borrower Restricted Information that (A) has
not been previously disclosed in writing to the assigning Lender(s) (other than
because such Lender does not wish to, or has elected not to, receive such
Borrower Restricted Information) prior to such time and (B) could reasonably be
expected to have a material effect upon, or otherwise be material to, a Lender’s
decision to assign Term Loans in such Purchase Offer.

SECTION 3. Fees; Reductions of Commitment.

3.01 Fees. The Borrower agrees to pay to the Agents, for their own account, the
fees set forth in the Agent Fee Letter at the times and in the amounts specified
therein. All fees payable under Agent Fee Letter shall be paid on the dates due,
in Dollars and immediately available funds. Once paid, none of the fees payable
under the Agent Fee Letter shall be refundable under any circumstances.

3.02 Mandatory Reduction of Commitments. The Initial Term Loan Commitment of
each Lender shall terminate permanently in its entirety on the Closing Date
(after giving effect to the incurrence of the Initial Term Loans on such date).

SECTION 4. Prepayments; Payments; Taxes.

4.01 Voluntary Prepayments. (a) The Borrower shall have the right to prepay the
Term Loans on a pro rata basis, without premium or penalty (subject to
Section 2.11), in whole or in part at any time and from time to time on the
following terms and conditions: (i) the Borrower shall give the Administrative
Agent prior to 2:30 P.M. (New York City time) at the Notice Office (A) at least
one Business Day’s prior written notice of its intent to prepay Base Rate Loans
and (B) at least three Business Days’ prior written notice of its intent to
prepay LIBOR Loans, which notice (in each case) shall specify the amount of such
prepayment, the date of prepayment (which shall be a Business Day) and the Types
of Term Loans to be prepaid, and which notice the Administrative Agent shall,
promptly transmit to each of the Lenders; (ii) each partial prepayment of Term
Loans pursuant to this Section 4.01(a) shall be in an aggregate principal amount
of at least $1,000,000 or a whole multiple of $100,000 in excess thereof (or
such lesser amount as is acceptable to the Administrative Agent); 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
Borrower shall have no force or effect; (iii) each prepayment pursuant to this
Section 4.01(a) shall be applied pro rata among such Term Loans; and (iv) each
prepayment of Term Loans pursuant to this Section 4.01(a) shall be applied to
reduce the then remaining Scheduled Repayments thereof as directed by the
Borrower or, absent such direction, in direct order of maturity thereof;
provided, that any prepayment constituting a PIK Increase Paydown pursuant to
Section 2.08(c), together with any mandatory prepayment pursuant to
Section 4.02(j), shall be applied solely to the two immediately succeeding
Scheduled Repayments following the earlier of such voluntary prepayment
constituting a PIK Increase Paydown and such mandatory prepayment pursuant to
Section 4.02(j), as applicable, and then shall be applied to the remaining
Scheduled Repayments in inverse order of maturity (including the bullet payment
due on the Maturity Date).

 

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(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 12.12(a), the Borrower shall have the right, upon five Business Days’
prior written notice by the Borrower to the Administrative Agent at the Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Lenders), to repay all Term 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) and terminate all
Commitments of such Lender in accordance with, and subject to the requirements
of Section 12.12(b), so long as the consents, if any, required by
Section 12.12(b) in connection with the repayment pursuant to this clause
(b) shall have been obtained. Each prepayment of Term Loans pursuant to this
Section 4.01(b) shall reduce the then remaining Scheduled Repayments on a pro
rata basis (based on the then remaining principal amount of each such Scheduled
Repayment after giving effect to all prior reductions thereto).

(c) [Reserved].

(d) Notwithstanding anything to the contrary contained in this Agreement, the
Borrower may, subject to Section 2.11, rescind any notice of prepayment pursuant
to Section 4.01(a) or (b) if such prepayment would have resulted from a
refinancing, which refinancing shall not be consummated or shall otherwise be
delayed.

4.02 Mandatory Repayments. (a) In addition to any other mandatory repayments
required pursuant to this Section 4.02, on the last Business Day of each Fiscal
Quarter of the Borrower, commencing with the Fiscal Quarter ending October 31,
2020 (each, a “Scheduled Repayment Date”), the Borrower shall be required to
repay that aggregate principal amount of Initial Term Loans, to the extent then
outstanding, in an amount equal to the amount set forth below, and the Borrower
shall be required to repay the remaining aggregate principal amount of Initial
Term Loans then outstanding on the Maturity Date (each such repayment, as the
same may be (x) reduced as provided in Section 4.01(a), 4.01(b) or 4.02(f), a
“Scheduled Repayment”):

 

Scheduled Initial Term Loan Repayment Date

   Amount

October 31, 2020

   $684,786.65

January 31, 2021

   $684,786.65

April 30, 2021

   $684,786.65

July 31, 2021

   $684,786.65

October 31, 2021

   $684,786.65

January 31, 2022

   $684,786.65

April 30, 2022

   $684,786.65

July 31, 2022

   $684,786.65

October 31, 2022

   $684,786.65

January 31, 2023

   $684,786.65

April 30, 2023

   $684,786.65

July 31, 2023

   $684,786.65

October 31, 2023

   $684,786.65

January 31, 2024

   $684,786.65

April 30, 2024

   $684,786.65

Maturity Date

   Remaining outstanding principal

 

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(b) In addition to any other mandatory repayments required pursuant to this
Section 4.2, within three Business Days after each date on or after the Closing
Date upon which Holdings or any of its Subsidiaries receives any cash proceeds
from any issuance or incurrence by Holdings or any of its Subsidiaries of
Indebtedness not permitted to be incurred pursuant to Section 9.04 an amount
equal to 100% of the Net Cash Proceeds of the respective issuance or incurrence
of Indebtedness shall be applied on such date as a mandatory repayment in
accordance with the requirements of Sections 4.02(f) and (g).

(c) In addition to any other mandatory repayments required pursuant to this
Section 4.2, within five Business Days after each date on or after the Closing
Date upon which Holdings or any of its Subsidiaries receives any cash proceeds
from any Asset Sale, an amount equal to 100% of the Net Sale Proceeds therefrom
shall be applied on such date as a mandatory repayment in accordance with the
requirements of Sections 4.02(f) and (g); provided, however, that, if the
Borrower would be in compliance with Section 9.11 on a Pro Forma Basis as of the
date of such Asset Sale (calculated as if the ratios therein are 1.00x lower
than set forth therein) and no Event of Default shall have occurred and be
continuing, such Net Sale Proceeds shall not be required to be so applied on
such date so long as the Borrower delivers a certificate to the Administrative
Agent on or prior to such date stating that such Net Sale Proceeds shall be used
by the Borrower and/or one or more of its Subsidiaries to purchase assets
(including Equity Interests of another Person (x) that is not already a
Subsidiary or (y) which represent the acquisition of minority interests in such
Person not theretofore owned by the Borrower or a Subsidiary, but excluding
working capital except to the extent tangential to an acquisition or investment)
used or to be used in the businesses permitted pursuant to Section 9.09 within
the Relevant Reinvestment Period; provided, further, that if all or any portion
of such Net Sale Proceeds not required to be so applied as provided above in
this Section 4.02(c) are not so reinvested within such Relevant Reinvestment
Period, such remaining portion shall be applied within three Business Days of
the last day of such Relevant Reinvestment Period as otherwise provided above in
this Section 4.02(c) without regard to the preceding proviso.

(d) In addition to any other mandatory repayments pursuant to this Section 4.02,
within five Business Days after each date on or after the Closing Date upon
which the Borrower or any of its Subsidiaries receives any cash proceeds from
any Recovery Event (other than Recovery Events where the Net Insurance Proceeds
therefrom do not exceed $1,500,000), an amount equal to 100% of the Net
Insurance Proceeds from such Recovery Event shall be applied on such date as a
mandatory repayment in accordance with the requirements of Sections 4.02(f) and
(g); provided, however, that, if the Borrower would be in compliance with
Section 9.11 (calculated as if the ratios therein are 1.00x lower than set forth
therein) on a Pro Forma Basis as of the date of such Asset Sale and no Event of
Default shall have occurred and be continuing, such Net Insurance Proceeds shall
not be required to be so applied on such date so long as the Borrower has
delivered a certificate to the Administrative Agent on such date stating that
such Net Insurance Proceeds shall be used to replace, restore or otherwise
acquire properties or assets (including

 

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Equity Interests of another Person (x) that is not already a Subsidiary or
(y) which represent the acquisition of minority interests in such Person not
theretofore owned by the Borrower or a Subsidiary, but excluding working
capital) used or to be used in the business within the Relevant Reinvestment
Period; provided; further, that if all or any portion of such Net Insurance
Proceeds not required to be so applied pursuant to the preceding proviso are not
so used within the Relevant Reinvestment Period, such remaining portion shall be
applied within three Business Days of the end the last day of such Relevant
Reinvestment Period as provided above in this Section 4.02(d) without regard to
the immediately preceding proviso.

(e) In addition to any other mandatory repayments pursuant to this Section 4.02,
on each Excess Cash Payment Date, an amount equal to 50% of the Excess Cash Flow
for the related Excess Cash Payment Period shall be applied as a mandatory
repayment in accordance with the requirements of Sections 4.02(f) and (g);
provided, however, that any amount required to be applied pursuant to this
Section 4.02(e) shall be reduced dollar-for-dollar by the amount (i) of any
voluntary prepayments of (x) the Term Loans and (y) to the extent accompanied by
a permanent reduction of the commitments under the ABL Credit Agreement (or any
other revolving credit facility outstanding pursuant to Section 9.04(j)(x)), the
ABL Loans (or advances under any other revolving credit facility outstanding
pursuant to Section 9.04(j)(x)) (to the extent permitted by the terms of the
Credit Documents) and (ii) paid in cash by the Borrower to repurchase Term
Loans, to the extent such repurchase was made pursuant to a Dutch Auction
Purchase Offer to all Lenders to repurchase Term Loans pursuant to Section 2.15,
in each case made during the applicable Fiscal Year, in each case except to the
extent made with the proceeds of long-term Indebtedness.

(f) Each amount required to be applied pursuant to Sections 4.02(b), (c), (d)
and (e) in accordance with this Section 4.02(f) shall be applied to repay the
outstanding principal amount of Term Loans; provided, however, if as part of any
Asset Sale or Recovery Event, any ABL Facility Priority Collateral is being sold
or has been damaged or taken (as the case may be), then the amount of the Net
Sale Proceeds from such Asset Sale or the Net Insurance Proceeds from such
Recovery Event (as the case may be) that is attributable to such ABL Facility
Priority Collateral shall first be applied to the outstanding ABL Loans (or any
Permitted Refinancing in respect thereof outstanding pursuant to
Section 9.04(j)(x)) to the extent required by the ABL Credit Agreement (or any
Permitted Refinancing in respect thereof outstanding pursuant to
Section 9.04(j)(x)) before any portion of such Net Sale Proceeds or Net
Insurance Proceeds is applied as provided above in this Section 4.02(f) without
regard to this proviso (and any such application to outstanding ABL Loans (or
any Permitted Refinancing in respect thereof outstanding pursuant to
Section 9.04(j)(x)) shall reduce the mandatory repayment required hereunder
dollar-for-dollar). The amount of each principal repayment of Term Loans made as
required by this Section 4.02(f) shall be applied ratably (based on the relative
outstanding principal amounts thereof) to Term Loans then outstanding and shall
reduce the scheduled installments of principal of the Term Loans occurring on or
after the date of such prepayment in direct order of maturity.

(g) Each repayment of any Term Loans required by this Section 4.02 shall be
applied pro rata among the Lenders holding such Term Loans.

 

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(h) In addition to any other mandatory repayments pursuant to this Section 4.02,
all then outstanding Term Loans shall be repaid by the Borrower in full on the
Maturity Date for such Term Loans.

(i) Notwithstanding any other provisions of this Section 4.02, (A) to the extent
that repatriation to the United States of any portion of Excess Cash Flow
attributable to a Foreign Subsidiary or any Net Sale Proceeds or Net Insurance
Proceeds, as applicable, of a Foreign Subsidiary is (x) prohibited or delayed by
applicable local law (including local laws with respect to financial assistance,
corporate benefit, restrictions on up-streaming of cash intra-group and
fiduciary and statutory duties of the directors of the relevant Foreign
Subsidiaries) or (y) restricted by applicable material constituent documents (so
long as such restrictions were not implemented for the purpose of avoiding such
mandatory repayment requirements), the amount of such portion of Excess Cash
Flow, Net Sale Proceeds or Net Insurance Proceeds so affected will not be
required to be applied to repay Term Loans at the times provided in this
Section 4.02 but may be retained by the applicable Foreign Subsidiary so long,
but only so long, as the applicable local law or applicable constituent
documents will not permit repatriation to the United States, and, if within one
year following the date on which the respective repayment would otherwise have
been required, such repatriation of any portion of such affected amount of
Excess Cash Flow, Net Sale Proceeds or Net Insurance Proceeds is permissible
under the applicable local law or applicable material constituent documents
(even if such cash is not actually repatriated at such time), an amount equal to
such amount will be promptly (and in any event not later than two Business Days
or such longer time period as the Administrative Agent may agree) applied (net
of costs, expenses or taxes incurred by the Borrower and its Subsidiaries
arising exclusively as a result of compliance with this provision) by the
Borrower to the repayment of the Term Loans pursuant to this Section 4.02 to the
extent provided herein and (B) to the extent that the Borrower has determined in
good faith, and can so demonstrate to the reasonable satisfaction of the
Administrative Agent, that repatriation of any portion of Excess Cash Flow would
incur a tax liability, including a deemed dividend pursuant to Section 956 of
the Code, (taking into account any foreign tax credit or benefit that is
anticipated in connection with such repatriation) the amount of such portion of
Excess Cash Flow, Net Sale Proceeds or Net Insurance Proceeds so affected may be
retained by the applicable Foreign Subsidiary; (ii) the non-application of any
portion of Excess Cash Flow, Net Sale Proceeds or Net Insurance Proceeds amount
pursuant to this Section 4.02(i) shall not constitute an Event of Default (and
such amounts shall be available for the working capital purposes of the
applicable Foreign Subsidiary, in each case, subject to the repayment provisions
in this Section 4.02(i). For the avoidance of doubt, it is understood and agreed
that (x) the Borrower shall be required to first use all Excess Cash Flow (other
than the amounts thereof affected as described in preceding clauses (A) and (B)
of this Section 4.02(i)) in order to make the full amount of the mandatory
repayment required to be made on the relevant Excess Cash Payment Date pursuant
to Section 4.02(e) before the preceding provisions of this Section 4.02(i) shall
apply, and (y) nothing in this Section 4.02(i) shall require the Borrower to
cause any amounts to be repatriated to the United States (whether or not such
amounts are used in or excluded from the determination of the amount of any
mandatory repayments hereunder).

 

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(j) If, prior to January 31, 2022, the Credit Parties receive Post-Closing
Refunds in an aggregate amount for all such Post-Closing Refunds received from
time to time exceeding $25,000,000 (such amount in excess thereof, the
“Additional Shared Tax Proceeds”), the Borrower shall, promptly (and no later
than seven (7) Business Days) after receipt thereof, repay an aggregate
principal amount of Loans equal to 50% of the Additional Shared Tax Proceeds (up
to a total aggregate principal amount of Loans repaid pursuant to this clause
(j) in respect of the Additional Shared Tax Proceeds not to exceed $2,500,000).
For the avoidance of doubt, no amount shall be due and payable to the Lenders in
respect of Post-Closing Refunds received by the Credit Parties in excess of
$30,000,000; provided, that any prepayment pursuant to this Section 4.02(j),
together with any voluntary prepayment constituting a PIK Increase Paydown
pursuant to Section 2.08(c), shall be applied solely to the two immediately
succeeding Scheduled Repayments following the earlier of such voluntary
prepayment constituting a PIK Increase Paydown and such mandatory prepayment
pursuant to this Section 4.02(j), as applicable, and then shall be applied to
the remaining Scheduled Repayments in inverse order of maturity (including the
bullet payment due on the Maturity Date).

