Exhibit 10.1

 

 

 

CREDIT AGREEMENT

Dated as of December 23, 2016

among

E.L.F. COSMETICS, INC., JA 139 FULTON STREET CORP., JA 741 RETAIL CORP.,

JA COSMETICS RETAIL, INC., J.A. RF, LLC, J.A. CHERRY HILL, LLC,

and each other Person that becomes a Borrower hereunder by execution of a
Joinder Agreement, as the Borrowers,

THE OTHER PERSONS PARTY HERETO THAT ARE DESIGNATED AS LOAN PARTIES,

as Guarantors,

CERTAIN FINANCIAL INSTITUTIONS,

as Lenders,

BANK OF MONTREAL,

as Administrative Agent, Swing Line Lender and an L/C Issuer,

JPMORGAN CHASE BANK, N.A.,

as Syndication Agent,

U.S. BANK,

as Documentation Agent

and

BMO CAPITAL MARKETS CORP.,

as Arranger and Bookrunner

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

     1   

1.01.

  Defined Terms      1   

1.02.

  Other Interpretive Provisions      43   

1.03.

  Accounting Terms      44   

1.04.

  Uniform Commercial Code      45   

1.05.

  Reserved      45   

1.06.

  Foreign Currency      45   

1.07.

  Times of Day      45   

ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS

     45   

2.01.

  Loan Commitments      45   

2.02.

  Borrowings, Conversions and Continuations of Loans      46   

2.03.

  Letters of Credit      47   

2.04.

  Swing Line Loans      54   

2.05.

  Repayment of Loans      57   

2.06.

  Prepayments      58   

2.07.

  Termination or Reduction of Commitments      63   

2.08.

  Interest      63   

2.09.

  Fees      64   

2.10.

  Computation of Interest and Fees      66   

2.11.

  Evidence of Debt      66   

2.12.

  Payments Generally; Administrative Agent’s Clawback      66   

2.13.

  Sharing of Payments by Lenders      68   

2.14.

  Settlement Among Lenders      69   

2.15.

  Nature and Extent of Each Borrower’s Liability      70   

2.16.

  Cash Collateral      71   

2.17.

  Defaulting Lenders      72   

2.18.

  Increase in Revolving Credit Commitments or Term Loan Facility      74   

2.19.

  Prepayments Below Par      78   

ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY

     82   

3.01.

  Taxes      82   

3.02.

  Illegality      86   

3.03.

  Inability to Determine Rates      86   

3.04.

  Increased Costs; Reserves on Eurodollar Rate Loans      87   

3.05.

  Compensation for Losses      89   

3.06.

  Reimbursement      89   

3.07.

  Mitigation Obligations      90   

3.08.

  Survival      90   

3.09.

  Acknowledgment and Consent to Bail-In of EEA Financial Institutions      90   

 

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ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

     90   

4.01.

  Conditions of Initial Credit Extension      90   

4.02.

  Conditions to all Credit Extensions      93   

ARTICLE V REPRESENTATIONS AND WARRANTIES

     94   

5.01.

  Existence, Qualification and Power      94   

5.02.

  Authorization; No Contravention; Consents      94   

5.03.

  Binding Effect      94   

5.04.

  Financial Statements; No Material Adverse Effect      95   

5.05.

  Litigation      95   

5.06.

  No Default      95   

5.07.

  Ownership of Property; Liens      95   

5.08.

  Environmental Compliance      96   

5.09.

  Insurance and Casualty      97   

5.10.

  Taxes      97   

5.11.

  ERISA Compliance      97   

5.12.

  Subsidiaries; Equity Interests; Capitalization      98   

5.13.

  Margin Regulations; Investment Company Act      98   

5.14.

  Disclosure      98   

5.15.

  Compliance with Laws; Anti-Terrorism Laws and Foreign Asset Control
Regulations      99   

5.16.

  Labor Matters      99   

5.17.

  [Reserved]      100   

5.18.

  Intellectual Property      100   

5.19.

  Senior Indebtedness      100   

ARTICLE VI AFFIRMATIVE COVENANTS

     100   

6.01.

  Financial Statements      100   

6.02.

  Other Information      101   

6.03.

  Notices      102   

6.04.

  Payment of Taxes and Assessments      103   

6.05.

  Preservation of Existence, Etc      103   

6.06.

  Maintenance of Properties      103   

6.07.

  Maintenance of Insurance; Business Interruption Proceeds      104   

6.08.

  Compliance with Laws Generally; Environmental Laws      105   

6.09.

  Books and Records      105   

6.10.

  Inspection Rights; Meetings with Administrative Agent      105   

6.11.

  Compliance with ERISA      105   

6.12.

  Further Assurances      106   

6.13.

  Use of Proceeds      107   

6.14.

  Control Agreements      107   

6.15.

  Collateral Access Agreements      108   

ARTICLE VII NEGATIVE COVENANTS

     108   

7.01.

  Indebtedness      108   

 

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7.02.

  Liens      112   

7.03.

  Investments      115   

7.04.

  Mergers, Dissolutions, Etc.      119   

7.05.

  Dispositions      120   

7.06.

  Restricted Payments      122   

7.07.

  Change in Nature of Business      125   

7.08.

  Transactions with Affiliates      125   

7.09.

  Inconsistent Agreements      126   

7.10.

  Reserved      126   

7.11.

  Prepayment of Indebtedness; Amendment to Organization Documents; Amendment to
Management Agreement; Payment of Earnouts and Other Deferred Purchase Price
Obligations      126   

7.12.

  Financial Covenants      128   

7.13.

  Anti-Terrorism Laws and Foreign Asset Control Regulations      129   

7.14.

  Fiscal Year      129   

7.15.

  Holdings Covenant      129   

ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES

     130   

8.01.

  Events of Default      130   

8.02.

  Remedies Upon Event of Default      132   

8.03.

  Application of Funds      133   

8.04.

  Equity Cure Right      134   

ARTICLE IX ADMINISTRATIVE AGENT

     135   

9.01.

  Appointment and Authority; Limitations on Lenders      135   

9.02.

  Rights as a Lender      136   

9.03.

  Exculpatory Provisions      136   

9.04.

  Reliance by Administrative Agent      137   

9.05.

  Delegation of Duties      137   

9.06.

  Resignation of Administrative Agent      137   

9.07.

  Non-Reliance on Administrative Agent and Other Lenders      138   

9.08.

  No Other Duties, Etc.      139   

9.09.

  Administrative Agent May File Proofs of Claim; Credit Bidding      139   

9.10.

  Collateral Matters      140   

9.11.

  Other Collateral Matters      140   

9.12.

  Right to Perform, Preserve and Protect      141   

9.13.

  Credit Product Providers and Credit Product Arrangements      141   

9.14.

  Designation of Additional Agents      142   

9.15.

  Authorization to Enter into Intercreditor Agreements and Subordination
Agreements      142   

ARTICLE X MISCELLANEOUS

     142   

10.01.

  Amendments, Etc.      142   

10.02.

  Notices; Effectiveness; Electronic Communication      146   

 

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10.03.

  No Waiver; Cumulative Remedies      149   

10.04.

  Expenses; Indemnity; Damage Waiver      150   

10.05.

  Marshalling; Payments Set Aside      153   

10.06.

  Successors and Assigns      153   

10.07.

  Treatment of Certain Information; Confidentiality      163   

10.08.

  Right of Setoff      164   

10.09.

  Interest Rate Limitation      165   

10.10.

  Counterparts; Integration; Effectiveness      165   

10.11.

  Survival      165   

10.12.

  Severability      166   

10.13.

  Replacement of Lenders      166   

10.14.

  Governing Law; Jurisdiction; Etc.      167   

10.15.

  Waiver of Jury Trial      168   

10.16.

  USA PATRIOT Act Notice      168   

10.17.

  No Advisory or Fiduciary Responsibility      168   

10.18.

  Attachments      169   

ARTICLE XI CONTINUING GUARANTEE

     169   

11.01.

  Guarantee      169   

11.02.

  Rights of Lenders      169   

11.03.

  Certain Waivers      170   

11.04.

  Obligations Independent      171   

11.05.

  Subrogation      172   

11.06.

  Termination; Reinstatement      172   

11.07.

  Subordination      172   

11.08.

  Condition of Borrowers      172   

11.09.

  Limitation of Liability      173   

 

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SCHEDULES

 

1.01

  

Existing Letters of Credit

2.01

  

Commitments and Applicable Percentages

5.05

  

Litigation

5.07(b)(1)

  

Owned Real Estate

5.07(b)(2)

  

Leased Real Estate

5.09

  

Insurance

5.11(d)

  

Pension Plans

5.11(e)

  

Foreign Plans

5.12

  

Subsidiaries; Capitalization; Other Equity Investments

5.16

  

Labor Matters

7.01

  

Existing Indebtedness

7.02

  

Existing Liens

7.03

  

Existing Investments

7.08

  

Affiliate Transactions

10.02

  

Administrative Agent’s Office (and Account)

EXHIBITS

Form of

 

A

    

Committed Loan Notice

B

    

Swing Line Loan Notice

C-1

    

Revolving Loan Note

C-2

    

Term Loan Note

D

    

Compliance Certificate

E

    

Excess Cash Flow Certificate

F

    

Assignment and Assumption

G

    

Closing Checklist

H

    

Form of Joinder to Credit Agreement

 

 

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CREDIT AGREEMENT

This CREDIT AGREEMENT (as amended, restated, supplemented or otherwise modified
from time to time, this “Agreement”) is entered into as of December 23, 2016,
among e.l.f. Cosmetics, Inc., a Delaware corporation (“elf Cosmetics”), JA 139
Fulton Street Corp., a New York corporation (“JA 139 Fulton”), JA 741 Retail
Corp., a New York corporation (“JA 741 Retail), JA Cosmetics Retail, Inc., a New
York corporation (“JA Cosmetics Retail”), J.A. RF, LLC, a Delaware limited
liability company (“JA RF”), J.A. Cherry Hill, LLC, a Delaware limited liability
company (“JA Cherry Hill”; elf Cosmetics, JA 139 Fulton, JA 741 Retail, JA
Cosmetics Retail, JA RF, JA Cherry Hill and each Domestic Subsidiary of Holdings
who hereafter becomes a “Borrower” hereunder pursuant to a Joinder Agreement,
may be referred to individually, as a “Borrower” and collectively herein, as
“Borrowers”), e.l.f. Beauty, Inc., a Delaware corporation (“Holdings”), the
other Persons party hereto that are designated as a “Loan Party”, EACH LENDER
FROM TIME TO TIME PARTY HERETO (collectively, the “Lenders” and individually, a
“Lender”), and BANK OF MONTREAL, a Canadian chartered bank acting through its
Chicago branch as Administrative Agent, Swing Line Lender, and an L/C Issuer.

PRELIMINARY STATEMENTS

A. Borrowers have requested that Lenders, the Swing Line Lender and the L/C
Issuer provide a credit facility to Borrowers to finance their mutual and
collective business enterprise.

B. Lenders are willing to provide the credit facility on the terms and
conditions set forth in this Agreement.

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

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

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

“Acquired EBITDA” means, with respect to any Acquired Entity or Business for any
period, the amount for such period of Adjusted Consolidated EBITDA of such
Acquired Entity or Business, as determined on a consolidated basis for such
Acquired Entity or Business.

“Acquired Entity or Business” has the meaning specified in the definition of the
term “Adjusted Consolidated EBITDA” in the Compliance Certificate.

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in the acquisition of (a) a
majority equity or other ownership interest in another Person (including the
purchase of an option, warrant or convertible or similar type security to
acquire such a majority interest at the time it becomes exercisable by the
holder thereof), or (b) assets of another Person which constitute all or
substantially all of the assets of such Person or of a line or lines of business
or division conducted by such Person.

 

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“Additional Lender” has the meaning specified in Section 2.18(c).

“Adjusted Consolidated EBITDA” has the meaning specified in the Compliance
Certificate.

“Adjustment Date” means for any Fiscal Quarter of the Borrowers ending on or
after March 31, 2017, the first day of the month following the date on which
Administrative Agent is in receipt of Borrowers’ most recent financial
statements for the fiscal period most recently ended pursuant to Section 6.01(a)
or (b).

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

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

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

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

“Affiliated Lender” has the meaning specified in Section 10.06(a).

“Agent Parties” has the meaning specified in Section 10.02(c).

“Aggregate Revolving Credit Commitments” means, as at any date of determination
thereof, the sum of all Revolving Credit Commitments of all Lenders at such
date.

“Agreement” has the meaning specified in the introductory paragraph hereto.

“All-In Yield” means, as to any Indebtedness, the yield thereon, whether in the
form of interest rate, margin, original issue discount (“OID”), up-front fees or
a Eurodollar Base Rate or Base Rate floor greater than the applicable Existing
Floor, in each case, incurred or payable by the Borrowers generally to the
lenders of such Indebtedness; provided that (x) OID and up-front fees (which
shall be deemed to constitute like amounts of OID) shall be equated to interest
rate adjustments, assuming a 4-year life to maturity (or, if less, the stated
life to maturity of the applicable Indebtedness at the time of its incurrence),
(y) any Eurodollar Rate floor, Eurodollar Base Rate floor, Base Rate floor shall
or Existing Floor shall be equated to yield for purposes of any calculation of
“All-In Yield”, and (z) any amendments to the Eurodollar Rate floor, Eurodollar
Base Rate floor, Base Rate floor on the initial Term Loan that became effective
subsequent to the Closing Date but on or prior to the time of such Incremental
Term Loan Facility shall also be included in such calculation of “All-In Yield”;
and provided, further, that

 

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“All-In Yield” shall not include customary arrangement, structuring,
underwriting fees, ticking, consent, amendment or similar fees paid to (x) BMO,
Arranger or their respective Affiliates, (y) one or more arrangers, underwriters
or their respective Affiliates of such Indebtedness or (z) one or more existing
lenders or their respective Affiliates of such Indebtedness and, in each case,
not shared by all lenders providing such Indebtedness.

“Applicable Indebtedness” has the meaning specified in the definition of
Weighted Average Life to Maturity.

“Applicable Margin” means (a) for the period commencing on the Closing Date
through the first Adjustment Date: (i) if a Eurodollar Rate Loan, the greater of
(x) 3.00% per annum and (y) the Applicable Margin for Eurodollar Rate Loans as
determined in the pricing grid below based on the Consolidated Total Net
Leverage Ratio (calculated after giving pro forma effect to the Transactions) on
the Closing Date and (ii) if a Base Rate Loan, the greater of (x) 2.00% and
(y) the Applicable Margin for Base Rate Loans as determined in the pricing grid
below based on the Consolidated Total Net Leverage Ratio (calculated after
giving pro forma effect to the Transactions) on the Closing Date.

 

Level   

Consolidated Total Net

Leverage

Ratio

   Applicable
Margin for
Eurodollar
Rate Loans     Applicable
Margin for Base
Rate Loans  

I

   > 3.00:1.00      3.50 %      2.50 % 

II

  

> 2.50:1.00 but < 3.00:1.00

     3.00 %      2.00 % 

III

  

> 2.00:1.00 but < 2.50:1.00

     2.50 %      1.50 % 

IV

  

> 1.50:1.00 but < 2.00:1.00

     2.25 %      1.25 % 

V

   < 1.50:1.00      2.00 %      1.00 % 

(b) thereafter, the Applicable Margin shall equal the applicable margin in
effect from time to time determined as set forth above based upon the applicable
Consolidated Total Leverage Ratio then in effect pursuant to the appropriate
column under the table above and any increase or decrease in the Applicable
Margin resulting from a change in the Consolidated Total Leverage Ratio shall
become effective as of each Adjustment Date based upon the Consolidated Total
Leverage Ratio for the immediately preceding Fiscal Quarter for which financial
statements have been delivered or were required to be delivered pursuant to
Section 6.01(a) or (b). If any Compliance Certificate (including any required
financial information in support thereof) of the Borrowers is not received by
Administrative Agent by the date required pursuant to Section 6.02(a), then, at
Administrative Agent’s election, the Applicable Margin shall be determined as if
the Consolidated Total Leverage Ratio for the immediately preceding Fiscal
Quarter is at Level I until such time as such Compliance Certificate and
supporting information is received.

In the event either Borrower Agent or Administrative Agent determines in good
faith that the calculation of the Consolidated Total Leverage Ratio on which the
applicable interest rate and any fees for any particular period was determined
is inaccurate, and as a consequence thereof, the Applicable Margin was lower
that it would have been, (i) Borrower

 

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Agent shall immediately deliver to Administrative Agent a correct Compliance
Certificate for such period (and if such Compliance Certificate is not
accurately restated and delivered within ten (10) Business Days after the first
discovery of such inaccuracy or upon notice by Administrative Agent of such
determination, then Level I shall apply retroactively for such period
notwithstanding any subsequent restatement thereof after such ten (10) day
period), (ii) Administrative Agent shall notify Borrower Agent of the amount of
interest and fees that would have been due in respect of any outstanding
Obligations during such period had the applicable rate been calculated based on
the correct Consolidated Total Leverage Ratio (or the Level I rate if a correct
Compliance Certificate was not delivered within the ten (10) day period) and
(iii) Borrowers shall promptly pay to Administrative Agent for the benefit of
the applicable Lenders and other Persons that hold the Commitments and Loans at
the time such payment is received (regardless of whether those Persons held the
Commitments and Loans during the relevant period) the difference between the
amount that would have been due and the amount actually paid in respect of such
period.

“Applicable Percentage” means (a) in respect of the Revolving Credit Facility,
with respect to any Revolving Lender at any time, the percentage (carried out to
the ninth-decimal place) of the Revolving Credit Facility, represented by the
amount of the Revolving Credit Commitment of such Revolving Lender at such time;
provided that if the Aggregate Revolving Credit Commitments have been terminated
at such time, then the Applicable Percentage of each Revolving Lender shall be
the Applicable Percentage of such Revolving Lender immediately prior to such
termination and after giving effect to any subsequent assignments, and (b) in
respect of the Term Loan Facility, with respect to any Term Lender at any time,
the percentage (carried out to the ninth decimal place) of the Term Loan
Facility represented by (i) on or prior to the Closing Date, such Term Lender’s
Term Loan Commitment at such time and (ii) thereafter, the Outstanding Amount of
such Term Lender’s Term Loans at such time. The initial Applicable Percentage of
each Lender with respect to each Facility is set forth opposite the name of such
Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which
such Lender becomes a party hereto, as applicable.

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

“Arranger” means BMO Capital Markets Corp.

“Assignee Group” means two or more assignees of Loans or Commitments that are
Affiliates of one another or two or more Approved Funds managed by the same
investment advisor.

“Assignment and Assumption” means an assignment and assumption agreement entered
into by a Lender and an assignee of Loans or Commitments (with the consent of
any party whose consent is required by Section 10.06(b)) (or the Sponsor or its
Affiliates in the case of an assignment pursuant to Section 10.06(g)), and
accepted by Administrative Agent, in substantially the form of Exhibit F or any
other form reasonably approved by Administrative Agent.

 

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“Attributable Indebtedness” means, on any date, (a) in respect of any Capital
Lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any synthetic lease or other similar financing lease, the
capitalized amount of the remaining lease payments under the relevant lease that
would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP if such lease were accounted for as a capital lease.

“Audited Financial Statements” means the audited consolidated balance sheet of
the Holdings and its Subsidiaries for the Fiscal Year ended December 31, 2015,
and the related consolidated statements of income or operations and cash flows
for such Fiscal Year, including the notes thereto.

“Auditor” has the meaning specified in Section 6.01(a).

“Auto-Extension Letter of Credit” has the meaning specified in
Section 2.03(b)(iii).

“Available Amount” means, on any date of determination, the sum (but not less
than zero for any applicable fiscal year) of (without duplication) (a)
$10,000,000; plus (b) an amount equal to the portion of Excess Cash Flow (50%,
75% or 100%, as applicable) for each Fiscal Year ending after the Closing Date
for which an Excess Cash Flow Certificate has been delivered, commencing with
the Fiscal Year ending December 31, 2017, and prior to such date of
determination that was not taken into account in calculating the Excess Cash
Flow prepayment required pursuant to Section 2.06(b)(i) (for the avoidance of
doubt, any portion of the Excess Cash Flow prepayment not required to be paid
pursuant to Section 2.06(b)(vii) shall not increase the amount in this clause
(b)); plus (c) the aggregate amount of Net Cash Proceeds of an issuance by
Holdings of or capital contribution (including, without limitation, any capital
contribution of marketable securities or other Cash Equivalents) in respect of
any of its Equity Interests that are not Disqualified Equity Interests or
Permitted Cure Securities and which are not used to make Restricted Payments
under Section 7.06(i) received by any of the Borrowers during the period from
and including the Business Day immediately following the Closing Date through
and including such date of determination; minus (d) the aggregate amount of the
Available Amount used to pay dividends and distributions pursuant to Section
7.06(h) during the period from and including the Business Day immediately
following the Closing Date through and including such date of determination
(without taking account of the intended usage of the Available Amount on such
date of determination); minus (e) the aggregate amount of the Available Amount
used for Permitted Acquisitions during the period from and including the
Business Day immediately following the Closing Date through and including such
date of determination (without taking account of the intended usage of the
Available Amount on such date of determination); minus (f) the aggregate amount
of the Available Amount used to make other investments pursuant to Section
7.03(z) during the period from and including the Business Day immediately
following the Closing Date through and including such date of determination
(without taking account of the intended usage of the Available Amount on such
date of determination); minus (g) the aggregate amount of the Available Amount
used to make cash loans and advances to officers, directors and employees
pursuant to Section 7.03(x) during the period from and including the Business
Day immediately following the Closing Date through and including such date of
determination (without taking account of the intended usage of the Available
Amount on such date of

 

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determination); minus (h) the aggregate amount of the Available Amount used to
make payments of Subordinated Indebtedness pursuant to Section 7.11(a)(iv)
during the period from and including the Business Day immediately following the
Closing Date through and including such date of determination (without taking
account of the intended usage of the Available Amount on such date of
determination).

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

“Bail-In Legislation” means, 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.

“Bankruptcy Code” means Title 11 of the United States Code, as in effect from
time to time.

“Base Rate” means, for any day, a fluctuating rate per annum equal to the
highest of (a) the rate of interest announced by BMO from time to time as its
prime rate, or its equivalent for U.S. Dollar loans to borrowers located in the
United States, for such day (whether or not the lowest rate offered by BMO and
with any change in such rate announced by BMO taking effect at the opening of
business on the day specified in the public announcement of such change); (b)
the Federal Funds Rate for such day, plus 0.50%; and (c) the Eurodollar Rate,
calculated for such day for an Interest Period of one month (but for the
avoidance of doubt, not less than 0.00%) plus 1.00%.

“Base Rate Loan” means a Loan (or segment of a Loan) that bears interest based
on the Base Rate.

“Base Rate Revolving Loan” means a Revolving Loan that is a Base Rate Loan.

“BMO” means Bank of Montreal.

“Borrower Agent” has the meaning specified in Section 2.15(d).

“Borrower” and “Borrowers” has the meaning specified in the introductory
paragraph hereto.

“Borrower Materials” has the meaning specified in Section 10.02(c).

“Borrowing” means any of (a) a Revolving Borrowing, (b) a Term Borrowing or
(c) a Swing Line Borrowing, as the context may require.

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

 

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“Capital Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases; provided, that, for purposes of this
Agreement, the determination of whether a lease is required to be accounted for
as a Capital Lease on the balance sheet of such Person shall be made by
reference to GAAP as in effect on the Closing Date.

“Cash Collateralize” means to pledge and deposit with or deliver to
Administrative Agent, (a) for the benefit of one or more of the L/C Issuer or
the Revolving Lenders, as collateral for L/C Obligations or obligations of the
Revolving Lenders to fund participations in respect of L/C Obligations, (i) cash
or Deposit Account balances in an amount equal to 104% of the L/C Obligations
(pursuant to documentation reasonably satisfactory to Administrative Agent and
the L/C Issuer), (ii) a standby letter of credit, in form and substance
reasonably satisfactory to Administrative Agent and the L/C Issuer, from a
commercial bank acceptable to Administrative Agent and the L/C Issuer, in an
amount equal to 104% of the L/C Obligations, or (iii) such other credit support
or other arrangements with respect thereto reasonably satisfactory to
Administrative Agent and the L/C Issuer in their sole discretion shall have been
made or (b) for the benefit of the Swing Line Lender, as collateral for Swing
Line Loans that have not been refunded by the Revolving Lenders, cash or Deposit
Account balances in an amount equal to the principal amount of such Swing Line
Loans or, if Administrative Agent shall agree in its sole discretion, other
credit support, in each case pursuant to documentation in form and substance
reasonably satisfactory to Administrative Agent. “Cash Collateral” shall have a
meaning correlative to the foregoing and shall include the proceeds of such cash
collateral.

“Cash Equivalents” means any of the following types of property, to the extent
owned by Holdings or any of its Subsidiaries:

(a) cash, denominated in Dollars or, with respect to a Borrower or any of its
Subsidiaries, any other lawful currency and investments of comparable tenor and
credit quality to those described in the other clauses in this definition
customarily utilized in countries in which Holdings or any of its Subsidiaries
operate for cash management purposes;

(b) readily marketable direct obligations of the government of the United States
or any agency or instrumentality thereof, or obligations the timely payment of
principal and interest on which are fully and unconditionally guaranteed by the
government of the United States or any state or municipality thereof, in each
case so long as such obligation has an investment grade rating by S&P and
Moody’s;

(c) commercial paper maturing no more than 24 months from the date of creation
thereof and rated at least P-1 (or the then equivalent grade) by Moody’s and A-1
(or the then equivalent grade) by S&P, or carrying an equivalent rating by a
nationally recognized rating agency if at any time neither Moody’s and S&P shall
be rating such obligations;

 

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(d) insured certificates of deposit or bankers’ acceptances of, or time deposits
with any commercial bank that (i) is a member of the Federal Reserve System,
(ii) issues (or the parent of which issues) commercial paper rated as described
in clause (c) above, (iii) is organized under the laws of the United States or
of any state thereof and (iv) has combined capital and surplus of at least
$250,000,000;

(e) readily marketable general obligations of any corporation organized under
the laws of any state of the United States, payable in the United States,
expressed to mature not later than 24 months following the date of issuance
thereof and rated A or better by S&P or A2 or better by Moody’s;

(f) readily marketable shares of investment companies or money market funds
that, in each case, invest solely in the foregoing Investments described in
clauses (a) through (e) above; and

(g) in the case of a Foreign Subsidiary, Investments of a kind or type similar
to Cash Equivalents described above (replacing United States or any state,
agency, instrumentality or municipality thereof with the corresponding
Governmental Authorities of any foreign jurisdiction and using comparable
ratings, if any, customary in the relevant jurisdiction) in any country other
than the United States where such Foreign Subsidiary maintains a business
location.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any Law, (b) any change
in any Law or in the administration, interpretation, implementation or
application thereof or (c) the making or issuance of any request, rule,
guideline, interpretation, or directive (whether or not having the force of law)
by any Governmental Authority; provided that notwithstanding anything herein to
the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act
and all requests, rules, guidelines or directives thereunder or issued in
connection therewith 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 in Law”, regardless of the date enacted,
adopted or issued.

“Change of Control” means an event or series of events by which:

(a) any “person” or “group” (within the meaning of Rules 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) (other than any Permitted Holder
and other than any employee benefit plan of Holdings or Borrower and any Person
acting as the trustee, agent or other fiduciary or administrator thereof)
becomes the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under
such Act), directly or indirectly, of Voting Equity Interests representing
(x) more than 35% of the Voting Equity Interests of Holdings and (y) a greater
percentage of Voting Equity Interests of Holdings than is then beneficially
owned, directly or indirectly, in the aggregate by the Permitted Holders,
unless, in the case of either clause (x) or (y) above, the Permitted Holders
have, at such time, the right or the ability by percentage of Voting Equity
Interest of Holdings owned, contract or otherwise to elect or designate for
election at least a majority of the board of directors of Holdings;

 

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(b) Holdings shall fail to own (i) directly 100% of the issued and outstanding
Equity Interests of elf Cosmetics (or any surviving entity of a merger with elf
Cosmetics permitted under Section 7.04(b), (x) that has assumed all obligations
of elf Cosmetics under the Loan Documents in accordance with Section 7.04(b) and
(y) 100% of the issued and outstanding Equity Interests of which have been
pledged by Holdings to Administrative Agent) or (ii) directly or indirectly,
100% of the issued and outstanding Equity Interests of the other Borrowers,
except in this clause (ii) where such failure is the result of a transaction
permitted under the Loan Documents provided that, with respect to any such
transaction permitted under Section 7.04(b), 100% of the issued and outstanding
Equity Interests of any surviving entity of such other Borrower shall have been
pledged to Administrative Agent; or

(c) any “change of control” or similar event under any material Indebtedness

“Closing Date” means December 23, 2016.