(k) The Borrower shall notify the Administrative Agent in writing of any
mandatory prepayment under Sections 4.02(b), (c), (d) and (e) not later than
1:00 p.m., New York City time, three (3) Business Days before the date of the
proposed prepayment. Each such notice shall specify the prepayment date, the
principal amount of each Borrowing or portion thereof to be prepaid and a
reasonably detailed calculation of the amount of such prepayment.
Notwithstanding the foregoing, in the case of any such mandatory prepayment
pursuant to Section 4.02(e), such notice requirement shall be deemed satisfied
by any prior delivery of an applicable compliance certificate in accordance with
Section 8.01(e)(i).

4.03 Method and Place of Payment. Except as otherwise specifically provided
herein, all payments under this Agreement shall be made to the Administrative
Agent for the account of the Lender or Lenders entitled thereto not later than
1:00 P.M. (New York City time) on the date when due and shall be made in Dollars
in immediately available funds to the Payment Account. 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 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.

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

 

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4.04 Net Payments. (a) 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) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

(b) 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) The Credit Parties shall, without duplication of Section 4.04(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) 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
Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

(d) 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 any
obligation of the Credit Parties to do so), (ii) any Taxes attributable to such
Lender’s failure to comply with the provisions of Section 12.04 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) As soon as reasonably practicable after any payment of Taxes by any Credit
Party to a Governmental Authority pursuant to this Section 4.04, 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.

 

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(f) (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 Borrower and the Administrative Agent, at the time or times
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation reasonably requested by the Borrower 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 Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. 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 Section 4.04(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if (x) 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 Borrower and (y) 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 Borrower and the Administrative Agent (in such number
of copies as shall be reasonably requested by the recipient) on or prior to the
date on which such Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the reasonable request of the Borrower 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 Borrower and the Administrative Agent (in such number of copies
as shall be reasonably requested by the recipient) on or prior to the date on
which such Foreign Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the reasonable request of the Borrower or the
Administrative Agent), whichever of the following is applicable:

(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;

 

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

(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 C-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 Borrower 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 C-2 or Exhibit C-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 C-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 Borrower and the Administrative Agent (in such number of copies
as shall be reasonably requested by the recipient) on or prior to the date on
which such Foreign Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the reasonable request of the Borrower or the
Administrative Agent), 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 Borrower or
the Administrative Agent to determine the withholding or deduction required to
be made;

(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 Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA 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 the Borrower to
such Agent under the law of the jurisdiction in which the Borrower is located
shall deliver to the Borrower or 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 Borrower or Administrative
Agent, as applicable), any such properly completed and executed documentation
prescribed by applicable law and such additional documentation reasonably
requested by the Borrower 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 Borrower and the Administrative Agent (or, in the
case of an Administrative Agent, the Borrower) (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 Borrower or 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 Borrower 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 (x) update such form or certification or (y) notify the Borrower and
the Administrative Agent in writing of its legal inability to do so. Each Lender
shall promptly (x) notify the Borrower 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 reasonable judgment of such Lender, and as may be reasonably
necessary to avoid any requirement of applicable laws of any jurisdiction that
the Borrower or the Administrative Agent make any withholding or deduction for
Taxes from amounts payable to such Lender.

(g) 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 4.04 (including by the payment of additional amounts
pursuant to this Section 4.04), 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 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

 

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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) Each Lender represents and warrants that the information set forth on
Schedule 4.04 and the W-8 or W-9, as applicable, previously provided to Holdings
and the Borrower is complete and accurate, and acknowledges that Holdings and
the Borrower will provide such information to the transfer agent for its common
stock in connection with issuance of the Equity Consideration and the Additional
Shares. Each Lender receiving Equity Consideration or Additional Shares shall
provide such information (and a properly executed W-8 or W-9 of such Lender, as
applicable) as reasonably requested by Holdings and its transfer agent as a
condition to issuance of shares of common stock of Holdings to such Lender.

(i) Each party’s obligations under this Section 4.04 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 Commitments
and the repayment, satisfaction or discharge of all obligations under any Credit
Document.

SECTION 5. Conditions Precedent to the Initial Borrowing. The obligation of each
Lender to make Initial Term Loans on the Closing Date is subject at the time of
the making of such Initial Term Loans to the satisfaction or waiver (in
accordance with Section 12.12) of the following conditions:

5.01 Counterparts; Notes. On or prior to the Closing Date, (a) Holdings, the
Borrower, 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 and to the Required Lenders and (b) there shall have been
delivered to each of the Lenders that has requested same in writing, the
appropriate Notes executed by the Borrower, in the amount, maturity and as
otherwise provided herein.

5.02 Officer’s Certificate. On the Closing Date, the Administrative Agent and
the Required Lenders shall have received a certificate, dated the Closing Date
and signed on behalf of the Borrower by an Authorized Officer of the Borrower,
certifying on behalf of the Borrower that all of the conditions in Sections
5.07, 5.10, 5.16 and 5.17 have been (or will be concurrently with the funding of
the Term Loans on the Closing Date) satisfied on such date.

 

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5.03 Opinions of Counsel. On the Closing Date, the Administrative Agent and the
Required Lenders shall have received from Kirkland & Ellis LLP and Holland &
Knight LLP, special counsel to the Credit Parties, opinions addressed to the
Administrative Agent, the Collateral Agent and the Lenders and dated the Closing
Date in form and substance reasonably acceptable to the Required Lenders.

5.04 Company Documents; Proceedings; etc. (a) On the Closing Date, the
Administrative Agent and the Required Lenders shall have received a certificate
from each Credit Party, dated the Closing 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 D 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 Required Lenders.

(b) On or prior to the Closing Date, the Administrative Agent and the Required
Lenders 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.

5.05 Notice of Borrowing. Prior to the making of the Term Loans on the Closing
Date, the Administrative Agent shall have received from the Borrower, the Notice
of Borrowing with respect to such Term Loans meeting the requirements of
Section 2.03.

5.06 [Reserved].

5.07 Interest. On the Closing Date, the Borrower shall have paid in cash the
accrued and unpaid interest on the Existing Term Loans purchased pursuant to the
Closing Date Open Market Purchase Agreements.

5.08 Guaranty. On the Closing Date, each Guarantor shall have duly authorized,
executed and delivered the Guaranty in the form of Exhibit E (as amended,
modified and/or supplemented from time to time, the “Guaranty”), and the
Guaranty shall be in full force and effect.

5.09 Fees, Expenses, etc. On the Closing Date, the Borrower shall have paid
(i) all costs, fees and expenses (including, without limitation, reasonable and
documented legal fees and expenses) of the Administrative Agent (and its
relevant affiliates) and the Collateral Agent, including, without limitation,
the reasonable and documented legal fees and expenses of Arnold & Porter Kaye
Scholer LLP, and other compensation contemplated hereby payable to the
Administrative Agent (and/or its relevant affiliates) or the Collateral Agent to
the extent presented for payment at least one (1) Business Day prior to the
Closing Date and for which reasonably detailed invoices have been provided and
(ii) all costs, fees and expenses (including, without limitation, reasonable and
documented legal fees and expenses) of the Lenders, including, without
limitation, the reasonable and documented legal fees and expenses of Stroock &
Stroock & Lavan LLP, as counsel to the Lenders, and Guggenheim Securities LLC,
as financial advisor to the Lenders, to the extent presented for payment at
least one (1) Business Day prior to the Closing Date and for which reasonably
detailed invoices have been provided. In addition, the Administrative Agent
shall have received a fully executed copy of the Agent Fee Letter, and the
payment of the agency fee payable thereunder on the Closing Date.

 

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5.10 Transaction Support Agreement; Minimum Condition; Cancellation of Existing
Term Loans. (x) The Transaction Support Agreement shall remain in full force and
effect, and shall not have been terminated by any party thereto; and (y) lenders
under the Existing Term Loan Credit Agreement holding at least 95% in aggregate
principal amount of Existing Term Loans as of the Out-of-Court Toggle Date (as
defined in the Transaction Support Agreement) shall have executed Closing Date
Open Market Purchase Agreements, and on the Closing Date, the Existing Term
Loans purchased pursuant to such Closing Date Open Market Purchase Agreements
shall have been automatically cancelled and retired.

5.11 Security Agreements. Subject to Section 12.22, on the Closing 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:

(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 Required Lenders, desirable, to
perfect the security interests purported to be created by the foregoing Security
Documents;

(ii) (x) any certificates representing Pledged Interests (as defined in the
Security Agreement), together with executed and undated endorsements of transfer
and (y) any promissory notes endorsed in blank;

(iii) reports as of a recent date listing all effective financing statements and
intellectual property security filings that name Holdings or any of its
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 Permitted
Liens; 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.

5.12 ABL Amendment and Waiver; Existing Term Loan Amendment and Waiver;
Subordinated Facility Loan Documents; Initial Borrowing Under the Subordinated
Facility Credit Agreement. On the Closing Date, the Administrative Agent and the
Required Lenders shall have received a true and correct copy of the ABL
Amendment and Waiver, the Existing Term Loan Amendment and Waiver, the
Subordinated Facility Loan Documents, the ABL Intercreditor Agreement, the Term
Loan Intercreditor Agreement and the Subordination Agreement, each of

 

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which shall be in full force and effect and shall be in form and substance
reasonably acceptable to the Administrative Agent (at the direction of Required
Lenders); provided, that the ABL Amendment and Waiver may not be deemed
unacceptable to the Administrative Agent and Required Lenders for failure to
include an increase of aggregate revolving commitments, so long as the Borrower
shall have used commercially reasonable efforts to procure such increase. On the
Closing Date, the Borrower shall have borrowed not less than $15,000,000 in
aggregate principal amount of Subordinated Facility Loans under the Subordinated
Facility Credit Agreement.

5.13 Financial Statements. The Required Lenders shall have received the Annual
Financial Statements, the Quarterly Financial Statements and the Monthly
Financial Statements.

5.14 Insurance Certificates. On the Closing Date, the Administrative Agent and
the Required Lenders shall have received certificates of insurance for (A) all
“All Risk” policies naming the Collateral Agent, on behalf of the Secured
Creditors, as loss payee and (B) all general liability policies naming the
Collateral Agent, on behalf of the Secured Creditors, as additional insured and
(ii) to the extent available, legends providing that no cancellation, material
reduction in the amount of insurance coverage thereof shall be effective until
at least thirty (30) days (or ten (10) days in the case of cancellation for
non-payment) after receipt by the Collateral Agent of written notice thereof, in
each case, in respect of the Holdings and its Subsidiaries.

5.15 Patriot Act. The Administrative Agent shall have received at least five
days prior to the Closing Date (or such shorter period as may be agreed) all
documentation and other information about Holdings, the Borrower and the
Guarantors 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 Closing
Date.

5.16 No Material Adverse Effect. Since February 1, 2020, there shall not have
occurred a Material Adverse Effect.

5.17 No Default; Representations and Warranties. Immediately prior to the
Borrowing of Initial Term Loans on the Closing Date, and immediately after
giving effect thereto, (i) no Default or Event of Default shall have occurred
and be continuing and (ii) 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
(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).

5.18 Initial Budget. On or prior to the Closing Date, the Borrower shall have
prepared and delivered to the Administrative Agent for distribution to the
private-side Lenders (once the Platform has been established) a 13-week budget
and cash flow forecast (the “Initial Budget”), in a form substantially similar
to the budget delivered by the Borrower to certain lenders under the Existing
Term Loan Credit Agreement prior to the Closing Date, which shall (x) reflect,
on a line-item basis, the projected receipts and disbursements of Holdings, the
Borrower 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 Borrower ending on the first
Saturday occurring after the date on which the Initial Budget is delivered and
including the subsequent twelve (12) fiscal weeks.

 

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SECTION 6. [Reserved].

SECTION 7. Representations, Warranties and Agreements. Each of Holdings and the
Borrower makes the following representations, warranties and agreements, in each
case after giving effect to the Transaction, all of which shall survive the
execution and delivery of this Agreement and the Notes and the making of the
Initial Term Loans on the Closing Date:

7.01 Company Status. Each of Holdings 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.

7.02 Power and Authority. Each Credit Party has the company 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 company 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).

7.03 No Violation. Neither the consummation of the Transaction, 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.

 

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7.04 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 Closing Date and
which remain in full force and effect on the Closing Date, (b) those listed on
Schedule 7.04 hereto and (c) 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.

7.05 Financial Statements; Financial Condition. (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 Holdings 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) After giving effect to the Transaction, 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.

7.06 Litigation. There are no actions, suits or proceedings pending or, to the
knowledge of Holdings and the Borrower, threatened (a) with respect to the
Transaction 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.

7.07 True and Complete Disclosure. All factual information (taken as a whole)
furnished by or on behalf of Holdings or the Borrower 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 7.07, 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 the Borrower and its Subsidiaries operate.

 

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7.08 Use of Proceeds; Margin Regulations.

(a) The Initial Term Loans shall be used solely to repurchase the Existing Term
Loans in accordance with the Closing Date Open Market Purchase Agreements.

(b) No part of the proceeds of any Term Loan 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 Term Loan nor the use of the
proceeds thereof will violate or be inconsistent with the provisions of
Regulation T, U or X.

7.09 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 Holdings or any of its Subsidiaries, being asserted by any
Governmental Authority regarding any Taxes relating to Holdings or any of its
Subsidiaries; (b) each of Holdings and 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 Holdings,
the Borrower 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 Closing Date, (i) neither Holdings 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 Holdings or any of
its Subsidiaries, and (ii), to the best knowledge of Holdings or any of its
Subsidiaries, the taxable years or other taxable periods of Holdings or any of
its Subsidiaries are subject to the normally applicable statute of limitations;
and (d) each of Holdings 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 Holdings and its Subsidiaries, as applicable, for the periods covered
thereby.

7.10 Compliance with ERISA. (a) None of Holdings, any Subsidiary of Holdings 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.

(b) None of Holdings, any Subsidiary of Holdings 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 contribution, 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 Holdings nor any of its Subsidiaries has incurred any obligation
in connection with the termination of, or withdrawal from, any Foreign Pension
Plan.

 

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7.11 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 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
Term Loan 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
ABL Facility Priority Collateral (in each case, except for Excluded Deposit
Accounts and Securities Accounts over which Control Agreements are not required
pursuant to Section 9.05(b) 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 9.01(d) are
subject to the terms of the ABL Intercreditor Agreement and the Permitted Liens
described in Section 9.01(g) are subject to the Term Loan Intercreditor
Agreement and the Subordination Agreement, as applicable). The recordation of
(i) the Grant of Security Interest in U.S. Patents and (ii) 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.

7.12 Properties. All Real Property owned or leased by Holdings or any of its
Subsidiaries as of the Closing Date, and the nature of the interest therein, is
correctly set forth in Schedule 7.12. Each of Holdings 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 Holdings
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.

7.13 OFAC. Neither Holdings, the Borrower nor any of their respective
Subsidiaries (i) 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

 

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Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) 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 (iii) 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.

7.14 Patriot Act/FCPA. Holdings, the Borrower and their respective Subsidiaries
are in compliance with the Patriot Act. No part of the proceeds of the Term
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.

7.15 Compliance with Statutes. Each of Holdings 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.

7.16 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.

7.17 Environmental Matters. (a) Each of Holdings 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 Holdings and the Borrower, threatened Environmental Claims against
Holdings or any of its Subsidiaries or any Real Property owned, leased or
operated by Holdings or any of its Subsidiaries (including any such claim
arising out of the ownership, lease or operation by Holdings or any of its
Subsidiaries of any Real Property formerly owned, leased or operated by Holdings
or any of its Subsidiaries but no longer owned, leased or operated by Holdings
or any of its Subsidiaries); there are no facts, circumstances, conditions or
occurrences with respect to the business or operations of Holdings or any of its
Subsidiaries, or any Real Property owned, leased or operated by Holdings or any
of its Subsidiaries (including, to the knowledge of Holdings and the Borrower,
any Real Property formerly owned, leased or operated by Holdings or any of its
Subsidiaries but no longer owned, leased or operated by Holdings or any of its
Subsidiaries) or, to the knowledge of Holdings and the Borrower, 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 Holdings or any
of its Subsidiaries or any Real Property owned, leased or operated by Holdings
or any of its Subsidiaries or (ii) to cause any Real Property owned, leased or
operated by Holdings or any of its Subsidiaries to be subject to any
restrictions on the ownership, lease, occupancy or transferability of such Real
Property by Holdings 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 Holdings or any of its Subsidiaries or,
to the knowledge of Holdings and the Borrower, any Real Property formerly owned,
leased or operated by Holdings 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 7.17, the
representations and warranties made in Section 7.17(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.

7.18 Employment and Labor Relations. Neither Holdings 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 Holdings
or any of its Subsidiaries or, to the knowledge of Holdings and the Borrower,
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 Holdings or any of its Subsidiaries
or, to the knowledge of Holdings and the Borrower, threatened against any of
them, (b) no strike, labor dispute, slowdown or stoppage pending against
Holdings or any of its Subsidiaries or, to the knowledge of Holdings and the
Borrower, threatened against Holdings or any of its Subsidiaries, (c) no equal
employment opportunity charges or other claims of employment discrimination are
pending or, to the knowledge of Holdings and the Borrower, threatened against
Holdings or any of its Subsidiaries, and (d) no wage and hour department
investigation has been made of Holdings 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.

7.19 Intellectual Property, Etc. Each of Holdings 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.

SECTION 8. Affirmative Covenants. Each of Holdings and the Borrower hereby
covenants and agrees that on and after the Closing Date and until the Total
Commitment has terminated and the Term Loans and Notes (in each case together
with interest thereon), Fees and all other Obligations (other than indemnities
described herein and reimbursement obligations under Section 12.01 which are, in
either case, not then due and payable), are paid in full:

 

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8.01 Information Covenants. The Borrower will furnish to the Administrative
Agent for delivery to each Lender (unless otherwise specified below):

(a) Quarterly Financial Statements. Within 45 days after the close of each of
the first three Fiscal Quarters in each Fiscal Year of Holdings, or, in the case
of the first Fiscal Quarter ending after the Closing 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 Holdings and
its 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 Holdings as fairly presenting in all material
respects in accordance with GAAP the consolidated financial condition of
Holdings and its 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 Holdings, commencing with the Fiscal Year ending on January 30, 2021,
(i) the consolidated balance sheet of Holdings and its 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
(acting at the direction of the Required Lenders), 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 Financial Statements. Within 20 days after the end of each Fiscal
Month, commencing with the first full month following the Closing Date, the
unaudited consolidated balance sheet of Holdings and its 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 Holdings as fairly
presenting in all material respects in accordance with GAAP the consolidated
financial condition of Holdings and its 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) Holdings 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 the Borrower
(and, without limitation on the foregoing, does not have any subsidiaries other
than the Borrower and the Borrower’s Subsidiaries or (B) in connection with any
reporting requirements described in clauses (a), (b) and (c) of this
Section 8.01 the Borrower delivers consolidating financial information that
explains, at a level of detail reasonably acceptable to the Required Lenders,
the differences between the information relating to Holdings, on the one hand,
and the information relating to the Borrower and its Subsidiaries on a
standalone basis, on the other hand, then such consolidated reporting at
Holdings in a manner consistent with that described in clauses (a), (b) and
(c) of this Section 8.01 for the Borrower will satisfy the requirements of such
clauses.

(d) Budgets. No later than the 90th day of each Fiscal Year of the Borrower
(beginning with its Fiscal Year ended January 30, 2021), a budget in form and
detail reasonably satisfactory to the Required Lenders (including budgeted
statements of income, cash flow statement and balance sheets for the Borrower
and its 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.

(i) At the time of the delivery of the financial statements provided for in
Sections 8.01(a), (b) and (c) a compliance certificate from an Authorized
Officer of the Borrower in the form of Exhibit H certifying on behalf of the
Borrower 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 (i) if delivered with the financial statements required by Section 8.01(a)
or (b), set forth calculations in reasonable detail of the covenant in
Section 9.11 and (ii) if delivered with the financial statements required by
Section 8.01(b), set forth the amount of (and, in reasonable detail, the
calculations required to establish the amount of) Excess Cash Flow for the
respective Excess Cash Payment Period and the amount of any required payment
under Section 4.02(e) in respect of such Excess Cash Payment Period.

(ii) Notwithstanding clause (i) above, on or before April 30, 2022, a compliance
certificate from an Authorized Officer of the Borrower in the form of Exhibit H
certifying on behalf of the Borrower 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, and setting forth calculations in reasonable detail
demonstrating that the Borrower is in compliance with the covenant in
Section 9.11 for the Fiscal Quarter ending January 29, 2022.

(f) Notice of Default, Litigation and Material Adverse Effect. Promptly, and in
any event within five Business Days after any officer of Holdings 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 Holdings 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.

 

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(g) Other Reports and Filings. Promptly after the filing or delivery thereof,
copies of all financial information, proxy materials and reports, if any, which
Holdings or any of its Subsidiaries publicly filed with the SEC.

(h) Environmental Matters. Promptly after any officer of Holdings 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:

(i) any pending or threatened Environmental Claim against Holdings or any of its
Subsidiaries or any Real Property owned, leased or operated by Holdings or any
of its Subsidiaries;

(ii) any condition or occurrence on or arising from any Real Property owned,
leased or operated by Holdings or any of its Subsidiaries that (A) results in
noncompliance by Holdings 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 Holdings or any of its Subsidiaries or any such Real
Property;

(iii) any condition or occurrence on any Real Property owned, leased or operated
by Holdings 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 Holdings 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 Holdings or any of its Subsidiaries as required by any Environmental
Law or any governmental or other administrative agency; provided, that in any
event Holdings shall deliver to the Administrative Agent all notices received by
Holdings or any of its Subsidiaries from any government or governmental agency
under, or pursuant to, CERCLA which identify Holdings or any of its Subsidiaries
as potentially responsible parties for remediation costs or which otherwise
notify Holdings 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 Holdings’
or such Subsidiary’s response thereto.

(i) Material Real Property. Promptly upon, and in any event within ten Business
Days after, Holdings 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 Holdings’ good faith determination of
the fair market value thereof.

(j) ABL Information. All written reports required to be delivered to the ABL
Agent and/or lenders under the ABL Credit Agreement (including, without
limitation, borrowing base certificates and information related thereto required
to be delivered); provided, that such information required by this clause
(j) shall only be required to be delivered to the Administrative Agent for
distribution to the private-side Lenders.

 

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(k) Other Information. From time to time, such other information or documents
(financial or otherwise) with respect to Holdings or any of its Subsidiaries as
the Administrative Agent may reasonably request.

8.02 Books, Records and Inspections; Quarterly Conference Calls. (a) Holdings
will, and will cause each of its 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. Holdings will, and will cause each of its
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 Holdings or such Subsidiary, any of the properties of
Holdings or such Subsidiary and (ii) to examine the books of account of Holdings
or such Subsidiary and discuss the affairs, finances and accounts of Holdings 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 Holdings, the Borrower or any of its
Subsidiaries be required pursuant to the terms of this Section 8.02 to allow any
Person to inspect or examine, or be required to discuss, any records, documents
or other information (x) with respect to which Holdings, the Borrower 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 Holdings, the Borrower or any of its Subsidiaries shall,
following a reasonable request from the Administrative Agent or a Lender,
(A) 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 (B) 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 (y) that is subject to
attorney-client privilege. Any Lender may accompany the Administrative Agent or
its representative on any such inspection.

(b) At the request of the Administrative Agent or the Required Lenders, within
10 days following the date of the delivery of the quarterly and annual financial
information pursuant to Sections 8.01(a) and (b), the Borrower will hold a
conference call or teleconference, at a time selected by the Borrower 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 the
Borrower and its Subsidiaries and the budgets presented for the current Fiscal
Year or Fiscal Quarter, as the case may be, of the Borrower and its Subsidiaries
if applicable.

8.03 Maintenance of Property; Insurance. (a) Holdings will, and will cause each
of its Subsidiaries to, (i) keep all property necessary to the business of
Holdings 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

 

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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 Holdings 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.

(b) Holdings will, and will cause each of the Credit Parties 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 Borrower 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.

8.04 Existence; Franchises. Holdings will, and will cause each of its
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 8.04 shall prevent
(a) sales of assets and other transactions by Holdings or any of its
Subsidiaries in accordance with Section 9.02 or (b) the withdrawal or lapse by
Holdings or any of its Subsidiaries of its qualification as a foreign Company 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.

8.05 Compliance with Statutes, etc. Holdings will, and will cause each of its
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 noncompliances as
could not, either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

8.06 Compliance with Environmental Laws. (a) Holdings will comply, and will
cause each of its 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 Holdings 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 8.01(h), (ii) at any time that Holdings
or any of its Subsidiaries are not in compliance with Section 8.06(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 10.01, Holdings
and the Borrower will (in each case) provide, at the sole expense of Holdings
and the Borrower, upon the reasonable request of the Administrative Agent or the
Required Lenders, an environmental site assessment report concerning any
relevant Real Property owned, leased or operated by the Borrower or any of its
Subsidiaries, prepared by an environmental consulting firm reasonably approved
by the Required Lenders, 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 Holdings and the
Borrower 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
Holdings and the Borrower, and Holdings and the Borrower 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 Holdings or the Borrower, all at the sole expense of Holdings and the
Borrower.

8.07 ERISA. Holdings shall supply to the Administrative Agent:

(a) promptly and in any event within 30 days after Holdings, any Subsidiary of
Holdings 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 Holdings, any Subsidiary of
Holdings or any ERISA Affiliate knows of the occurrence of any ERISA Event, a
certificate of the chief financial officer of Holdings describing such ERISA
Event, what action Holdings, any Subsidiary of Holdings 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 Holdings, any Subsidiary of Holdings 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 (5) 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
Holdings, any Subsidiary of Holdings 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 Holdings, any Subsidiary of Holdings or any ERISA
Affiliate, a detailed written description thereof from the chief financial
officer of Holdings.

8.08 [Reserved].

 

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8.09 Ratings. Holdings and the Borrower shall use commercially reasonable
efforts to (no later than thirty (30) days after the Closing Date) obtain and
maintain (i) a public corporate family rating of the Borrower and a rating of
the Term Loans, in each case from Moody’s, and (ii) a public corporate credit
rating of the Borrower and a rating of the Term Loans, in each case from S&P,
but, in each case, not a specific rating (it being understood and agreed that
“commercially reasonable efforts” shall in any event include the payment by the
Borrower of customary rating agency fees and cooperation); provided, that if no
such rating is so obtained, the Borrower shall continue to use commercially
reasonable efforts to obtain such ratings as are requested by the Required
Lenders.

8.10 Payment of Taxes. Holdings will pay and discharge, and will cause each of
its 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 Holdings or any of its Subsidiaries not
otherwise permitted under Section 9.01(a); provided, that neither Holdings nor
any of its 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.

8.11 Use of Proceeds. The Borrower will use the proceeds of the Term Loans only
as provided in Section 7.08.

8.12 Additional Security; Further Assurances; etc. (a) Subject to clause (e) of
this Section 8.12, Holdings will, and will cause each other Credit Party to,
grant to the Collateral Agent for the benefit of the Secured Creditors, at the
expense of the Borrower, 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 Holdings and such other Credit Party as are not covered by the
original Security Documents, as may be reasonably requested from time to time by
the Administrative Agent or the Required Lenders (or otherwise required at such
time pursuant to the Security Documents, subject to the terms of 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 the Required Lenders and shall constitute valid and
enforceable (x) First Priority (subject to the terms of the Intercreditor
Agreements) perfected security interests, hypothecations and Mortgages with
respect to Term Loan Priority Collateral and (y) Second Priority (subject to the
terms of the ABL Intercreditor Agreement) perfected security interests,
hypothecations and Mortgages with respect to ABL Facility Priority Collateral.
The Additional Security Documents or instruments related thereto shall, at the
expense of the Borrower, 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 8.12(a) shall not apply to (and Holdings and its Subsidiaries shall not
be required to grant a security interest or Mortgage in) (i) 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

 

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to the terms of either the ABL Loan Documents or the documents governing any
secured Indebtedness incurred or issued in reliance on Section 9.04(r), (ii) any
motor vehicles, (iii) [reserved] or (iv) 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 8.12, Holdings will, and will cause
each of the other Credit Parties to, at the expense of Holdings and the
Borrower, 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, control agreements and other assurances or instruments
and take such further steps relating to the Collateral covered by any of the
Security Documents as the Collateral Agent or the Required Lenders 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, Holdings and the
other Credit Parties 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, Holdings will, and will cause the
other Credit Parties 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 a standard
survey exception. Mortgage Policies and other related documents as may be
reasonably requested by, and in form and substance reasonably satisfactory to,
the Collateral Agent or the Required Lenders to assure itself or themselves, as
applicable, that this Section 8.12 has been complied with.

(c) If the Required Lenders reasonably determine that the Lenders are required
by law or regulation to have appraisals prepared in respect of any Real Property
of Holdings and the other Credit Parties constituting Collateral, subject to
clause (e) of this Section 8.12, Holdings and the Borrower 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 8.12, the Borrower 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 Borrower 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) Holdings and the Borrower agree that each action required by clauses
(a) through (d), or by clauses (f) and (g) of this Section 8.12 shall be
completed as soon as reasonably practicable, but in no event later than 90 days
(or 30 days in the case of clauses (f) and (g) of this Section 8.12) after such
action is requested to be taken by the Administrative Agent or the Required
Lenders (or such longer period of time as may be agreed to by the Required
Lenders in their discretion); provided, that, in no event will Holdings 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 8.12.

 

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(f) Holdings will cause each Person that becomes a Subsidiary (other than an
Excluded Subsidiary) after the Closing 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 the
certificates, if any, representing such stock or other Equity Interests,
together with stock or other appropriate powers duly executed in blank,
(ii) become a party to each of the Guaranty, the Security Agreement, the
Intercreditor Agreements (if required thereby) and, if applicable, execute
Control Agreements, a Patent Security Agreement, a Trademark Security Agreement
and a Copyright Security Agreement, and (iii) to the extent requested by the
Administrative Agent or the Required Lenders, take all actions required pursuant
to this Section 8.12. In addition, to the extent reasonably requested by the
Collateral Agent or the Required Lenders, each new Subsidiary 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 5 as such new Subsidiary would have
had to deliver if such new Subsidiary were a Credit Party on the Closing 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 the Borrower that is an
Excluded Subsidiary ceases to constitute an “Excluded Subsidiary”, the Borrower
shall cause such Subsidiary to take all actions required by this Section 8.12 as
if such Subsidiary were then established, created or acquired.

8.13 [Reserved].