“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to
time, and any successor statute, and regulations promulgated thereunder.

“Collateral” means, collectively, certain personal property of the Loan Parties
or any other Person in which Administrative Agent or any Lender Party is granted
a Lien under any Security Instrument as security for all or any portion of the
Secured Obligations or any other obligation arising under any Loan Document.

“Commitment” means a Term Loan Commitment or a Revolving Credit Commitment, as
the context may require.

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

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.).

“Competitor” means any operating entity competing with the Borrowers or their
Subsidiaries in the Borrowers’ and Subsidiaries’ operating businesses.

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

“Consolidated” means the consolidation, in accordance with GAAP, of the
financial condition or operating results of such Person and its Subsidiaries.

“Consolidated Fixed Charge Coverage Ratio” has the meaning specified in the
Compliance Certificate.

“Consolidated Senior Net Debt” has the meaning specified in the Compliance
Certificate.

 

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“Consolidated Senior Net Leverage Ratio” has the meaning specified in the
Compliance Certificate.

“Consolidated Total Net Funded Debt” has the meaning specified in the Compliance
Certificate.

“Consolidated Total Net Leverage Ratio” has the meaning specified in the
Compliance Certificate.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, indenture, mortgage, deed of trust,
contract or any other instrument or undertaking (other than a Loan Document) to
which such Person is a party or by which it or any of its property is bound or
to which any of its property is subject.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Control Agreement” means, with respect to any Deposit Account, any Securities
Account, Commodity Account, securities entitlement or Commodity Contract, an
agreement, in form and substance reasonably satisfactory to Administrative
Agent, among Administrative Agent, the financial institution or other Person at
which such account is maintained or with which such entitlement or contract is
carried and the Loan Party maintaining such account, effective to grant
“control” (as defined under the applicable UCC governing such account) over such
account to Administrative Agent.

“Controlled Account Bank” means each bank with whom Deposit Accounts are
maintained in which any funds of any of the Loan Parties are maintained and with
whom a Control Agreement has been, or is required to be, executed in accordance
with the terms hereof.

“Controlled Investment Affiliates” means, as to any Person, any other Person
that (a) directly or indirectly, is in Control of, is Controlled by, or is under
common Control with, such Person and (b) is organized by such Person primarily
for the purpose of making equity or debt investments in one or more companies.

“Core Business” means any material line of business conducted by the Borrowers
and their Subsidiaries as of the Closing Date and any business reasonably
related, complementary, supplemental or ancillary thereto.

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

“Credit Product Arrangements” means, collectively, (a) Swap Contracts between
any Loan Party and any Credit Product Provider and (b) Treasury Management and
Other Services between any Loan Party and any Credit Product Provider.

“Credit Product Indemnitee” has the meaning specified in Section 9.13(a).

 

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“Credit Product Obligations” means Indebtedness and other obligations of any
Loan Party or any Subsidiary of a Loan Party arising under Credit Product
Arrangements and owing to any Credit Product Provider; provided, that Credit
Product Obligations shall not include Excluded Swap Obligations.

“Credit Product Provider” means (a) BMO, and (b) any other Person who was a
Lender, Administrative Agent, or an Affiliate of a Lender or Administrative
Agent at the time of entry into the applicable Credit Product Arrangement, so
long as such provider with the Borrowers’ consent, delivers written notice to
Administrative Agent, in form and substance reasonably satisfactory to
Administrative Agent, by the later of the Closing Date or the entering into of
the applicable Credit Product Arrangement, (i) describing the Credit Product
Arrangement and (ii) agreeing to be bound by Section 9.13.

“Cure Amount” has the meaning specified in Section 8.04.

“Cure Right” has the meaning specified in Section 8.04.

“Debt Fund Affiliate” means any Affiliate of the Sponsor (other than any natural
person, Holdings, the Borrowers or any of their Affiliates): (i) that is
primarily engaged in the making, purchasing, holding or otherwise investing in
commercial loans, bonds and similar extensions of credit or debt securities in
the ordinary course of business and (ii) with respect to which investment
vehicles managed or advised by TPG Capital, L.P. that are not engaged primarily
in making, purchasing, holding or otherwise investing in commercial loans, bonds
and similar extensions of credit or debt securities in the ordinary course do
not make investment decisions for such entity.

“Debtor Relief Laws” means 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 and affecting the rights of creditors generally.

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

“Default Rate” means (a) an interest rate equal to the rate of interest
otherwise applicable hereunder plus 2% per annum, and (b) with respect to Letter
of Credit Fees, the Letter of Credit Fee then in effect plus 2% per annum, in
each case to the fullest extent permitted by applicable Laws.

“Defaulting Lender” means, subject to Section 2.17(b), any Lender that (a) has
failed to fund all or any portion of its Loans or otherwise pay to
Administrative Agent, the L/C Issuer, the Swing Line Lender or any other Lender
any other amount required to be paid by it hereunder, in any case within two
Business Days of the date such Loans were required to be funded or amounts
required to be paid hereunder unless due to such Lender’s good faith
determination that the conditions set forth in Section 4.02 have not been met,
(b) has notified any Borrower, Administrative Agent, the L/C Issuer or the Swing
Line Lender in writing that it does not intend to comply with its funding
obligations hereunder, or has made a public statement to

 

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that effect, unless due to such Lender’s good faith determination that the
conditions set forth in Section 4.02 have not been met, (c) has failed, within
three Business Days after written request by Administrative Agent or Borrower
Agent, to confirm in writing to Administrative Agent and Borrower Agent that it
will comply with its prospective funding obligations hereunder (provided that
such Lender shall cease to be a Defaulting Lender pursuant to this clause
(c) upon receipt of such written confirmation by Administrative Agent and
Borrower Agent), or (d) has, or has a direct or indirect parent company that
has, (i) become the subject of a proceeding under any Debtor Relief Law,
(ii) becomes the subject of a Bail-In Action or (iii) had appointed for it a
receiver, custodian, conservator, trustee, administrator, assignee for the
benefit of creditors or similar Person charged with reorganization or
liquidation of its business or assets; provided, that a Lender shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of any equity
interest in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender. Any determination by Administrative Agent that a Lender is a Defaulting
Lender under any one or more of clauses (a) through (d) above shall be
conclusive and binding absent manifest error.

“Disposed EBITDA” means, with respect to any Sold Entity or Business for any
period, the amount of Adjusted Consolidated EBITDA of such Sold Entity or
Business for such period, all as determined on a consolidated basis for such
Sold Entity or Business.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property
(including any Equity Interest), or part thereof, by any Person, including any
sale, assignment, transfer or other disposal, with or without recourse, of any
notes or accounts receivable or any rights and claims associated therewith;
provided that “Dispose” shall not be deemed to include any issuance by Holdings
of any of its Equity Interests.

“Disqualified Equity Interest” means any Equity Interest that (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, initial public offering or asset sale so long as any rights
of the holders thereof upon the occurrence of a change of control, initial
public offering or asset sale event shall be subject to the prior repayment in
full of the Loans and all other Obligations that are accrued and payable and the
termination of the Commitments and all outstanding Letters of Credit), (b) is
redeemable at the option of the holder thereof (other than solely for Qualified
Equity Interests), in whole or in part, (c) is convertible into or exchangeable
for debt securities or other Indebtedness (unless only occurring at the sole
option of the issuer thereof) that would constitute Disqualified Equity
Interests or (d) provides for the scheduled payments of dividends in cash (other
than in respect of taxes), in each case, prior to the date that is 91 days after
the later of (x) the Revolving Credit Maturity Date and (y) the Term Loan
Maturity Date; provided that if such Equity Interests are issued pursuant to a
plan for the benefit of employees of Holdings or its Subsidiaries or by any such
plan to such employees, such Equity Interests shall not constitute Disqualified
Equity Interests solely because it may be required to be repurchased by Holdings
or its Subsidiaries in order to satisfy applicable

 

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statutory or regulatory obligations as a result of such employee’s termination,
death, invalidity or disability; provided, further, that if such Equity
Interests are issued by (x) any direct or indirect Subsidiary of the Borrowers
to a Loan Party or (y) any direct or indirect Subsidiary of the Borrowers that
is not a Loan Party to any other direct or indirect Subsidiary of the Borrowers
that is not a Loan Party, such Equity Interests shall not constitute
Disqualified Equity Interests.

“Disqualified Institutions” means (a) those banks, financial institutions and
other institutional lenders and Persons (or related funds of such Persons), (b)
any Competitor and (c) any Subsidiary or Affiliate (other than their financial
investors that are not operating companies or Affiliates of operating companies
and other than any Affiliate that is a bona fide diversified debt fund) of the
foregoing, in the case of clauses (a), (b) and (c) above, identified in writing
by the Borrowers or the Sponsor to Administrative Agent on December 20, 2016;
provided, that upon reasonable notice to the Administrative Agent, the Borrowers
shall be permitted to supplement in writing the list of Competitors that are
Disqualified Institutions after the date hereof, but which supplement shall not
apply to assignments and participations entered into prior to such supplement
(such list of Disqualified Institutions, the “Disqualified Institutions List”).

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

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
any state of the United States or the District of Columbia (but excluding any
territory or possession thereof).

“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.

“elf Cosmetics” has the meaning specified in the introductory paragraph hereto.

“Environmental Laws” means any and all applicable Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, licenses, legally-binding agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any Hazardous Materials into the environment, including those related
to air emissions and other discharges of Hazardous Materials to waste or public
systems.

 

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

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in, including
partnership, member or trust interests) such Person, all of the warrants,
options or other rights for the purchase or acquisition from such Person of
shares of capital stock of (or other ownership or profit interests in) such
Person, and all of the other ownership or profit interests in such Person.

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

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with any Loan Party or a Subsidiary thereof within the
meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the
Code for purposes of provisions relating to Sections 412 and 430 through 436 of
the Code and Section 302 through 305 and 4007 of ERISA).

“ERISA Event means (a) a Reportable Event with respect to a Pension Plan;
(b) the withdrawal of any Loan Party, a Subsidiary thereof or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan
year in which such entity was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such
a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by any Loan Party, a Subsidiary thereof or any ERISA Affiliate from a
Multiemployer Plan or receipt by any Loan Party, a Subsidiary thereof or any
ERISA Affiliate of notification that a Multiemployer Plan is in reorganization
or that any Multiemployer Plan is insolvent or being terminated; (d) the filing
of a notice of intent to terminate, the treatment of a Pension Plan amendment as
a termination, each under Section 4041 or 4041A of ERISA; (e) the institution by
the PBGC of proceedings to terminate a Pension Plan; (f) any event or condition
which constitutes grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan; (g) the
determination that any Pension Plan or Multiemployer Plan is considered an
at-risk plan or a plan in endangered or critical status within the meaning of
Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; or
(h) the imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any Loan
Party, a Subsidiary thereof or any ERISA Affiliate; or (i) any failure by any
Pension Plan to satisfy the minimum funding standards (within the meaning of
Sections 412 or 430 of the Code or Section 302 of ERISA) applicable to such
Pension Plan, whether or not waived.

 

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“Eurodollar Rate” means for any Interest Period with respect to a Eurodollar
Rate Loan, a rate per annum determined by Administrative Agent pursuant to the
following formula:

 

Eurodollar Rate =

   Eurodollar Base Rate      

 

1.00 –Reserve Percentage

  

notwithstanding anything provided herein to the contrary, the Eurodollar Rate
shall not be less than 0.00% per annum.

“Eurodollar Base Rate” means, for such Interest Period, the offered rate per
annum for deposits of Dollars for the applicable Interest Period that appears on
Reuters Screen LIBOR01 Page as of 11:00 A.M. (London, England time) two London
Banking Days prior to the first day in such Interest Period; provided that if
such rate is not available at such time for any reason, then the “Eurodollar
Base Rate” for such Interest Period shall be the rate per annum determined by
Administrative Agent to be the rate at which deposits in Dollars for delivery on
the first day of such Interest Period in immediately available funds in the
approximate amount of the Eurodollar Rate Loan being made, continued or
converted and with a term equivalent to such Interest Period would be offered by
such other authoritative source (as is selected by Administrative Agent in its
sole reasonable discretion) to major banks in the London interbank eurodollar
market at their request at approximately 11:00 a.m. (London, England time) two
London Banking Days prior to the commencement of such Interest Period.

“Eurodollar Reserve Percentage” means, for any day during any Interest Period,
the reserve percentage (expressed as a decimal, carried out to five decimal
places) in effect on such day, whether or not applicable to any Lender, under
regulations issued from time to time by the FRB for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding. The Eurodollar Rate
for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of
the effective date of any change in the Eurodollar Reserve Percentage.

“Eurodollar Rate Loan” means a Loan (or segment of a Loan) that bears interest
at a rate based on the Eurodollar Rate.

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

“Event of Loss” means, with respect to any property, any of the following:
(a) any loss, destruction or damage of such property or (b) any condemnation,
seizure, or taking, by exercise of the power of eminent domain or otherwise, of
such property by any Governmental Authority, or confiscation of such property or
the requisition of the use of such property by any Governmental Authority.

“Exchange Act” means the Securities Exchange Act of 1934.

“Excess Cash Flow” has the meaning specified in the Excess Cash Flow
Certificate.

“Excess Cash Flow Certificate” means a certificate substantially in the form of
Exhibit E.

 

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“Excluded Domestic Holdco” means a Domestic Subsidiary the primary assets of
which are the Equity Interests of one or more Foreign Subsidiaries and, if
applicable, Indebtedness of such Foreign Subsidiaries.

“Excluded Domestic Subsidiary” means any Domestic Subsidiary that is a direct or
indirect Subsidiary of (a) a Foreign Subsidiary or (b) an Excluded Domestic
Holdco.

“Excluded Subsidiary” means any Subsidiary of the Borrowers (a) that is a
Foreign Subsidiary, an Excluded Domestic Subsidiary or an Excluded Domestic
Holdco, (b) that is a captive insurance company, (c) that is a not-for-profit
Subsidiary, (d) that is a special purpose entity, (e) that is prohibited or
restricted by any contract existing on the Closing Date or on the date such
Subsidiary is acquired (so long as in respect of such contractual prohibition
such prohibition is not incurred in contemplation of such acquisition) or formed
(solely to the extent the formation of such a Subsidiary is not materially
adverse to the Lenders and the designation of such newly formed Subsidiary as an
Excluded Subsidiary is agreed to by Administrative Agent in its sole discretion)
with a Person who is not an Affiliate of a Borrower, applicable law (including,
in each case, any requirement to obtain governmental authority or third party
consent (unless such consent has been received)), rule or regulation from
providing a guaranty (but only so long as such prohibition or restriction is in
effect), (f) with respect to which the Borrower Agent has reasonably determined
in consultation with the Administrative Agent, that providing a Guarantee would
result in material adverse tax consequences to the Borrowers or any of their
Subsidiaries, and (g) to the extent the Administrative Agent and Borrowers
mutually determine the cost and/or burden of obtaining the guaranty from such
Subsidiary outweigh the benefits to the Lenders.

“Excluded Swap Obligation” means, with respect to any Loan Party (other than the
direct counterparty of such Swap Obligation), any Swap Obligation of a Loan
Party (other than the direct counterparty of such Swap Obligation) if, and to
the extent that, all or a portion of the Guarantee of such Loan Party of, or the
grant by such Loan Party of a security interest to secure, such Swap Obligation
(or any Guarantee thereof) is or becomes illegal or unlawful 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 Loan Party’s failure for any reason to constitute an “eligible
contract participant” as defined in the Commodity Exchange Act at the time the
Guarantee of such Loan Party or the grant of such security interest would
otherwise become effective with respect to such Swap Obligation but for such
Loan Party’s failure to constitute an “eligible contract participant” at such
time. 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 Guarantee or security interest is
or becomes illegal or unlawful 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 Loan
Party’s failure for any reason to constitute an “eligible contract participant”
as defined in the Commodity Exchange Act at the time the Guarantee of such Loan
Party or the grant of such security interest would otherwise have become
effective with respect to such Swap Obligation but for such Loan Party’s failure
to constitute an “eligible contract participant” at such time.

 

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“Excluded Taxes” means 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)
and franchise Taxes, in each case, 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 Lending Office located in, the jurisdiction imposing such Tax
(or any political subdivision thereof), and any other Taxes imposed by an
jurisdiction as a result of a present or former connection of such Recipient
with such jurisdiction (other than any such connection arising solely from such
Recipient having executed, enforced, delivered, performed its obligations,
becomes a party to or received any payment under this Agreement or any other
Loan Document), (b) branch profit Taxes imposed by the United States or any
similar tax imposed by any other Governmental Authority, (c) U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Recipient pursuant to a law in effect on the date on which such Recipient
(i) becomes a party to this Agreement (other than pursuant to an assignment
request by Borrower Agent under Section 10.13) or (ii) in the case of a Lender,
changes its Lending Office, except in each case, in the case of a Lender, to the
extent that, pursuant to Section 3.01 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,
(d) United States federal withholding Taxes (including backup withholding taxes)
that would not have been imposed but for such Recipient’s failure to comply with
Section 3.01(e) (except where the failure to comply with Section 3.01(e) was the
result of a change in law, ruling, regulation, treaty, directive, or
interpretation thereof by a Governmental Authority after the date the Recipient
became a party to this Agreement or a Participant, and (e) any U.S. federal
withholding Taxes imposed under FATCA.

“Executive Order” has the meaning specified in Section 5.15.

“Existing Agreement” means that certain Credit Agreement dated as of January 31,
2014, among the Borrowers, the other Loan Parties party thereto, Bank of
Montreal, as administrative agent, and a syndicate of lenders, as amended
through the Closing Date.

“Existing Floor” means, (a) with respect to the Eurodollar Base Rate, the rate
specified in the definition of “Eurodollar Rate” and (b) with respect to the
Base Rate, the rate specified in clause (c) of the definition of “Base Rate”.

“Existing Letters of Credit” means the letter of credit issued and outstanding
under the Existing Agreement which are identified on Schedule 1.01 hereto.

“Extending Lender” has the meaning specified in Section 10.01.

“Extension Agreement” means an extension agreement, in a form reasonably
satisfactory to the Administrative Agent, among Holdings, the Borrowers and one
or more Extending Lenders, effecting one or more Extension Permitted Amendments
and such other amendments hereto and to the other Loan Documents as are
contemplated by Section 10.01.

“Extension Offer” is defined in Section 10.01.

 

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“Extension Permitted Amendment” means an amendment to this Agreement and the
other Loan Documents, effected in connection with an Extension Offer pursuant to
Section 10.01, providing for an extension of the Revolving Credit Maturity Date
and/or Term Loan Maturity Date applicable to the Extending Lenders’ Loans and/or
Commitments of the applicable Extension Request Class (such Loans or Commitments
being referred to as the “Extended Loans” or “Extended Commitments”, as
applicable) and, in connection therewith, may also provide for (a) an increase
in the rate of interest accruing on such Extended Loans, (b) in the case of
Extended Loans that are Term Loans, a modification of the scheduled amortization
applicable thereto, provided that the Weighted Average Life to Maturity of such
Extended Loans shall be no less than the remaining Weighted Average Life to
Maturity (determined at the time of such Extension Offer) of the Term Loans,
(c) a modification of voluntary or mandatory prepayments applicable thereto
(including amortization payments), provided that voluntary and mandatory
prepayments (including amortization payments) applicable to any other Loans
shall not be affected by the terms thereof, (d) an increase in the fees payable
to, or the inclusion of new fees to be payable to, the Extending Lenders in
respect of such Extension Offer or their Extended Loans or Extended Commitments,
and/or (e) different covenants and other provisions that apply only to periods
after the then latest maturity date.

“Extension Request Class” is defined in Section 10.01.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and, any current or future
regulations or official interpretations thereof, any applicable agreement
entered into pursuant to Section 1471(b)(1) of the Code, and any applicable
intergovernmental agreement with respect thereto.

“Facility” means the Term Loan Facility and/or the Revolving Credit Facility, as
the context may require.

“Facility Termination Date” means the date as of which Payment in Full of all
Obligations has occurred.

“FDA” means the Federal Food and Drug Administration and any successor thereto.

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate (rounded upward, if necessary, to a whole multiple
of 1/100 of 1%) charged to BMO on such day on such transactions as reasonably
determined by Administrative Agent.

“Fee Letter” means the letter agreement, dated as of December 23, 2016 between
Borrowers and Administrative Agent.

“Fiscal Quarter” means each fiscal quarter of the Borrowers and their
Subsidiaries ending on March 31, June 30, September 30 and December 31 of each
year.

 

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“Fiscal Year” means each twelve month period of the Borrowers and their
Subsidiaries, ending on December 31 of each year.

“Foreign Assets Control Regulations” has the meaning specified in Section 5.15.

“Foreign Lender” means a Recipient that is not a U.S. Person.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“Fraudulent Conveyance” has the meaning specified in Section 11.09.

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

“Fronting Exposure” means, at any time there is a Defaulting Lender that is a
Revolving Lender, (a) with respect to the L/C Issuer, such Defaulting Lender’s
Applicable Percentage of the outstanding L/C Obligations other than L/C
Obligations as to which such Defaulting Lender’s participation obligation has
been reallocated to other Revolving Lenders or Cash Collateralized in accordance
with the terms hereof, and (b) with respect to the Swing Line Lender, such
Defaulting Lender’s Applicable Percentage of Swing Line Loans other than Swing
Line Loans as to which such Defaulting Lender’s participation obligation has
been reallocated to other Revolving Lenders.

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

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied, subject to Sections 1.03(b) and
1.03(c) below.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state 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 (including any
supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” means, as to any Person, any (a) obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee

 

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in respect of such Indebtedness or other obligation of the payment or
performance thereof or to protect such obligee against loss in respect thereof
(in whole or in part), or (b) Lien on any assets of such Person securing any
Indebtedness or other obligation of any other Person, whether or not such
Indebtedness or other obligation is assumed by such Person (or any right,
contingent or otherwise, of any holder of such Indebtedness to obtain any such
Lien). The amount of any Guarantee shall be deemed to be an amount equal to the
stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith; provided, that with respect
to clause (b) of the preceding sentence, if the subject Indebtedness or other
obligation is non-recourse, then the amount of such Guarantee shall be deemed to
be the lower of the amount of such Guarantee determined pursuant to the
foregoing terms of this sentence or the fair market value of the property
subject to such Lien. The term “Guarantee” as a verb has a corresponding
meaning.

“Guarantor” means Holdings, each Subsidiary Guarantor and each other Person that
becomes a guarantor of all or part of the Obligations after the Closing Date
pursuant to Section 6.12 of the Agreement or otherwise.

“Hazardous Materials” means all substances or wastes listed, defined or
regulated pursuant to any Environmental Law as explosive, radioactive,
hazardous, toxic or as pollutants and petroleum or petroleum distillates,
asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature
regulated pursuant to any Environmental Law due to their hazardous, toxic,
dangerous or deleterious properties or characteristics.

“Holdings” has the meaning specified in the introductory paragraph hereto.

“Honor Date” has the meaning specified in Section 2.03(c)(i).

“Increase” has the meaning specified in Section 2.18(a).

“Increase Effective Date” has the meaning specified in Section 2.18(d).

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations
(direct or contingent) of such Person evidenced by or arising under bonds
(including, without limitation, surety, customs, reclamation or performance
bonds), debentures, notes, loan agreements or other similar instruments;

(b) all direct or contingent obligations of such Person arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank guarantees
and similar instruments;

(c) net obligations of such Person under any Swap Contract;

 

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(d) (i) all obligations of such Person to pay the deferred purchase price of
property or services (other than (x) accrued expenses and trade payables
incurred in the Ordinary Course of Business, (y) any working capital adjustment
or any earnout obligation, deferred compensation, non-compete or similar
obligations under employment agreements of such Person and (z) obligations with
respect to seller notes), in each case, to the extent due and payable and
(ii) all obligations of such Person with respect to seller notes;

(e) indebtedness secured by a Lien on property owned or being purchased by such
Person (including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse;

(f) obligations under Capital Leases and synthetic or other similar financing
leases of such Person;

(g) all obligations of such Person with respect to the redemption, repayment or
other repurchase or payment in respect of any Disqualified Equity Interest; and

(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall (A) include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, to the extent such Indebtedness is
recourse to such Person and only to the extent such Indebtedness would be
included in the calculation of Consolidated Total Net Debt and (B) in the case
of the Borrowers and their Subsidiaries, exclude all intercompany Indebtedness
incurred in the Ordinary Course of Business consistent with past practice (other
than for purposes of Section 7.01 hereunder). The amount of any net obligation
under any Swap Contract on any date shall be deemed to be the Swap Termination
Value thereof as of such date. The amount of any Capital Lease or synthetic or
other similar financing lease as of any date shall be deemed to be the amount of
Attributable Indebtedness in respect thereof as of such date. The amount of any
Indebtedness described in clause (e) above shall be limited to the lesser of the
fair market value of any property securing such indebtedness as determined by
such Person in good faith and (ii) the aggregate unpaid amount of such
Indebtedness.

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

“Indemnitees” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

“Intellectual Property” means all rights, title and interest in intellectual
property arising under applicable law, including: trade secrets, trademarks,
internet domain names, service marks, trade dress, trade names, brand names,
business names, designs, logos, slogans (and all translations, adaptations,
derivations and combinations of the foregoing) and other source and/or business
identifiers, and the goodwill of the business relating thereto and all

 

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registrations or applications for registrations which have heretofore been or
may hereafter be issued thereon throughout the world; copyrights (including
copyrights for computer programs) and copyright registrations or applications
for registrations which have heretofore been or may hereafter be issued
throughout the world; patent applications and patents; and industrial design
applications and registered industrial designs.

“Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, (i) the last
day of each Interest Period applicable to such Eurodollar Rate Loan; provided
that if any Interest Period for a Eurodollar Loan is greater than three months,
the respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates, (ii) with respect to the
portion prepaid or converted, any date that a Term Loan is prepaid or converted,
in whole or in part, and with respect to the portion repaid or converted, any
date that a Revolving Loan is repaid or converted, in whole or in part, and
(iii) the Maturity Date with respect to such Loan; and (b) as to any Base Rate
Loan (including a Swing Line Loan), (i) the last day of each Fiscal Quarter with
respect to interest accrued through (and including) the last day of such Fiscal
Quarter, (ii) with respect to the portion prepaid or converted, any date that a
Term Loan is prepaid or converted, in whole or in part, and with respect to the
portion repaid or converted, any date that a Revolving Loan is repaid or
converted, in whole or in part, and (iii) the Maturity Date with respect to such
Loan; provided, further, that interest accruing at the Default Rate shall be
payable from time to time upon written demand of Administrative Agent or
Required Lenders.

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and ending, in each case, on the date one, two, three
or six months thereafter, or if available to each applicable Lender, twelve
months thereafter, or such other date (not to exceed twelve months) thereafter
as the applicable Lenders may agree, as selected by Borrower Agent in its
Committed Loan Notice; provided that:

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

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

(c) no Interest Period shall extend beyond the Maturity Date for the Term Loan
or Revolving Loan to which such Interest Period applies.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the ownership, purchase or
other acquisition of Equity Interests or other securities of another Person,
(b) a loan, advance or capital contribution to, Guarantee or assumption of
Indebtedness of, or purchase or other acquisition of any other debt or equity
participation or interest in, another Person, including any partnership or

 

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joint venture interest in such other Person and any arrangement pursuant to
which the investor Guarantees Indebtedness of such other Person (excluding loans
or advances made in the Ordinary Course of Business (including travel advances
and other similar cash advances) to employees and officers), or (c) the purchase
or other acquisition (in one transaction or a series of transactions) of assets
of another Person that constitute a business unit. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment, less all returns of principal or equity thereon (and without
adjustment by reason of the financial condition of such other Person) and shall,
if made by the transfer or exchange of property other than cash, be deemed to
have been made in an original principal or capital amount equal to the fair
market value of such property at the time of such transfer or exchange.

“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance of such Letter of Credit).

“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and any Borrower (or any other Loan Party) or in favor
the L/C Issuer and relating to any such Letter of Credit.

“JA 139 Fulton” has the meaning specified in the introductory paragraph hereto.

“JA 741 Retail” has the meaning specified in the introductory paragraph hereto.

“JA Cherry Hill” has the meaning specified in the introductory paragraph hereto.

“JA Cosmetics Retail” has the meaning specified in the introductory paragraph
hereto.

“JA RF” has the meaning specified in the introductory paragraph hereto.