8.14 Ownership of Subsidiaries. Except as otherwise permitted pursuant to an
Investment or an asset disposition pursuant to Section 9.02(d), in each case
consummated in accordance with the terms hereof, Holdings will, and will cause
each of its 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).

8.15 Post-Closing Refunds. Holdings and its Subsidiaries shall use reasonable
best efforts to seek any Post-Closing Refunds to which any of the Credit Parties
may be entitled as soon as possible, including by filing Form 1139 in order to
expedite the receipt thereof.

 

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8.16 Equity Consideration.

(a) As promptly as practicable (but in no event more than two (2) Trading Days
following the Closing Date), Holdings shall execute and deliver to its transfer
agent for its common stock an instruction letter (in form and substance
reasonably acceptable to the Required Lenders, the “Transfer Agent Instruction
Letter”) providing for the issuance to each Lender of its pro rata share (based
on the principal amount of its Initial Term Loans in proportion to the aggregate
principal amount of all Initial Term Loans) of the Equity Consideration.

(b) Holdings shall use commercially reasonable efforts to cause the transfer
agent to effectuate each issuance of common stock to each Lender as set forth in
the Transfer Agent Instruction Letter and provide each Lender satisfactory
evidence thereof within three (3) Business Days of receipt by the transfer agent
of the Transfer Agent Instruction Letter.

(c) As soon as reasonably practicable following expiration of the holding period
and other requirements of Rule 144 under the Securities Act, Holdings shall
cause its counsel to execute and deliver one or more legal opinion(s) to the
transfer agent authorizing the removal of the restrictive legend on the shares
of common stock issued to the Lenders, including the Additional Shares (if
applicable); provided, that, as a condition to such legend removal on such
shares of common stock issued to a Lender, such Lender shall provide any
reasonably requested factual representations about itself and its holdings of
the equity of Holdings as is requested by Holdings and its counsel. Holdings
shall bear the cost of its counsel associated with issuing such opinion(s).

(d) If the Equity Consideration received by Lenders under Section 8.16(a) was
less than 10% of the fully diluted shares of common stock of Holdings on the
Closing Date (for the avoidance of doubt, as calculated as set forth in clause
(y) of the definition of “Equity Consideration”), then, on May 31, 2021,
Holdings and the Borrower shall, at their option, either (i) repay $5,000,000 in
aggregate principal amount of the Loans, together with accrued and unpaid
interest thereon (such payment, the “Trigger Payment”), or (ii) subject to the
following paragraph, Holdings shall execute and deliver to its transfer agent
for its common stock an instruction letter providing for the issuance of
additional shares of common stock of Holdings (the “Additional Shares”) to the
Lenders, pro rata (based on the principal amount of its Term Loans in proportion
to the aggregate principal amount of all Term Loans), in an amount equal to the
greater of (I) (x) 10% of the fully diluted shares of common stock of Holdings
as of the Closing Date (for the avoidance of doubt, assuming the exercise of the
Sponsor Investment Warrants (as adjusted pursuant to Section 6.01(a)(vii) of the
Warrant Agreement assuming the issuance of the Additional Shares) and the
issuance of the Equity Consideration and the Additional Shares, and as otherwise
calculated as set forth in clause (y) of the definition of “Equity
Consideration”) less (y) the shares of common stock of Holdings as of the
Closing Date represented by the Equity Consideration received by Lenders under
Section 8.16(a) and (II) a number of shares of common stock of Holdings with an
aggregate value (based on the VWAP based on a trailing five (5) Trading Day
period ending on the Trading Day immediately prior to May 31, 2021) of $500,000
at the time of such issuance; provided, that the Lenders shall not receive on
such date shares of common stock of Holdings having a value (based on the VWAP
based on a trailing five (5) Trading Day period ending on the Trading Day
immediately prior to May 31, 2021) greater than $4,750,000 at the time of such
issuance. If Holdings and the Borrower exercise their right under clause (i) of
the first sentence of this Section 8.16(d), (i) the Borrower shall give the
Administrative Agent written notice thereof by 2:30 pm (New York City time) at
least three (3) Business Days prior to such repayment, which notice shall
specify the amount of such repayment and the date of repayment

 

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(which shall be a Business Day), and which notice the Administrative Agent shall
promptly transmit to each of the Lenders, (ii) such repayment shall be applied
pro rata among the Term Loans; and (iii) such repayment of the Term Loans shall
be applied to reduce the then remaining Scheduled Repayments thereof in direct
order of maturity thereof.

The Lenders entitled to receive the Additional Shares (if clause (ii) above is
elected) shall be treated for all purposes as the record holder(s) of such
Additional Shares as of the close of business on May 31, 2021. As promptly as
practicable on or after May 31, 2021 (and in any event no later than five
(5) Trading Days thereafter), Holdings shall issue the number of whole shares of
common stock issuable under this Section 8.16(d) (rounded, on a per-Lender
basis, to the nearest whole share of common stock). Such delivery of Additional
Shares shall be made in book-entry form; provided, that if Holdings cannot then
issue in book-entry form without unreasonable effort, in certificated form or as
otherwise agreed to by Holdings and the Lenders. Any such certificate or
certificates shall be delivered by Holdings to the appropriate Lender on a
book-entry basis or by mailing certificates evidencing the shares to the Lenders
at their respective addresses as referenced in Section 12.03. Holdings shall be
entitled to register and deliver such shares in the name of the Lender and in
the manner shown on the records of Holdings and the Borrower (unless Holdings
and the Borrower, on the one hand, and the Lender, on the other, agree
otherwise). No fractional shares of common stock of Holdings will be delivered
to the Lenders (including in respect of Equity Consideration or Additional
Shares), and Holdings and the Borrower shall round any fractional shares up or
down, as applicable, to the nearest whole number of shares to be delivered to
each Lender.

(e) Notwithstanding the foregoing or the definition of “Equity Consideration”,
the equity and/or payments to be made by Holdings and/or the Borrower in this
Section 8.16 shall be in an amount equal to the amounts described in the
definition of “Equity Consideration” or this Section 8.16, as applicable,
multiplied by a fraction, the numerator of which is the aggregate principal
amount of the Existing Term Loans of the Lender (or Affiliates of the Lenders)
purchased pursuant to the Closing Date Open Market Purchase Agreement and the
denominator of which is the total aggregate principal amount of the Existing
Term Loans outstanding immediately prior to the consummation of the transactions
under the Closing Date Open Market Purchase Agreements.

8.17 Cash Flow Reporting; Variance Reporting; Liquidity Reporting; Store Closure
Reporting.

(a) The Borrower shall prepare and deliver to the Administrative Agent for
distribution to the private-side Lenders, on Thursday of each fiscal week of
Holdings occurring after the Closing 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 Holdings, the Borrower 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 Holdings 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 Closing 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
Borrower to the lenders under the Existing Term Loan Credit Agreement prior to
the Closing 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 Closing Date, the Borrower 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 9.10 hereof.

(d) On Thursday of each fiscal week during any Temporary Store Closure Period,
the Borrower shall deliver to the Administrative Agent for distribution to the
private-side Lenders a report certifying the stores of Holdings and its
Subsidiaries that are closed and open.

8.18 Sponsor Equity Consideration. As promptly as practicable (but in no event
more than two (2) Trading Days following the Closing Date), Holdings shall
execute and deliver a warrant agreement in the form of Exhibit N to the
Subordinated Facility Credit Agreement (the “Warrant Agreement”) for the
issuance of warrants to the lenders under the Subordinated Facility Credit
Agreement, that provide such lenders the right to exercise warrants in the
aggregate for 27% of the fully diluted (for the avoidance of doubt, assuming the
exercise of the Sponsor Investment Warrants and the issuance of the Equity
Consideration (and, solely as an adjustment pursuant to the terms of the Warrant
Agreement, the Additional Shares (if and when issued)), but which shall not be
diluted by the “out-of-the-money” options or shares reserved under Holdings’
equity compensation plans that are not subject to outstanding equity awards)
shares of common stock of Holdings on the Closing Date (the “Sponsor Investment
Warrants”).

SECTION 9. Negative Covenants. Each of Holdings and the Borrower hereby
covenants and agrees that on and after the Closing Date and until the Total
Commitment has terminated and the Term Loans and Notes (in each case, together
with interest thereon), Fees and all other Obligations (other than any
indemnities described herein and reimbursement obligations under Section 12.01
which, in either case, are not then due and payable), are paid in full:

9.01 Liens. Holdings 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 Holdings 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 9.01
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 Holdings 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 Closing Date which are listed, and the property
subject thereto described, in Schedule 9.01, 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 Holdings 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) (x) Liens created by or pursuant to this Agreement and the Security
Documents and (y) Liens created by or pursuant to the ABL Loan Documents
(including any Permitted Refinancing Indebtedness in respect thereof outstanding
pursuant to Section 9.04(j)(x), 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 Holdings or any of its Subsidiaries to
other Persons not materially interfering with the conduct of the business of
Holdings 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 on
the date hereof or otherwise permitted by this Agreement to which Holdings or
any of its Subsidiaries is a party;

(f) Liens securing Indebtedness permitted by Section 9.04(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 Term Loan 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 9.04(s); provided, that such Liens shall extend solely to the
Post-Closing Refunds;

 

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(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 Holdings or any of its
Subsidiaries, taken as a whole;

(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 10.01(j);

(j) statutory and common law landlords’ liens under leases to which the Borrower
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 Holdings or any of its
Subsidiaries;

(l) Permitted Encumbrances and Liens arising in the ordinary course in
connection with Investments permitted pursuant to Section 9.05(n), (o) or (u);

(m) Liens on property or assets acquired pursuant to a permitted Investment, or
on property or assets of a Subsidiary of the Borrower 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 9.04, 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 Holdings or any other asset of the Borrower 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 Borrower 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 Holdings 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;

 

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(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 9.04;

(r) Liens on earnest money deposits made in connection with any permitted
Investment or in respect of any anticipated 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 Borrower 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 9.04(r); provided, that such Liens shall be Junior to the Liens securing
the Obligations pursuant to the Term Loan Intercreditor Agreement or an
intercreditor or subordination arrangement in form and substance reasonably
acceptable to the Administrative Agent (at the direction of Required Lenders)
and the Borrower;

(u) [reserved];

(v) additional Liens on assets of the Borrower or any Subsidiary of the Borrower
not otherwise permitted by this Section 9.01, 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, shall be Junior to the Liens securing the Obligations 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 Borrower;

(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 the Borrower or any 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.

 

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In connection with the granting of Liens of the type described in clauses (f),
(m), (s) or (x) of this Section 9.01 by the Borrower or any of its Subsidiaries,
the Administrative Agent and the Collateral Agent shall be authorized to
subordinate its Liens on property subject to such Liens and take any other
actions reasonably requested by the Borrower in connection therewith (including,
without limitation, by executing appropriate 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 Borrower
has provided to the Administrative Agent and the Collateral Agent a certificate
executed by an Authorized Officer of the Borrower certifying that (x) the Lien
is permitted under the applicable clause of this Section 9.01 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).

9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. Holdings will not,
and will not permit any of its 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 Borrower and its Subsidiaries may sell inventory in the ordinary
course of business;

(b) each of the Borrower 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 9.05;

(d) each of the Borrower 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 Borrower or the respective Subsidiary receives
at least Fair Market Value as determined in good faith by the Borrower,
(iii) with respect to any such transaction in which the purchase price is in
excess of $3,000,000, the consideration received by the Borrower 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), (w) 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 Borrower or any Subsidiary) of the Borrower
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 Borrower and/or its applicable
Subsidiary have been validly released by all relevant creditors in writing,
(x) the amount of any trade-in value applied to the purchase price of any
replacement assets acquired in connection with such disposition, (y) any
securities received by the Borrower 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

 

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Equivalents received) within 180 days following the closing of the applicable
disposition and (z) any Designated Non-Cash Consideration received by the
Borrower 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 (z) 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 applied and/or reinvested as (and to the extent) required by
Section 4.02(c); provided, that no capital stock or other Equity Interests of
any Subsidiary shall be sold pursuant to this clause (d), unless (1) all of the
capital stock or other Equity Interests of such Subsidiary are sold in
accordance with this clause (d) or (2) 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 (2) does not exceed 2.5% of
Consolidated Total Assets of the Borrower and its Subsidiaries as of the date of
any such sale;

(e) each of the Borrower 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 9.04(d)); provided, that Holdings and its
Subsidiaries may not exclusively license any of their intellectual property;

(f) each of the Borrower 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 Borrower 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 Borrower or any of its Subsidiaries;

(h) the Borrower or any Subsidiary of the Borrower may convey, sell or otherwise
transfer all or any part of its business, properties and assets to any Qualified
Credit Party, 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 Qualified Credit
Party) 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 Borrower may merge or consolidate with and into, or be
dissolved or liquidated into, any Qualified Credit Party, so long as (i) in the
case of any such merger, consolidation, dissolution or liquidation involving the
Borrower, the Borrower 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 Credit Party, a Credit
Party 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;

 

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(j) [reserved];

(k) each of the Borrower 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 9.01;

(m) any involuntary loss, damage or destruction of property and the disposition
of the assets so damaged or destroyed shall be permitted;

(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 Borrower and its Subsidiaries
shall be permitted in the reasonable business judgment of the Borrower or such
Subsidiary;

(p) any Subsidiary of the Borrower 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 Borrower 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 8.12 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 9.03;

(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 Closing 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) Holdings may merge or consolidate with and into, or be dissolved or
liquidated into, any direct or indirect parent of Holdings (“Parent”) so long as
(i) as a result of such merger, consolidation, liquidation or dissolution,
Parent shall directly own 100% of the Equity Interests of Borrower and
(ii) concurrently with such merger, Parent signs a joinder to this Credit
Agreement in form and substance reasonably satisfactory to the Administrative
Agent and the Required Lenders (and pursuant to which Parent agrees to become
“Holdings” hereunder and subject to all of the rights and obligations of
Holdings hereunder), along with such other security documents as may be
reasonably requested by the Agents or the Required Lenders, and otherwise
complies with Section 8.12; provided, that, for the avoidance of doubt,
concurrent with such merger, consolidation or liquidation, all actions required
to give the Collateral Agent a perfected

 

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security interest in the Equity Interests of the Borrower shall have been taken,
including, without limitation, that 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 Parent, representing
the Equity Interests of the Borrower. 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 9.02
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 9.02
(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 Borrower in order to
effect or evidence the foregoing; provided, that the Borrower has provided to
the Administrative Agent and the Collateral Agent a certificate executed by an
Authorized Officer of the Borrower certifying that the applicable sale, transfer
or disposition is permitted by this Section 9.02 (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).