“Joinder Agreement” means a joinder agreement in the form attached hereto as
Exhibit H or in a writing in any other form reasonably acceptable to
Administrative Agent duly completed executed by a Person joining this Agreement
as a Borrower or Guarantor, as the case may be; provided, however, that any such
Person joining as a Borrower must be organized in the United States or District
of Columbia unless otherwise agreed by all Lenders.

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

“L/C Advance” means each Revolving Lender’s funding of its participation in any
L/C Borrowing in accordance with its Applicable Percentage.

 

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“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed by the Honor Date.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of
the amount thereof.

“L/C Exposure” means, at any time, for any Lender, such Lender’s Applicable
Percentage of the total L/C Obligations at such time.

“L/C Issuer” means BMO and/or any other Lender that, at the request of Borrowers
and with the consent of Administrative Agent, agrees, in such Lender’s sole
discretion, to become an L/C Issuer, each in its capacity as an issuer of
Letters of Credit hereunder, or any successor issuer of Letters of Credit
hereunder. At any time there is more than one L/C Issuer, all singular
references to the L/C Issuer shall mean any L/C Issuer, either L/C Issuer, each
L/C Issuer, the L/C Issuer that has issued the applicable Letter of Credit, or
both or all L/C Issuers, as the context may require.

“L/C Obligations” means, as at any date of determination, (a) the aggregate
undrawn face amount of all outstanding Letters of Credit, plus (b) the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings. For all purposes of
this Agreement, if on any date of determination a Letter of Credit has expired
by its terms but any amount may still be drawn thereunder by reason of the
operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be
“outstanding” in the amount so remaining available to be drawn.

“Lender” has the meaning specified in the introductory paragraph hereto and, as
the context requires, includes the L/C Issuer and the Swing Line Lender.

“Lender Party” means (a) each Lender, (b) each Credit Product Provider to the
extent it holds Credit Product Obligations and was a Lender or an Affiliate of a
Lender when such Person provided Credit Product Arrangements to the Loan
Parties, (c) Administrative Agent, (d) the L/C Issuer, (e) the Swing Line
Lender, (f) the Arranger, (g) each SPV and (h) the successors and permitted
assigns of each of the foregoing.

“Lender Party Expenses” has the meaning set forth in Section 10.04(a).

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

“Letter of Credit” means any standby or documentary letter of credit issued by
L/C Issuer for the account of a Borrower or any of its Subsidiaries, or any
indemnity, guarantee, exposure transmittal memorandum or similar form of credit
support issued by Administrative Agent or L/C Issuer for the benefit of a
Borrower or any of its Subsidiaries, and shall include the Existing Letters of
Credit.

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.

 

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“Letter of Credit Expiration Date” means, with respect to any Letter of Credit,
the day that is the earlier of (a) the date that is twelve months after the date
such Letter of Credit is issued and (b) the date that is seven (7) Business Days
prior to the Revolving Credit Maturity Date then in effect (or, if such day is
not a Business Day, the next preceding Business Day) or, to the extent such
Letter of Credit is Cash Collateralized, such later date as may be permitted by
Section 2.03(a)(vi) hereof.

“Letter of Credit Fees” means, collectively or individually as the context may
indicate, the fees with respect to Letters of Credit described in
Section 2.09(b).

“Letter of Credit Sublimit” means $7,000,000. The Letter of Credit Sublimit is
part of, and not in addition to, the Aggregate Revolving Credit Commitments.

“License” means any license or agreement under which a Loan Party is granted any
license right in or to Intellectual Property.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

“Limited Condition Acquisition” means any acquisition by a Borrower or one or
more of its Subsidiaries permitted pursuant to the Loan Documents whose
consummation is not conditioned on the availability of, or on obtaining, third
party financing.

“Liquidity” means, as of any date of determination, the sum of (x) the Loan
Parties’ unrestricted domestic cash and Cash Equivalents plus (y) availability
under the Revolving Credit Facility.

“Loan” means an extension of credit under Article II in the form of a Revolving
Loan, a Term Loan or a Swing Line Loan, including any Increases.

“Loan Account” has the meaning specified in Section 2.11(a).

“Loan Documents” means this Agreement, each Note, each Security Instrument, and
the perfection certificate delivered on the Closing Date.

“Loan Obligations” means all Obligations other than amounts (including fees)
owing by any Loan Party or any Subsidiary of any Loan Party pursuant to any
Credit Product Arrangements.

“Loan Parties” means Borrowers, Holdings and the Subsidiary Guarantors,
collectively.

“London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.

 

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“Material Adverse Effect” means (a) material adverse change in, or a material
adverse effect on, the business, assets, financial condition or results of
operations of the Borrowers and their Subsidiaries, taken as a whole, (b) a
material adverse effect of the ability of the Loan Parties, taken as a whole, to
perform their payment obligations under the Loan Documents or (c) a material
adverse effect upon the legality, validity, binding effect or enforceability
against any Loan Party of any Loan Document to which it is a party (other than
to the extent a result of the action or inaction of the Administrative Agent,
the Lenders, the other Lender Parties under the Loan Documents or their
respective Affiliates, officers, employees, agents, attorneys or
representatives).

“Material License” has the meaning specified in Section 6.05(d).

“Maturity Date” means either of the Revolving Credit Maturity Date or the Term
Loan Maturity Date.

“Maximum Rate” has the meaning specified in Section 10.09.

“Measurement Period” means, at any date of determination, the most recently
completed consecutive four Fiscal Quarters of Holdings and its Subsidiaries for
which financial statements have or should have been delivered in accordance with
Section 6.01(a) or (b).

“Minimum Collateral Amount” means, at any time, (a) with respect to Cash
Collateral consisting of cash or Deposit Account balances provided to reduce or
eliminate Fronting Exposure, an amount equal to 104% of the Fronting Exposure of
the L/C Issuer with respect to Letters of Credit issued and outstanding at such
time and (b) with respect to Cash Collateral consisting of cash or Deposit
Account balances provided in accordance with the provisions of
Section 2.16(a)(i) or 2.16(a)(ii), an amount equal to 104% of the Outstanding
Amount of all L/C Obligations.

“Minority Investment” means any Person (including any joint ventures, limited
liability companies or partnerships) other than a Subsidiary in which the
Borrowers or any Subsidiary owns any Equity Interests.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Mortgaged Property” means the Real Estate of the Loan Parties required from
time to time to be subject to a Mortgage pursuant to the terms of the Loan
Documents.

“Mortgages” means the mortgages, deeds of trust, or deeds to secure debt
executed by a Loan Party on or about the Closing Date, or from time to time
thereafter in favor of Administrative Agent, for the benefit of the Lender
Parties, by which such Loan Party has granted to Administrative Agent, as
security for the Obligations, a Lien upon the Mortgaged Property described
therein.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which any Loan Party makes or is obligated to
make contributions, or during the preceding five plan years, has made or been
obligated to make contributions or with respect to which any Loan Party has any
current or contingent liability as a result of being considered a single
employer with any ERISA Affiliate.

 

 

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“Net Cash Proceeds” means (a) with respect to the Disposition of any asset by
any Borrower or any Subsidiary or any Event of Loss, the excess, if any, of
(i) the sum of cash and Cash Equivalents received in connection with such
Disposition or Event of Loss (including any cash or Cash Equivalents received by
way of deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received and, with respect to any Event of
Loss, any insurance proceeds or condemnation awards in respect of such Event of
Loss actually received by or paid to or for the account of the Borrowers or any
Subsidiary but excluding, in any event, any cash and Cash Equivalents received
solely as proceeds of business interruption insurance) over (ii) the sum of
(A) the principal amount, premium or penalty, if any, interest and other amounts
on any Indebtedness that is secured by the asset subject to such Disposition or
Event of Loss and that is required to be repaid in connection with such
Disposition or Event of Loss, (B) the out-of-pocket fees and expenses (including
attorneys’ fees, investment banking fees, survey costs, title insurance
premiums, and related search and recording charges, transfer taxes, deed or
mortgage recording taxes, other customary expenses and brokerage, consultant and
other customary fees and, with respect to any Event of Loss, costs incurred in
connection with the collection of such proceeds, awards or other payments or any
settlement of claims with respect thereto) actually incurred by the Borrowers or
such Subsidiary in connection with such Disposition or Event of Loss, (C) taxes
paid or reasonably estimated to be actually payable in connection therewith, or
upon the distribution to a Loan Party of such proceeds from such Disposition or
Event of Loss, and (D) any reserve for adjustment in respect of (x) the sale
price of such asset or assets established in accordance with GAAP and (y) any
liabilities associated with such asset or assets and retained by the Borrowers
or any Subsidiary after such sale or other disposition thereof, including
pension and other post-employment benefit liabilities and liabilities related to
environmental matters or with respect to any indemnification obligations
associated with such transaction, and it being understood that “Net Cash
Proceeds” shall include (i) any cash or Cash Equivalents received upon the
Disposition of any non-cash consideration by the Borrowers or any Subsidiary in
any such Disposition and (ii) upon the reversal (without the satisfaction of any
applicable liabilities in cash in a corresponding amount) of any reserve
described in clause (D) above or if such liabilities have not been satisfied in
cash and such reserve is not reversed within 365 days after such Disposition or
Event of Loss, the amount of such reserve; and (b) with respect to the
incurrence or issuance of any Indebtedness by the Borrowers or any Subsidiary,
the excess, if any, of (x) the sum of the cash received in connection with such
incurrence or issuance over (y) the sum of (A) the reasonable investment banking
fees, underwriting discounts, commissions, costs and other out-of-pocket
expenses and other reasonable and customary expenses, incurred by the Borrowers
or such Subsidiary in connection with such incurrence or issuance and (B) taxes
paid or reasonably estimated to be actually payable in connection therewith, or
upon the distribution to a Loan Party of proceeds from such incurrence or
issuance.

“Non-Consenting Lender” has the meaning specified in Section 10.01.

“Non-Debt Fund Affiliate” means any Affiliate of the Sponsor other than
(a) Holdings or any of its Subsidiaries, (b) any Debt Fund Affiliate and (c) any
natural person.

 

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“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting
Lender at such time.

“Non-Extension Notice Date” has the meaning specified in Section 2.03(b)(iii).

“Note” means any or all of the Revolving Loan Notes and/or the Term Loan Notes,
as applicable.

“Obligations” means all amounts owing by any Loan Party to Administrative Agent,
any Lender or any other Lender Party (excluding Persons specified in clause
(b) of the definition thereof solely to the extent of any Credit Product
Obligations owed to such Persons) pursuant to or in connection with this
Agreement or any other Loan Document or otherwise with respect to any Loan or
Letter of Credit, including without limitation, all principal, interest
(including any interest accruing after the filing of any petition in bankruptcy
or the commencement of any proceeding under any Debtor Relief Law relating to
any Loan Party, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), all reimbursement obligations, fees, expenses,
indemnification and reimbursement payments, costs and expenses (including all
fees and expenses of counsel to Administrative Agent incurred and payable by the
Loan Parties pursuant to this Agreement or any other Loan Document), whether
direct or indirect, absolute or contingent, liquidated or unliquidated, now
existing or hereafter arising hereunder or thereunder, together with all
renewals, extensions, modifications or refinancings thereof; provided, that
Obligations shall not include Excluded Swap Obligations.

“OFAC” has the meaning specified in Section 5.15.

“Offered Loans” has the meaning specified in Section 2.19(c).

“Ordinary Course of Business” means the ordinary course of business of the
Borrowers and their Subsidiaries and undertaken in good faith.

“Organization Documents” means, as applicable with respect to any Person, its
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
its certificate or articles of formation or organization and operating
agreement; or its partnership, joint venture or other applicable agreement of
formation or organization and any agreement, instrument, filing or notice with
respect thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization.

“Other Taxes” means 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 Loan Document, excluding for the avoidance of doubt,
Excluded Taxes.

“Outstanding Amount” means, as applicable, the aggregate outstanding principal
amount of Revolving Loans, Swing Line Loans and/or Term Loans on any date after
giving effect to any Borrowings, prepayments or repayments thereof occurring on
such date, and with respect to any L/C Obligations, the aggregate outstanding
amount of such L/C Obligations on any date after giving effect to any L/C Credit
Extension or other changes in the aggregate amount of the L/C Obligations
occurring on such date.

 

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“Outstanding Items” has the meaning specified in Section 6.18.

“Overnight Rate” means, for any day, with respect to any amount denominated in
Dollars, the greater of (a) the Federal Funds Rate and (b) an overnight rate
determined by Administrative Agent, the L/C Issuer, or the Swing Line Lender, as
the case may be, in accordance with banking industry rules on interbank
compensation.

“Participant” has the meaning specified in clause (d) of Section 10.06.

“Participation and SPV Register” has the meaning specified in clause (d) of
Section 10.06.

“Payment in Full” or “Payment in Full of the Obligations” means (a) the payment
in full in cash of all Loan Obligations (other than contingent indemnification
claims for which no claim has been asserted), together with all accrued and
unpaid interest and fees thereon, other than L/C Obligations that have been
fully Cash Collateralized, (b) the Commitments shall have terminated or expired,
and (c) the obligations and liabilities of each Loan Party under all Credit
Product Arrangements constituting Secured Obligations, to the extent such
obligations and liabilities are then due and outstanding as of the date clauses
(a) and (b) preceding have been satisfied and the amount of such obligations and
liabilities has been provided to Administrative Agent and Borrower Agent in
writing by the applicable Credit Product Provider on or prior to such date,
shall have been paid and satisfied in full or fully Cash Collateralized (other
than contingent indemnification claims for which no claim has been asserted).
“Paid in Full,” “paid in full,” “payment in full,” and “payment in full of the
Obligations” have meanings correlative thereto.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Pension Act” means the Pension Protection Act of 2006.

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum
required contributions (including any installment payment thereof) to Pension
Plans and Multiemployer Plans and set forth in, with respect to plan years
ending prior to the effective date of the Pension Act, Section 412 of the Code
and Section 302 of ERISA, each as in effect prior to the Pension Act and,
thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections 302,
303, 304 and 305 of ERISA, and any sections of the Code or ERISA related thereto
that are enacted after the date of this Agreement.

“Pension Plan” means any employee pension benefit plan (other than a Foreign
Plan or Multiemployer Plan) that is maintained or is contributed to by any Loan
Party, or with respect to which any Loan Party has any current or contingent
liability as a result of being considered a single employer with any ERISA
Affiliate and is either covered by Title IV of ERISA or is subject to the
minimum funding standards under Section 412 of the Code.

 

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“Permitted Acquisition” means any Acquisition by a Borrower or a Subsidiary of a
Borrower, including in the case of any Permitted Foreign Acquisition, any
Foreign Subsidiary, (i) that has been approved by the Required Lenders or
(ii) so long as all of the following conditions have been satisfied:

(a) such Acquisition shall be structured as (1) an asset acquisition by such
Borrower or Subsidiary, as applicable, of all or substantially all of the assets
of the Person whose assets are being acquired (or all or substantially all of a
line or lines of business of such Person), (2) a merger of the Person to be
acquired with and into such Borrower or Subsidiary, as applicable, with such
Borrower or Subsidiary, as applicable, as the surviving corporation in such
merger, unless the surviving entity has otherwise assumed all obligations of
such Borrower or Subsidiary, as applicable, under the Loan Documents pursuant to
documentation reasonably acceptable to Administrative Agent or (3) a purchase of
(x) any remaining Equity Interests in a Minority Investment, (y) any remaining
Equity Interest of a Subsidiary of Holdings that is not a wholly-owned
Subsidiary or (z) no less than a majority of the Equity Interests of the Person
to be acquired by such Loan Party;

(b) the Person to be (or whose assets are to be) acquired does not oppose such
Acquisition (unless otherwise agreed by the Required Lenders), such Acquisition
shall be consummated in accordance with the terms of the agreements and
documents related thereto and the line or lines of business of the Person to be
acquired constitute Core Businesses;

(c) no Default or Event of Default shall have occurred and be continuing either
immediately prior to or immediately after giving effect to such Acquisition;
provided, that solely with respect to a Limited Condition Acquisition, at the
Borrower Agent’s election this clause (c) shall instead require that (x) no
Specified Event of Default shall exist on the execution date of the applicable
acquisition agreement for such Limited Condition Acquisition, and (y) no Event
of Default under Section 8.01(a) or 8.01(f) shall exist on the date the Limited
Condition Acquisition is consummated;

(d) to the extent such Acquisition involves a Permitted Foreign Acquisition,
after giving effect to such Permitted Foreign Acquisition, the Loan Parties
shall be in compliance with the applicable provisions in Section 7.03 governing
Investments to Foreign Subsidiaries;

(e) after giving pro forma effect to such Acquisition (including the payment of
cash and other property given as consideration, any Indebtedness incurred,
assumed or acquired by any Borrower or Subsidiary, as applicable, in connection
with such Acquisition and all fees expenses and transaction costs incurred in
connection therewith), (i) the Loan Parties shall be in compliance on a Pro
Forma Basis with the covenants set forth in Section 7.12(a) and (b) for the
Fiscal Quarter most recently ended as determined based on the financial
statements for the most recently ended fiscal period that were required to be
delivered pursuant to this Agreement, (ii) the Loan Parties shall have on a Pro
Forma Basis a Consolidated Total Net Leverage Ratio of not greater than
3.00:1.00 for the Fiscal Quarter most recently ended as determined based on the
financial statements for the most recently ended fiscal period that were
required to be delivered pursuant to this Agreement; provided that in the case
of any Limited Condition Acquisition, the requirements set forth in clauses
(i) and (ii) above shall, at the election of the Borrower Agent, be tested (and
assuming for purposes of such calculations that

 

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(x) in the case of any Limited Condition Incremental Facility being incurred in
connection therewith such Limited Condition Incremental Facility is fully drawn
as of such date but without “netting” the Cash proceeds of such Limited
Condition Incremental Facility, and (y) the proposed Limited Condition
Acquisition, and all transactions to occur in connection therewith, have been
effected) either on the execution date of the applicable acquisition agreement
or the date the Limited Condition Acquisition is consummated, and
(iii) Liquidity shall be at least $5,000,000; provided that in the case of any
Limited Condition Acquisition, the Liquidity shall, at the election of the
Borrower Agent, be tested (and assuming for purposes of such calculation that
the proposed Limited Condition Acquisition, and all transactions to occur in
connection therewith, have been effected) either on the execution date of the
applicable acquisition agreement or the date the Limited Condition Acquisition
is consummated;

(f) Borrower Agent shall have furnished Administrative Agent (i) two (2)
Business Days’ (or such shorter period as may be agreed by Administrative Agent)
prior to the consummation of such intended Acquisition, a current draft of the
acquisition agreement (together with exhibits and schedules thereto and, to the
extent required in the acquisition agreement, all required regulatory and third
party approvals and copies of environmental assessments, if any) for such
intended Acquisition (and final copies thereof as and when executed) and
(ii) with respect to any intended Acquisition in which the Permitted Acquisition
Consideration exceeds $5,000,000, (w) a description of the proposed Acquisition,
(x) pro forma consolidated projections with respect to the intended Acquisition,
(y) historical financial statements for the target of the intended Acquisition
and (z) such other customary information or documentation regarding the intended
Acquisition as Administrative Agent may reasonably request, including, to the
extent available, a due diligence package;

(g) Borrower Agent shall have furnished to Administrative Agent at least two
(2) Business Days (or such shorter period as may be agreed by Administrative
Agent) prior to the date on which any such Acquisition is to be consummated or
such shorter time as Administrative Agent may allow, a certificate of a
Responsible Officer of Borrower Agent with a reasonably detailed calculation of
item (e)(i), (ii) and (iii) above;

(h) to the extent obtained by the Loan Parties or their Affiliates, a quality of
earnings report with respect to the target of such Acquisition;

(i) the Permitted Acquisition Consideration for all Permitted Foreign
Acquisitions and all other Permitted Acquisitions of targets that will not
become Guarantors, or of assets in respect of which Administrative Agent shall
not have a first priority perfected Lien (subject to Permitted Liens) on such
assets that constitute Collateral, does not exceed $10,000,000 in the aggregate
during the term of this Agreement plus the Available Amount when aggregated with
all other Foreign Acquisitions consummated during the term of this Agreement;
provided, that the limitation provided in this clause (i) shall not apply
(a) with respect to that portion of the consideration in the form of Equity
Interests of Holdings (or any parent entity thereof) that are not Disqualified
Equity Interests and (b) to the extent such Acquisition is financed with the Net
Cash Proceeds of issuances by Holdings (or any parent entity thereof) of, or
capital contributions to, its Equity Interests that are not Disqualified Equity
Interests, Permitted Cure Securities or cash common equity contributions in
connection with an Equity Cure pursuant to Section 8.04 (other than issuances
of, or contributions to, Equity Interests that

 

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are included in the calculation of the Available Amount or the Net Cash Proceeds
of which are used to make Restricted Payments under Section 7.06(i)) and solely
to the extent the Net Cash Proceeds of such issuances or contributions are
contributed by Holdings to a Borrower as cash common equity; and

(j) such Permitted Acquisition shall involve assets, except with respect to a
Permitted Foreign Acquisition, principally located in the United States (and, in
connection with the acquisition of the Equity Interests of a Person being
acquired, such Person shall be organized under the laws of a state within the
United States) (any Acquisition that satisfies all of the conditions to satisfy
a Permitted Acquisition, other than this clause (j) is referred to herein as a
“Permitted Foreign Acquisition”).

“Permitted Acquisition Consideration” means the purchase consideration for a
Permitted Acquisition and all other payments (but excluding any related
acquisition fees, costs and expenses incurred in connection with any Permitted
Acquisition), directly or indirectly, by Borrowers or any Subsidiary in exchange
for, or as part of, or in connection with, a Permitted Acquisition, whether paid
in cash or by exchange of Equity Interests or of any property or incurrence or
assumption of Indebtedness or otherwise and whether payable at or prior to the
consummation of a Permitted Acquisition or deferred for payment at any future
time (including earnouts, seller notes and other deferred purchase price
obligations); provided, that any such future payment that is an earnout or other
deferred purchase price obligation shall be included in the determination of
Permitted Acquisition Consideration as the maximum amount of such earnout or
other deferred purchase price obligation; provided, further, that Permitted
Acquisition Consideration shall not include (a) the portion of consideration or
payment constituting salary payments pursuant to ordinary course employment
agreements and salary bonuses payable thereunder to the extent relating to the
applicable Permitted Acquisition and (b) the portion of consideration or payment
attributable to cash and Cash Equivalents constituting working capital acquired
by Borrowers or their Subsidiaries as part of the applicable Permitted
Acquisition in excess of the working capital target set forth in the purchase
agreement for such Permitted Acquisition.

“Permitted Cure Security” means an Equity Interest other than a Disqualified
Equity Interest or other capital consideration the proceeds of which are
utilized in connection with a Cure Right pursuant to Section 8.04.

“Permitted Holder” means (a) the Sponsor (other than any portfolio company
thereof) and (b)(i) the individual founders of the e.l.f. cosmetics business
identified to Agent in writing prior to the Closing Date, (ii) such founders’
respective spouses and descendants (whether natural or adopted), and any trust,
limited partnership, limited liability company, corporation or other bona-fide
estate planning entity of any such founder the only beneficiaries of which are
any of the foregoing individuals, such individual’s estate (or an executor or
administrator acting on its behalf), heirs or legatees or any private foundation
or fund that is controlled by any of the foregoing individuals or any
donor-advised fund of which any such individual is the donor and (iii) entities
that are 100% wholly-owned, directly or indirectly, by such founders.

“Permitted Liens” has the meaning specified in Section 7.02.

 

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“Permitted Refinancing” means, with respect to any Person, any modification
(other than a release of such Person), refinancing, refunding, renewal or
extension of any Indebtedness of such Person; provided that (a) the principal
amount (or accreted value, if applicable) thereof does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness so modified,
refinanced, refunded, renewed or extended except by an amount equal to unpaid
accrued interest and premium thereon plus other reasonable amounts paid, and
fees and expenses reasonably incurred, in connection with such modification,
refinancing, refunding, renewal or extension and by an amount equal to any
existing commitments unutilized thereunder, and as otherwise permitted under
Section 7.01, (b) other than with respect to a Permitted Refinancing in respect
of Indebtedness permitted pursuant to Section 7.01(a), such modification,
refinancing, refunding, renewal or extension has a final maturity date equal to
or later than the final 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, refunded, renewed or extended,
(c) other than with respect to a Permitted Refinancing in respect of
Indebtedness permitted pursuant to Section 7.01(e), at the time thereof, no
Event of Default shall have occurred and be continuing, (d) such modified,
refinanced, refunded, renewed or extended Indebtedness shall only be guaranteed
by Holdings and/or the Subsidiaries of the Borrowers that are otherwise or are
required to be guarantors of the Indebtedness being modified, refinanced,
refunded, renewed or extended, at the time of such modification, refinancing,
refund, renewal or extension of Indebtedness occurs, and any other Subsidiaries
that are acquired in connection with such refinancing, (e) such modified,
refinanced, refunded, renewed or extended Indebtedness shall not be secured by
any property or assets other than the property or assets that were or are
required to be collateral (and then only with the same priority) for the
Indebtedness being modified, refinanced, refunded, renewed or extended at the
time of such modification, refinancing, refunding, renewal or extension, and
(f) if such Indebtedness being modified, refinanced, refunded, renewed or
extended is Indebtedness permitted pursuant to Section 7.01(b) or (l), to the
extent such Indebtedness being so modified, refinanced, refunded, renewed or
extended is subordinated in right of payment to the Obligations, such
modification, refinancing, refunding, renewal or extension is subordinated in
right of payment to the Obligations on terms at least as favorable to the
Lenders as those contained in the documentation governing the Indebtedness being
so modified, refinanced, refunded, renewed or extended; provided that a
certificate of a Responsible Officer delivered to the Administrative Agent at
least five Business Days prior to the incurrence of such Indebtedness, together
with a reasonably detailed description of the material terms and conditions of
such Indebtedness or drafts of the documentation relating thereto, stating that
the Borrower Agent has determined in good faith that such terms and conditions
satisfy the foregoing requirement (which determination shall be conclusive
evidence that such terms and conditions satisfy the foregoing requirement.

“Permitted Sale Leaseback” means any Sale Leaseback consummated by a Borrower or
any of its Subsidiaries after the Closing Date; provided that any such Sale
Leaseback not between (a) a Loan Party and another Loan Party or (b) a
Subsidiary that is not a Loan Party and another Subsidiary that is not a Loan
Party must be, in each case, consummated for fair value as determined at the
time of consummation in good faith by (i) such Borrower or such Subsidiary and
(ii) in the case of any Sale Leaseback (or series of related Sales Leasebacks)
the aggregate proceeds of which exceed $3,000,000, the board of directors (or
equivalent governing body) of such Borrower or such Subsidiary (which such
determination may take into account any retained interest or other Investment of
such Borrower or such Subsidiary in connection with, and any other material
economic terms of, such Sale Leaseback).

 

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

“Plan” means any employee benefit plan within the meaning of Section 3(3) of
ERISA (including a Pension Plan, but other than a Multiemployer Plan and other
than a Foreign Plan), maintained for employees of any Loan Party or any such
plan to which any Loan Party is required to contribute (including any Pension
Plan which any ERISA Affiliate maintains, or is required to contribute to) on
behalf of any of its employees.

“Platform” has the meaning specified in Section 10.02(c).

“Post-Acquisition Period” means, with respect to any Permitted Acquisition, the
period beginning on the date such Permitted Acquisition is consummated and
ending on the last day of the fourth full consecutive Fiscal Quarter immediately
following the date on which such Permitted Acquisition is consummated.