9.03 Dividends. Holdings will not, and will not permit any of its Subsidiaries
to, authorize, declare or pay any Dividends with respect to Holdings or any of
its Subsidiaries, except that:

(a) any Subsidiary of the Borrower may pay Dividends to the Borrower or to any
Subsidiary of the Borrower that owns Equity Interests therein;

(b) any Non-Wholly-Owned Subsidiary of the Borrower may pay Dividends to its
shareholders, members or partners generally, so long as the Borrower 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 Borrower may pay cash Dividends to Holdings, and Holdings may pay cash
Dividends to any parent entity of Holdings, for the purpose of enabling Holdings
(or any parent entity of Holdings) to redeem, repurchase or otherwise acquire
for value outstanding Equity Interests of Holdings (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 Holdings or any of its Subsidiaries (so long as Holdings (or any
parent holding company) promptly uses the proceeds therefrom for such purposes);
provided, that (x) the aggregate amount of Dividends paid by the Borrower in
reliance on this clause (c) shall not exceed $2,000,000 in any Fiscal Year of
the Borrower, and (y) 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;

 

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(d) the Borrower may pay cash Dividends to Holdings and Holdings may pay cash
Dividends to any parent entity of Holdings that serves as the common parent of
an affiliated, consolidated or unitary group that includes the Borrower at the
times and in the amounts necessary to enable Holdings or such parent holding
company to pay its tax obligations, to the extent attributable solely to the
business of the Borrower and its Subsidiaries; provided, that (x) the amount of
cash Dividends paid by the Borrower pursuant to this clause (d) to enable
Holdings 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 Holdings at such time for the respective period as determined
in good faith by Holdings and (y) the proceeds of such Dividends shall be used
promptly by Holdings and/or any parent holding company for the purposes
described above in this clause (d);

(e) the Borrower may pay cash Dividends to Holdings and Holdings may pay cash
Dividends to any parent entity of Holdings, so long as the proceeds thereof are
promptly used by Holdings or such parent entity to pay operating expenses of
Holdings 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, and in each case, to the extent attributable solely to the business of
the Borrower and its Subsidiaries; provided, that the aggregate amount of all
Dividends paid by the Borrower or Holdings pursuant to this clause (e) to one or
more parent entities of Holdings shall not exceed $2,000,000 in any Fiscal Year
of the Borrower;

(f) Holdings 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,
Holdings may increase the liquidation preference of the shares of Qualified
Preferred Stock in respect of which such Dividends have accrued;

(g) the Borrower may, in lieu of making direct cash payments to Sponsor and its
Affiliates as otherwise permitted by Section 9.06(g) pay cash Dividends to
Holdings, and Holdings may pay such cash Dividends to any parent holding company
thereof, to enable Holdings or such parent holding company to make such
payments, so long as Holdings 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 Holdings shall be permitted;

(j) the Borrower may pay dividends to Holdings and Holdings 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 Holdings
pursuant to this clause (j) shall not exceed $3,000,000; and

 

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(k) Holdings and its Subsidiaries may pay other Dividends in an aggregate
amount, together with all other Dividends made pursuant to this Section 9.03(k),
not to exceed $250,000.

9.04 Indebtedness. Holdings will not, and will not permit any of its
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 Closing Date and listed on Schedule 9.04 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 9.04 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 Borrower 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;

(e) Indebtedness constituting Intercompany Loans to the extent permitted by
Sections 9.05(h) and (q);

(f) Indebtedness consisting of guaranties (x) by the Qualified Credit Parties of
each other’s Indebtedness and lease and other contractual obligations permitted
under this Agreement and (y) 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 Borrower 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
Borrower 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 Borrower or any Subsidiary with respect to letters of credit supporting
such performance, appeal, customs or surety bonds or workers’ compensation
claims);

 

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(j) (x) Indebtedness of the Credit Parties under the ABL Loan Documents (and any
Permitted Refinancing Indebtedness incurred in respect thereof) in an aggregate
principal amount not to exceed $50,000,000 at any time outstanding; provided,
that no “first-in last-out” facility may be incurred pursuant to this clause
(j)(x) and the advance rates set forth in the ABL Loan Documents may not be
increased without the consent of Required Lenders; 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 Borrower 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 9.04(f);

(l) Indebtedness owed to any Person providing property, casualty, liability, or
other insurance to the Borrower 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;

(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 Closing
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 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, solely for the purpose of making the PIK Increase Paydown 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 10.04 or 10.05 of this Agreement or Section 11.04 of the ABL Credit
Agreement or (z) in an amount not in excess of the aggregate principal amount of
Indebtedness permitted to be incurred by the Borrower 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;

 

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(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 Borrower),
(iii) such Indebtedness shall have a final stated maturity date equal to or
later than the 91 days after the Maturity Date and have a Weighted Average Life
to Maturity equal to or greater than the Weighted Average Life to Maturity of
the Loans and (iv) such Indebtedness shall not have covenants or defaults or
events of default more restrictive than those set forth herein (unless applying
solely after the 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, (ii) such Indebtedness shall not be guaranteed
by any Person other than the Guarantors, (iii) no such Indebtedness shall be
secured by any asset of the Borrower or any of its Subsidiaries other than the
Collateral, (iv) 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 Term Loans), in
each case, prior to the date that is 91 days after the Maturity Date then in
effect, (v) the Liens securing such Indebtedness shall be Junior to the Liens
securing the Obligations pursuant to the Term Loan Intercreditor Agreement or an
intercreditor or subordination arrangement in form and substance reasonably
acceptable to the Administrative Agent (at the direction of Required Lenders)
and the Borrower; (vi) such Indebtedness shall be incurred on market terms (as
reasonably determined by the Borrower), and (iv) such Indebtedness shall not
have covenants or defaults or events of default more restrictive than those set
forth herein (unless applying solely after the 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 9.01(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 Term Loans
at par, (iv) the all-in-cost of such Indebtedness reflects market rates and
customary terms for a tax-receivables financing and (v) the Borrower shall have
provided the Lenders 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 Borrower 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 Borrower or any of its

 

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Subsidiaries other than the Collateral, (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 Term Loans), in each case, prior to the date that is 91 days after the
Maturity Date then in effect, (iv) such Indebtedness shall be incurred on market
terms (as reasonably determined by the Borrower), and (v) such Indebtedness
shall not have covenants or defaults or events of default more restrictive than
those set forth herein (unless applying solely after the Maturity Date)

(u) unsecured Indebtedness in respect of obligations of the Borrower 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 Borrower 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 Holdings, a
Subsidiary or any of their direct or indirect parent companies permitted by
Section 9.03(c) hereof; and

(w) (i) Indebtedness of Subsidiaries that are not Qualified 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
Qualified Credit Parties in an aggregate amount outstanding at any time not to
exceed $1,000,000.

9.05 Advances, Investments and Loans. Holdings will not, and will not permit any
of its 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 Borrower 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) Holdings and its Subsidiaries may acquire and hold cash and Cash
Equivalents; provided, that from and after the date required therefor under
Schedule 12.22 (or such later date as the Required Lenders shall agree), all
Deposit Accounts or Securities Accounts of each Credit Party, other than
Excluded Deposit Accounts, are subject to Control Agreements;

(c) Holdings and its Subsidiaries may hold the Investments held by them on the
Closing 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 9.05;

 

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(d) the Borrower 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 Borrower 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) Holdings 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 Holdings (so long as no cash is actually
advanced by Holdings or any of its Subsidiaries in connection with the
acquisition of such obligations);

(g) the Borrower may enter into Interest Rate Protection Agreements and Other
Hedging Agreements to the extent permitted by Section 9.04(c);

(h) (i) Holdings and any Qualified Credit Party may make intercompany loans and
advances to any other Qualified Credit Party, (ii) any Subsidiary of the
Borrower which is not a Qualified Credit Party may make intercompany loans and
advances to any Qualified Credit Party, (iii) any Subsidiary of the Borrower
which is not a Qualified Credit Party may make intercompany loans and advances
to any other Subsidiary of the Borrower which is not a Qualified Credit Party
and (iv) any Qualified Credit Party may make intercompany loans and advances to
any Subsidiary of the Borrower which is not a Qualified Credit Party 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 Borrower’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 Credit Party by a Person that is not a Credit Party 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)(z) of this Section 9.05 (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);

 

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(i) (w) Holdings may make capital contributions to, or acquire Equity Interests
of, the Borrower, (x) the Qualified Credit Parties may make capital
contributions to, or acquire Equity Interests of, any other Qualified Credit
Party (other than the Borrower), (y) any Subsidiary of the Borrower which is not
a Qualified Credit Party may make capital contributions to, or acquire Equity
Interests of, any other Subsidiary of the Borrower which is not a Qualified
Credit Party, and (z) any Qualified Credit Party may make capital contributions
to, or acquire Equity Interests of, any Subsidiary of the Borrower which is not
a Qualified Credit Party 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 Closing Date made and outstanding pursuant to
preceding subclause (z) (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 Borrower which is not a Qualified Credit Party
pursuant to subclause (iv) of Section 9.05(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) Holdings 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 9.05);

(k) Contingent Obligations permitted by Section 9.04, to the extent constituting
Investments;

(l) [Reserved];

(m) the Borrower and its Subsidiaries may receive and hold promissory notes and
other non-cash consideration received in connection with any asset sale
permitted by Section 9.02(d);

(n) the Borrower and its Subsidiaries may make advances (i) of payroll to
employees of the Borrower 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 Borrower or
such Subsidiary;

(o) the Borrower 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 or
would result therefrom, the Borrower and its Subsidiaries may make Investments
not otherwise permitted by this Section 9.05; 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, repayment, dividend or
distribution in respect thereof);

 

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(q) [Reserved];

(r) [Reserved];

(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 9.05.

9.06 Transactions with Affiliates. Holdings will not, and will not permit any of
its Subsidiaries to, enter into any transaction or series of related
transactions with any Affiliate of Holdings or any of its Subsidiaries (other
than Holdings or any Subsidiary thereof), except (x) on terms and conditions
substantially as favorable to the Borrower or such Subsidiary as would
reasonably be obtained by the Borrower 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 the Borrower 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 9.03;

(b) loans may be made and other transactions may be entered into by Holdings and
its Subsidiaries to the extent permitted by Section 9.05 (e), (f) and (s);

(c) customary fees, indemnities and reimbursements may be paid to directors of
Holdings and its Subsidiaries;

(d) Holdings may issue Holdings Common Stock (and options, warrants and rights
with respect thereto) and Qualified Preferred Stock;

(e) Holdings 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 Holdings and its Subsidiaries in the
ordinary course of business;

 

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(f) payments of principal, interest and fees hereunder to Affiliated Persons
that are Lenders solely in their capacities as Lenders;

(g) Holdings and/or the Borrower may reimburse the Sponsor and its Affiliates
for their (i) reasonable out-of-pocket expenses 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 Holdings 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 Holdings or any of its Subsidiaries pay to Sponsor
(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) in this Section 9.06, amounts paid to directors or
officers affiliated with the Sponsor pursuant to clauses (c) and (e) in this
Section 9.06 or in amounts permitted as Permitted Payments pursuant to and as
defined in the Subordination Agreement.

9.07 Modifications of Certificate of Incorporation, By-Laws and Certain Other
Agreements; Limitations on Voluntary Payments, etc. Holdings will not, and will
not permit any of its Subsidiaries to:

(a) except in connection with a Permitted Refinancing thereof or, for the
avoidance of doubt, regularly scheduled principal or interest payments thereon,
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) under, any
Junior Financing (collectively, “Restricted Junior Payments”); provided, that,
so long as no Default or Event of Default has occurred and is continuing at the
time of such payment or would exist after giving effect to the respective
payment, (i) any Credit Party may make Restricted Junior Payments in an
aggregate amount for all payments pursuant to this clause (i) not to exceed
$1,000,000 and (ii) any Credit Party may make Restricted Junior Payments with
Eligible Equity Proceeds, and any Junior Financing may be exchanged for
Qualified Equity Interests of Holdings; provided, further, this clause (a) shall
be subject to clause (f) below;

 

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(b) amend, modify, change or waive any term or provision of any ABL 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 Closing Date),
so long as (i) no Default or Event of Default shall have occurred and be
continuing and (ii) the Borrower (x) is in compliance with Section 9.10 on a Pro
Forma Basis immediately following such payment and (y) reasonably expects to be
in compliance with Section 9.10 on a Pro Forma Basis for the full calendar month
immediately succeeding such payment (based on reasonable projections of the
Borrower delivered to the Administrative Agent for delivery to private-side
Lenders), in each case, as certified by a Responsible Officer of the Borrower in
a certificate delivered to the Administrative Agent and private-side Lenders
prior to such payment;

(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 Holdings 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; or

(g) consent to (or consent to any amendment to the ABL Facility that would
permit) the purchase by the Sponsor of any loans or commitments under (i) the
ABL Facility or (ii) the Existing Term Facility, except pursuant to the Purchase
Right (as defined in the Subordination Agreement).

9.08 Limitation on Certain Restrictions on Subsidiaries. Holdings will not, and
will not permit any of its 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 Borrower or any of its Subsidiaries,
or pay

 

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any Indebtedness owed to the Borrower or any of its Subsidiaries, (b) make loans
or advances to the Borrower or any of its Subsidiaries that are Qualified Credit
Parties or (c) transfer any of its properties or assets to the Borrower or any
of its Subsidiaries that are Qualified Credit Parties, except for such
encumbrances or restrictions existing under or by reason of (i) any agreement in
effect on the Closing Date and described on Schedule 9.08, (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
ABL Credit Agreement and the other ABL Loan Documents, (v) customary provisions
restricting subletting or assignment of any lease governing any leasehold
interest of the Borrower or any of its Subsidiaries, (vi) customary provisions
restricting assignment sublicensing or subletting of any licensing or leasing
agreement (in which the Borrower 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 Holdings or any of its Subsidiaries in the
ordinary course of business, (vii) 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, (viii) restrictions on the transfer of any
asset subject to a Lien permitted by Sections 9.01(c), (e), (f), (m), (n), (r),
(s), (t), (v) or (x); (ix) any agreement or instrument in effect at the time any
entity becomes a Subsidiary of the Borrower 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; (x) restrictions applicable to any joint venture that
is a Subsidiary; (xi) customary restrictions on the transfer of joint venture
interests, (xii) 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 9.04, (xiii) customary net worth provisions
contained in real property leases entered into by the Borrower and the
Subsidiaries in the ordinary course of business, so long as the Borrower has
determined in good faith that such net worth provisions would not reasonably be
expected to impair the ability of the Borrower and Subsidiaries to meet their
ongoing obligations, (xiv) any restrictions regarding licenses or sublicenses by
the Borrower 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 (xv) 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 (xiv); provided, that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are, in the good faith judgment of the Borrower, no
more restrictive 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.

9.09 Business; etc. (a) Holdings will not, and will not permit any of its
Subsidiaries to, engage directly or indirectly in any business other than the
businesses engaged in by Holdings and its Subsidiaries as of the Closing Date
and businesses reasonably related, ancillary or complimentary thereto.

 

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(b) Notwithstanding the foregoing or anything else in this Agreement to the
contrary, Holdings 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 Borrower, cash and Cash Equivalents, (ii) holding intercompany
loans made to the Borrower, (iii) other activities attributable to or ancillary
to its role as a holding company, including making contributions to the capital
of the Borrower, 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
Borrower; provided, that Holdings may engage in those activities and have
liabilities that are incidental to (x) the maintenance of its existence in
compliance with applicable law and (y) legal, tax and accounting matters in
connection with any of the foregoing activities.

9.10 Minimum Liquidity Covenant. The Borrower shall not permit Liquidity as of
the last Business Day of any fiscal week of the Credit Parties, commencing with
the first full fiscal week after the Closing Date, to be less than the Minimum
Liquidity Amount.

9.11 First Lien Net Leverage Ratio. The Borrower shall not permit the First Lien
Net Leverage Ratio, as of the last day of any Test Period ended closest to any
date in the table below, to exceed the ratio set forth opposite such date in the
table below.

 

Test Period ended closest to:

   First Lien Net Leverage Ratio:  

January 31, 2022

     5.00:1.00  

April 30, 2022

     5.00:1.00  

July 31, 2022

     4.50:1.00  

October 31, 2022

     4.50:1.00  

January 31, 2023

     4.50:1.00  

April 30, 2023

     3.75:1.00  

July 31, 2023

     3.50:1.00  

October 31, 2023

     3.50:1.00  

January 31, 2024

     3.50:1.00  

April 30, 2024

     3.50:1.00  

9.12 Limitation on Capital Expenditures. The Borrower shall not permit the
aggregate amount of Capital Expenditures (other than (a) Capital Expenditures
described in clause (ii) of the definition thereof or (b) Capital Expenditures
made as tenant in leasehold improvements to the extent reimbursed by landlords)
made in any Fiscal Year to exceed $20,000,000.

9.13 Change of Fiscal Year. Holdings and the Borrower shall not change their
Fiscal Year end.

 

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SECTION 10. Events of Default and Remedies.

10.01 Events of Default. Upon the occurrence of any of the following specified
events (each, an “Event of Default”):

(a) Payments. The Borrower shall (x) default in the payment when due of any
principal of any Term Loan or any Note, or (y) default, in the payment when due
of any interest on any Term Loan or any Note or any Fees or any other amounts
owing hereunder or under any other Credit Document, and such default pursuant to
this clause (y) 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. Holdings 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 8.01(e)(i), 8.04 (with respect to company existence) or Section 9 (other
than Section 9.10), (ii) default in the due performance or observance by it of
any other term, covenant or agreement contained in Section 8.16 and such default
shall continue unremedied for a period of five (5) Business Days after the date
on which written notice thereof is given to the Borrower by the Administrative
Agent or the Required Lenders, (iii) 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
10.01(a), 10.01(b) and clauses (i), (ii), (iv) and (v) of this Section 10.01(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 Borrower by the
Administrative Agent or the Required Lenders, (iv) (x) prior to the Trigger
Payment, default in the due performance or observance by it of Section 9.10 with
respect to two (2) calendar weeks in any consecutive four-calendar week period
and (y) following the Trigger Payment, default in the due performance or
observance by it of Section 9.10 and (v) default in the due performance or
observance of Section 8.01(e)(ii) or Section 8.17 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 Borrower by the by the Administrative
Agent or the Required Lenders); or

(d) Default Under Other Agreements. (x) Holdings or any of its Subsidiaries
shall (A) default in any payment of any Indebtedness (other than the Obligations
and the Indebtedness described in clause (y) 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 (y) 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 (x) of this Section 10.01(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 Subordinated Facility
Loan Documents or the Existing Term Loan Documents), or (y) Holdings or any of
its Subsidiaries shall (A) default in any payment of any Indebtedness under the
ABL

 

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Loan Documents (or any Permitted Refinancing Indebtedness with respect thereto
and secured on a pari passu basis therewith) 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
ABL Loan Documents (or any Permitted Refinancing Indebtedness with respect
thereto and secured on a pari passu basis therewith) 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 ABL Loan Documents (or any Permitted Refinancing Indebtedness with
respect thereto and secured on a pari passu basis therewith), as applicable (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 foregoing,
with respect to any breach or default with respect to Section 10.11 of the ABL
Credit Agreement (or any other financial covenant subsequently added to the ABL
Credit Agreement or contained in any Permitted Refinancing of the ABL Credit
Agreement), such breach or default shall constitute an Event of Default under
this Agreement only if the maturity of the obligations under the ABL Credit
Agreement are accelerated as a result of such breach or default; or

(e) Bankruptcy, etc. Holdings 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 Holdings 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 Holdings or any of its Subsidiaries (other
than an Immaterial Subsidiary), to operate all or any substantial portion of the
business of Holdings or any of its Subsidiaries (other than an Immaterial
Subsidiary), or Holdings 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 Holdings or any of its Subsidiaries (other than an Immaterial
Subsidiary), or there is commenced against Holdings or any of its Subsidiaries
any such proceeding which remains undismissed for a period of 60 days after the
filing thereof, or Holdings 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 Holdings or any
of its Subsidiaries (other than an Immaterial Subsidiary) makes a general
assignment for the benefit of creditors; or Holdings or any of its Subsidiaries
(other than an Immaterial Subsidiary) shall fail generally to pay its debts as
they become due; or

(f) ERISA. (a)(i) one or more ERISA Events shall have occurred, or (ii) there is
or arises an Unfunded Pension Liability (taking into account only Plans with
positive Unfunded Pension Liability); or (iii) there is or arises any withdrawal
liability under Section 4201 of ERISA, if Holdings, any Subsidiary of Holdings
or any of the ERISA Affiliates withdraws completely from any and all
Multiemployer Plans; and (b) 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

 

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(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, 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, and, with respect to ABL Facility Priority
Collateral, on at least a Second Priority basis and in all respects to the
Subordinated Facility Loans and the Existing Term Loans) to the rights of all
third Persons (except for Liens permitted by Section 9.01), and subject to no
other Liens (except for Liens permitted by Section 9.01); 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 10.01(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
Holdings or any Subsidiary of Holdings 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 Holdings 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;

 

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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 Borrower, 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 Borrower
(provided that, if an Event of Default specified in Section 10.01(e) shall occur
with respect to the Borrower, the result 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 Commitment terminated, whereupon the Commitment of each Lender
shall forthwith terminate immediately without any other notice of any kind;
(b) declare the principal of and any accrued interest in respect of all Term
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) 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
(d) enforce each Guaranty.

10.02 Rescission. If (1) at any time after acceleration of the maturity of the
Term Loans, the Borrower shall have paid all arrears of interest and all
payments on account of principal of the Term Loans owing by it 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 Term Loans due and payable solely by virtue of
acceleration) shall have been remedied or waived pursuant to Section 12.12 and
all Events of Default (in each case, other than non-payment of principal of and
accrued interest on the Term 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 Sections 10.04 and 10.05) pursuant to
Section 12.12, then upon the written consent of the Required Lenders and written
notice to the Borrower, 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 10.02 do not give
the Borrower the right to require the Lenders to rescind or annul any
acceleration hereunder, even if the conditions set forth herein are met.

10.03 Application of Funds. After the exercise of remedies (subject to the terms
of the Intercreditor Agreements) provided for in Section 10.01 (or after the
Term Loans have automatically become immediately due and payable as provided in
Section 10.01), any amounts received on account of the Secured Obligations shall
be applied by the Administrative Agent in the following order:

First, to payment of that portion of the Secured Obligations constituting fees,
indemnities, expenses and other amounts (including expenses of counsel payable
under Section 12.01) payable to the Administrative Agent and the Collateral
Agent in their respective capacities as such;

Second, to payment of that portion of the Secured Obligations constituting fees,
indemnities and other amounts (other than principal and interest and other than
any amounts due under Term Secured Hedging Agreements) payable to the Secured
Creditors (including expenses of counsel payable under Section 12.01 and amounts
payable under Section 2.10), ratably among them in proportion to the amounts
described in this clause Second payable to them;

 

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Third, to payment of that portion of the Secured Obligations constituting
accrued and unpaid interest on the Term Loans and any interest due on amounts
unpaid under Term Secured Hedging Agreements, ratably among the Secured
Creditors in proportion to the respective amounts described in this clause Third
payable to them;

Fourth, to payment of that portion of the Secured Obligations constituting
unpaid principal of the Term Loans and any amounts due under Term Secured
Hedging Agreements (other than as previously applied under clause Third above),
ratably among the Secured Creditors in proportion to the respective amounts
described in this clause Fourth held by them;

Fifth, to the payment of all other Secured Obligations of the Credit Parties
that are due and payable to the Administrative Agent and the other Secured
Creditors on such date, ratably based upon the respective aggregate amounts of
all such Secured Obligations owing to the Administrative Agent and the other
Secured Creditors on such date; and

Last, the balance, if any, after all of the Secured Obligations have been
indefeasibly paid in cash in full, to the Borrower or as otherwise required by
law.

Notwithstanding the foregoing, Secured Obligations arising under the Term
Secured Hedging Agreements shall be excluded from the application described
above if the Administrative Agent has not received a Secured Party Designation
Notice, together with such supporting documentation as the Administrative Agent
may request, from the applicable Lender Counterparty. Each Lender Counterparty
not a party to this Agreement that has given the notice contemplated by the
preceding sentence shall, by such notice, be deemed to have acknowledged and
accepted the appointment of the Administrative Agent pursuant to the terms of
Section 11 for itself and its Affiliates as if a “Lender” party hereto.

10.04 Leverage Covenant Cure Right. (a) Notwithstanding anything to the contrary
contained in this Section 10, in the event that the Borrower fails to comply
with the requirements of the covenant under Section 9.11, until the expiration
of the tenth Business Day subsequent to the date financial statements are
required to be delivered pursuant to Section 8.01(a) or Section 8.01(b) (the
“Anticipated Leverage Cure Deadline”), in respect of the period ending on the
last day of such Fiscal Quarter, the Borrower shall have the right to request
Holdings to issue Specified Common Equity or to borrow additional Subordinated
Facility Loans pursuant to Section 9.04(p), in each case, for cash and, in the
case of the Specified Common Equity, to be contributed to the equity capital of
the Borrower as common equity (the “Leverage Cure Right”), in each case,
following the end of such Fiscal Quarter and on or prior to the Anticipated
Leverage 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, the
proceeds of which may, at the election of the Borrower 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 Borrower of
written notice to the Administrative Agent that it intends to exercise the
Leverage 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

 

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received as the Leverage 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 9.11 is less than the full amount of
any originally designated amount) and (y) receipt by the Borrower of such cash
proceeds (the “Leverage Cure Amount”), such covenant shall be recalculated
giving effect to the following pro forma adjustments:

(i) solely for purpose of determining the existence of a failure to comply with
the requirements of the covenant under Section 9.11, Consolidated EBITDA for the
Fiscal Quarter of the Borrower for which such certificate is required to be
delivered shall be increased by an amount equal to the Leverage Cure Amount, and
such increase shall be effective for all periods that include the Fiscal Quarter
of the Borrower for which such Leverage Cure Right was exercised and not for any
other purpose under this Agreement; provided, that (1) the receipt by the
Borrower of the Leverage Cure Amount pursuant to the Leverage 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 (2) no Leverage 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 Leverage Cure Amount is included in the calculation of Consolidated EBITDA
for purposes of calculating the financial covenant set forth in Section 9.11;
provided, further, that the proceeds of any Leverage Cure Amount may be used, at
the Borrower’s option, to prepay Term 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 9.11 for any period in which the
Leverage 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 Leverage Cure Amount when
calculating compliance with Section 9.11 at the end of such (but no other)
Fiscal Quarter), the Borrower shall then be in compliance with the requirements
of the covenant under Section 9.11 at the end of such Fiscal Quarter, the
Borrower shall be deemed to have satisfied the requirements of the covenant
under Section 9.11 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 9.11 that had occurred shall be deemed cured for this purpose under this
Agreement and the other Credit Documents; provided, that if the Leverage Cure
Amount is not received by the Borrower prior to the Anticipated Leverage Cure
Deadline, such Default or Event of Default shall be deemed reinstated.

(b) Notwithstanding anything herein to the contrary, (i) in each consecutive
four-fiscal-quarter period of the Borrower there shall be at least two Fiscal
Quarters in which the Leverage Cure Right is not exercised, (ii) the Leverage
Cure Right shall not be exercised more than three times during the term of this
Agreement, (iii) the Leverage Cure Amount shall not exceed the amount required
to cause the Borrower to be in compliance with the covenant under Section 9.11;
and (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 9.11
until after the Borrower’s ability to cure has lapsed and the Borrower has not
exercised the Leverage Cure Right.

 

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10.05 Minimum Liquidity Cure Right. (a) Notwithstanding anything to the contrary
contained in this Section 10, in the event that the Borrower fails to comply
with the requirements of the covenant under Section 9.10, until the expiration
of the fifth Business Day subsequent to the date of the Liquidity report
required to be delivered pursuant to Section 8.17(c) (the “Anticipated Liquidity
Cure Deadline”), in respect of the last Business Day of the preceding fiscal
week, the Borrower shall have the right to request Holdings to issue Specified
Common Equity or to borrow additional Subordinated Facility Loans pursuant to
Section 9.04(p), in each case, for cash and, in the case of the Specified Common
Equity, to be contributed to the equity capital of the Borrower as common equity
(the “Liquidity Cure Right”), in each case following the last Business Day of
such fiscal week and on or prior to the Anticipated Liquidity Cure Deadline, in
each case in an aggregate amount necessary to cure the relevant failure to
comply with such covenant (and not less than $3,000,000 in any case), and upon
the earlier of (x) the delivery by the Borrower of written notice to the
Administrative Agent that it intends to exercise the Liquidity Cure Right
hereunder and (y) receipt by the Borrower of such cash proceeds (the “Liquidity
Cure Amount”), such covenant shall be recalculated giving effect to the
following pro forma adjustments:

(i) solely for purpose of determining the existence of a failure to comply with
the requirements of the covenant under Section 9.10, Liquidity as of the last
Business Day of the fiscal week for which such Liquidity report is required to
be delivered shall be increased by an amount equal to the Liquidity Cure Amount;
provided, that the receipt by the Borrower of the Cure Amount pursuant to the
Liquidity 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

(ii) if, after giving effect to the foregoing recalculations, the Borrower shall
then be in compliance with the requirements of the covenant under Section 9.10
at the end of such fiscal week, the Borrower shall be deemed to have satisfied
the requirements of the covenant under Section 9.10 as of the last day of such
fiscal week 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 9.10 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 Borrower prior to the Anticipated
Liquidity Cure Deadline, such Default or Event of Default shall be deemed
reinstated.

(b) Notwithstanding anything herein to the contrary, (i) the Liquidity Cure
Right shall not be exercised more than four times during the term of this
Agreement, (ii) no Liquidity Cure Right may be exercised unless the Borrower
receives at least $3,000,000 in immediately available funds pursuant to the
exercise of such Liquidity Cure Right, regardless of the Liquidity shortfall
resulting in the Default or Event of Default subject to such cure and
(iii) 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 9.10 until
after the Borrower’s ability to cure has lapsed and the Borrower has not
exercised the Liquidity Cure Right.

 

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SECTION 11. The Administrative Agent.

11.01 Appointment. (a) The Lenders hereby irrevocably designate and appoint
Wilmington Trust as Administrative Agent and Collateral Agent (for purposes of
this Section 11 and Section 12.01, the term “Administrative Agent” also shall
include Wilmington Trust 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 Wilmington
Trust 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 Section 11 and Section 12.01 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 Term Loans, as well as activities as Administrative 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 subagent. The provisions of this Section 11
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
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.

(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.

 

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11.02 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 10.01 or Section 12.12) 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.

11.03 Lack of Reliance on the Administrative Agent; Etc.

(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 (a) its own independent investigation of the
financial condition and affairs of Holdings and its Subsidiaries in connection
with the making and the continuance of the Term Loans and the taking or not
taking of any action in connection herewith and (b) its own appraisal of the
creditworthiness of Holdings 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 Term Loans
or at any time or times thereafter. Each Lender further represents and warrants
that it has reviewed each document made available to it on the Platform in
connection with this Agreement and has acknowledged and accepted the terms and
conditions applicable to the recipients thereof (including any such terms and
conditions set forth, or otherwise maintained, on the Platform with respect
thereto). 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,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or any other Credit Document or the financial condition of Holdings or
any of its Subsidiaries or be required to make any inquiry concerning the
financial condition of Holdings 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
Holdings, the Borrower or a Lender. No Agent shall be responsible for or have
any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Credit Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Credit Document or the occurrence of any Default, (iv) the
validity, enforceability,

 

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effectiveness or genuineness of any Credit Document or any other agreement,
instrument or document, (v) the value or the sufficiency of any Collateral or
(vi) the satisfaction of any condition set forth in Section 5 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 Borrower 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 Term 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 Closing Date.