“Pro Forma Adjustment” means, for any Measurement Period that includes all or
any part of a Fiscal Quarter included in any Post-Acquisition Period, with
respect to the Acquired EBITDA of the applicable Acquired Entity or Business or
the Adjusted Consolidated EBITDA of the Loan Parties and their Subsidiaries,
(a) the pro forma increase or decrease in such Acquired EBITDA or such Adjusted
Consolidated EBITDA, as the case may be, that is factually supportable and is
expected to have a continuing impact, and (b) additional good faith pro forma
adjustments arising out of cost savings initiatives attributable to such
transaction and additional costs associated with the combination of the
operations of such Acquired Entity or Business with the operations of the
Borrowers and their Subsidiaries, in each case being given pro forma effect that
(i) have been realized or (ii) will be implemented following such transaction
and are supportable and quantifiable (as determined by the chief financial
officer of the Borrower Agent) and expected to be realized within the succeeding
12 months and, in each case, including, but not limited to, (w) reduction in
personnel expenses, (x) reduction of costs related to administrative functions,
(y) reductions of costs related to leased or owned properties and (z) reductions
from the consolidation of operations and streamlining of corporate overhead)
taking into account, for purposes of determining such compliance, the historical
financial statements of the Acquired Entity or Business and the consolidated
financial statements of the Borrowers and their Subsidiaries, assuming such
Permitted Acquisition or Disposition, and all other Permitted Acquisitions or
Dispositions that have been consummated during the period, and any Indebtedness
or other liabilities repaid in connection therewith had been consummated and
incurred or repaid at the beginning of such period (and assuming that such
Indebtedness to be incurred bears interest during any portion of the applicable
measurement period prior to the relevant acquisition at the interest rate which
is or would be in effect with respect to such Indebtedness as at the relevant
date of determination); provided that, so long as such actions are initiated
during such Post-Acquisition Period or such costs are incurred during such
Post-Acquisition Period, as applicable, for purposes of projecting such pro
forma increase or decrease to such Acquired EBITDA or such Adjusted Consolidated
EBITDA, as the case may be, it may be assumed that such cost savings will be
realizable during the entirety of such Measurement

 

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Period, or such additional costs, as applicable, will be incurred during the
entirety of such Measurement Period; provided, further, that any increase in
Acquired EBITDA or Adjusted Consolidated EBITDA, as the case may be, as a result
of such Pro Forma Adjustments shall not, together with all increases in Adjusted
Consolidated EBITDA pursuant to Restructuring Charges, Business Optimization
Expenses and Reserves (as defined in the Compliance Certificate) and Cost
Savings and Synergies (as defined in the Compliance Certificate), exceed 20% (or
such greater amount approved by the Administrative Agent) of Adjusted
Consolidated EBITDA on a Pro Forma Basis calculated prior to giving effect to
such adjustments and the adjustments resulting from Restructuring Charges,
Business Optimization Expenses and Reserves and Costs Savings and Synergies in
the aggregate in any Measurement Period.

“Pro Forma Basis” and “Pro Forma Effect” mean, with respect to compliance with
any test hereunder for an applicable period of measurement, that (A) to the
extent applicable, the Pro Forma Adjustment shall have been made and (B) all
Specified Transactions and the following transactions in connection therewith
shall be deemed to have occurred as of the first day of the applicable period of
measurement (as of the last date in the case of a balance sheet item) in such
test: (a) income statement items (whether positive or negative) attributable to
the property or Person subject to such Specified Transaction, (i) in the case of
a Disposition of all or substantially all Equity Interests in any Subsidiary of
the Borrowers or any division, product line, or facility used for operations of
the Borrowers or any of their Subsidiaries which represents a contribution to
Adjusted Consolidated EBITDA in excess of $500,000, shall be excluded, and
(ii) in the case of a Permitted Acquisition or Investment described in the
definition of “Specified Transaction”, shall be included, (b) any retirement of
Indebtedness, and (c) any Indebtedness incurred or assumed by a Borrower or any
of its Subsidiaries in connection therewith and if such Indebtedness has a
floating or formula rate, 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; provided that, without limiting the application
of the Pro Forma Adjustment pursuant to (A) above, the foregoing pro forma
adjustments may be applied to any such test solely to the extent that such
adjustments are consistent with the definition of Adjusted Consolidated EBITDA
and give effect to events (including operating expense reductions) that are (as
determined by the Borrower Agent in good faith) (i) (x) directly attributable to
such transaction, (y) expected to have a continuing impact on the Borrowers and
their Subsidiaries and (z) factually supportable or (ii) otherwise consistent
with the definition of Pro Forma Adjustment.

“Properly Contested” means with respect to any obligation of a Loan Party or any
Subsidiary of a Loan Party, (a) the obligation is being properly contested in
good faith by appropriate proceedings; and (b) appropriate reserves have been
established in accordance with GAAP.

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

 

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“Qualified Equity Interests” means any Equity Interests that are not
Disqualified Equity Interests.

“Qualified IPO” means a bona fide underwritten sale to the public of common
stock of Holdings or any other direct or indirect parent company of the
Borrowers pursuant to a registration statement (other than on Form S-8 or any
other form relating to securities issuable under any benefit plan of Holdings or
any other direct or indirect parent company of the Borrowers) that is declared
effective by the SEC.

“Qualifying Lenders” has the meaning set forth in Section 2.19(e).

“Qualifying Loans” has the meaning specified in Section 2.19(e).

“Real Estate” means all land, together with the buildings, structures, parking
areas, and other improvements thereon, now or hereafter owned by any Loan Party,
including all easements, rights-of-way, and similar rights appurtenant thereto
and all leases, tenancies, and occupancies thereof.

“Recipient” means (a) Administrative Agent, (b) any Lender, (c) any L/C Issuer
or (d) any other Lender Party.

“Register” has the meaning specified in Section 10.06(c).

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the directors, officers, partners, employees, agents and controlling Persons
of such Person and of such Person’s Affiliates.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Loans, a Committed Loan Notice, (b) with respect to an L/C
Credit Extension, a Letter of Credit Application, and (c) with respect to a
Swing Line Loan, a Swing Line Loan Notice.

“Required Lenders” means, as of any date of determination, Lenders holding more
than 50% of the sum of (a) Total Outstandings and (b) aggregate unused
Commitments; but if at least two unaffiliated Lenders that are not Defaulting
Lenders exist, Required Lenders must include at least two unaffiliated Lenders
that are not Defaulting Lenders. The unused Commitments of, and the portion of
the Total Outstandings held or deemed held by, any Defaulting Lender shall be
disregarded in determining Required Lenders at any time.

“Required Revolving Lenders” means, as of any date of determination, Lenders
(a) holding more than 50% of the Aggregate Revolving Credit Commitments of all
Lenders, or (b) if the Aggregate Revolving Credit Commitments have been
terminated, more than fifty percent (50%) of the sum, without duplication, of
the aggregate outstanding amount of Revolving Loans, the outstanding L/C
Obligations, amounts of participations in Swing Loans and the principal amount
of unparticipated portions of Swing Line Loans; but if at least two

 

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unaffiliated Revolving Lenders that are not Defaulting Lenders exist, Required
Revolving Lenders must include at least two unaffiliated Lenders that are not
Defaulting Lenders. The unused Revolving Credit Commitments of, and the portion
of the Total Revolving Credit Outstandings held or deemed held by, any
Defaulting Lender shall be disregarded in determining Required Revolving Lenders
at any time.

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

“Restricted Payment” means (a) any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
Equity Interest of Holdings or any Subsidiary, (b) any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such capital stock or other Equity Interest, or on account of
any return of capital to a Loan Party’s or its Subsidiaries’ stockholders,
partners or members (or the equivalent Person thereof), or (c) any payment of
management, consulting, monitoring, transaction or advisory fees to the Sponsor.

“Revolving Credit Commitment” means, as to each Revolving Lender, its obligation
to (a) make Revolving Loans to Borrowers pursuant to Section 2.01(a), (b)
purchase participations in L/C Obligations, and (c) purchase participations in
Swing Line Loans, in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Revolving Lender’s name on
Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable, as such amount may be adjusted from time
to time in accordance with this Agreement.

“Revolving Credit Facility” means the facility described in Sections 2.01(a),
2.03 and 2.04 providing for Revolving Loans, Letters of Credit and Swing Line
Loans to or for the benefit of Borrowers by the Revolving Lenders, L/C Issuer
and Swing Line Lender, as the case may be, in the maximum aggregate principal
amount at any time outstanding of $35,000,000 as adjusted from time to time
pursuant to the terms of this Agreement.

“Revolving Credit Maturity Date” means December 23, 2021.

“Revolving Credit Outstandings” means, with respect to any Lender at any time,
the sum of the Outstanding Amount of such Lender’s Revolving Loans and its L/C
Exposure and Swing Line Exposure at such time.

“Revolving Credit Termination Date” means the earliest of (a) the Revolving
Credit Maturity Date, (b) the date of termination of the Aggregate Revolving
Credit Commitments pursuant to Section 2.07(a), and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to Section 8.02.

 

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“Revolving Lender” means each Lender that has a Revolving Credit Commitment or,
following termination of the Revolving Credit Commitments, has Revolving Loans
outstanding or participations in outstanding Letters of Credit and/or Swing Line
Loans.

“Revolving Loan” means a Base Rate Loan or a Eurodollar Rate Loan made to
Borrowers pursuant to Section 2.01(a) or any Increase pursuant to Section 2.18.

“Revolving Loan Note” means a promissory note made by Borrowers in favor of a
Revolving Lender evidencing Revolving Loans made by such Revolving Lender,
substantially in the form of Exhibit C-1.

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The
McGraw-Hill Companies, Inc. and any successor thereto.

“SEC” means the Securities and Exchange Commission.

“Sale Leaseback” means any transaction or series of related transactions
pursuant to which the Borrowers or any of their Subsidiaries (a) sells,
transfers or otherwise disposes of any property, real or personal, whether now
owned or hereafter acquired, and (b) as part of such transaction, thereafter
rents or leases such property or other property that it intends to use for
substantially the same purpose or purposes as the property being sold,
transferred or disposed.

“Secured Obligations” means (a) the Obligations and (b) all Credit Product
Obligations; provided, that Secured Obligations shall not include Excluded Swap
Obligations.

“Securitization” means an existing or proposed public or private offering of
securities by, or other financing facility involving, a Lender or any of its
Affiliates or their respective successors and assigns, which represent an
interest in, or which are collateralized, in whole or in part, by the Loans or
the Commitments.

“Security Agreement” means the Pledge and Security Agreement dated as of the
date hereof by the Loan Parties and Administrative Agent for the benefit of the
Lender Parties.

“Security Instruments” means, collectively or individually as the context may
indicate, the Security Agreement, the Control Agreements, the Mortgages, all
security agreements pertaining to Intellectual Property, any landlord lien
waiver, warehouseman’s or bailee’s letter or similar agreement and all other
agreements, instruments and other documents, whether now existing or hereafter
in effect, pursuant to which any Loan Party or other Person shall grant or
convey to Administrative Agent or the Lenders a Lien in property as security for
all or any portion of the Obligations.

“Settlement Date” has the meaning provided in Section 2.14(a).

“Sold Entity or Business” has the meaning specified in the Compliance
Certificate.

 

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“Solvent” means, as to any Person on any date of determination, that on such
date such Person (a) owns assets whose fair value (on a consolidated and going
concern basis) exceeds such Person’s debts and liabilities, subordinated,
contingent or otherwise; (b) owns property whose present fair salable value (on
a consolidated and going concern basis) is greater than the amount that will be
required to pay the probable liability, on a consolidated basis, of such
Person’s debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured in the ordinary
course of business; (c) is able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such liabilities become absolute and matured in the
ordinary course of business; and (d) is not engaged in, and is not about to
engage in, business contemplated as of the applicable date of determination for
which they have unreasonably small capital. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the amount
that would reasonably be expected to become an actual and matured liability.

“Specified Event of Default” means any Event of Default under Section 8.01(a),
8.01(b) (solely with respect to Section 6.01, 6.02(a) or 6.02(b) or Article VII)
or 8.01(f).

“Specified Transaction” means any Investment, Disposition, incurrence or
repayment of Indebtedness, Restricted Payment, or any Increase that by the terms
of this Agreement requires, as a condition to consummating such transaction,
compliance with the financial covenants to be calculated on a “Pro Forma Basis”
or after giving “Pro Forma Effect”; provided that any increase in the Revolving
Commitment, for purposes of this “Specified Transaction” definition, shall be
deemed to be fully drawn.

“Sponsor” means TPG Growth II Advisors, Inc. and its Controlled Investment
Affiliates.

“SPV” means any special purpose funding vehicle identified as such in a writing
by any Lender to the Administrative Agent.

“Subordinated Indebtedness” has the meaning specified in Section 7.01(v).

“Subordination Provisions” has the meaning specified in Section 8.01(k).

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity (but not a representative
office of such Person) of which a majority of the Voting Equity Interests are at
the time beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise specified, all references herein to a “Subsidiary” or
to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of Holdings or any
of its direct or indirect Subsidiaries.

“Subsidiary Guarantor” and “Subsidiary Guarantors” means each Subsidiary that
becomes a Guarantor of all or a part of the Secured Obligations after the
Closing Date pursuant to Section 6.12 of the Agreement or otherwise.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index

 

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transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether or
not any such transaction is governed by or subject to any master agreement,
(b) a “swap agreement” as that term is defined in Section 101(53B)(A) of the
Bankruptcy Code, and (c) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

“Swap Obligation” means, with respect to any Loan Party, any obligation to pay
or perform under any agreement, contract or transaction that constitutes a
“swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

“Swing Line” means the revolving credit facility made available by the Swing
Line Lender pursuant to Section 2.04.

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.

“Swing Line Exposure” means, at any time, the Outstanding Amount of all Swing
Line Loans outstanding at such time. The Swing Line Exposure of any Lender at
any time shall be its Applicable Percentage of the total Swing Line Exposure at
such time.

“Swing Line Lender” means BMO in its capacity as provider of Swing Line Loans,
or any successor swing line lender hereunder.

“Swing Line Lender’s Quoted Rate” has the meaning specified in Section 2.04(b).

“Swing Line Loan” has the meaning specified in Section 2.04(a).

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B.

“Swing Line Sublimit” means an amount equal to $5,000,000. The Swing Line
Sublimit is part of, and not in addition to, the Aggregate Revolving Credit
Commitments.

 

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“Taxes” means 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.

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

“Term Lender” means each Lender that has a Term Loan Commitment or, following
termination of the Term Loan Commitments, has Term Loans outstanding.

“Term Loan” means a Base Rate Loan or a Eurodollar Rate Loan made to Borrowers
pursuant to Section 2.01(b) or any Increase under an incremental term facility
pursuant to Section 2.18.

“Term Loan Commitment” means, as to each Term Lender, its obligation to make
Term Loans to Borrowers on the Closing Date pursuant to Section 2.01(b) in an
aggregate original principal amount equal to the amount set forth opposite such
Term Lender’s name on Schedule 2.01.

“Term Loan Facility” means the facility described in Section 2.01(b), providing
for Term Loans to Borrowers by the Term Lenders in the original aggregate
principal amount of $165,000,000.

“Term Loan Maturity Date” means December 23, 2021.

“Term Loan Note” means a promissory note made by Borrowers in favor of a Term
Lender evidencing Term Loans made by such Term Lender, substantially in the form
of Exhibit C-2.

“Total Outstandings” means the Outstanding Amount of all Loans and L/C
Obligations.

“Total Revolving Credit Outstandings” means, without duplication, the aggregate
Outstanding Amount of all Revolving Loans, Swing Line Loans and L/C Obligations
at such time.

“Trading With the Enemy Act” has the meaning specified in Section 5.15.

“Transaction” means, individually or collectively as the context may indicate,
the entering by Borrowers and the other Loan Parties of the Loan Documents to
which they are a party and the funding of the Revolving Credit Facility and the
Term Loan Facility, in each case, including the payment of any costs, fees and
expenses in connection with the foregoing.

“Treasury Management and Other Services” means (a) all arrangements for the
delivery of treasury management services, (b) all commercial credit card,
purchase card and merchant card services; and (c) all other banking products or
services, other than Letters of Credit and Swap Contracts, in each case, to or
for the benefit of any Loan Party or a Subsidiary of a Loan Party which are
entered into or maintained with a Lender or Affiliate of a Lender and which are
not prohibited by the express terms of the Loan Documents.

 

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

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York; provided that if, with respect to any financing statement or
by reason of any mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of any security interests granted to Administrative
Agent pursuant to any applicable Loan Document is governed by the Uniform
Commercial Code as in effect in a jurisdiction of the United States other than
New York, the term “UCC” shall also include the Uniform Commercial Code as in
effect from time to time in such other jurisdiction for purposes of the
provisions of this Agreement, each Loan Document and any financing statement
relating to such perfection or effect of perfection or non-perfection.

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

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

“Unused Fee” has the meaning specified in Section 2.09(a).

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

“USA PATRIOT Act” has the meaning specified in Section 5.15.

“Voting Equity Interests” of any Person means capital stock or other equity
interests of any class or classes (however designated) having ordinary voting
power for the election of directors or other similar governing body of such
Person, other than stock or other equity interests having such power only by
reason of the happening of a contingency.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing: (a) the sum of the products
obtained by multiplying (i) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (ii) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment by (b) the then outstanding principal amount of such
Indebtedness; provided that for purposes of determining the Weighted Average
Life to Maturity of any Indebtedness that is being modified, refinanced,
refunded, renewed, replaced or extended (the “Applicable Indebtedness”), the
effects of any prepayments made on such Applicable Indebtedness prior to the
date of the applicable modification, refinancing, refunding, renewal,
replacement or extension shall be disregarded.

“Write-Down and Conversion Powers” means, 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.

 

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

(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and permitted assigns (subject to any restrictions on
assignment set forth herein or in any other Loan Document), (iii) the words
“herein,” “hereof” and “hereunder,” and words of similar import when used in any
Loan Document, shall be construed to refer to such Loan Document in its entirety
and not to any particular provision thereof, (iv) all references in a Loan
Document to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, the Loan
Document in which such references appear, (v) any reference to any law shall
include all statutory and regulatory provisions consolidating, amending,
replacing or interpreting such law and any reference to any law or regulation
shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time, and (vi) 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,
securities, accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

(d) For purposes of determining compliance with any provision in Section 7.01,
7.02, 7.03, 7.05, 7.06, 7.08 or 7.11(a), in the event that an item or subject
matter meets the criteria of more than one of the categories described in each
of the respective Sections therein, the Borrowers may, in their commercially
reasonable discretion, classify and reclassify or later divide, classify or
reclassify such item or subject matter (or any portion thereof) and will only be
required to include the amount and type of such item or subject matter in one or
more of the applicable categories in the applicable Section.

 

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1.03. Accounting Terms.

(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein.

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either Borrower Agent, Administrative Agent or the Required
Lenders shall so request, Administrative Agent, the Lenders and Borrower Agent
shall negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Required Lenders); provided that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) Borrower Agent shall provide to Administrative Agent and
the Lenders financial statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio or requirement made before and after giving
effect to such change in GAAP.

(c) Pro Forma Calculations. Any pro forma calculation of the financial covenants
set forth in Section 7.12 hereof (i) shall be made on a Pro Forma Basis as if
all Specified Transactions (including, without limitation, all Indebtedness
incurred or Acquisitions or Dispositions of a Subsidiary or business segment)
made prior to the time of such measurement had been incurred or made, as
applicable, on the first day of the Measurement Period most recently ended for
which Borrower Agent has delivered (or was required to deliver) financial
statements pursuant to Sections 6.01(a) or 6.01(b) and (ii) as of any date
occurring prior to March 31, 2017 shall assume that the maximum Consolidated
Total Net Leverage Ratio or minimum Fixed Charge Coverage Ratio, as applicable,
permitted or required, as applicable, as of such date is the applicable covenant
level for the Measurement Period ending March 31, 2017. All defined terms used
in the calculation of the financial covenants set forth in Section 7.12 hereof
shall be calculated on a historical pro forma basis giving effect, during any
Measurement Period that includes any Permitted Acquisition or, to the extent
there is a reasonable basis for Administrative Agent to verify such historical
results, any other Investment constituting an Acquisition permitted to be made
hereunder, to the actual historical results of the Person or line of business so
acquired and which amounts shall include adjustments as contemplated by the Pro
Forma Adjustments set forth herein and in the Compliance Certificate.

(d) In computing financial ratios and other financial calculations of Holdings
and its Subsidiaries required to be submitted pursuant to this Agreement, all
Indebtedness shall be calculated at par value irrespective of whether such
Person has elected the fair value option pursuant to FASB Interpretation No. 159
– The Fair Value Option for Financial Assets and Financial Liabilities—Including
an amendment of FASB Statement No. 115 (February 2007).

 

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1.04. Uniform Commercial Code. As used herein, the following terms are defined
in accordance with the UCC in effect in the State of New York from time to time:
“Chattel Paper,” “Commodity Account”, “Commodity Contract”, “Deposit Account,”
“Documents,” “General Intangible,” “Instrument,” “Inventory,” and “Securities
Account.”

1.05. Reserved.

1.06. Foreign Currency. Transactions with Foreign Subsidiaries permitted
hereunder that are denominated in Dollars shall be deemed to be the dollar
equivalent of any such transactions that are actually funded in a foreign
currency, if applicable, using prevailing exchange rates at the time of such
transaction and without giving effect to fluctuations in exchange rates.

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

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01. Loan Commitments.

(a) Revolving Credit Commitments. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make Revolving Loans to Borrowers from
time to time until the Revolving Credit Termination Date, in an aggregate amount
not to exceed at any time outstanding the amount of such Lender’s Revolving
Credit Commitment, subject to the following limitations:

(i) after giving effect to any Revolving Borrowing, the Total Revolving Credit
Outstandings shall not exceed the Aggregate Revolving Credit Commitments,

(ii) the Outstanding Amount of all L/C Obligations shall not at any time exceed
the Letter of Credit Sublimit, and

(iii) the Outstanding Amount of all Swing Line Loans shall not at any time
exceed the Swing Line Sublimit.

Within the limits of each Lender’s Revolving Credit Commitment, and subject to
the other terms and conditions hereof, Borrowers may borrow under this Section
2.01(a), prepay under Section 2.06(a), and reborrow under this Section 2.01(a).

(b) Term Loan Commitments. Subject to the terms and conditions set forth herein,
each Lender severally agrees to make a Term Loan to Borrowers on the Closing
Date in an amount equal to such Lender’s Term Loan Commitment. The advance of
the Term Loan shall be made simultaneously by the Lenders on the Closing Date in
accordance with their respective Applicable Percentages of the Term Loan
Facility. Amounts borrowed under this Section 2.01(b) and repaid or prepaid may
not be reborrowed.

 

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2.02. Borrowings, Conversions and Continuations of Loans.

(a) Each Borrowing, each conversion of Loans from one Type to the other, and
each continuation of Eurodollar Rate Loans shall be made upon Borrower Agent’s
irrevocable notice to Administrative Agent, which may be given by telephone.
Each such notice must be received by Administrative Agent not later than 1:00
p.m. (i) three Business Days prior to the requested date of any Borrowing of,
conversion to or continuation of Eurodollar Rate Loans or of any conversion of
Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of any
Borrowing of Base Rate Loans. Each telephonic notice pursuant to this
Section 2.02(a) must be confirmed promptly by delivery to Administrative Agent
of a written Committed Loan Notice, appropriately completed and signed by a
Responsible Officer of Borrower Agent. Each Borrowing of, conversion to or
continuation of Eurodollar Rate Loans shall be in a principal amount of $500,000
or a whole multiple of $100,000 in excess thereof. Except as provided in
Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Loans
shall be in a principal amount of $100,000 or a whole multiple of $10,000 in
excess thereof. If Borrowers fail to specify a Type of Loan in a Committed Loan
Notice or if Borrowers fail to give a timely notice requesting a conversion or
continuation, then the applicable Loans shall be made as, or converted to, Base
Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective
as of the last day of the Interest Period then in effect with respect to the
applicable Eurodollar Rate Loans. If Borrowers request a Borrowing of,
conversion to, or continuation of Eurodollar Rate Loans in any such Committed
Loan Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month.

(b) Following receipt of a Committed Loan Notice for a Facility, Administrative
Agent shall promptly notify each Lender of the amount of its Applicable
Percentage under such Facility of the applicable Loans, and if no timely notice
of a conversion or continuation is provided by Borrower Agent, Administrative
Agent shall notify each Lender of the details of any automatic conversion to
Base Rate Loans described in the preceding subsection. In the case of a Term
Borrowing or Revolving Borrowing, each Lender shall make the amount of its Loan
available to Administrative Agent in immediately available funds at
Administrative Agent’s Office not later than 1:00 p.m. on the Business Day
specified in the applicable Committed Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing is the
initial Credit Extension, Section 4.01), Administrative Agent shall make all
funds so received available to Borrowers in like funds as received by
Administrative Agent either by (i) crediting the account of Borrowers on the
books of BMO with the amount of such funds or (ii) wire transfer of such funds,
in each case in accordance with written instructions provided to (and reasonably
acceptable to) Administrative Agent by Borrower Agent.

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued
or converted only on the last day of an Interest Period for such Eurodollar Rate
Loan. During the existence of an Event of Default, at the election of Required
Lenders, no Loans may be requested as, converted to or continued as Eurodollar
Rate Loans with an Interest Period in excess of one month.

 

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(d) After giving effect to all conversions of Loans from one Type to the other,
and all continuations of Loans as the same Type, there shall not be more than
nine (9) Interest Periods in effect in respect of the Facilities plus two
(2) for any Increase.

2.03. Letters of Credit.

(a) The Letter of Credit Commitment.

(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the Revolving Lenders set forth in
this Section 2.03, from time to time on any Business Day during the period from
the Closing Date until the earlier to occur of the Letter of Credit Expiration
Date or Revolving Credit Termination Date, to issue Letters of Credit at the
request of Borrower Agent for the account of any Borrower or any Subsidiary
thereof and for the benefit of any Borrower or any Subsidiary thereof, and to
amend Letters of Credit previously issued by it, in accordance with subsection
(b) below; and (B) the Revolving Lenders severally agree to participate in
Letters of Credit issued for the account of any Borrower and any drawings
thereunder; provided that the L/C Issuer shall not be obligated to make any L/C
Credit Extension, if as of the date of such L/C Credit Extension, (A) the
aggregate Revolving Credit Outstandings of any Revolving Lender would exceed
such Revolving Lender’s Revolving Credit Commitment, (B) the Total Revolving
Credit Outstandings would exceed the Aggregate Revolving Credit Commitments or
(C) the Outstanding Amount of the L/C Obligations would exceed the Letter of
Credit Sublimit. Each request by Borrower Agent for the issuance or amendment of
a Letter of Credit shall be deemed to be a representation by Borrower Agent that
the L/C Credit Extension so requested complies with the conditions set forth in
the proviso to the preceding sentence. All Existing Letters of Credit shall be
deemed to have been issued pursuant hereto, and from and after the Closing Date
shall be subject to and governed by the terms and conditions hereof.

(ii) The L/C Issuer shall not be under any obligation to issue any Letter of
Credit if:

(A) subject to Section 2.03(b)(iii), the expiry date of such requested Letter of
Credit would occur later than the earlier of (i) the Letter of Credit Expiration
Date, and (ii) twelve months after the date of issuance,

(B) any order, judgment, decree, request or directive of any Governmental
Authority or arbitrator or any Law shall by its terms purport to enjoin,
restrain or prohibit the L/C Issuer from issuing such Letter of Credit or shall
impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date;

 

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(C) the issuance of such Letter of Credit would violate one or more policies of
the L/C Issuer;

(D) such Letter of Credit is in an initial amount less than $10,000; or

(E) any Revolving Lender is at that time a Defaulting Lender, unless the L/C
Issuer has entered into arrangements, including the delivery of Cash Collateral,
satisfactory to the L/C Issuer (in its sole discretion) with Borrowers or such
Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure
(after giving effect to Section 2.17(a)(iv)) with respect to the Defaulting
Lender arising from either the Letter of Credit then proposed to be issued or
that Letter of Credit and all other L/C Obligations as to which the L/C Issuer
has actual or potential Fronting Exposure, as it may elect in its sole
discretion.

(iii) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer
would not be permitted at such time to issue such Letter of Credit in its
amended form under the terms hereof.

(iv) The L/C Issuer shall be under no obligation to amend any Letter of Credit
if (A) the L/C Issuer would have no obligation at such time to issue such Letter
of Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

(v) The L/C Issuer shall act on behalf of the Revolving Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith, and
the L/C Issuer shall have all of the benefits and immunities (A) provided to
Administrative Agent in Article IX with respect to any acts taken or omissions
suffered by the L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and Issuer Documents pertaining to such Letters of
Credit as fully as if the term “Administrative Agent” as used in Article IX
included the L/C Issuer with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the L/C Issuer.

(vi) Notwithstanding anything contained in this Section 2.03, at the election of
Administrative Agent and the L/C Issuer, Borrower Agent may request that the L/C
Issuer issue Letters of Credit with expiration dates extending beyond the
earlier of the Letter of Credit Expiration Date and the Revolving Credit
Termination Date (or that the L/C Issuer permits an automatic extension of any
Letter of Credit to a date beyond the earlier of the Letter of Credit Expiration
Date and the Revolving Credit Termination Date), in each case subject to the
delivery to Administrative Agent by Borrowers of cash collateral in an amount at
least equal to the Minimum Collateral Amount (to be held by the Administrative
Agent as set forth in Section 2.16 hereof), and in any event, such cash
collateral shall be deposited no later than 5 Business Days prior to the earlier
of the Letter of Credit Expiration Date and the Revolving Credit Termination
Date.

 

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(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension
Letters of Credit.