11.04 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 12.12) 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, (b) no Agent (nor any of their officers, partners, directors,
employees or agents) shall except as expressly set forth herein or in the other
Credit Documents, have any duty to disclose, and shall not be liable to the
Lenders for the failure to disclose, any information relating to the Borrower or
any Affiliate thereof that is communicated to or obtained by the Person serving
as Administrative Agent, Collateral Agent or any of their respective Affiliates
in any capacity and (c) 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 11.01 or 12.12); 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

 

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States or other applicable jurisdictions from time to time in effect. The
Administrative Agent shall not be liable for any apportionment or distribution
of payments made by it in good faith and if any such apportionment or
distribution is subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to recover
pro rata from other Lenders any payment equal to the amount to which they are
determined to be entitled (and such other Lenders hereby agree to return to such
Lender any such erroneous payments received by them). The Administrative Agent
and the Collateral Agent shall have no obligation to monitor whether any
amendment or waiver to any Loan Document has properly become effective or is
permitted hereunder or thereunder except to the extent expressly agreed to by
the Administrative Agent or the Collateral Agent in such amendment or waiver.

In no event shall any Agent be liable for any failure or delay in the
performance of their respective obligations under this Agreement or any related
documents because of circumstances beyond such Agent’s control, including, but
not limited to, a failure, termination, or suspension of a clearing house,
securities depositary, settlement system or central payment system in any
applicable part of the world or acts of God, flood, war (whether declared or
undeclared), civil or military disturbances or hostilities, nuclear or natural
catastrophes, political unrest, explosion, severe weather or accident,
earthquake, terrorism, fire, riot, labor disturbances, strikes or work stoppages
for any reason, embargo, government action, including any laws, ordinances,
regulations or the like (whether domestic, federal, state, county or municipal
or foreign) which delay, restrict or prohibit the providing of the services
contemplated by this Agreement or any related documents, or the unavailability
of communications or computer facilities, the failure of equipment or
interruption of communications or computer facilities, or the unavailability of
the Federal Reserve Bank wire or telex or other wire or communication facility,
or any other causes beyond the Agent’s control whether or not of the same class
or kind as specified above.

Nothing in this Agreement or any other Credit Document shall require the
Administrative Agent or the Collateral Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers hereunder.

The Agents shall have no obligation for (a) perfecting, maintaining, monitoring,
preserving or protecting the security interest or Lien granted under this
Agreement, any other Credit Document, or any agreement or instrument
contemplated hereby or thereby; (b) the filing, re-filing, recording,
re-recording, or continuing of any document, financing statement, mortgage,
assignment, notice, instrument of further assurance, or other instrument in any
public office at any time or times; or (c) providing, maintaining, monitoring,
or preserving insurance on or the payment of taxes with respect to any
Collateral.

The Agents shall not (x) be obligated to ascertain, monitor or inquire as to
whether any Lender or Participant or prospective Lender or Participant is a
Disqualified Lender or (y) have any liability with respect to or arising out of
any assignment or participation of Term Loans, or disclosure of confidential
information, to any Disqualified Lender.

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

 

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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 Holdings, the Borrower or any of their Subsidiaries nor can it constitute the
basis of any Default or Event of Default.

11.05 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 Term 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 Term 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, advice of counsel (who may be counsel for the
Borrower), 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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11.06 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 11.01 or any comparable provision of any Credit Document
(collectively, the “Related Persons”), is not reimbursed and indemnified by the
Borrower (without limiting the obligation of the Borrower to do so), the Lenders
will reimburse, indemnify and hold harmless such Agent (or such Related Persons)
in proportion to their respective Pro Rata Shares (as defined below) (determined
at the time such indemnification is sought (or, if indemnification is sought
after the date upon which all Commitments shall have terminated and the Term
Loans shall have been paid in full, ratably in accordance with such Pro Rata
Shares as in effect immediately prior to such date)) from and against any and
all Indemnified Liabilities which may be imposed on, asserted against or
incurred by such Agent (or such Related Person) (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 Commitments shall have terminated and the Term 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
Borrower. 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 11.06. The
undertaking in this Section 11.06 shall survive termination of the 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 11.06, (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 Term Loans of such Lender at such
time and its unused Commitments at such time by (ii) the sum of the aggregate
outstanding principal amount of the Term Loans of all Lenders at such time and
the aggregate unused Commitments of all Lenders at such time.

 

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11.07 The Administrative Agent in its Individual Capacity. With respect to its
obligation to make Term Loans under this Agreement (if any), the Administrative
Agent, if applicable, 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” or any similar terms shall, if applicable and
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.

11.08 [Reserved].

11.09 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 10.01(e) has
occurred and is continuing, the Borrower. 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 Borrower, which acceptance shall not be unreasonably withheld or delayed;
provided, that the Borrower’s 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 Borrower (which
consent shall not be unreasonably withheld or delayed) (provided that the
Borrower’s 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.

 

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(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 11.09, the Administrative Agent shall remain indemnified to the extent
provided in this Agreement and the other Credit Documents and the provisions of
this Section 11 (and the analogous provisions of the other Credit Documents) and
Sections 12.01, 12.08 and 12.23 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.

(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 Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor.

11.10 Collateral Matters. (a) Each Secured Creditor hereby authorizes and
directs the Administrative Agent or the Collateral Agent, as applicable, to
enter into the Guaranty, the Security Documents and 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 Term 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 Term 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 Term
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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 Term Secured Hedging Agreements, (ii) constituting property being sold or
otherwise disposed of (to Persons other than Holdings and the Qualified Credit
Parties) upon the sale or other disposition thereof in compliance with
Section 9.02, (iii) if approved, authorized or ratified in writing by the
Required Lenders (or all of the Lenders hereunder, to the extent required by
Section 12.12), (iv) as otherwise may be expressly provided in the relevant
Security Documents, in the Intercreditor Agreements or the last sentence of each
of Sections 9.01 and 9.02, (v) constituting property following or concurrently
with a sale or other disposition (to Persons other than Holdings and the
Qualified Credit Parties) of a Subsidiary of Holdings in compliance with
Section 9.02, 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 Borrower, release
or subordinate, as applicable, the Collateral Agent’s Liens on such property;
provided, that the Borrower has delivered to the Agents a certificate executed
by an Authorized Officer of the Borrower certifying that the applicable
transaction is permitted under the Credit Documents (and the 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 Term Secured Hedging Agreement) have been paid in
full and all Commitments have terminated or expired, upon request of the
Borrower, 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 Term
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 Term
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 the 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, the Borrower or any Guarantor or any substantial part of its
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 11.10.

(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 11.10 or in any of the Security Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission or event
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thereto, the Collateral Agent may act in any manner it may deem appropriate, in
its sole discretion, 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) (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).

(e) Right to Realize on Collateral and Enforce Guaranty. Anything contained in
any of the Credit Documents to the contrary notwithstanding, Holdings, the
Borrower, 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 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.

11.11 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.

11.12 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
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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.

11.13 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 Term Loan
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether the Administrative Agent shall have made any demand
on the Borrower) shall be entitled and empowered (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 Term 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;

(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.

 

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SECTION 12. Miscellaneous.

12.01 Payment of Expenses, etc. (a) The Borrower hereby agrees to:

(i) whether or not the transactions herein contemplated are consummated, pay all
reasonable and documented out-of-pocket costs and expenses of (A) (x) the Agents
and their Affiliates (limited in the case of legal counsel to the reasonable
fees and disbursements of one counsel to the Agents (taken as a whole), which as
of the Closing Date shall be Arnold & Porter Kaye Scholer LLP, and of one
separate firm of local counsel to the Agents in each appropriate jurisdiction)
and (y) the Lenders (taken as a whole) (limited in the case of legal counsel to
the reasonable fees and disbursements of one counsel to the Lenders (taken as a
whole), which as of the Closing Date shall be Stroock & Stroock & Lavan LLP, and
of one separate firm of local counsel to the Lenders (taken as whole) in each
appropriate jurisdiction) 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 and (B) the Administrative Agent
and each of 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 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 Lenders, taken as a whole (unless
there is a conflict of interest that requires separate representation for any
Lender, in which case those 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 Lenders, taken as a whole; and

(ii) indemnify the Administrative Agent, the Collateral Agent 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 separate firm of local
counsel in each appropriate jurisdiction (which may include a single

 

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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 Borrower 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, the Collateral Agent 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 Term Loans hereunder or the consummation of the Transaction 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 Holdings or any of its
Subsidiaries, the generation, storage, transportation, handling or disposal of
Hazardous Materials by Holdings or any of its Subsidiaries at any location,
whether or not owned, leased or operated by Holdings or any of its Subsidiaries,
the non-compliance by Holdings or any of its Subsidiaries with any Environmental
Law (including applicable permits thereunder) applicable to any Real Property,
or any Environmental Claim asserted against the Borrower, any of its
Subsidiaries or any Real Property at any time owned, leased or operated by the
Borrower 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 (x) found in a final, non-appealable judgment by a court
of competent jurisdiction to have resulted from (I) 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 (II) 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 (y) relating to any dispute solely among the Indemnified Persons
(other than (I) claims against an Agent or its Affiliates in their capacity or
in fulfilling their role as an Agent or any other similar role under the Credit
Documents and (II) claims arising out of any act or omission on the part of
Holdings, the Borrower or its Subsidiaries); provided, further, that clause
(ii) of this Section 12.01(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, the Collateral Agent or any Lender set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Borrower 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 Holdings and the
Borrower 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 Term Loan or the use of the proceeds thereof. No Indemnified Person shall be
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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).

12.02 Right of Set-off. (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 and, subject to Section 12.24, 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 Holdings 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 TERM
LOANS 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 TAKEN WITH THE 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 LENDERS AND THE ADMINISTRATIVE AGENT HEREUNDER.

12.03 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, transmitted or
delivered: if to any Credit Party, at the address specified on Schedule 12.03;
if to any Lender, at its address specified in an Administrative Questionnaire
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otherwise on file with) the Administrative Agent; 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 Borrower 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 Borrower shall not be effective until received by the
Administrative Agent or the Borrower, as the case may be.

(b) Notwithstanding Section 12.03(a), unless directed otherwise by the
Administrative Agent, Holdings and the Borrower 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, (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 Holdings and the Borrower 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 12.03(a) but only to the extent specifically requested by the
Administrative Agent in a particular instance.

(c) Each of Holdings and the Borrower hereby acknowledges that (a) the
Administrative Agent will make available to the Lenders materials and/or
information provided by or on behalf of Holdings and/or the Borrower 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 Borrower or its securities (each, a “Public
Lender”). Each of Holdings and the Borrower 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
page thereof; (x) by marking Borrower Materials “PUBLIC,” Holdings and the
Borrower shall be deemed to have authorized the Administrative Agent and the
Lenders to treat such Borrower Materials as not containing any information of a
type that would constitute material non-public information with respect to
Holdings or the Borrower 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 Borrower notifies 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.

 

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(d) 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 Holdings or the
Borrower or its securities for purposes of United States Federal or state
securities laws.

(e) 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.

(f) Notwithstanding Section 12.03(a), the Administrative Agent 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 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 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
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12.04 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,
neither Holdings nor the Borrower 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 Commitment, Term Loans,
Note or other Obligations hereunder except as provided in Sections 2.13 and
12.04(b)) and the Participant shall not constitute a “Lender” hereunder;
provided, further, 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 Term Loan or Note 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 Commitment or a mandatory repayment of the Term
Loans shall not constitute a change in the terms of such participation, and that
an increase in any Commitment (or the available portion thereof) or Term Loan
(or the addition of additional Commitments or Term 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
Holdings or the Borrower 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 Term Loans hereunder in which such Participant is participating.
In the case of any such participation, except as otherwise set forth below in
this Section 12.04(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 Borrower hereunder shall be determined as if such
Lender had not sold such participation.

The Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.10, 2.11 and 4.04 (subject to the requirements and limitations
therein, including the requirements under Section 4.04(f) (it being understood
that the documentation required under Section 4.04(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;
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; and (B) shall not be entitled to receive any greater payment under
Sections 2.10 or 4.04, 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 4.04 to the extent such Participant fails to comply
with Section 4.04(f) as though it were a Lender (it being understood that the
documentation required under Section 4.04(f) shall be delivered to the
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Borrower’s request and expense, to use reasonable efforts to cooperate with the
Borrower 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 12.02 as though it were a Lender; provided,
that such Participant agrees to be subject to Section 12.06 as though it were a
Lender. Each Lender that sells a participation shall, acting solely for this
purpose as an agent of the Borrower, maintain a register on which it enters the
name and address of each Participant and the principal amounts (and stated
interest) of each Participant’s interest in the Term 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, 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 Affiliated Person, except as expressly permitted pursuant
to Section 2.15) (x) assign all or a portion of its Commitment and related
outstanding Obligations (or, if the Commitment has terminated, outstanding
Obligations) hereunder to (i) (A) any Lender Affiliate of such Lender or (B) 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 (x)(i)(B)), or (ii) 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 (y) assign all, or if less than
all, a portion equal to at least $1,000,000 (or such lesser amount as the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower may otherwise agree, which agreement shall not be
unreasonably withheld or delayed) in the aggregate for the assigning Lender, of
such Commitment and related outstanding Obligations (or, if the 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 (i) at such time, Schedule 1.01(a) shall be deemed
modified to reflect the Commitments and/or outstanding Term Loans, as the case
may be, of such new Lender and of the existing Lenders, (ii) upon the surrender
of the relevant Notes (if any) by the assigning Lender (or, upon such assigning
Lender’s indemnifying the Borrower for any lost Note pursuant to a customary
indemnification agreement) new Notes will be issued, at the Borrower’s 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

 

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2.05 (with appropriate modifications) to the extent needed to reflect the
revised Commitments and/or outstanding Term Loans, as the case may be, (iii) the
consent of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower (such consent deemed to have been made
with respect to any assignment if the Borrower has not responded within ten
Business Days after delivery of notice of such assignment) shall be required in
connection with any such assignment pursuant to clause (y) above (such consent,
in any case, not to be unreasonably withheld, delayed or conditioned), (iv) 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
(v) no such transfer or assignment will be effective until recorded by the
Administrative Agent on the Register pursuant to Section 12.15. To the extent of
any assignment pursuant to this Section 12.04(b), the assigning Lender shall be
relieved of its obligations hereunder with respect to its assigned Commitment
and outstanding Term Loans. At the time of each assignment pursuant to this
Section 12.04(b) to a Person which is not already a Lender hereunder, the
respective assignee Lender shall, (i) to the extent legally entitled to do so,
provide to the Borrower the appropriate Internal Revenue Service Forms described
in Section 4.04(f), and (ii) 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 Commitment and
related outstanding Obligations pursuant to Section 2.13 or this
Section 12.04(b) would, at the time of such assignment, result in increased
costs under Section 2.10 or 4.04 from those being charged by the respective
assigning Lender prior to such assignment, then the Borrower shall not be
obligated to pay such increased costs (although the Borrower shall be obligated
to pay increased costs, as and to the extent provided in Sections 2.10 and 4.04
(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 Term 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 Term 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 Borrower or the Administrative Agent, collaterally assign or pledge all or
any portion of its rights under this Agreement, including the Loans 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.

 

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(d) Any Lender which assigns all of its Commitment and/or Term Loans hereunder
in accordance with Section 12.04(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, 4.04, 11.06,
12.01 and 12.06), which shall survive as to such assigning Lender.

(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 (x) be obligated
to ascertain, monitor or inquire as to whether any Lender or Participant or
prospective Lender or Participant is a Disqualified Lender or (y) have any
liability with respect to or arising out of any assignment or participation of
Term 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 Term 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 Borrower, the Administrative Agent and such
Lender.

12.05 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 Borrower 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.

12.06 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 the 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 Term Loans, 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

 

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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.