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of Borrower Agent delivered to the L/C Issuer (with a copy to
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of Borrower Agent
and, if applicable, of the applicable Borrower. Such Letter of Credit
Application must be received by the L/C Issuer and Administrative Agent not
later than 11:00 a.m. at least two Business Days (or such later date and time as
Administrative Agent and the L/C Issuer may agree in a particular instance in
their sole discretion) prior to the proposed issuance date or date of amendment,
as the case may be. In the case of a request for an initial issuance of a Letter
of Credit, each Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer the date on which the proposed Letter of Credit
is to be issued (which shall be a Business Day), the expiration date of such
Letter of Credit and such other matters as the L/C Issuer may require. In the
case of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail satisfactory to
the L/C Issuer the Letter of Credit to be amended, the proposed date of
amendment thereof (which shall be a Business Day), and such other matters as the
L/C Issuer may require. Additionally, Borrower Agent shall furnish to the L/C
Issuer and Administrative Agent such other documents and information pertaining
to such requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the L/C Issuer or Administrative Agent may require.

(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer
will confirm with Administrative Agent (by telephone or in writing) that
Administrative Agent has received a copy of such Letter of Credit Application
and, if not, the L/C Issuer will provide Administrative Agent with a copy
thereof. Unless the L/C Issuer has received written notice from any Revolving
Lender, Administrative Agent or any Borrower, at least one Business Day prior to
the requested date of issuance or amendment of the applicable Letter of Credit,
that one or more applicable conditions contained in Article IV shall not then be
satisfied, then, subject to the terms and conditions hereof, the L/C Issuer
shall, on the requested date, issue a Letter of Credit for the account of the
applicable Borrower or enter into the applicable amendment, as the case may be,
in each case in accordance with the L/C Issuer’s usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each
Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the L/C Issuer a risk participation in such Letter of
Credit in an amount equal to such Revolving Lender’s Applicable Percentage of
such Letter of Credit.

 

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(iii) If Borrower Agent so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole and absolute discretion, agree to
issue a standby Letter of Credit that has automatic extension provisions (each,
an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension
Letter of Credit must permit the L/C Issuer to prevent any such extension at
least once in each twelve-month period (commencing with the date of issuance of
such Letter of Credit) by giving prior notice to the beneficiary thereof not
later than a day (the “Non-Extension Notice Date”) in each such twelve-month
period to be agreed upon at the time such Letter of Credit is issued. Unless
otherwise directed by the L/C Issuer, Borrower Agent shall not be required to
make a specific request to the L/C Issuer for any such extension. Once an
Auto-Extension Letter of Credit has been issued, the Revolving Lenders shall be
deemed to have authorized (but may not require) the L/C Issuer to permit the
extension of such Letter of Credit; provided, however, that the L/C Issuer shall
not permit any such extension if (A) the L/C Issuer has determined that it would
not be permitted at such time to issue such Letter of Credit in its revised form
(as extended) under the terms hereof, or (B) it has received notice (which may
be by telephone or in writing) on or before the day that is five Business Days
before the Non-Extension Notice Date (1) from Administrative Agent that the
Required Lenders have elected not to permit such extension or (2) from
Administrative Agent, any Revolving Lender or Borrower Agent that one or more of
the applicable conditions specified in Section 4.02 is not then satisfied, and
in each such case directing the L/C Issuer not to permit such extension.

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the L/C Issuer will also deliver to Borrower Agent and Administrative
Agent a true and complete copy of such Letter of Credit or amendment.

(c) Drawings and Reimbursements; Funding of Participations.

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing or presentation of documents under such Letter of Credit, the L/C Issuer
shall notify the Borrower Agent and Administrative Agent thereof. Not later than
1:00 p.m. on the first Business Day immediately following the date of any
payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor
Date”), Borrowers shall reimburse the L/C Issuer through Administrative Agent in
Dollars and in an amount equal to the amount of such drawing (together with
interest thereon at the rate then applicable to Base Rate Revolving Loans). If
Borrowers fail to so reimburse the L/C Issuer by such time, Administrative Agent
shall promptly notify each Revolving Lender of the Honor Date, the amount of the
unreimbursed drawing or payment (the “Unreimbursed Amount”), and the amount of
such Revolving Lender’s Applicable Percentage thereof. In such event, the
Borrower Agent shall be deemed to have requested a Revolving Borrowing of Base
Rate Loans to be disbursed on the Honor Date in an amount equal to the
Unreimbursed Amount, without regard to the minimum and multiples

 

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specified in Section 2.03 for the principal amount of Base Rate Loans, but
subject to the amount of the unutilized portion of the Aggregate Revolving
Credit Commitments. Any notice given by the L/C Issuer or Administrative Agent
pursuant to this Section 2.03(c)(i) may be given by telephone if immediately
confirmed in writing; provided that the lack of such an immediate confirmation
shall not affect the conclusiveness or binding effect of such notice.

(ii) Each Revolving Lender shall upon any notice pursuant to Section 2.03(c)(i)
make funds available (and Administrative Agent may apply Cash Collateral
provided for this purpose) to Administrative Agent for the account of the L/C
Issuer, in Dollars, at Administrative Agent’s Office, an amount equal to its
Applicable Percentage of the Unreimbursed Amount not later than 3:00 p.m. on the
Business Day specified in such notice by Administrative Agent, whereupon,
subject to the provisions of Section 2.03(c)(iii), each Revolving Lender that so
makes funds available shall be deemed to have made a Base Rate Revolving Loan to
the Borrower Agent in such amount. Administrative Agent shall remit the funds so
received to the L/C Issuer in Dollars.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Revolving Borrowing of Base Rate Loans for any reason, the L/C Issuer may
require the Borrowers to provide Cash Collateral in an amount not less than any
such remaining Unreimbursed Amount and in the absence of any such requirement to
provide Cash Collateral, Borrowers shall be deemed to have incurred from the L/C
Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand (together
with interest) and shall bear interest at the Default Rate. In such event, each
Revolving Lender’s payment to Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance from
such Revolving Lender in satisfaction of its participation obligation under this
Section 2.03.

(iv) Until each Revolving Lender funds its Revolving Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount
drawn under any Letter of Credit, interest in respect of such Revolving Lender’s
Applicable Percentage of such amount shall be solely for the account of the L/C
Issuer.

(v) Each Revolving Lender’s obligation to make Revolving Loans or L/C Advances
to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.03(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Revolving Lender may
have against the L/C Issuer, any Borrower or any other Person for any reason
whatsoever; (B) the failure of one or more of the applicable conditions
specified in Section 4.02 to be satisfied, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing. No such making of an
L/C Advance shall relieve or otherwise impair the obligation of Borrowers to
reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer
under any Letter of Credit, together with interest as provided herein.

 

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(vi) If any Revolving Lender fails to make available to Administrative Agent for
the account of the L/C Issuer any amount required to be paid by such Revolving
Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time
specified in Section 2.03(c)(ii), then, without limiting the other provisions of
this Agreement, the L/C Issuer shall be entitled to recover from such Revolving
Lender (acting through Administrative Agent), on demand, such amount with
interest thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the L/C Issuer at a rate
per annum equal to the applicable Overnight Rate from time to time in effect,
plus any administrative, processing or similar fees customarily charged by the
L/C Issuer in connection with the foregoing. A certificate of the L/C Issuer
submitted to any Revolving Lender (through Administrative Agent) with respect to
any amounts owing under this clause (vi) shall be conclusive absent manifest
error.

(d) Repayment of Participations. At any time after the L/C Issuer has made a
payment under any Letter of Credit and has received from any Revolving Lender
such Revolving Lender’s L/C Advance in respect of such payment in accordance
with Section 2.03(c), if Administrative Agent receives for the account of the
L/C Issuer any payment in respect of the related Unreimbursed Amount or interest
thereon (whether directly from Borrowers or otherwise, including proceeds of
Cash Collateral applied thereto by Administrative Agent), Administrative Agent
will distribute to such Revolving Lender its Applicable Percentage thereof in
Dollars (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Revolving Lender’s L/C Advance was
outstanding).

(e) Obligations Absolute. The obligation of Borrowers to reimburse the L/C
Issuer for each drawing under each Letter of Credit, and to repay each L/C
Borrowing shall be joint and several and absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other agreement or instrument relating thereto;

(ii) the existence of any claim, counterclaim, set-off, defense or other right
that any Borrower or any Subsidiary may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any other
Person, whether in connection with this Agreement, the transactions contemplated
hereby or by such Letter of Credit or any agreement or instrument relating
thereto, or any unrelated transaction;

 

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(iii) any draft, demand, certificate or other document or endorsement presented
under or in connection with such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under such Letter of Credit;

(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit, or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law; or

(v) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Borrower or any
Subsidiary (other than the defense of payment in full).

provided, that the foregoing shall not excuse any L/C Issuer from liability to
the Borrowers to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are waived by the Borrowers to the extent
permitted by applicable Law) suffered by the Borrowers that are caused by such
L/C Issuer’s bad faith, gross negligence or willful misconduct when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof.

(f) Role of L/C Issuer. Each Revolving Lender and each Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the request
or with the approval of the Revolving Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. Each Borrower hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit. The L/C Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument endorsing,
transferring or assigning or purporting to endorse, transfer or assign a Letter
of Credit or the rights or benefits thereunder or proceeds thereof, in whole or
in part, which may prove to be invalid or ineffective for any reason.

 

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(g) Applicability of ISP and UCP. Unless otherwise expressly agreed by the L/C
Issuer and Borrower Agent, when a Letter of Credit is issued, (i) the rules of
the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the
Uniform Customs and Practice for Documentary Credits, as most recently published
by the International Chamber of Commerce at the time of issuance shall apply to
each commercial Letter of Credit.

(h) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.
Borrowers shall pay directly to the L/C Issuer for its own account a fronting
fee with respect to each Letter of Credit, in an amount equal to 0.125% per
annum or such other amount as may be agreed by the Borrowers and the L/C Issuer,
computed on the amount of such Letter of Credit, and payable quarterly in
arrears on the last Business Day of each Fiscal Quarter commencing March 31,
2017 and upon the Revolving Termination Date in respect of each such Letter of
Credit issued or renewed (automatic or otherwise) or amended to increase the
amount thereof during such Fiscal Quarter. In addition, Borrowers shall pay
directly to the L/C Issuer for its own account, in Dollars, the customary
issuance, presentation, amendment and other processing fees, and other standard
costs and charges, of the L/C Issuer relating to letters of credit issued by it
as from time to time in effect. Such customary fees and standard costs and
charges are due and payable on demand and are nonrefundable.

(i) Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

2.04. Swing Line Loans.

(a) The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender may, but shall not be obligated to, make loans in reliance
upon the agreements of the other Lenders set forth in this Section 2.04 in
Dollars (each such loan, a “Swing Line Loan”) to Borrowers from time to time on
any Business Day until the Revolving Credit Termination Date in an aggregate
amount not to exceed at any time outstanding the amount of the Swing Line
Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated
with the Applicable Percentage of the Outstanding Amount of Revolving Loans and
L/C Obligations of the Revolving Lender acting as Swing Line Lender, may exceed
the amount of such Revolving Lender’s Revolving Credit Commitment; provided,
however, that after giving effect to any Swing Line Loan, the Revolving Credit
Outstandings of any Revolving Lender shall not exceed such Revolving Lender’s
Revolving Credit Commitment, and provided, further, that Borrowers shall not use
the proceeds of any Swing Line Loan to refinance any outstanding Swing Line
Loan. Within the foregoing limits and subject to the discretion of the Swing
Line Lender to make Swing Line Loans, and subject to the other terms and
conditions hereof, Borrowers may borrow under this Section 2.04, prepay under
Section 2.06, and reborrow under this Section 2.04. Each Swing Line Loan shall
bear interest until maturity at a rate per annum equal to (i) the sum of the
Base Rate plus the

 

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Applicable Margin for Base Rate Loans under the Revolving Credit Facility as
from time to time in effect or (ii) the Swing Line Lender’s Quoted Rate
(computed on the basis of a year of 365/6 days for the actual number of days
elapsed). Immediately upon the making of a Swing Line Loan, each Revolving
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Revolving Lender’s Applicable
Percentage times the amount of such Swing Line Loan.

(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon Borrower
Agent’s irrevocable notice to the Swing Line Lender and Administrative Agent,
which may be given by telephone. Each such notice must be received by the Swing
Line Lender and Administrative Agent not later than 3:00 p.m. (unless the
Borrowers want to reserve the option to borrow at the Swing Line Lender’s Quoted
Rate, in which case such notice must be received by the Swing Line Lender and
Administrative Agent not later than Noon) on the requested borrowing date, and
shall specify (i) the amount to be borrowed, which shall be a minimum of
$100,000 and integral multiples of $10,000 in excess thereof, and (ii) the
requested borrowing date, which shall be a Business Day. Each such telephonic
notice must be confirmed promptly by delivery to the Swing Line Lender and
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of Borrower Agent. Promptly after
receipt by the Swing Line Lender of any Swing Line Loan Notice, the Swing Line
Lender will (i) deliver notice to Borrower Agent and Administrative Agent as to
whether it will or will not make such Swing Line Loan available to Borrowers
and, if agreeing to make such Swing Line Loan, (ii) in its discretion quote an
interest rate to Borrower Agent at which the Swing Line Lender would be willing
to make such Swing Line Loan available to Borrowers (the rate so quoted being
herein referred to as “Swing Line Lender’s Quoted Rate”) and (iii) confirm with
Administrative Agent (by telephone or in writing) that Administrative Agent has
also received such Swing Line Loan Notice and, if not, the Swing Line Lender
will notify Administrative Agent (by telephone or in writing) of the contents
thereof. Unless the Swing Line Lender has received notice (by telephone or in
writing) from Administrative Agent (including at the request of any Revolving
Lender) prior to 1:00 p.m. on the date of the proposed Swing Line Borrowing
(A) directing the Swing Line Lender not to make such Swing Line Loan as a result
of the limitations set forth in the proviso to the first sentence of
Section 2.04(a), or (B) that one or more of the applicable conditions specified
in Article IV is not then satisfied, then, subject to the terms and conditions
hereof, the Swing Line Lender may, not later than 3:00 p.m. on the borrowing
date specified in such Swing Line Loan Notice, make the amount of its Swing Line
Loan available to Borrower Agent at its office by crediting the account of
Borrower Agent on the books of the Swing Line Lender in immediately available
funds.

(c) Refinancing of Swing Line Loans.

(i) The Swing Line Lender at any time in its sole and absolute discretion, may
request (and no less frequently than once each week, shall require), on behalf
of Borrowers (which hereby irrevocably authorize the Swing Line Lender to so
request on their behalf), that each Revolving Lender make a

 

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Base Rate Revolving Loan in an amount equal to such Revolving Lender’s
Applicable Percentage of the amount of Swing Line Loans then outstanding. Such
request shall be made in writing (which written request shall be deemed to be a
Committed Loan Notice for purposes hereof) and in accordance with the
requirements of Section 2.04 without regard to the minimum and multiples
specified therein for the principal amount of Base Rate Loans, but subject to
the unutilized portion of the Aggregate Revolving Credit Commitments and the
conditions set forth in Section 4.02. The Swing Line Lender shall furnish
Borrower Agent with a copy of the applicable Committed Loan Notice promptly
after delivering such notice to Administrative Agent. Each Revolving Lender
shall make an amount equal to its Applicable Percentage of the amount specified
in such Committed Loan Notice available to Administrative Agent in immediately
available funds (and Administrative Agent may apply Cash Collateral available
with respect to the applicable Swing Line Loan) for the account of the Swing
Line Lender at Administrative Agent’s Office not later than 2:00 p.m. on the day
specified in such Committed Loan Notice, whereupon, subject to
Section 2.04(c)(ii), each Revolving Lender that so makes funds available shall
be deemed to have made a Base Rate Revolving Loan to Borrowers in such amount.
Administrative Agent shall remit the funds so received to the Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Revolving Borrowing in accordance with Section 2.04(c)(i), the request for Base
Rate Revolving Loans submitted by the Swing Line Lender as set forth herein
shall be deemed to be a request by the Swing Line Lender that each of the
Revolving Lenders fund its risk participation in the relevant Swing Line Loan
and each Revolving Lender’s payment to Administrative Agent for the account of
the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in
respect of such participation.

(iii) If any Revolving Lender fails to make available to Administrative Agent
for the account of the Swing Line Lender any amount required to be paid by such
Revolving Lender pursuant to the foregoing provisions of this Section 2.04(c) by
the time specified in Section 2.04(c)(i), the Swing Line Lender shall be
entitled to recover from such Revolving Lender (acting through Administrative
Agent), on demand, such amount with interest thereon for the period from the
date such payment is required to the date on which such payment is immediately
available to the Swing Line Lender at a rate per annum equal to the applicable
Overnight Rate from time to time in effect, plus any administrative processing
or similar fees customarily charged by the Swing Line Lender in connection with
the foregoing. A certificate of the Swing Line Lender submitted to any Revolving
Lender (through Administrative Agent) with respect to any amounts owing under
this clause (iii) shall be conclusive absent manifest error.

(iv) Each Revolving Lender’s obligation to make Revolving Loans or to purchase
and fund risk participations in Swing Line Loans pursuant to this
Section 2.04(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any set-off, counterclaim, recoupment, defense

 

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or other right which such Revolving Lender may have against the Swing Line
Lender, Borrowers or any other Person for any reason whatsoever, (B) the
occurrence or continuance of a Default or an Event of Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Revolving Lender’s obligation to make Revolving
Loans or to purchase and fund participations pursuant to this Section 2.04(c) is
subject to the conditions set forth in Section 4.02. No such funding of risk
participations shall relieve or otherwise impair the obligation of Borrowers to
repay Swing Line Loans, together with interest, as provided herein.

(d) Repayment of Participations. At any time after any Revolving Lender has
purchased and funded a risk participation in a Swing Line Loan, if the Swing
Line Lender receives any payment on account of such Swing Line Loan, the Swing
Line Lender will distribute to such Revolving Lender its Applicable Percentage
of such payment (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Revolving Lender’s risk
participation was funded) in the same funds as those received by the Swing Line
Lender.

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing Borrowers for interest on the Swing Line Loans. Until
each Revolving Lender funds its Base Rate Revolving Loan or risk participation
pursuant to this Section 2.04 to refinance such Revolving Lender’s Applicable
Percentage of any Swing Line Loan, interest in respect of such Applicable
Percentage shall be solely for the account of the Swing Line Lender.

(f) Payments Directly to Swing Line Lender. Borrowers shall make all payments of
principal and interest in respect of the Swing Line Loans directly to the Swing
Line Lender.

2.05. Repayment of Loans.

(a) Term Loans. Borrowers unconditionally promise to pay to Administrative Agent
for the account of each Term Lender the aggregate principal amount of the Term
Loan outstanding on the following dates in the respective amounts set forth
opposite such dates:

 

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Date

   Quarterly Payment  

March 31, 2017

   $ 2,062,500   

June 30, 2017

   $ 2,062,500   

September 30, 2017

   $ 2,062,500   

December 31, 2017

   $ 2,062,500   

March 31, 2018

   $ 2,062,500   

June 30, 2018

   $ 2,062,500   

September 30, 2018

   $ 2,062,500   

December 31, 2018

   $ 2,062,500   

March 31, 2019

   $ 2,475,000   

June 30, 2019

   $ 2,475,000   

September 30, 2019

   $ 2,475,000   

December 31, 2019

   $ 2,475,000   

March 31, 2020

   $ 3,093,750   

June 30, 2020

   $ 3,093,750   

September 30, 2020

   $ 3,093,750   

December 31, 2020

   $ 3,093,750   

March 31, 2021

   $ 4,125,000   

June 30, 2021

   $ 4,125,000   

September 30, 2021

   $ 4,125,000   

December 23, 2021

     As set forth below   

The outstanding unpaid principal balance and all accrued and unpaid interest on
the Term Loan shall be due and payable on the earlier of (i) the Term Loan
Maturity Date, and (ii) the date of the acceleration of such Term Loans in
accordance with the terms hereof.

(b) Revolving Loans. Borrowers shall repay to Administrative Agent for the
account of the Revolving Lenders on the earlier of (i) the Revolving Credit
Maturity Date, and (ii) the date of the acceleration of the Revolving Loans the
aggregate principal amount of all Revolving Loans outstanding on such date.

(c) Swing Line Loans. The Borrowers shall repay each Swing Line Loan on the
Revolving Credit Maturity Date.

2.06. Prepayments.

(a) Optional.

(i) Borrowers may, upon notice to Administrative Agent from Borrower Agent, at
any time or from time to time voluntarily prepay Term Loans

 

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or Revolving Loans in whole or in part without premium or penalty; provided that
(A) such notice must be received by Administrative Agent not later than 2:00
p.m. (1) three Business Days prior to any date of prepayment of Eurodollar Rate
Loans and (2) on the date of prepayment of Base Rate Loans; (B) any prepayment
of Eurodollar Rate Loans shall be in a principal amount of at least $100,000;
and (C) any prepayment of Base Rate Loans shall be in a principal amount of at
least $50,000 or, in each case, if less, the entire principal amount thereof
then outstanding. Each such notice shall specify the date and amount of such
prepayment, how such prepayment shall be applied and the Type(s) of Loans to be
prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s)
of such Loans. Administrative Agent will promptly notify each Lender of its
receipt of each such notice, and of the amount of such Lender’s ratable portion
of such prepayment (based on such Lender’s Applicable Percentage in respect of
the relevant Facility). If such notice is given by Borrower Agent, Borrowers
shall make such prepayment and the payment amount specified in such notice shall
be due and payable on the date specified therein; provided that such notice may
state that the prepayment is conditioned upon the effectiveness of other credit
facilities, acquisitions or dispositions, in which case such notice may be
revoked by Borrower Agent (by notice to Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied. Any prepayment of
a Eurodollar Rate Loan shall be accompanied by all accrued interest on the
amount prepaid, together with any additional amounts required pursuant to
Section 3.05. Each prepayment of the outstanding Term Loans pursuant to this
Section 2.06(a) shall be applied as specified by the Borrower Agent in the
applicable notice of prepayment and, in the absence of such direction, in the
manner set forth in Section 2.06(b)(v). Subject to Section 2.17, such
prepayments shall be paid to the Lenders in accordance with their respective
Applicable Percentage in respect of each of the relevant Facilities.

(ii) Borrowers may, upon notice to the Swing Line Lender (with a copy to
Administrative Agent) from Borrower Agent, at any time or from time to time,
voluntarily prepay Swing Line Loans in whole or in part without premium or
penalty (without a reduction of the Swing Line Sublimit); provided that (A) such
notice must be received by the Swing Line Lender and Administrative Agent not
later than 3:00 p.m. on the date of the prepayment, and (B) any such prepayment
shall be in a minimum principal amount of $10,000 or, if less, the entire
principal amount thereof outstanding. Each such notice shall specify the date
and amount of such prepayment. If such notice is given by Borrower Agent,
Borrowers shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.

(b) Mandatory.

(i) Excess Cash Flow. Within ten Business Days after financial statements have
been delivered or should have been delivered pursuant to Section 6.01(a) and the
related Compliance Certificate has been delivered or should have been delivered
pursuant to Section 6.02(a) for any Fiscal Year

 

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(commencing with the Fiscal Year ending December 31, 2017), Borrowers shall
prepay an aggregate principal amount of Loans equal to (x) 50% of Excess Cash
Flow for the Fiscal Year covered by such financial statements; provided that
(1) if the Consolidated Total Net Leverage Ratio (determined as of the last day
of such Fiscal Year by reference to the Compliance Certificate delivered
together with the financial statements delivered pursuant to Section 6.01(a) for
such Fiscal Year) shall be less than or equal to 3.50 to 1.00 but greater than
3.00 to 1.00, Borrowers shall prepay an aggregate principal amount of Loans
equal to 25% of Excess Cash Flow for such Fiscal Year and (2) if the
Consolidated Total Net Leverage Ratio (determined as of the last day of such
Fiscal Year by reference to the Compliance Certificate delivered together with
the financial statements delivered pursuant to Section 6.01(a) for such Fiscal
Year) shall be less than or equal to 3.00 to 1.00, Borrowers shall prepay an
aggregate principal amount of Loans equal to 0% of Excess Cash Flow for such
Fiscal Year, less (y) the aggregate amount of voluntary prepayments of the Term
Loans (and in the case of any Discounted Voluntary Prepayments solely to the
extent of the actual Cash amount paid by Borrowers in such Discounted Voluntary
Prepayment) and voluntary prepayments of the Revolving Loans (to the extent
accompanied by a permanent reduction in the Revolving Credit Commitment) made
(i) during such Fiscal Year (other than any voluntary prepayments made during
the first 120 days of such Fiscal Year to the extent such voluntary prepayments
were credited in the calculation of the Excess Cash Flow prepayment for the
prior Fiscal Year) or (ii) within 120 days after the end of the Fiscal Year for
which such Excess Cash Flow is being calculated that are applied in the manner
set forth in Section 2.06(b)(v), in each case, to the extent not financed with
proceeds equity proceeds or from the incurrence of long-term Indebtedness (other
than Revolving Loans).

(ii) Asset Dispositions. If any Loan Party or any of its Subsidiaries Disposes
of, or suffers an Event of Loss of, any property (other than any Disposition of
any property permitted by Sections 7.05(a), (b)(i), (c), (e), (f), (g), (h),
(i), (j), (k) or (l)) which results in Net Cash Proceeds in connection with such
Disposition or Event of Loss occurring during the Fiscal Year in excess of
$2,500,000 in the aggregate for all such Dispositions and Events of Loss,
Borrowers shall prepay an aggregate principal amount of Loans equal to such
excess Net Cash Proceeds promptly after receipt thereof by such Person; provided
that so long as no Event of Default shall have occurred and be continuing (or,
to the extent the only Event of Default that has occurred and is continuing is
an Event of Default arising under Section 8.01(a), so long as the Borrowers have
paid in full the unpaid amount giving rise to such Event of Default with such
Net Cash Proceeds (such payment, the “Monetary Default Payment”)), the recipient
of any such Net Cash Proceeds realized in a Disposition or Event of Loss
described in this Section 2.06(b)(ii) may (x) reinvest the amount of any such
Net Cash Proceeds (or, to the extent such Net Cash Proceeds were used to pay the
Monetary Default Payment, the remaining amount of such Net Cash Proceeds) within
three hundred sixty-five (365) days of the receipt thereof, in replacement
assets of a kind then used or usable in the business of such recipient or
(y) enter into a binding commitment thereof within said three hundred sixty-five
(365) day period

 

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and actually reinvests such Net Cash Proceeds within one hundred eighty
(180) days after the last day of said three hundred sixty-five (365) day period;
provided that if the recipient does not intend to fully reinvest such Net Cash
Proceeds, or if the time period set forth in this sentence expires without such
recipient having reinvested such Net Cash Proceeds, Borrowers shall prepay the
Loans in an amount equal to such Net Cash Proceeds (to the extent not reinvested
or intended to be reinvested within such time period).

(iii) Debt Incurrence. Upon the incurrence or issuance by any Loan Party or any
of its Subsidiaries of any Indebtedness (other than Indebtedness expressly
permitted to be incurred or issued pursuant to Section 7.01), Borrowers shall
prepay an aggregate principal amount of Loans equal to all Net Cash Proceeds
received therefrom promptly after receipt thereof by such Loan Party or such
Subsidiary.

(iv) If at any time the outstandings under the Revolving Credit Facility
(including Letters of Credit outstanding and Swing Line Loans) exceed the
Aggregate Revolving Credit Commitments, prepayments of Revolving Loans (and/or
the Cash Collateralization of Letters of Credit) shall be required in an amount
equal to such excess within one (1) Business Day of notice by Administrative
Agent to Borrower Agent.

(v) Application of Mandatory Prepayments.

(A) Each prepayment of Loans pursuant to the foregoing provisions of this
Section 2.06(b) shall be applied, first, to prepay the next four (4) principal
installments of the Term Loans (pro rata between the Term Loans (including any
Increase of the Term Loan only if the Lenders providing such Increase so
require)) in direct order of maturity, then pro rata to the remaining principal
installments (excluding the principal installment payable at maturity) of the
Term Loans and then to the principal installment payable at maturity, second, to
the Revolving Credit Facility (without a corresponding permanent reduction in
the Revolving Credit Commitment) in the manner set forth in clause (B) of this
Section 2.06(b)(v), and third, shall be used to Cash Collateralize the remaining
L/C Obligations. Subject to Section 2.17, such prepayments shall be paid to the
Lenders in accordance with their respective Applicable Percentage in respect of
the relevant Facilities.

(B) Except as otherwise provided in Section 2.17, prepayments of the Revolving
Credit Facility made pursuant to this Section 2.06(b), first, shall be applied
ratably to the L/C Borrowings and the Swing Line Loans, second, shall be applied
ratably to the outstanding Revolving Loans, third, shall be used to Cash
Collateralize the remaining L/C Obligations. Upon the drawing of any Letter of
Credit that has been Cash Collateralized, the funds held as Cash Collateral
shall be applied (without any further action by or notice to or from Borrowers
or any other Loan Party or any Defaulting Lender that has provided Cash
Collateral) to reimburse the L/C Issuer or the Revolving Lenders, as applicable.

 

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(vi) Notwithstanding the foregoing, any Lender may elect to decline, by notice
to Administrative Agent and the Borrower Agent on or prior to the date of any
prepayment of Term Loans required or permitted to be made by the Borrowers for
the account of such Lender pursuant to Section 2.06(b)(i) or 2.06(b)(ii), all or
a portion of such prepayment, in which case such prepayment (or portion thereof)
shall be retained by the Borrowers.

(vii) Notwithstanding the foregoing, to the extent any or all of the Net Cash
Proceeds of any Disposition by, or Event of Loss of, a Foreign Subsidiary
otherwise giving rise to a prepayment pursuant to Section 2.06(b)(ii) or Excess
Cash Flow attributable to Foreign Subsidiaries, is prohibited, restricted or
delayed by any applicable local requirements of Law (including but not limited
to financial assistance, corporate benefit restrictions and restrictions on
upstreaming of cash intra-group and the fiduciary and statutory duties of the
directors of the relevant Foreign Subsidiaries) from being repatriated or passed
on or distributed to or used for the benefit of any of the Borrowers or any
Domestic Subsidiary (each, a “Repatriation”; with “Repatriated” having a
correlative meaning), or if the Borrowers have determined in good faith that
Repatriation of any such amount would reasonably be expected to have adverse tax
consequences with respect to Holdings or its Subsidiaries (including, without
limitation, a deemed dividend pursuant to Section 956 of the Code), the receipt
or realization of the portion of such Net Cash Proceeds or Excess Cash Flow so
affected (solely in the case of Excess Cash Flow, to the extent not exceeding
20% of the aggregate Excess Cash Flow payment otherwise required to be made
pursuant to Section 2.06(b)(i) without giving effect to this clause (vii)), will
not be taken into account in measuring the Borrowers’ obligation to prepay Term
Loans or Revolving Loans at the times provided in this Section 2.06; provided,
that if any such Repatriation ceases to be prohibited, restricted or delayed by
applicable local requirements of Law at any time during the one (1) year period
immediately following the date on which the applicable mandatory prepayment
pursuant to Section 2.06 was required to be made, the Loan Parties shall
reasonably promptly Repatriate, or cause to be Repatriated, an amount equal to
that portion of the applicable mandatory prepayment amount previously not taken
into account in measuring the Borrowers’ obligation to make such mandatory
prepayment under Section 2.06 (such amount, the “Excluded Prepayment Amount”),
and the Loan Parties shall reasonably promptly pay the Excluded Prepayment
Amount to the Lenders, which payment shall be applied in accordance with Section
2.06(b)(v). For the avoidance of doubt, the non-application of any such portion
of the mandatory prepayment amount pursuant to this Section 2.06(b)(vii) shall
not constitute a Default or an Event of Default and such portion of the
mandatory prepayment amount shall be available for working capital purposes of
such Foreign Subsidiaries.

 

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2.07. Termination or Reduction of Commitments.

(a) Revolving Credit Commitment. Borrowers may, upon revocable notice which may
be conditioned to Administrative Agent from Borrower Agent, from time to time
permanently reduce the Aggregate Revolving Credit Commitments; provided that
(i) any such notice shall be received by Administrative Agent not later than
2:00 p.m. three Business Days prior to the date of reduction, (ii) any such
reduction shall be in an aggregate amount of $500,000 or any whole multiple of
$100,000 in excess thereof, (iii) Borrowers shall not reduce the Aggregate
Revolving Credit Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Revolving Credit Outstandings would
exceed the Aggregate Revolving Credit Commitments, and (iv) if, after giving
effect to any reduction, the Letter of Credit Sublimit or the Swing Line
Sublimit exceeds the amount of the Aggregate Revolving Credit Commitments, such
Sublimit shall be automatically reduced by the amount of such excess.
Administrative Agent will promptly notify the Lenders of any such notice of
reduction of the Aggregate Revolving Credit Commitments. Any reduction of the
Aggregate Revolving Credit Commitments shall be applied to the Revolving Credit
Commitment of each Revolving Lender according to its Applicable Percentage.

(b) Term Loan Commitment. The aggregate Term Loan Commitments shall be
automatically and permanently reduced to zero on the date of the Term Borrowing
(after giving effect thereto).

2.08. Interest.

(a) Subject to the provisions of Section 2.10 and subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period plus the Applicable Margin; (ii) each Base Rate
Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Margin; and (iii) subject to the Swing Line Lender and Borrower Agent
agreeing that interest shall be paid at the Swing Line Lender’s Quoted Rate,
each Swing Line Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the Base
Rate plus the Applicable Margin for Revolving Loans.

(b) (i) If any amount payable by Borrowers under any Loan Document is not paid
when due (without regard to any applicable grace periods), whether at stated
maturity, by acceleration or otherwise, then such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

(ii) If any Event of Default exists, then upon the written request of the
Required Lenders (which Administrative Agent shall notify Borrowers thereof) (or
automatically if an Event of Default under Section 8.01(a) or 8.01(f) exists),
all outstanding Loan Obligations shall bear interest at a fluctuating interest
rate per annum at all times equal to the Default Rate.

 

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(iii) Accrued and unpaid interest on past due amounts (including interest on
past due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

2.09. Fees.

(a) Unused Fee. Borrowers shall pay to Administrative Agent for the account of
each Revolving Lender in accordance with its Applicable Percentage, a fee (the
“Unused Fee”) equal to (x) for the period commencing on the Closing Date through
the first Adjustment Date, 0.35% times the average daily amount by which the
Aggregate Revolving Credit Commitments (other than those of Defaulting Lenders)
exceeds the sum of (i) the Outstanding Amount of Revolving Loans (other than
those of Defaulting Lenders) and (ii) the Outstanding Amount of L/C Obligations,
subject to adjustment as provided in Section 2.17 and (y) thereafter, the Unused
Fee shall equal the unused fee in effect from time to time determined as set
forth below based upon the applicable Consolidated Total Leverage Ratio then in
effect pursuant to the appropriate column under the table below and any increase
or decrease in the Unused Fee resulting from a change in the Consolidated Total
Leverage Ratio shall become effective as of each Adjustment Date based upon the
Consolidated Total Leverage Ratio for the immediately preceding Fiscal Quarter
for which financial statements were delivered or were required to be delivered
pursuant to Section 6.01(a) or (b). The Unused Fee shall accrue at all times
until the Revolving Credit Termination Date, including at any time during which
one or more of the conditions in Article IV is not met, and shall be due and
payable quarterly in arrears on the last Business Day of each Fiscal Quarter,
commencing March 31, 2017, and on the Revolving Credit Termination Date.

 

Level   

Consolidated Total Net

Leverage

Ratio

   Unused Fee  

I

   > 3.00:1.00      0.35 % 

II

   > 2.50:1.00 but < 3.00:1.00      0.35 % 

III

   > 2.00:1.00 but < 2.50:1.00      0.30 % 

IV

   > 1.50:1.00 but < 2.00:1.00      0.25 % 

V

   < 1.50:1.00      0.25 % 

If any Compliance Certificate (including any required financial information in
support thereof) of the Borrowers is not received by Administrative Agent by the
date required pursuant to Section 6.02(a), then, at Administrative Agent’s
election, the Unused Fee shall be determined as if the Consolidated Total
Leverage Ratio for the immediately preceding Fiscal Quarter is at Level I until
such time as such Compliance Certificate and supporting information is received.

 

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In the event either Borrower Agent or Administrative Agent determines in good
faith that the calculation of the Consolidated Total Leverage Ratio on which the
applicable Unused Fees for any particular period was determined is inaccurate,
and as a consequence thereof, the Unused Fee was lower that it would have been,
(i) Borrower Agent shall immediately deliver to Administrative Agent a correct
Compliance Certificate for such period (and if such Compliance Certificate is
not accurately restated and delivered within ten (10) Business Days after the
first discovery of such inaccuracy or upon notice by Administrative Agent of
such determination, then Level I shall apply retroactively for such period
notwithstanding any subsequent restatement thereof after such ten (10) day
period), (ii) Administrative Agent shall notify Borrower Agent of the amount of
fees that would have been due in respect of any outstanding Obligations during
such period had the applicable rate been calculated based on the correct
Consolidated Total Leverage Ratio (or the Level I rate if a correct Compliance
Certificate was not delivered within the ten (10) day period) and
(iii) Borrowers shall promptly pay to Administrative Agent for the benefit of
the applicable Lenders and other Persons that hold the Commitments and Loans at
the time such payment is received (regardless of whether those Persons held the
Commitments and Loans during the relevant period) the difference between the
amount that would have been due and the amount actually paid in respect of such
period.

(b) Letter of Credit Fees. Subject to the provisions of the last sentence of
this subsection (b), Borrowers shall pay to Administrative Agent for the account
of each Revolving Lender in accordance with its Applicable Percentage, (i) a
Letter of Credit fee (“Letter of Credit Fee”) for each Letter of Credit equal to
the Applicable Margin for Eurodollar Rate Loans that are Revolving Loans times
the daily maximum amount available to be drawn under such Letter of Credit
(whether or not such maximum amount is then in effect under such Letter of
Credit); provided, however, any Letter of Credit Fees otherwise payable for the
account of a Defaulting Lender with respect to any Letter of Credit as to which
such Defaulting Lender has not provided Cash Collateral satisfactory to the L/C
Issuer shall be payable, to the maximum extent permitted by applicable Law, to
the other Revolving Lenders in accordance with the upward adjustments in their
respective Applicable Percentages allocable to such Letter of Credit pursuant to
Section 2.17(a)(iv), with the balance of such fee, if any, payable to the L/C
Issuer for its own account. The Letter of Credit Fee with respect to each Letter
of Credit shall accrue at all times until the Revolving Credit Termination Date
and shall be due and payable quarterly in arrears on the last Business Day of
each Fiscal Quarter, commencing March 31, 2017, and on the Revolving Credit
Termination Date. If there is any change in the Applicable Margin for Eurodollar
Rate Loans that are Revolving Loans during any quarter, the daily maximum amount
of each Letter of Credit shall be computed and multiplied by the Applicable
Margin for Eurodollar Rate Loans that are Revolving Loans separately for each
period during such quarter that such Applicable Margin was in effect. At all
times that the Default Rate shall be applicable to any Loans pursuant to
Section 2.08(b), the Letter of Credit Fees payable under this subsection
(i) shall accrue and be payable at the Default Rate.

(c) Fee Letter. Borrowers agree to pay the fees payable in the amounts and at
the times set forth in the Fee Letter.

 

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(d) Generally. All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to (i) Administrative Agent for distribution, in
the case of commitment fees and participation fees, to the Revolving Lenders,
and otherwise, to the Lenders entitled thereto or (ii) the L/C Issuer, in the
case of fees payable to it. Fees paid shall not be refundable under any
circumstances.

2.10. Computation of Interest and Fees. All computations of interest for Base
Rate Loans shall be made on the basis of the actual days elapsed over a year of
365 or 366 days, as the case may be. All other computations of fees and interest
shall be made on the basis of the actual days elapsed over a 360-day year (i.e.,
the 365/360 day method of interest computation, which results in more fees or
interest, as applicable, being paid than if computed on the basis of a 365-day
year). Interest shall accrue on each Loan for the day on which the Loan is made,
and shall not accrue on a Loan, or any portion thereof, for the day on which the
Loan or such portion is paid, provided that any Loan that is repaid on the same
day on which it is made shall, subject to Section 2.12(a), bear interest for one
day. Each determination by Administrative Agent of an interest rate or fee
hereunder shall be conclusive and binding for all purposes, absent manifest
error.

2.11. Evidence of Debt.

(a) The Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by Administrative Agent (the “Loan Account”) in
the Register; provided that any failure to so record or any error in doing so
shall not limit or otherwise affect the obligation of Borrowers hereunder to pay
any amount owing with respect to the Obligations. The accounts or records
maintained by Administrative Agent (and any Lender) shall be conclusive absent
manifest error; provided that in the event of any conflict between the accounts
and records maintained by any Lender and the Register, the Register shall
control in the absence of manifest error. Upon the request of any Lender made
through Administrative Agent, Borrowers shall execute and deliver to such Lender
(through Administrative Agent) a Note, which shall evidence such Lender’s Loans
in addition to such accounts or records.

(b) In addition to the accounts and records referred to in (a) above, each
Lender and Administrative Agent shall maintain in accordance with its usual
practice accounts or records and, in the case of the Administrative Agent,
entries in the Register, evidencing the purchases and sales by such Lender of
participations in Letters of Credit and Swing Line Loans. In the event of any
conflict between the accounts and records maintained by Administrative Agent and
the accounts and records of any Lender in respect of such matters, the Register
shall control in the absence of manifest error.

2.12. Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by Borrowers shall be made without
deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise expressly provided herein, all payments by Borrowers hereunder shall
be made to Administrative Agent, for the account of the respective Lenders to
which such payment is owed, at Administrative Agent’s Office in Dollars and in
immediately available funds not

 

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later than 2:00 p.m. on the date specified herein. Subject to Section 2.14,
Administrative Agent will promptly distribute to each Lender its Applicable
Percentage in respect of the relevant Facility (or other applicable share as
provided herein) of such payment in like funds as received by wire transfer to
such Lender’s Lending Office. All payments received by Administrative Agent
after 2:00 p.m. shall be deemed received on the next succeeding Business Day and
any applicable interest or fee shall continue to accrue. If any payment to be
made by Borrowers shall come due on a day other than a Business Day, payment
shall be made on the next following Business Day, and such extension of time
shall be reflected when computing interest or fees, as the case may be.

(b) Presumptions by Administrative Agent.

(i) Funding by Lenders. Unless Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate
Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon
on the date of such Borrowing) that such Lender will not make available to
Administrative Agent such Lender’s share of such Borrowing, Administrative Agent
may assume that such Lender has made such share available in accordance with
Section 2.02 and may, in reliance upon such assumption, make available to
Borrowers a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to Administrative Agent,
then the applicable Lender and Borrowers severally agree to pay to
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to Borrowers to but excluding
the date of payment to Administrative Agent, at (A) in the case of a payment to
be made by such Lender, the greater of the Federal Funds Rate and a rate
determined by Administrative Agent in accordance with banking industry rules on
interbank compensation, plus any administrative, processing or similar fees
customarily charged by Administrative Agent in connection with the foregoing,
and (B) in the case of a payment to be made by Borrowers, the interest rate
applicable to Base Rate Loans. If Borrowers and such Lender shall pay such
interest to Administrative Agent for the same or an overlapping period,
Administrative Agent shall promptly remit to Borrowers the amount of such
interest paid by Borrowers for such period. If such Lender pays its share of the
applicable Borrowing to Administrative Agent, then the amount so paid shall
constitute such Lender’s Loan included in such Borrowing. Any payment by
Borrowers shall be without prejudice to any claim Borrowers may have against a
Lender that shall have failed to make such payment to Administrative Agent.

(ii) Payments by Borrowers. Unless Administrative Agent shall have received
notice from Borrower Agent prior to the time at which any payment is due to
Administrative Agent for the account of the Lenders or the L/C Issuer hereunder
that Borrowers will not make such payment, Administrative Agent may assume that
Borrowers have made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the L/C Issuer, as
the case may be, the amount due. In such event, if Borrowers

 

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have not in fact made such payment, then each of the Lenders or the L/C Issuer,
as the case may be, severally agrees to repay to Administrative Agent forthwith
on demand the amount so distributed to such Lender or the L/C Issuer, in
immediately available funds 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 Administrative Agent, at the greater of the Federal Funds Rate and a
rate determined by Administrative Agent in accordance with banking industry
rules on interbank compensation.

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

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
Administrative Agent funds for any Loan to be made by such Lender as provided in
the foregoing provisions of this Article II, and such funds are not made
available to Borrowers by Administrative Agent because the conditions to the
applicable Credit Extension set forth in Article IV are not satisfied or waived
in accordance with the terms hereof, Administrative Agent shall return such
funds (in like funds as received from such Lender) to such Lender, without
interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Loans, to fund participations in Letters of Credit and Swing Line Loans and
to make payments pursuant to Section 10.04(c) are several and not joint. The
failure of any Lender to make any Loan, to fund any such participation or to
make any payment under Section 10.04(c) on any date required hereunder shall not
relieve any other Lender of its corresponding obligation to do so on such date,
and no Lender shall be responsible for the failure of any other Lender to so
make its Loan, to purchase its participation or to make its payment under
Section 10.04(c).

(e) Insufficient Funds. If at any time insufficient funds are received by and
available to Administrative Agent to pay fully all amounts of principal, L/C
Borrowings, interest and fees then due hereunder, such funds shall be applied as
provided in Section 8.03.

2.13. Sharing of Payments by Lenders. Except as otherwise provided herein, if
any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of (a) Obligations in respect of any of the
Facilities due and payable to such Lender hereunder and under the other Loan
Documents at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations due and payable to such Lender
at such time to (ii) the aggregate amount of the Obligations in respect of the
Facilities due and payable to all Lenders hereunder and under the other Loan
Documents at such time) of payments on account of the Obligations in respect of
the Facilities due and payable to all Lenders hereunder and under the other Loan
Documents at such time obtained by all the Lenders at such time or
(b) Obligations in respect of any of the Facilities owing (but not due and
payable) to such Lender hereunder and under the other Loan Documents at such
time in excess of its ratable share (according to the proportion of (i) the
amount of such Obligations owing (but not due and payable) to such Lender at
such time to (ii) the aggregate amount of the Obligations in respect of

 

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the Facilities owing (but not due and payable) to all Lenders hereunder and
under the other Loan Documents at such time) of payments on account of the
Obligations in respect of the Facilities owing (but not due and payable) to all
Lenders hereunder and under the other Loan Documents at such time obtained by
all of the Lenders at such time, then, in each case under clauses (a) and (b)
above, the Lender receiving such greater proportion shall (A) notify
Administrative Agent of such fact, and (B) purchase (for cash at face value)
participations in the Loans and subparticipations in L/C Obligations and Swing
Line Loans of the other Lenders, or make such other adjustments as shall be
equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of Obligations in
respect of the Facilities then due and payable to the Lenders or owing (but not
due and payable) to the Lenders, as the case may be, provided that:

(i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

(ii) the provisions of this Section shall not be construed to apply to (A) any
payment made by or on behalf of any Loan Party pursuant to and in accordance
with the express terms of this Agreement (including the application of funds
arising from the existence of a Defaulting Lender or payments under
Section 2.19), (B) the application of Cash Collateral provided for in
Section 2.16, or (C) any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or
subparticipations in L/C Obligations or Swing Line Loans to any assignee or
participant.

2.14. Settlement Among Lenders.

(a) The amount of each Revolving Lender’s Applicable Percentage of outstanding
Revolving Loans shall be computed on each Business Day (or less frequently in
Administrative Agent’s discretion but no less frequently than weekly) and shall
be adjusted upward or downward based on all Revolving Loans and repayments of
Revolving Loans received by Administrative Agent as of 3:00 p.m. on such
Business Day (or the first Business Day (such date, the “Settlement Date”)
following the end of the period specified by Administrative Agent).

(b) Each Business Day, or on each Settlement Date, as applicable,
(i) Administrative Agent shall transfer to each Revolving Lender its Applicable
Percentage of repayments, and (ii) each Revolving Lender shall transfer to
Administrative Agent (as provided below) or Administrative Agent shall transfer
to each Revolving Lender, such amounts as are necessary to insure that, after
giving effect to all such transfers, the Revolving Credit Outstandings of each
Revolving Lender shall be equal to such Revolving Lender’s Applicable Percentage
of all the Total Revolving Credit Outstandings as of such Business Day or
Settlement Date. If the applicable Revolving Lender is notified of a transfer to
be made to Administrative Agent prior to 1:00 p.m. on a Business Day, such
transfer shall be made in immediately available funds no later than 3:00 p.m.
that day; and, if received after 1:00 p.m., then no later than 3:00 p.m. on the

 

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next Business Day. The obligation of each Revolving Lender to transfer such
funds is irrevocable, unconditional and without recourse to or warranty by
Administrative Agent. If and to the extent any Revolving Lender shall not have
so made its transfer to Administrative Agent, such Lender agrees to pay to
Administrative Agent, forthwith on demand such amount, together with interest
thereon, for each day from such date until the date such amount is paid to
Administrative Agent, equal to the greater of the Federal Funds Rate and a rate
determined by Administrative Agent in accordance with banking industry rules on
interbank compensation plus any reasonable administrative, processing, or
similar fees customarily charged by Administrative Agent in connection with the
foregoing.

2.15. Nature and Extent of Each Borrower’s Liability.

(a) Joint and Several Liability. Each Borrower agrees that it is jointly and
severally liable for all Obligations and all agreements under the Loan
Documents. As such, each Borrower agrees that it is a guarantor of each other
Borrower’s obligations and liabilities hereunder and under the other Loan
Documents.

(b) Direct Liability. Nothing contained in this Section 2.15 or Article XI shall
limit the liability of any Borrower to pay Loans made directly or indirectly to
that Borrower (including Loans advanced to any other Borrower and then re-loaned
or otherwise transferred to, or for the benefit of, such Borrower), L/C
Obligations relating to Letters of Credit issued to support such Borrower’s
business, and all accrued interest, fees, expenses and other related Obligations
with respect thereto, for which such Borrower shall be primarily liable for all
purposes hereunder.

(c) Joint Enterprise. Each Borrower has requested that Administrative Agent and
Lenders make this credit facility available to Borrowers on a combined basis, in
order to finance Borrowers’ business most efficiently and economically.
Borrowers’ business is a mutual and collective enterprise, and the successful
operation of each Borrower is dependent upon the successful performance of the
integrated group. Borrowers believe that consolidation of their credit facility
will enhance the borrowing power of each Borrower and ease administration of the
facility, all to their mutual advantage. Borrowers acknowledge that
Administrative Agent’s and Lenders’ willingness to extend credit and to
administer the Collateral on a combined basis hereunder is done solely as an
accommodation to Borrowers and at Borrowers’ request.

(d) Borrower Agent.

(i) Each Borrower hereby irrevocably appoints and designates elf Cosmetics
(“Borrower Agent”) as its representative and agent and attorney-in-fact for all
purposes under the Loan Documents, including requests for Credit Extensions,
designation of interest rates, delivery or receipt of communications,
preparation and delivery of financial reports, receipt and payment of
Obligations, requests for waivers, amendments or other accommodations, actions
under the Loan Documents (including in respect of compliance with covenants),
and all other dealings with Administrative Agent, L/C Issuers or any Lender.

 

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(ii) Each other Loan Party hereby irrevocably appoints and designates Borrower
Agent as its agent and attorney-in-fact to receive statements on its account and
all other notices from Administrative Agent and Lenders with respect to the
Obligations or otherwise under or in connection with this Agreement and the
other Loan Documents.

(iii) Any notice, election, representation, warranty, agreement or undertaking
by or on behalf of any Loan Party by Borrower Agent shall be deemed for all
purposes to have been made by such Loan Party and shall be binding upon and
enforceable against such Loan Party to the same extent as if made directly by
such Loan Party.

(iv) Borrower Agent hereby accepts the appointment by each Loan Party hereunder
to act as its agent and attorney-in-fact.

(v) Administrative Agent and Lenders shall be entitled to rely upon, and shall
be fully protected in relying upon, any notice or communication (including any
notice of borrowing) delivered by Borrower Agent on behalf of any Borrower or
other Loan Party. Administrative Agent and Lenders may give any notice or
communication with a Borrower or other Loan Party hereunder to Borrower Agent on
behalf of such Borrower or Loan Party. Each of Administrative Agent, L/C Issuers
and Lenders shall have the right, in its discretion, to deal exclusively with
Borrower Agent for any or all purposes under the Loan Documents. Each Borrower
and each other Loan Party agrees that any notice, election, communication,
representation, agreement or undertaking made on its behalf by Borrower Agent
shall be binding upon and enforceable against it.

2.16. Cash Collateral.

(a) Certain Credit Support Events. If (i) the L/C Issuer has honored any full or
partial drawing request under any Letter of Credit upon presentation and such
drawing has resulted in an L/C Borrowing, (ii) as of the date that is 5 Business
Days prior to the earlier of the Letter of Credit Expiration Date and the
Revolving Credit Termination Date, any L/C Obligation for any reason remains
outstanding, or (iii) there shall exist a Defaulting Lender, Borrowers shall
immediately (in the case of clause (iii) above) or within one Business Day (in
all other cases) following any request by Administrative Agent or the L/C
Issuer, provide Cash Collateral in an amount not less than the Minimum
Collateral Amount (determined in the case of Cash Collateral provided pursuant
to clause (iii) above, after giving effect to Section 2.17(a)(iv) and any Cash
Collateral provided by the Defaulting Lender).

(b) Grant of Security Interest. Borrowers, and to the extent provided by any
Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the
control of) Administrative Agent, for the benefit of Administrative Agent, the
L/C Issuer and the Lenders, and agrees to maintain, a first priority security
interest in all such cash, Deposit Accounts and all balances therein, and all
other property so provided as collateral pursuant hereto, and in all proceeds of
the foregoing, all as security for the obligations to

 

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which such Cash Collateral may be applied pursuant to Section 2.16(c). If at any
time Administrative Agent determines that Cash Collateral is less than the
Minimum Collateral Amount or otherwise deficient for any reason, Borrowers will,
promptly upon written demand by Administrative Agent, pay or provide to
Administrative Agent additional Cash Collateral in an amount sufficient to
eliminate such deficiency. All Cash Collateral (other than credit support not
constituting funds subject to deposit) shall be maintained in one or more
blocked, non-interest bearing Deposit Accounts at BMO.

(c) Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided in respect of Letters of Credit or Swing
Line Loans, shall be held and applied to the satisfaction of the specific L/C
Obligations, Swing Line Loans, obligations to fund participations therein
(including, as to Cash Collateral provided by a Revolving Lender that is a
Defaulting Lender, any interest accrued on such obligation) and other
obligations for which the Cash Collateral was so provided, prior to any other
application of such property as may be provided for herein.

(d) Release. Cash Collateral (or the appropriate portion thereof) provided to
reduce Fronting Exposure or to secure other obligations shall be released
promptly following (i) the elimination of the applicable Fronting Exposure or
other obligations giving rise thereto (including by the termination of
Defaulting Lender status of the applicable Revolving Lender (or, as appropriate,
its assignee following compliance with Section 10.06(b)(v)) or (ii) the
determination by Administrative Agent and the L/C Issuer that there exists
excess Cash Collateral.

2.17. Defaulting Lenders.

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

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of “Required Lenders,” or any
comparable definition and Section 10.01.

(ii) Reallocation of Payments. Any payment of principal, interest, fees or other
amounts received by Administrative Agent for the account of such Defaulting
Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or
otherwise) or received by Administrative Agent from a Defaulting Lender pursuant
to Section 10.08 shall be applied at such time or times as may be determined by
Administrative Agent, provided that if (x) such payment is a payment of the
principal amount of any Loans or L/C Borrowings in respect of which that
Defaulting Lender has not fully funded its appropriate share and (y) such Loans
were made or the related Letters of Credit were issued at a time when the
conditions set forth in Section 4.02 were satisfied or waived, such payment
shall be applied solely to pay the Loans of, and L/C Obligations owed to, all
Non-Defaulting Lenders under the applicable Facility on a pro rata basis (and
ratably

 

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among all applicable Facilities computed in accordance with the Defaulting
Lenders’ respective funding deficiencies) prior to being applied to the payment
of any Loans of, or L/C Obligations owed to, such Defaulting Lender under the
applicable Facility until such time as all Loans and funded and unfunded
participations in L/C Obligations and Swing Line Loans are held by the Lenders
pro rata in accordance with the Commitments hereunder without giving effect to
Section 2.17(a)(iv). It is agreed and understood that Administrative Agent shall
be entitled to set off any funding shortfall of such Defaulting Lender against
such Defaulting Lender’s respective share of any payments received from
Borrowers. Any payments, prepayments or other amounts paid or payable to a
Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting
Lender or to post Cash Collateral pursuant to this Section 2.16(a)(ii) shall be
deemed paid to and redirected by such Defaulting Lender, and each Lender
irrevocably consents hereto.