(c) Notwithstanding anything to the contrary contained herein, the provisions of
the preceding Sections 12.06(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 and the express
provisions of Section 2.15 that permit differing payments among Lenders.

12.07 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 Section 9 and calculations of the
First Lien Net Leverage Ratio, Secured Net Leverage Ratio and Interest Coverage
Ratio, shall utilize GAAP; provided, that if the Borrower notifies the
Administrative Agent that the Borrower requests 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 Borrower 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 Borrower or the Required
Lenders, then the Borrower and the Required Lenders 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
Borrower 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,
if 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 Borrower referring to a period
prior to the Closing Date shall refer to the applicable period prior to the
Closing Date as if the Borrower had existed and the Transaction has occurred on
the first day of said period.

 

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(b) All computations of interest and 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, Section 9.11(a), any First Lien Net Leverage
Ratio test, any Secured Net Leverage Ratio test, any Interest Coverage Ratio
test 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
Payment, the determination of whether the relevant condition is satisfied may be
made, at the election of the Borrower, (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) (x) the declaration of such Dividend or (y) 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) (x) delivery of irrevocable (which may be
conditional) notice with respect to such Restricted Junior Payment or (y) 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 9.11(a), any First Lien Net Leverage
Ratio test, any Secured Net Leverage Ratio test, any Interest 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 (subject to clause
(c) above), 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) [Reserved].

(f) 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 Borrower shall deliver a schedule
showing the adjustments necessary to reconcile such financial statements with
GAAP as in effect immediately prior to such accounting change).

 

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12.08 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 OF HOLDINGS AND THE BORROWER 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 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 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 12.03 OF THIS AGREEMENT, 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 HOLDINGS OR THE BORROWER 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.

 

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(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.

12.09 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 Borrower and the Administrative
Agent. Delivery of an executed counterpart hereof by facsimile or electronic
transmission shall be as effective as delivery of any original executed
counterpart hereof.

12.10 Effectiveness. This Agreement shall become effective on the date (the
“Closing Date”) on which all the conditions precedent in Section 5 are satisfied
or waived in accordance with Section 12.12.

12.11 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.

12.12 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 Borrower and Collateral may be released from, the Guaranty
and the Security Documents and the Intercreditor Agreements in accordance with
the provisions hereof and thereof 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 Term Loan or Note, or
reduce the rate or extend the time of payment of scheduled amortization,
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 12.07(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 Borrower to select Interest Periods
for any Term 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 the Guarantors (except as expressly
provided in the Credit Documents), (iii) amend, modify or waive any provision of
this Section 12.12(a) (except for technical amendments with respect to
additional extensions of credit pursuant to this Agreement which afford the
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the type provided to the Commitments and the Term Loans on the Closing Date),
(iv) reduce the “majority” voting threshold specified in the definition of
“Required 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 Required Lenders on substantially the same
basis as the extensions of Commitments and/or Term Loans are included on the
Closing Date), (v) consent to the assignment or transfer by Holdings or the
Borrower of any of its rights and obligations under this Agreement and
(vi) amend, modify or waive any provision of Sections 10.03 and 12.06 or consent
to the subordination in right of payment of any Secured Obligations to any other
Indebtedness; provided, further, that no such change, waiver, discharge or
termination shall (1) increase the 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 Commitment or a
mandatory repayment of Term Loans shall not constitute an increase of the
Commitment of any Lender, and that an increase in the available portion of the
Commitment of any Lender shall not constitute an increase of the Commitment of
such Lender), (2) without the consent of (x) the Administrative Agent, amend,
modify or waive any provision of Section 11 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 11 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, (3) without the consent of the
Collateral Agent, amend, modify or waive any provision relating to the rights or
obligations of the Collateral Agent, (4) [reserved] or (5) directly or
indirectly, extend the PIK Increase Date without the consent of Lenders holding
at least two-thirds (2/3) in aggregate principal amount of the Term Loans;
provided, further, that any amendment or modification to the Agent Fee Letter,
or waiver of any rights or privileges thereunder, shall only require the consent
of the Borrower and the Agents party thereto. 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 (v), inclusive, of the
first proviso to Section 12.12(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 Borrower shall have the right, so long as all
non-consenting Lenders whose individual consent is required are treated as
described in either clause (A) or (B) below, to either (A) 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 (B) repay all outstanding Term Loans and terminate all
Commitments of such Lender in accordance with Section 4.01(b); provided, that,
unless the Term Loans which are repaid or Commitments which are terminated
pursuant to preceding clause (B) are immediately replaced in full at such time
through the addition of new Lenders or the increase of the outstanding Term
Loans or Commitments of existing Lenders (who in each case must specifically
consent thereto), then in the case of any action pursuant to preceding clause
(B), (x) the calculation of Required Lenders shall be determined after giving
effect to any such repayment or termination, (y) the Required Lenders
(determined after giving effect to the proposed action) shall specifically
consent thereto and (z) by the terms of such agreement the Commitment of each
Lender not consenting to the amendment provided for therein shall terminate upon
the effectiveness of such amendment and all Term 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 Borrower shall not have the right to replace a
Lender or repay its Term 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 12.12(a).

 

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(b) Notwithstanding anything to the contrary in this Section 12.12, 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 the Intercreditor Agreements 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 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.

(c) If Indebtedness is incurred pursuant to Section 9.04 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 Borrower in order to reflect
the incurrence of such Indebtedness and the Lien priority intended by the
express terms hereof to be created therefor.

(d) [Reserved].

(e) Notwithstanding anything to the contrary in this Section 12.12, 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 (acting at the direction of the Required
Lenders) and may be amended and waived with the consent of the Collateral Agent
at the request of Holdings or the Borrower 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 guarantee, collateral security document or other
document to be consistent with this Agreement and the other Credit Documents.

(f) Further, notwithstanding anything to the contrary contained in this
Section 12.12, (x) (i) 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, (ii) [reserved], and (iii) 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 Borrower without the need to obtain the consent of
any other Person if such amendment, supplement or waiver is delivered (A) in
order to comply with local law or advice of local counsel, (B) in order to cause
such Security Document or other document to be consistent with this Agreement
and the other Credit Documents or (C) in connection with the incurrence of any
Indebtedness under Section 9.04(j)(x) and the entry by the Administrative Agent

 

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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
Borrower in connection with the transactions described above) and (y) if,
following the Closing Date, the Administrative Agent and the Borrower 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 Borrower 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.

12.13 Survival. All indemnities set forth herein including, without limitation,
in Sections 2.10, 2.11, 4.04, 11.06 and 12.01 shall survive the execution,
delivery and termination of this Agreement and the Notes and the making and
repayment of the Obligations.

12.14 Domicile of Term Loans. Each Lender may transfer and carry its Term 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 Term Loans pursuant to this Section 12.14 would, at the time of such
transfer, result in increased costs under Section 2.10, 2.11 or 4.04 from those
being charged by the respective Lender prior to such transfer, then the Borrower
shall not be obligated to pay such increased costs (although the Borrower 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).

12.15 Register. The Borrower hereby designates the Administrative Agent to serve
as its non-fiduciary agent, solely for purposes of this Section 12.15 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 Commitments
of, and the principal amounts (and stated interest) of the Term 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 Term Loans. With respect to any
Lender, the transfer of the Commitment of such Lender and the rights to the
principal of, and interest on, any Term Loan made pursuant to such Commitment
shall not be effective until such transfer is recorded on the Register
maintained by the Administrative Agent with respect to ownership of such
Commitment and Term Loans and prior to such recordation all amounts owing to the
transferor with respect to such Commitment and Term Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of any
Commitments and Term 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 12.04(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 12.04(b), if applicable, and the consent
of the Administrative Agent and, if required, the Borrower. Upon such acceptance
and recordation, the assignee specified therein shall be treated as a Lender for
all purposes of this

 

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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 Term Loan, or as soon thereafter as
practicable, the assigning or transferor Lender shall surrender the Note (if
any) evidencing such Term 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 Borrower agrees 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 12.15 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 Borrower, the Collateral Agent and any Lender (with respect to
its interest only), at any reasonable time and from time to time upon reasonable
prior notice.

12.16 Confidentiality. Each Lender agrees that it will not disclose without the
prior written consent of the Borrower (other than to its affiliates, and its and
their partners, officers, directors, employees, 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 12.16 to the
same extent as such Lender) any information with respect to Holdings or any of
its Subsidiaries which is now or in the future furnished pursuant to this
Agreement or any other Credit Document; provided, that any Lender may disclose
any such information (i) as has become generally available to the public other
than by virtue of a breach of this Section 12.16 by the respective Lender,
(ii) 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, (iii) as may be required or appropriate in
respect to any summons or subpoena or in connection with any litigation, (iv) in
order to comply with any law, order, regulation or ruling applicable to such
Lender, (v) to the Administrative Agent or the Collateral Agent or any other
Lender, (vi) to any direct or indirect contractual (actual or prospective)
counterparty in any 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 12.16 and no such disclosure shall be
made to a Disqualified Lender, and (vii) to any prospective or actual
transferee, pledgee or participant in connection with any contemplated transfer,
pledge or participation of any of the Notes, Commitments, Term 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 12.16.

12.17 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 8.12(b), each Credit Party shall only be required to take actions
under the laws of the United States and any State

 

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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 Borrower 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 8.12(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 Borrower or any other Persons organized
under laws of jurisdictions other than the United States and any State thereof.

12.18 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 Holdings and the Borrower that pursuant to the
requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies Holdings, the Borrower and the other Credit Parties
and other information that will allow such Lender or Agent, as applicable, to
identify the Borrower and the other Credit Parties in accordance with the
Patriot Act.

12.19 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 ABL 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 12.19 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

 

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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 Term Loan
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, the Term Loan 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, the Term Loan Intercreditor Agreement and the Subordination
Agreement. In the event of any conflict or inconsistency between any of the
provisions of the ABL Intercreditor Agreement, the Term Loan Intercreditor
Agreement or the Subordination Agreement and this Agreement, the provisions of
the ABL Intercreditor Agreement, the Term Loan Intercreditor Agreement or the
Subordination Agreement, as applicable, shall control

12.20 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 Term Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender 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.

12.21 No Fiduciary Duty. Each Agent, each Lender and their respective Affiliates
(collectively, solely for purposes of this Section 12.21, 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: (i) 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 (ii) in connection therewith and with the process leading
thereto, (x) 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

 

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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 (y) 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.

12.22 Post-Closing Actions. Notwithstanding anything to the contrary contained
in this Agreement or the other Credit Documents, the parties hereto acknowledge
and agree that Holdings and its Subsidiaries shall be required to take the
actions specified in Schedule 12.22 attached hereto as promptly as practicable,
and in any event within the time periods set forth in Schedule 12.22, unless and
then only to the extent extended by the Required Lenders.

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 Closing
Date, 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 12.22. The acceptance of the benefits of the Borrowing on the Closing
Date shall constitute a representation, warranty and covenant by the Borrower
and Holdings to each of the Secured Creditors that the actions required pursuant
to this Section 12.22 will be taken within the relevant time periods referred to
in this Section 12.22 and Schedule 12.22, 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.

12.23 Revival and Reinstatement of Obligations. If the incurrence or payment of
the Secured Obligations by the Borrower 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 Borrower or such
Guarantor automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.

 

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12.24 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 (at the direction of the Required
Lenders) (in respect of the exercise of any set off, such consent not to be
unreasonably withheld). The provisions of this Section 12.24 are for the sole
benefit of the Lenders and shall not afford any right to, or constitute a
defense available to, any Credit Party

12.25 Hedging Creditors. 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 Hedging Creditors and, by virtue of being a
counterparty to a Term Secured Hedging Agreement, 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 Hedging
Creditor under the Credit Documents consist exclusively of 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
Hedging Creditor unless such Hedging Creditor 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. No Hedging Creditor shall have any
right to notice of any action or to consent to, direct or object to any action
hereunder or under any other Credit Document or otherwise in respect of the
Collateral (including the release or impairment of any Collateral) other than in
its capacity as a Lender and, in such case, only to the extent expressly
provided in the Credit Documents. Notwithstanding any other provision herein to
the contrary, neither the Administrative Agent nor the Collateral Agent shall be
required to verify the payment of, or that other satisfactory arrangements have
been made with respect to, obligations arising under Term Secured Hedging
Agreements with Hedging Creditors except to the extent expressly provided herein
and unless the Administrative Agent has received a Secured Party Designation
Notice of such Secured Obligations, together with such supporting documentation
as the Administrative Agent may request, from the applicable Lender
Counterparty. The Administrative Agent shall not be required to verify the
payment of, or that other satisfactory arrangements have been made with respect
to, Secured Obligations arising under Term Secured Hedging Agreements in the
case of a Maturity Date.

 

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12.26 Acknowledgement and Consent to Bail-In of Affected Financial Institutions.
Notwithstanding anything to the contrary in any Loan 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 Loan 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 Loan 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.

12.27 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 Borrower
agrees that any Electronic Signature on or associated with any Loan
Communication shall be valid and binding of the Borrower 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 the
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 in
any form or in any format unless expressly agreed to by the Administrative Agent
and the Collateral Agent

 

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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.

12.28 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.

12.29 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 Borrower, 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.

12.30 Accredited Investor Representation. Each Lender hereby represents and
warrants that, as of the Closing Date and, if applicable, on the date of receipt
of any Additional Shares, (i) it is an “accredited investor” (an “Accredited
Investor”) within the meaning of Rule 501 under the Securities Act; (ii) any
acquisition of the Equity Consideration or the Additional Shares, if applicable,
by it will be for its own account or for the account of one or more other
Accredited Investors as to which it exercises sole investment discretion;
(iii) it has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of an investment in the
Equity Consideration and the Additional Shares, if applicable, and it and any
accounts for which it is acting are able to bear the economic risks of and an
entire loss of its or their investment in the Equity Consideration and the
Additional Shares, if applicable; (iv) it is not acquiring the Equity
Consideration or the Additional Shares, if applicable, with a view to any
distribution thereof in a transaction that would violate the Securities Act or
the securities laws of any state of the United States or any other applicable
jurisdiction; (v) it acknowledges that the Equity Consideration and the
Additional Shares, if applicable, have not been registered under the Securities
Act and that the Equity Consideration and the Additional Shares, if applicable,
may not be offered or sold within the United States or to or for the benefit of
U.S. Persons except as set forth below.

Each Lender agrees, for the benefit of the Borrower and Holdings, on its own
behalf and on behalf of each account for which it is acting, that the Equity
Consideration and Additional Shares, if applicable, may be offered, sold,
pledged or otherwise transferred only in accordance with the Securities Act and
any applicable securities laws of any state of the United States and only (i) to
Holdings or any Subsidiary thereof, (ii) pursuant to a registration statement
that has been declared effective under the Securities Act or (iii) pursuant to
an exemption from the registration requirements of the Securities Act.

 

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12.31 Legend. All certificates, other instruments or book-entry interests
representing the Equity Consideration and Additional Shares, if applicable, will
bear a legend substantially to the following effect:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS.

 

 

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

 

J.JILL, INC.,

as Holdings

By:  

/s/ Mark Webb

  Name: Mark Webb   Title: Chief Financial Officer

JILL ACQUISITION LLC,

as the Borrower

By:  

/s/ Mark Webb

  Name: Mark Webb   Title: Chief Financial Officer

Signature Page to Priming Term Loan Credit Agreement

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WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Administrative Agent and Collateral Agent

By:  

/s/ Jeffery Rose

  Name:   Jeffery Rose   Title:   Vice President

Signature Page to Priming Term Loan Credit Agreement

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[****],

as a Lender

By:  

[****]

  Name:[****]   Title: [****]

Signature Page to Priming Term Loan Credit Agreement