(iii) Certain Fees. No Defaulting Lender shall be entitled to receive any Unused
Fee payable pursuant to Section 2.09(a) for any period during which that Lender
is a Defaulting Lender (and Borrowers shall not be required to pay any such fee
that otherwise would have been required to have been paid to that Defaulting
Lender). Each Defaulting Lender which is a Revolving Lender shall be entitled to
receive Letter of Credit Fees for any period during which that Lender is a
Defaulting Lender only to the extent allocable to its Applicable Percentage of
the stated amount of Letters of Credit for which it has provided Cash Collateral
pursuant to Section 2.16.

(iv) Reallocation of Applicable Percentages to Reduce Fronting Exposure. All or
any part of such Defaulting Lender’s participation in L/C Obligations and Swing
Line Loans shall be reallocated among the Non-Defaulting Lenders which are
Revolving Lenders in accordance with their respective Applicable Percentages
(calculated without regard to such Defaulting Lender’s Revolving Credit
Commitment) but only to the extent that (x) the conditions set forth in
Section 4.02 are satisfied at the time of such reallocation (and, unless
Borrower Agent shall have otherwise notified Administrative Agent at such time,
Borrowers shall be deemed to have represented and warranted that such conditions
are satisfied at such time), and (y) such reallocation does not cause the
aggregate Revolving Credit Outstandings of any Non-Defaulting Lender to exceed
such Non-Defaulting Lender’s Revolving Credit Commitment. No reallocation
hereunder shall constitute a waiver or release of any claim of any party
hereunder against a Defaulting Lender arising from that Lender having become a
Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of
such Non-Defaulting Lender’s increased exposure following such reallocation.

(b) Defaulting Lender Cure. If Borrower Agent, Administrative Agent and, in the
case that a Defaulting Lender is a Revolving Lender, the Swing Line Lender and
the L/C Issuer, agree in writing that a Lender is no longer a Defaulting Lender,
Administrative Agent will so notify the parties hereto, whereupon as of the
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specified in such notice and subject to any conditions set forth therein (which
may include arrangements with respect to any Cash Collateral), that Lender will,
to the extent applicable, purchase at par that portion of outstanding Revolving
Loans of the other Lenders or take such other actions as Administrative Agent
may determine to be necessary to cause the Revolving Loans and funded and
unfunded participations in Letters of Credit and Swing Line Loans to be held on
a pro rata basis by the Lenders in accordance with their Applicable Percentages
(without giving effect to Section 2.17(a)(iv)), whereupon such Lender will cease
to be a Defaulting Lender; provided that no adjustments will be made
retroactively with respect to fees accrued or payments made by or on behalf of
Borrowers while that Lender was a Defaulting Lender; and provided, further, that
except to the extent otherwise expressly agreed by the affected parties, no
change hereunder from Defaulting Lender to Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender.

2.18. Increase in Revolving Credit Commitments or Term Loan Facility.

(a) Request for Increase. Upon notice to Administrative Agent (who shall
promptly notify the applicable Revolving Lenders and Term Lenders), Borrower
Agent may from time to time prior to the Maturity Date request to add one or
more incremental term facilities and/or request an increase in the Aggregate
Revolving Credit Commitments or Term Loan Facility by an amount (for all such
requests) not exceeding, in the aggregate, the greater of (x) 1.0x of Adjusted
Consolidated EBITDA on a Pro Forma Basis for the four Fiscal Quarter period most
recently ended as determined based on the financial statements for the most
recently ended fiscal period that were required to be delivered pursuant to this
Agreement and (y) $50,000,000, all of which may be used to increase the Term
Loan Facility or add one or more incremental term facilities and not more than
$10,000,000 of which may be used to increase the Aggregate Revolving Credit
Commitments (each such increase or addition of incremental facilities, an
“Increase”); provided that any such request for an Increase shall be in a
minimum amount of $5,000,000 in the aggregate (or $2,500,000 with respect to an
Increase in the Aggregate Revolving Credit Commitments) or, if less, the entire
unutilized amount of the maximum amount of all such requests set forth above.
Each notice from the Borrower Agent pursuant to this Section shall set forth the
requested amount and proposed terms of the relevant Increase, as applicable.

(b) Reserved.

(c) Notification by Administrative Agent; Additional Lenders. Each Increase may
be made by any existing Lender or by any other Person reasonably acceptable to
Borrowers, subject to the approval of Administrative Agent to the extent such
approval would be required for an assignment to such Person pursuant to
Section 10.06 and, solely in the case of any Increase in respect of the
Revolving Credit Facility, subject to the approval of Administrative Agent, the
Swing Line Lender and each L/C Issuer (which approval shall not be unreasonably
withheld) to the extent such approval would be required for an assignment under
the Revolving Credit Facility to such Person pursuant to Section 10.06, who
becomes a Lender pursuant to a joinder agreement in form and

 

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substance satisfactory to Administrative Agent and its counsel (each such
assignee issuing a commitment, executing and delivering such joinder agreement
and becoming a Lender, an “Additional Lender”). No existing Lender shall have
any obligation to participate in any Increase.

(d) Effective Date and Allocations. If the Aggregate Revolving Credit
Commitments or the Term Loan Facility are increased or an incremental term
facility is provided in accordance with this Section 2.18, Administrative Agent
and Borrower Agent shall determine the effective date (the “Increase Effective
Date”) and the final allocation of such Increase or incremental term facility.
Administrative Agent shall promptly notify Borrower Agent and the Revolving
Lenders or Term Lenders, as applicable, of the final allocation of such Increase
or incremental term facility and the Increase Effective Date.

(e) Conditions to Effectiveness of Increase. As a condition precedent to each
Increase, (i) Borrower Agent shall have delivered to Administrative Agent a
certificate dated as of the Increase Effective Date signed by a Responsible
Officer of Borrower Agent (A) certifying and attaching the resolutions adopted
by the Loan Parties approving or consenting to such Increase, and (B) certifying
that, no Event of Default exists or would immediately exist after giving effect
to the Increase; provided, that solely with respect to an Increase in the Term
Loan Facility or an incremental term facility, as applicable, the proceeds of
which are intended to and shall be used to finance a substantially
contemporaneous consummation of a Limited Condition Acquisition (such Increase
or incremental term facility, as applicable, a “Limited Condition Incremental
Facility”), the Persons providing such Limited Condition Incremental Facility
may agree to a “Funds Certain Provision” that does not condition the funding of
such Limited Condition Incremental Facility on the absence of any Default or
Event of Default, in which case the conditions shall be that (x) no Event of
Default shall exist on the execution date of the applicable acquisition
agreement for such Limited Condition Acquisition, and (y) no Event of Default
under Section 8.01(a) or 8.01(f) shall exist on the date the related Limited
Condition Incremental Facility is funded, (ii) Borrowers, Administrative Agent,
and any Additional Lender shall have executed and delivered a joinder to the
Loan Documents in such form as Administrative Agent shall reasonably require;
(iii) Borrowers shall have paid such fees and other compensation to the Lenders
increasing their Revolving Credit Commitments, the Lenders increasing their Term
Loan Commitments or providing any incremental term loan and the Additional
Lenders, as Borrowers, such Lenders and such Additional Lenders shall agree;
(iv) Borrower Agent shall have delivered to Administrative Agent a certificate
dated as of the Increase Effective Date evidencing that on a Pro Forma Basis
after giving effect to the applicable Increase (but without “netting” the Cash
proceeds of such Increase), and, in the case of an Increase of the Aggregate
Revolving Credit Commitments, assuming such incremental Revolving Loans are
fully drawn on the Increase Effective Date, any permitted acquisitions,
dispositions or prepayments of indebtedness and other appropriate pro forma
adjustments to be mutually agreed by Administrative Agent and Borrowers, (A) the
Consolidated Total Net Leverage Ratio of Holdings and its Subsidiaries as of the
end of the Fiscal Quarter most recently ended as determined based on the
financial statements for the most recently ended fiscal period that were
required to be delivered pursuant to this Agreement was equal to or less than
3.00 to 1.00 and (B) Holdings and its

 

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Subsidiaries are in compliance on a Pro Forma Basis with the covenants set forth
in Sections 7.12(a) and (b) for the Fiscal Quarter most recently ended computed
as of the last day of the most recently ended fiscal period for which financial
statements have been delivered or were required to be delivered pursuant to
Section 6.01(a) or (b); provided, that in connection with a Limited Condition
Acquisition, each of the requirements set forth in clauses (A) and (B) above
may, at the election of the Borrower Agent, be tested (and assuming for purposes
of such calculations that (x) in the case of any Limited Condition Incremental
Facility being incurred in connection therewith, such Limited Condition
Incremental Facility is fully drawn as of such date but without “netting” the
Cash proceeds of such Limited Condition Incremental Facility and (y) the
proposed Limited Condition Acquisition, and all transactions to occur in
connection therewith, have been effected) on the execution date of the
applicable acquisition agreement for such Limited Condition Acquisition;
(v) Borrowers, the Lenders increasing their Commitments and each Additional
Lender shall have delivered such other instruments, documents and agreements as
Administrative Agent may reasonably have requested to effectuate such Increase;
(vi) the representations and warranties of the Loan Parties contained in
Article V or any other Loan Document, shall be true and correct in all material
respects (or in all respects for such representations and warranties that are by
their terms already qualified as to materiality), except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct in all material respects (or in all respects
for such representations and warranties that are by their terms already
qualified as to materiality) as of such earlier date; provided, that with
respect to a Limited Condition Incremental Facility, the Persons providing such
Limited Condition Incremental Facility may agree to a “Funds Certain provision”
that does not impose as a condition to funding thereof that such representations
and warranties are true and correct at the time the Limited Condition
Incremental Facility is funded; and (vii) solely to the extent all or any
portion of an Increase to the Term Loan or an incremental term loan is provided
by Sponsor or any of its Affiliates (other than Holdings and its Subsidiaries
and any Debt Fund Affiliates), after giving effect to such Increase or
incremental term loan, as applicable, (x) the aggregate principal amount of the
Term Loans and incremental term loans held by the Sponsor and its Affiliates
(other than Holdings and its Subsidiaries and any Debt Fund Affiliates) shall
not at any time, in the aggregate for all such Persons, exceed 25% of the
aggregate principal amount of the Term Loans and incremental term loans then
outstanding, and (y) the Sponsor and its Affiliates (other than Holdings and its
Subsidiaries and any Debt Fund Affiliates) holding the Term Loans and
incremental term loans shall not constitute 50% or more of the aggregate number
of Lenders holding a portion of the Term Loans and incremental term loans at the
time of such Increase or incremental term loan, as applicable. In the case of an
Increase in respect of the Revolving Credit Facility, the Revolving Loans
outstanding on the Increase Effective Date shall be reallocated and adjusted
between and among the applicable Lenders, and Borrowers shall pay any additional
amounts required pursuant to Section 3.05 resulting therefrom, to the extent
necessary to keep the outstanding applicable Revolving Loans ratable among the
applicable Lenders with any revised Applicable Percentages, as applicable,
arising from any nonratable increase in the applicable Revolving Loans under
this Section 2.18.

 

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(f) Interest Margins. Borrower Agent shall have reached agreement with the
Lenders (or Additional Lenders) agreeing to the respective Increase with respect
to the interest margins applicable to Revolving Loans, Term Loans or incremental
term loans to be made pursuant such Increase (which interest margins may be
(A) with respect to Revolving Loans made pursuant to the increased Revolving
Credit Commitments, higher than or equal to the interest margins applicable to
Revolving Loans set forth in this Agreement immediately prior to the Increase
Effective Date, and (B) with respect to any Increase of the Term Loans or any
Increase pursuant to which any incremental term facilities are provided, higher
than, equal to, or lower than the interest margins applicable to the applicable
Term Loan set forth in this Agreement immediately prior to the Increase
Effective Date, as applicable) and shall have communicated the amount of such
interest margins to Administrative Agent. The Administrative Agent and Borrowers
(with the consent of the Lenders or Additional Lenders providing such Increase
(and, for the avoidance of doubt, without the consent of any existing Lenders
not providing such Increase)) may effect such amendments to this Agreement and
the other Loan Documents as may be necessary or appropriate to effectuate the
provisions of this Section 2.18 (including any amendment necessary to effectuate
the interest margins for the Revolving Loans, Term Loans or incremental term
loans to be made pursuant to such Increase). Anything to the contrary contained
herein notwithstanding, (1) as of the date of the incurrence of such Increase,
the Weighted Average Life to Maturity of such incremental term facility shall
not be shorter than that of the original existing Term Loan (without giving
effect to any prepayments thereof) and (2) the All-In Yield applicable to any
Increase will be determined by the Borrowers and the lenders providing such
Increase but in the event that the All-In Yield applicable to such Increase
exceeds the All-In Yield of the original existing Term Loans and/or Revolving
Loans, as applicable, by more than 50 basis points then in the event that the
All-In Yield applicable to such Increase to the Term Loan or incremental term
facility exceeds the All-In Yield of the original existing Term Loans and/or
Revolving Loans by more than 50 basis points (for the avoidance of doubt,
including as a result of any Eurodollar Rate floor, Eurodollar Base Rate floor
or, as applicable, exceeding the applicable Existing Floor), the interest rate
margins for the original existing Term Loans and/or Revolving Loans existing at
such time shall be increased to the extent necessary so that the All-In Yield of
such original existing Term Loans and/or Revolving Loans, as applicable, is
equal to the All-In Yield of the applicable Increase minus 50 basis points;
provided, that any increase to the All-In Yield of the existing Term Loans or
Revolving Loans existing at such time due solely to the Eurodollar Base Rate or
Base Rate floor applicable to such Increase exceeding the applicable Existing
Floor, such increase shall be effected as an increase to the Existing Floor or
the interest rate margin of the existing Term Loans or Revolving Loans (or a
combination thereof) at the option of the Borrower Agent; provided further that
the provisions of this subclause (2) shall not apply to any Increase of the Term
Loans made or any Increase pursuant to which any incremental term facilities are
provided, in each case, after the first twelve (12) months following the Closing
Date.

(g) Each Increase shall rank pari passu in right of payment in respect of
Collateral and with the Obligations in respect of the Revolving Credit
Commitments and Term Loans available to Borrowers. In addition thereto
(i) Increases to the Term Loans or any incremental term loans shall not have a
final maturity date earlier than the latest

 

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maturity date applicable to the original Term Loan or previously established
incremental term loan, (ii) other than pricing, amortization or maturity date,
Increases of the Term Loans and establishment of incremental term loans shall be
on terms and pursuant to documentation consistent with the terms and
documentation of the Term Loans or reflect market terms and conditions at the
time of incurrence or issuance thereof as determined by the Borrower Agent and
the Administrative Agent (it being understood that terms differing from those
with respect to the initial Term Loans applicable only after the maturity date
of the initial Term Loans are acceptable) or as otherwise reasonably acceptable
to the Administrative Agent, (iii) each Increase of the Revolving Credit
Commitments and Revolving Borrowing thereunder shall be under the same terms
(excluding original issue discount and upfront fees and arrangement,
structuring, underwriting, ticking, consent and amendment fees and other upfront
fee compensation payable in connection therewith) as Revolving Loans in respect
of Revolving Loan Commitments and (iv) subject to the foregoing, (A) the
amortization schedule applicable to any Increase of the Term Loans or any
Increase pursuant to which any incremental term facilities are provided shall be
determined by the Borrowers and the lenders providing such Increase, and (B) the
applicable lenders providing any Increase of the Term Loans or any Increase
pursuant to which any incremental term facilities are provided may agree to
participate on a pro rata basis or less than a pro rata basis (but not on a
greater than pro rata basis) in any voluntary or mandatory prepayments as the
original existing Term Loans.

(h) Conflicting Provisions. This Section 2.18 shall supersede any provisions in
Section 2.13 or 10.01 to the contrary.

2.19. Prepayments Below Par.

(a) Borrowers’ Right to Prepay. Each Borrower shall have the right at any time
and from time to time to prepay the Term Loan to the Lenders at a discount to
the par value of such Loan and on a non-pro rata basis (but, in the case of a
prepayment pursuant to clause (x) below, which offer of prepayment shall be on a
pro rata basis as to all Lenders with a portion of the Term Loan) pursuant to
(x) the procedures described in this Section 2.19 or (y) open market purchases
(any prepayment pursuant to the foregoing clauses (x) or (y) each, a “Discounted
Voluntary Prepayment”), provided that (i) no proceeds of Revolving Loans or
Swing Line Loans shall be used to consummate any Discounted Voluntary
Prepayment, (ii) no Default or Event of Default shall have occurred and be
continuing or would result from the Discounted Voluntary Prepayment, (iii) the
relevant Borrower shall deliver to Administrative Agent, together with each
Discounted Prepayment Option Notice (if applicable), a certificate of a
Responsible Officer of the relevant Borrower (1) stating that each of the
conditions to such Discounted Voluntary Prepayment contained in this
Section 2.19 has been satisfied and (2) specifying the aggregate principal
amount of the Term Loan to be prepaid pursuant to such Discounted Voluntary
Prepayment, (iv) the Term Loan prepaid is immediately cancelled and may not be
reborrowed, and (v) neither the Sponsor, the Borrowers or any of their
respective Affiliates shall be required to make a representation that it is not
in possession of material non-public information with respect to the Borrowers,
their Subsidiaries or their respective securities and customary “Big Boy”
disclaimers from all parties shall be obtained.

 

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(b) Notice. To the extent any Borrower seeks to make a Discounted Voluntary
Prepayment pursuant to clause (x) of the definition thereof, such Borrower will
provide written notice to the Administrative Agent (each, a “Discounted
Prepayment Option Notice”) that such Borrower desires to prepay a portion of the
Term Loan in an aggregate principal amount specified therein by such Borrower
(each, a “Proposed Discounted Prepayment Amount”), in each case at a discount to
the par value of the Term Loan as specified below. The Proposed Discounted
Prepayment Amount shall not be less than $1,000,000 (unless otherwise agreed by
the Administrative Agent). The Discounted Prepayment Option Notice shall further
specify with respect to the proposed Discounted Voluntary Prepayment (i) the
Proposed Discounted Prepayment Amount, (ii) a discount range (which may be a
single percentage) selected by such Borrower with respect to such proposed
Discounted Voluntary Prepayment equal to a percentage of par of the principal
amount of the Term Loan to be prepaid (the “Discount Range”), and (iii) the date
by which Lenders are required to indicate their election to participate in such
proposed Discounted Voluntary Prepayment, which shall be at least 5 Business
Days following the date of the Discounted Prepayment Option Notice (the
“Acceptance Date”).

(c) Lender Acceptance. Upon receipt of a Discounted Prepayment Option Notice,
the Administrative Agent shall promptly notify each applicable Lender thereof.
On or prior to the Acceptance Date, each such Lender may specify by written
notice (each, a “Lender Participation Notice” it being understood that a Lender
may deliver more than one Lender Participation Notice, and that each such Lender
Participation Notice of such Lender shall constitute an independent and
unconditional offer, and no such Lender Participation Notice may be contingent
on the making of any prepayment with respect to the Offered Loans (defined
below) in respect of any other Lender Participation Notice, or otherwise be
contingent or conditional in any way) to the Administrative Agent setting forth
(i) a maximum acceptable discount to par (the “Acceptable Discount”) within the
Discount Range (for example, a Lender specifying a discount to par of 20% would
accept a purchase price of 80% of the par value of the portion of the Term Loan
to be prepaid) and (ii) a maximum principal amount (subject to rounding
requirements specified by the Administrative Agent) of the Term Loan held by
such Lender with respect to which such Lender is willing to permit a Discounted
Voluntary Prepayment at the Acceptable Discount (“Offered Loans”). Based on the
Acceptable Discounts and principal amounts of the Offered Loans, the
Administrative Agent, in consultation with the relevant Borrower, shall
determine the applicable discount for the portion of the Term Loan to be prepaid
(the “Applicable Discount”), which Applicable Discount shall be (y) the
percentage specified by the relevant Borrower if such Borrower has selected a
single percentage pursuant to Section 2.19(b) for the applicable Discounted
Voluntary Prepayment or (z) otherwise, the highest Acceptable Discount at which
such Borrower can pay the Proposed Discounted Prepayment Amount in full
(determined by adding the principal amounts of Offered Loans commencing with the
Offered Loans with the highest Acceptable Discount); provided, however, that in
the event that such Proposed Discounted Prepayment Amount cannot be paid in full
at any

 

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Acceptable Discount, the Applicable Discount shall be the highest Acceptable
Discount specified by the Lenders that is within that Discount Range and then
the next highest until all of the Offered Loans are repurchased. The Applicable
Discount shall be applicable for all Lenders who have offered to participate in
the applicable Discounted Voluntary Prepayment and have Qualifying Loans (as
defined below). Any Lender whose Lender Participation Notice is not received by
the Administrative Agent by the Acceptance Date shall be deemed to have declined
to accept a Discounted Voluntary Prepayment of its portion of the Term Loan at
any discount to their par value within the Discount Range.

(d) Loans held by Sponsor and Affiliates. Notwithstanding anything in this
Section 2.19 to the contrary, if the consummation of any Discounted Voluntary
Prepayment would have the effect of causing the aggregate principal amount of
the Term Loans held by Sponsor and its Affiliates (other than Debt Fund
Affiliates) to exceed (A) 33% of the aggregate principal amount of all Term
Loans then outstanding (or the number of Sponsor and any of its Affiliates
holding Term Loans to exceed the applicable cap on the number of Sponsor or any
of its Affiliates holding Term Loans in Section 10.06(g)) or (B) solely to the
extent the Permitted Holders control, directly or indirectly, a majority of the
Voting Equity Interests of Holdings, 25% of the aggregate principal amount of
all Term Loans then outstanding (each of the foregoing clauses (A) and (B), a
“Sponsor Investor Overage”), the Sponsor, such Affiliates and each Borrower
agree that (i) the Sponsor and such Affiliates shall be deemed to have issued
Lender Participation Notices accepting the Discounted Voluntary Prepayment offer
for, or offered for sale in the open market, as applicable, sufficient portions
of the Term Loans held by the Sponsor and its Affiliates (other than Debt Fund
Affiliates) so that the Sponsor Investor Overage would be eliminated, (ii) the
applicable Borrower shall be deemed to have accepted such Lender Participation
Notices or purchased such Term Loans in the open market, as applicable, in the
aggregate amount necessary to eliminate the Sponsor Investor Overage and
(iii) the Administrative Agent shall determine, in consultation with the
applicable Borrower, how to allocate the applicable Discounted Voluntary
Prepayment among the Sponsor and its Affiliates; provided, that in lieu of
taking such action set forth in this Section 2.19(d), the Sponsor may, in
accordance with and to the extent permitted by Section 10.06(g)(C) hereof,
contribute or assign Term Loans to the Borrowers (which Term Loans shall for all
purposes, including under this Agreement, be disregarded for purposes of
calculating each of Adjusted Consolidated EBITDA and Excess Cash Flow for any
applicable period of calculation and such portion of the Term Loan and all
rights and obligations as a Lender related thereto shall for all purposes
(including under this Agreement, the other Loan Documents and otherwise) be
deemed to be irrevocably prepaid, terminated, extinguished, cancelled and of no
further force and effect and such Borrower or such Borrower’s Subsidiary shall
neither obtain nor have any rights as a Lender hereunder or under the other Loan
Documents by virtue of such capital contribution or assignment) in an amount
sufficient to eliminate any Sponsor Investor Overage prior to taking actions
required by this Section 2.19(d).

(e) Allocation. The relevant Borrower shall make a Discounted Voluntary
Prepayment pursuant to clause (x) of the definition thereof by prepaying the
portion of the Term Loan to be prepaid (or the respective portions thereof)
offered by the Lenders

 

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(“Qualifying Lenders”) that specify an Acceptable Discount that is equal to or
greater than the Applicable Discount (“Qualifying Loans”) at the Applicable
Discount, provided that if the aggregate proceeds required to prepay all
Qualifying Loans (disregarding any interest payable at such time) would exceed
the amount of aggregate proceeds required to prepay the Proposed Discounted
Prepayment Amount, such amounts in each case calculated by applying the
Applicable Discount, such Borrower shall prepay such Qualifying Loans ratably
among the Qualifying Lenders based on their respective principal amounts of such
Qualifying Loans (subject to rounding requirements specified by the
Administrative Agent). If the aggregate proceeds required to prepay all
Qualifying Loans (disregarding any interest payable at such time) would be less
than the amount of aggregate proceeds required to prepay the Proposed Discounted
Prepayment Amount, such amounts in each case calculated by applying the
Applicable Discount, the relevant Borrower shall prepay all Qualifying Loans.
The relevant Borrower shall make a Discounted Prepayment pursuant to clause
(y) of the definition thereof by paying the applicable Lender offering the
applicable Term Loan for sale in the open market the applicable purchase price
therefor.

(f) Payment Mechanics. Each Discounted Voluntary Prepayment pursuant to clause
(x) of the definition thereof shall be made within 5 Business Days of the
Acceptance Date (or such later date as the Administrative Agent shall reasonably
agree, given the time required to calculate the Applicable Discount and
determine the amount and holders of Qualifying Loans), without premium or
penalty, upon irrevocable notice (each a “Discounted Voluntary Prepayment
Notice”), delivered to the Administrative Agent no later than 1:00 p.m. New York
City Time, 3 Business Days prior to the date of such Discounted Voluntary
Prepayment, which notice shall specify the date and amount of the Discounted
Voluntary Prepayment and the Applicable Discount determined by the
Administrative Agent. Upon receipt of any Discounted Voluntary Prepayment
Notice, the Administrative Agent shall promptly notify each relevant Lender
thereof. If any Discounted Voluntary Prepayment Notice is given, the amount
specified in such notice shall be due and payable to the applicable Lenders,
subject to the Applicable Discount on the applicable portion of the Term Loan,
on the date specified therein together with accrued interest (on the par
principal amount) to but not including such date on the amount prepaid. Each
Discounted Voluntary Prepayment pursuant to clause (y) of the definition thereof
shall be made within the time period mutually agreed by the relevant Borrower
and the applicable Lender or as required by the applicable market platform on or
in which such purchase is to be consummated. The par principal amount of each
Discounted Voluntary Prepayment of the Term Loan shall be applied ratably to
reduce the remaining installments of the Term Loan.

(g) Additional Procedures. To the extent not expressly provided for herein,
(i) each Discounted Voluntary Prepayment pursuant to clause (x) of the
definition thereof shall be consummated pursuant to reasonable procedures
(including as to timing, rounding, minimum amounts, Type and Interest Periods
and calculation of Applicable Discount in accordance with Section 2.19(b) above)
established by the Administrative Agent and the relevant Borrower and (ii) each
Discounted Voluntary Prepayment pursuant to clause (y) of the definition thereof
shall be consummated pursuant to reasonable procedures established by the
relevant Borrower, the applicable Lender and/or the market platform on or in
which such purchase is to be consummated.

 

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ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01. Taxes.

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of
Taxes.

(i) Any and all payments by or on account of any obligation of the Loan Parties
hereunder or under any other Loan Document shall to the extent permitted by
applicable Laws be made free and clear of and without reduction or withholding
for any Taxes. If, however, applicable Law requires the withholding or deduction
of any Tax, such Tax shall be withheld or deducted in accordance with such Laws
as determined in good faith by Borrower Agent or Administrative Agent, as the
case may be, taking into account the information and documentation to be
delivered pursuant to subsection (e) below.

(ii) If applicable Law requires the withholding or deduction of any Taxes from
any payment under any Loan Document, then (A) the applicable Loan Party shall
withhold or make such deductions as are required taking into account the
information and documentation it has received pursuant to subsection (e) below,
(B) such Loan Party shall timely pay the full amount withheld or deducted to the
relevant Governmental Authority in accordance with the applicable Law, and
(C) to the extent that the withholding or deduction is made on account of
Indemnified Taxes, the sum payable by the Loan Parties shall be increased as
necessary so that after any required withholding or the making of all required
deductions (including deductions 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 withholding or deduction been made.

(b) Payment of Other Taxes by Loan Parties. Without limiting the provisions of
subsection (a) above but without duplication of amounts payable under this
Section, the Loan Parties shall timely pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable Law.

(c) Tax Indemnification.

(i) Without limiting the provisions of subsection (a) or (b) above but without
duplication of amounts payable under this Section, each Loan Party shall, and
does hereby, on a joint and several basis indemnify each Recipient (and its
respective directors, officers, employees, affiliates and agents) and shall make
payment in respect thereof 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) withheld or deducted
on payments to, or paid by, such Recipient (or its respective directors,

 

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officers, employees, affiliates and agents), as the case may be, and any
penalties, interest and related expenses and losses arising therefrom or with
respect thereto (including the fees, charges and disbursements of any counsel or
other tax advisor for the Recipient (or its respective directors, officers,
employees, affiliates, and agents)), 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 any such payment or liability delivered to
Borrower Agent by a Lender or the L/C Issuer (with a copy to Administrative
Agent), or by Administrative Agent on its own behalf or on behalf of a Lender or
the L/C Issuer, shall be conclusive absent manifest error.

(ii) Without limiting the provisions of subsection (a) or (b) above, each Lender
and the L/C Issuer shall, and does hereby, indemnify Administrative Agent, and
shall make payment in respect thereof within 10 days after demand therefor,
against (i) any Indemnified Taxes attributable to such Lender, (ii) any Taxes
attributable to such Lender’s failure to comply with the provisions of Section
10.06(d) relating to the maintenance of a Participation and SPV Register and
(iii) any Taxes (other than Indemnified Taxes) attributable to such Lender, in
each case, that are payable or paid by the Administrative Agent in connection
with any Loan Document, and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to any Lender or L/C Issuer by the
Administrative Agent shall be conclusive absent manifest error. Each Lender and
the L/C Issuer hereby authorizes Administrative Agent to set off and apply any
and all amounts at any time owing to such Lender or the L/C Issuer, as the case
may be, under this Agreement or any other Loan Document against any amount due
to Administrative Agent under this clause (ii). The agreements in this clause
(ii) shall survive the resignation and/or replacement of Administrative Agent,
any assignment of rights by, or the replacement of, a Lender or the L/C Issuer
and the occurrence of the Facility Termination Date.

(d) Evidence of Payments. Upon request by Borrower Agent or Administrative
Agent, as the case may be, after any payment of Taxes by the Loan Parties or by
Administrative Agent to a Governmental Authority as provided in this
Section 3.01, Borrower Agent shall deliver to Administrative Agent or
Administrative Agent shall deliver to Borrower Agent, as the case may be, the
original or a copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of any return required by Laws to report such payment or
other evidence of such payment reasonably satisfactory to Borrower Agent or
Administrative Agent, as the case may be.

(e) Status of Lenders; Tax Documentation.

(i) Each Recipient shall deliver to Borrower Agent and to Administrative Agent,
at the time or times prescribed by applicable Laws or when reasonably requested
by Borrower Agent or Administrative Agent, such properly completed and executed
documentation prescribed by applicable Laws or by the

 

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taxing authorities of any jurisdiction and such other reasonably requested
information as will permit Borrower Agent or Administrative Agent, as the case
may be, to determine (A) whether or not payments made hereunder or under any
other Loan Document are subject to Taxes, (B) if applicable, the required rate
of withholding or deduction, and (C) such Recipient’s entitlement to any
available exemption from, or reduction of, applicable Taxes in respect of all
payments to be made to such Recipient by the Loan Parties pursuant to this
Agreement or otherwise to establish such Recipient’s status for withholding tax
purposes in the applicable jurisdiction; provided each Recipient shall only be
required to deliver such documentation as it may legally provide.

(ii) Without limiting the generality of the foregoing:

(A) any Recipient that is a “United States person” within the meaning of
Section 7701(a)(30) of the Code shall deliver to Borrower Agent and
Administrative Agent executed originals of Internal Revenue Service Form W-9 or
such other documentation or information prescribed by applicable Laws or
reasonably requested by Borrower Agent or Administrative Agent as will enable
Borrower Agent or Administrative Agent, as the case may be, to determine whether
or not such Recipient is subject to backup withholding or information reporting
requirements; and

(B) each Foreign Lender shall deliver to Borrower Agent and Administrative Agent
(in such number of copies as shall be 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 request of Borrower Agent or
Administrative Agent, but only if such Foreign Lender is legally entitled to do
so), whichever of the following is applicable:

(I) executed originals of Internal Revenue Service Form W-8BEN or W-8BEN-E, as
applicable, claiming eligibility for benefits of an income tax treaty to which
the United States is a party, if any,

(II) executed originals of Internal Revenue Service Form W-8ECI,

(III) executed originals of Internal Revenue Service Form W-8IMY and all
required supporting documentation, or

(IV) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Borrower
within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in section 881(c)(3)(C) of the Code and
(y) executed originals of Internal Revenue Service Form W-8BEN or W-8BEN-E, as
applicable.

 

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(iii) If a payment made to a Recipient under any Loan Document would be subject
to U.S. federal withholding Tax imposed by FATCA if such Recipient 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
Recipient shall deliver to Borrower Agent and Administrative Agent at the time
or times prescribed by law and at such time or times reasonably requested by
Borrower Agent or 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 Borrower Agent or
Administrative Agent as may be necessary for Borrower and Administrative Agent
to comply with their obligations under FATCA and to determine the amount to
deduct and withhold from such payment. Solely for purposes of this clause (iii),
“FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

(iv) Each Recipient shall promptly notify Borrower Agent and Administrative
Agent of any change in circumstances which would modify or render invalid any
claimed exemption or reduction.

(f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time
shall Administrative Agent have any obligation to file for or otherwise pursue
on behalf of a Lender or the L/C Issuer, or have any obligation to pay to any
Lender or the L/C Issuer, any refund of Taxes withheld or deducted from funds
paid for the account of such Lender or the L/C Issuer, as the case may be. So
long as no Event of Default is occurring, if Administrative Agent, any Lender or
the L/C Issuer determines, in its sole discretion acting in good faith, that it
has received a refund of any Indemnified Taxes or Other Taxes as to which it has
been indemnified by any Loan Party or with respect to which any Loan Party has
paid additional amounts pursuant to this Section, it shall pay to such Loan
Party an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by any Loan Party under this
Section with respect to the Indemnified Taxes or Other Taxes giving rise to such
refund), net of all reasonable out-of-pocket expenses (including Taxes) incurred
by Administrative Agent, such Lender or the L/C Issuer, as the case may be, and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that each Loan Party, upon the
request of Administrative Agent, such Lender or the L/C Issuer, agrees to repay
the amount paid over to any Loan Party (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to Administrative Agent,
such Lender or the L/C Issuer in the event Administrative Agent, such Lender or
the L/C Issuer is required to repay such refund to such Governmental Authority.
Notwithstanding anything to the contrary in this paragraph (f), in no event will
the indemnified party be required to pay any amount to an indemnifying party
pursuant to this paragraph (f) to the extent the payment of which would place
the indemnified party in a less favorable net after-Tax position than the
indemnified party

 

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would have been in if the Tax subject to indemnification had not been deducted,
withheld or otherwise imposed and the indemnification payments or additional
amounts giving rise to such refund had never been paid. This subsection shall
not be construed to require Administrative Agent, any Lender or the L/C Issuer
to make available its tax returns (or any other information relating to its
taxes that it deems confidential) to any Loan Party or any other Person.

3.02. Illegality. If any Lender determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for any Lender
or its applicable Lending Office to make, maintain or fund Loans whose interest
is determined by reference to the Eurodollar Rate, or to determine or charge
interest rates based upon the Eurodollar Rate, or any Governmental Authority has
imposed material restrictions on the authority of such Lender to purchase or
sell, or to take deposits of, Dollars in the London interbank market, then, on
notice thereof by such Lender to Borrower Agent through Administrative Agent,
(i) any obligation of such Lender to make or continue Eurodollar Rate Loans or
to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended, and
(ii) if such notice asserts the illegality of such Lender making or maintaining
Base Rate Loans the interest rate on which is determined by reference to the
Eurodollar Rate component of the Base Rate, the interest rate on which Base Rate
Loans of such Lender shall, if necessary to avoid such illegality, be determined
by Administrative Agent without reference to the Eurodollar Rate component of
the Base Rate, in each case until such Lender notifies Administrative Agent and
Borrower Agent that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, (x) the Loan Parties shall, upon
demand from such Lender (with a copy to Administrative Agent), prepay or, if
applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans
(the interest rate on which Base Rate Loans of such Lender shall, if necessary
to avoid such illegality, be determined by Administrative Agent without
reference to the Eurodollar Rate component of the Base Rate), either on the last
day of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Eurodollar Rate Loans and (y) if such
notice asserts the illegality of such Lender determining or charging interest
rates based upon the Eurodollar Rate, Administrative Agent shall during the
period of such suspension compute the Base Rate applicable to such Lender
without reference to the Eurodollar Rate component thereof until Administrative
Agent is advised in writing by such Lender that it is no longer illegal for such
Lender to determine or charge interest rates based upon the Eurodollar Rate.
Upon any such prepayment or conversion, the Loan Parties shall also pay accrued
interest on the amount so prepaid or converted.

3.03. Inability to Determine Rates. If the Administrative Agent determines that
for any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan or in
connection with an existing or proposed Base Rate Loan, or (c) the Eurodollar
Rate for any requested Interest Period with respect to a proposed Eurodollar
Rate Loan does not adequately and fairly reflect the cost to such Lenders of
funding such Loan, Administrative Agent will promptly so notify Borrower Agent
and each Lender. Thereafter, (x) the obligation of the

 

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Lenders to make or maintain Eurodollar Rate Loans shall be suspended, and (y) in
the event of a determination described in the preceding sentence with respect to
the Eurodollar Rate component of the Base Rate, the utilization of the
Eurodollar Rate component in determining the Base Rate shall be suspended, in
each case until Administrative Agent revokes such notice. Upon receipt of such
notice, Borrower Agent may revoke any pending request for a Borrowing of,
conversion to or continuation of Eurodollar Rate Loans or, failing that, will be
deemed to have converted such request into a request for a Borrowing of Base
Rate Loans in the amount specified therein.

3.04. Increased Costs; Reserves on Eurodollar Rate Loans.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement contemplated by Section 3.04(e)) or the L/C
Issuer;

(ii) subject any Recipient to any Taxes on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto (except for (i) Indemnified Taxes
covered by Section 3.01, (ii) any Tax described in clause (a) of the definition
of Excluded Taxes to the extent such Taxes are imposed on or measured by such
Recipient’s net income or profits (or are franchise Taxes imposed in lieu
thereof) and (iii) any Tax described in clauses (b) through (e) of the
definition of Excluded Taxes); or

(iii) impose on any Lender or the L/C Issuer or the London interbank market any
other condition, cost or expense affecting this Agreement or Eurodollar Rate
Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Rate Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender or the
L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or
of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender or the L/C Issuer hereunder with respect to a Eurodollar Rate Loan
(whether of principal, interest or any other amount) then, upon request of such
Lender or the L/C Issuer, the Loan Parties will pay to such Lender or the L/C
Issuer, as the case may be, such additional amount or amounts as will compensate
such Lender or the L/C Issuer, as the case may be, for such additional costs
incurred or reduction suffered.

(b) Capital Requirements. If any Lender or the L/C Issuer determines that any
Change in Law affecting such Lender or the L/C Issuer or any Lending Office of
such Lender or such Lender’s or the L/C Issuer’s holding company, if any,
regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on
the capital of such Lender’s or the L/C Issuer’s

 

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holding company, if any, as a consequence of this Agreement, the Revolving
Credit Commitments of such Lender or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the
L/C Issuer, to a level below that which such Lender or the L/C Issuer or such
Lender’s or the L/C Issuer’s holding company could have achieved but for such
Change in Law (taking into consideration such Lender’s or the L/C Issuer’s
policies and the policies of such Lender’s or the L/C Issuer’s holding company
with respect to capital adequacy), then from time to time pursuant to subsection
(c) below the Loan Parties will pay to such Lender or the L/C Issuer, as the
case may be, such additional amount or amounts as will compensate such Lender or
the L/C Issuer or such Lender’s or the L/C Issuer’s holding company for any such
reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or the
L/C Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to Borrower Agent shall be
conclusive absent manifest error. The Loan Parties shall pay such Lender or the
L/C Issuer, as the case may be, the amount shown as due on any such certificate
within 10 Business Days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender or the L/C
Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right
to demand such compensation, provided that the Loan Parties shall not be
required to compensate a Lender or the L/C Issuer pursuant to the foregoing
provisions of this Section for any increased costs incurred or reductions
suffered more than nine months prior to the date that such Lender or the L/C
Issuer, as the case may be, notifies the Loan Parties of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or the
L/C Issuer’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the nine-month period referred to above shall be extended to include the
period of retroactive effect thereof).

(e) Reserves on Eurodollar Rate Loans. Without duplication of the effect of the
Eurodollar Reserve Percentage, Borrowers shall pay to each Lender, as long as
such Lender shall be required to maintain reserves with respect to liabilities
or assets consisting of or including Eurocurrency funds or deposits, additional
interest on the unpaid principal amount of each Eurodollar Rate Loan equal to
the actual costs of such reserves allocated to such Loan by such Lender (as
determined by such Lender in good faith, which determination shall be conclusive
absent manifest error), which shall be due and payable on each date on which
interest is payable on such Loan, provided Borrower Agent shall have received at
least 15 days’ prior written notice (with a copy to Administrative Agent) of
such additional interest from such Lender. If a Lender fails to give notice 15
days prior to the relevant Interest Payment Date, such additional interest shall
be due and payable 15 days from receipt of such written notice.

 

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(f) Notwithstanding anything to the contrary herein, requests by any Lender or
L/C Issuer pursuant to this Section 3.04 shall be limited to circumstances in
which the applicable Lender or L/C Issuer is generally imposing such charges on
other similarly situated borrowers under similar circumstances.

3.05. Compensation for Losses. Upon demand of any Lender (with a copy to
Administrative Agent) from time to time, Borrowers shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
(excluding, for the avoidance of doubt, loss of profits) incurred by it as a
result of:

(a) any continuation, conversion, payment or prepayment of any Loan other than a
Base Rate Loan on a day other than the last day of the Interest Period for such
Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);

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

(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of
the Interest Period therefor as a result of a request by Borrower Agent pursuant
to Section 10.13;

including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. Borrowers shall also pay any
customary administrative fees charged by such Lender in connection with the
foregoing.

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

3.06. Reimbursement

No Loan Party shall be required to compensate a Lender or the L/C Issuer
pursuant to this Article III for any increased costs or reductions incurred more
than one hundred eighty (180) days prior to the date that such Lender notifies
the Borrower Agent of the change in law giving rise to such increased costs or
reductions and of such Lender’s or the L/C Issuer’s intention to claim
compensation therefore, provided further that, if the change in law giving rise
to such increases costs or reduction is retroactive then the 180 day period
referred to above shall be extended to include the period of retroactive effect
hereof. Upon the receipt by Borrower Agent of such demand, the Borrower Agent
shall have the option to immediately repay such Eurodollar Loan or convert such
Eurodollar Loan to a Base Rate Loan, or cause the beneficiary of any such Letter
of Credit to terminate such Letter of Credit, in each case in order to minimize
or eliminate such increased cost or reduction.

 

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3.07. Mitigation Obligations. If any Lender requests compensation under
Section 3.04, or Borrowers are required to indemnify or pay any additional
amount to any Lender, the L/C Issuer or any Governmental Authority for the
account of any Lender or the L/C Issuer pursuant to Section 3.01, or if any
Lender gives a notice pursuant to Section 3.02, then such Lender or the L/C
Issuer, as applicable, shall use reasonable efforts to designate a different
Lending Office for funding or booking its Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender or the L/C Issuer, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the
need for the notice pursuant to Section 3.02, as applicable, and (ii) in each
case, would not subject such Lender or the L/C Issuer, as the case may be, to
any unreimbursed cost or expense and would not otherwise be disadvantageous to
such Lender or the L/C Issuer, as the case may be. Borrowers hereby agree to pay
all reasonable costs and expenses incurred by any Lender or the L/C Issuer in
connection with any such designation or assignment.

3.08. Survival. All of the obligations under this Article III shall survive the
resignation of Administrative Agent, the L/C Issuer and the Swing Line Lender,
the replacement of any Lender and the occurrence of the Facility Termination
Date.

3.09. Acknowledgment and Consent to Bail-In of EEA 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 EEA 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 an EEA 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 an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA 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 EEA 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 (iii) the variation of the terms
of such liability in connection with the exercise of the write-down and
conversion powers of any EEA Resolution Authority.

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01. Conditions of Initial Credit Extension. The obligation of each Lender and
the L/C Issuer to make any initial Credit Extension hereunder is subject to
satisfaction or waiver by the applicable party of the following conditions
precedent:

(a) Administrative Agent’s receipt of the following items, each properly
executed by a Responsible Officer of applicable Loan Party, each dated as of the
Closing Date (or, in the case of certificates of governmental officials, a
recent date before the Closing Date) and each in form and substance reasonably
satisfactory to Administrative Agent and its legal counsel:

 

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(i) Uniform Commercial Code financing statements, suitable in form and substance
for filing in all places required by applicable law to perfect the Liens of
Administrative Agent under the Security Instruments as a first priority Lien
under U.S. law as to items of Collateral in which a security interest may be
perfected by the filing of financing statements;

(ii) a legal opinion from Kirkland and Ellis LLP;

(iii) the secretary’s certificates, borrowing request and closing certificates
set forth on the closing checklist attached hereto as Exhibit G;

(iv) a solvency certificate in the form of Exhibit I;

(v) the Loan Documents, except for those items that are specifically permitted
herein to be delivered after the Closing Date; and

(vi) evidence of the payment in full and cancellation of the Existing Agreement,
including terminations of Uniform Commercial Code financing statements filed in
connection with the Existing Agreement and other evidence of Lien releases and
other related matters on terms acceptable to Administrative Agent.

(b) The representations and warranties of the Loan Parties contained in
Article V or any other Loan Document, shall be true and correct in all material
respects (or in all respects for such representations and warranties that are by
their terms already qualified as to materiality) on and as of the date of such
initial Credit Extension, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be
true and correct in all material respects (or in all respects for such
representations and warranties that are by their terms already qualified as to
materiality) as of such earlier date;

(c) No Default or Event of Default shall have occurred and be continuing, or
would immediately result from such initial Credit Extension and the consummation
of the Transaction and the Loan Documents;

(d) All accrued costs, fees and expenses (including all reasonable and
documented out-of-pocket fees, charges and disbursements of counsel to
Administrative Agent, plus such additional amounts of such reasonable
out-of-pocket fees, charges and disbursements as shall constitute its reasonable
estimate of such reasonable out-of-pocket fees, charges and disbursements
incurred or to be incurred by it through the closing proceedings (provided that
such estimate shall not thereafter preclude a final settling of accounts between
Borrowers and Administrative Agent) and the fees and expenses of any other
advisors) and other compensation due and payable to Administrative Agent, the
Arranger and the Lenders on or before the Closing Date shall have been paid (or
deducted from the initial funding of the Loans hereunder), to the extent set
forth in the Fee Letter or otherwise invoiced at least two (2) Business Days
prior to the Closing Date (except as otherwise reasonably agreed by the Borrower
Agent).

 

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(e) The Administrative Agent shall have received (i) audited consolidated
balance sheets and related statements of income, stockholders’ equity and cash
flows of Holdings and its Subsidiaries for the Fiscal Year ended December 31,
2015, and (ii) unaudited consolidated balance sheets and related statements of
income and cash flows of Holdings and its Subsidiaries for the Fiscal Quarter
ended September 30, 2016; it being agreed and understood that as of the date
hereof, the Administrative Agent has received such documents.

(f) The Administrative Agent shall have received an unaudited pro forma
consolidated balance sheet of the Borrowers and their Subsidiaries as of the
date of the most recent consolidated balance sheet delivered pursuant to clause
(e) above adjusted to give effect to the Transactions as if the Transactions had
occurred as of such date (in the case of such pro forma balance sheet) or at the
beginning of such period (in the case of the pro forma statement of income) (it
being understood that no valuation of assets or purchase price accounting shall
be required).

(g) The Borrowers and the other Loan Parties shall have provided the
documentation and other information to the Administrative Agent (to the extent
reasonably requested by the Administrative Agent in writing at least ten
(10) Business Days prior to the Closing Date) that are required by regulatory
authorities under the applicable “know-your-customer” rules and regulations,
including the PATRIOT Act, in each case at least three (3) days prior to the
Closing Date.

(h) Administrative Agent shall be satisfied that after giving pro forma effect
to (i) the initial Credit Extension hereunder, (ii) consummation of the
Transactions and payment of all fees and expenses in connection therewith, the
Consolidated Total Net Leverage Ratio shall not be greater than 3.25:1.00.

(i) After giving effect to the initial Credit Extension hereunder and
consummation of the Transactions and payment of all fees and expenses in
connection therewith, the Revolving Credit Outstandings shall not exceed
$25,000,000 on the Closing Date.

Notwithstanding anything herein to the contrary, the terms of the Loan Documents
shall be in a form such that they do not impair availability of the Loans on the
Closing Date if the conditions set forth in Section 4.01 are satisfied or waived
(it being understood that to the extent any security interest in Collateral
(including the creation or perfection of any security interest) (other than
(x) grants of security interests in Collateral subject to the Uniform Commercial
Code that may be perfected by the filing of Uniform Commercial Code financing
statements and (y) the delivery of equity certificates for certificated Equity
Interests of Holdings’ Domestic Subsidiaries that are part of the Collateral) is
not or cannot be provided or perfected on the Closing Date after the Borrowers’
use of commercially reasonable efforts to do so, without undue burden or
expense, the delivery of such Collateral (and granting and perfecting of
security interests therein) shall not constitute a condition precedent to the
availability of the Loans on the Closing Date but shall be required to be
delivered within 90 days after the Closing Date (or such later date as may be
reasonably agreed by the Administrative Agent in its sole discretion) pursuant
to arrangements to be mutually agreed).

 

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Without limiting the generality of the provisions of Section 9.04, for purposes
of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless Administrative Agent shall have received notice
from such Lender prior to the proposed Closing Date specifying its objection
thereto.

4.02. Conditions to all Credit Extensions. The obligation of each Lender to
honor any Request for Credit Extension (other than the initial Credit Extension
hereunder on the Closing Date or a Committed Loan Notice requesting only a
conversion of Loans to the other Type or a continuation of Eurodollar Rate
Loans) is subject to the following conditions precedent:

(a) The representations and warranties of the Loan Parties contained in
Article V or any other Loan Document, shall be true and correct in all material
respects (or in all respects for such representations and warranties that are by
their terms already qualified as to materiality) on and as of the date of such
Credit Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct in all material respects (or in all respects for such representations
and warranties that are by their terms already qualified as to materiality) as
of such earlier date; or solely with respect to any Incremental Term Loan
(including any Limited Condition Incremental Facility), the applicable
conditions set forth in Section 2.18(e) have been satisfied.

(b) No Default or Event of Default shall have occurred and be continuing, or
would immediately result from such proposed Credit Extension; or, solely with
respect to any Incremental Term Loan (including any Limited Condition
Incremental Facility), the applicable conditions set forth in Section 2.18(e)
have been satisfied.

(c) Administrative Agent and, if applicable, the L/C Issuer or the Swing Line
Lender shall have received a Request for Credit Extension in accordance with the
requirements hereof.

Each Request for Credit Extension (other than the initial Credit Extension
hereunder on the Closing Date or a Committed Loan Notice requesting only a
conversion of Loans to the other Type or a continuation of Eurodollar Rate
Loans) submitted by Borrower Agent shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and 4.02(b) have been
satisfied on and as of the date of the applicable Credit Extension.

 

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ARTICLE V

REPRESENTATIONS AND WARRANTIES

To induce Administrative Agent and the Lenders to enter into this Agreement and
to make Loans and to issue Letters of Credit hereunder, each Loan Party
represents and warrants to Administrative Agent and the Lenders, that:

5.01. Existence, Qualification and Power. Each Loan Party and each Subsidiary
(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
and all requisite governmental licenses, authorizations, consents and approvals
to (i) own or lease its assets and carry on its business as is now being
conducted and (ii) execute, deliver and perform its obligations under the Loan
Documents to which it is a party, and (c) is duly qualified and in good standing
under the Laws of each jurisdiction where its operation or properties requires
such qualification, except, in the case of clauses (b)(i) and (c), to the extent
that failure to do so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

5.02. Authorization; No Contravention; Consents. The execution, delivery and
performance by each Loan Party of each Loan Document to which it is a party, and
the consummation of the Transactions, have been duly authorized by all necessary
organizational action, and (a) do not and will not (i) contravene the terms of
its Organization Documents, (ii) conflict with or result in any breach or
contravention of, or the creation of any Lien under (other than as permitted by
Section 7.02) (x) any Contractual Obligation to which such Person is a party or
(y) any order, injunction, writ or decree of any Governmental Authority or any
arbitral award to which such Person or its property is subject, (iii) violate
any Law material to any Loan Party or Subsidiary in any material respect, except
with respect to any conflict, breach, or contravention referred to in clause
(a)(ii), to the extent that such conflict, breach or contravention would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or (b) do not or will not require any approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person, except for (i) filings necessary to
perfect Liens on the Collateral granted by the Loan Parties in favor of the
Administrative Agent for the benefit of the Lender Parties, (ii) the approvals,
consents, exemptions, authorizations, actions, notices, and filings which have
been duly obtained, taken, given or made and are in full force and effect or
(iii) if the failure to obtain the same, take such action or give such notice
could reasonably be expected to result in a Material Adverse Effect.

5.03. Binding Effect. This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by each
Loan Party that is party thereto. This Agreement constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, except as the enforcement hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
Laws relating to or affecting the rights and remedies of creditors or by general
equitable principles.

 

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5.04. Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as expressly
noted therein; and (ii) fairly present, in all material respects, the financial
condition of the Target and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein.

(b) The unaudited consolidated balance sheet of Holdings and its Subsidiaries
dated as of December 31, 2015, and the related consolidated statements of income
or operations and cash flows for the fiscal month then ended fairly present in
all material respects the financial condition of Holdings and its Subsidiaries
as of the date thereof and their results of operations for the period covered
thereby, subject to the absence of footnotes and to year-end audit adjustments.

(c) Since the Closing Date, there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.

(d) On the Closing Date, immediately after giving effect to the Transactions,
the Loan Parties and their Subsidiaries, on a Consolidated basis, are Solvent.

5.05. Litigation. As of the Closing Date, there are no actions, suits,
proceedings, claims or disputes pending or, to the knowledge of any Loan Party,
threatened in writing or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against any Loan Party or any
Subsidiary or against any of their properties that (a) purport to affect or
pertain to this Agreement or any other Loan Document or any of the Transactions
or (b) except as specifically disclosed in Schedule 5.05, either individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.

5.06. No Default. No Default or Event of Default has occurred and is continuing.

5.07. Ownership of Property; Liens.

(a) Each Loan Party and each of its Subsidiaries has good, and in the case of
Real Estate, defensible title to all property (tangible and intangible)
necessary to, or used in the ordinary conduct of, its business, subject to
Permitted Liens and except (i) for any such properties which are immaterial to
the operations of such Loan Party’s or such Subsidiary’s respective business,
(ii) as may have been disposed of in compliance with the terms of this
Agreement, (iii) minor defects in title that do not materially interfere with
such Loan Party’s ability to conduct its business or to utilize such assets for
their intended purpose and/or (iv) where the failure to have such title or other
interest would not reasonably be expected to have, individually, or in the
aggregate, a Material Adverse Effect.

(b) Schedule 5.07(b)(1) sets forth the address (including street address, county
and state) of all Real Estate that is owned by any Loan Party as of the Closing
Date. Schedule 5.07(b)(2) sets forth the address (including street address,
county and state) of all leased real property of the Loan Parties, with respect
to each such lease as of the Closing Date.

 

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5.08. Environmental Compliance.

(a) No Loan Party or any Subsidiary (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law with respect to such Loan
Party’s or Subsidiary’s operations, (ii) has become subject to a pending claim
with respect to any Environmental Liability or (iii) has received written notice
of any claim with respect to any Environmental Liability except, in each case of
clauses (i) – (iii) above, as has not resulted, and could not, individually or
in the aggregate, reasonably be expected to result, in a Material Adverse
Effect.

(b) As of the Closing Date, (i) none of the properties owned or operated by any
Loan Party or any Subsidiary is listed or, to the knowledge of the Loan Parties,
proposed for listing on the NPL or on the CERCLIS or any analogous foreign,
state or local list or is adjacent to any such property; (ii) there are no and,
to the knowledge of the Loan Parties, never have been any underground or
above-ground storage tanks or any surface impoundments, septic tanks, pits,
sumps or lagoons in which Hazardous Materials are being or have been treated,
stored or disposed on any property currently owned or operated by any Loan Party
or any Subsidiary; (iii) to the knowledge of the Loan Parties, there is no
asbestos or asbestos-containing material on any property currently owned or
operated by any Loan Party or Subsidiary; and (iv) Hazardous Materials have not
been released, discharged or disposed of by any Loan Party or Subsidiary in
violation of Environmental Laws or, to the knowledge of the Loan Parties, by any
other Person in violation of Environmental Laws on any property currently owned
or operated by any Loan Party or any Subsidiary, except in each case of clauses
(i)—(iv) above, as has not resulted and could not, individually or in the
aggregate, reasonably be expected to result in, a Material Adverse Effect.

(c) Except as could not individually or in the aggregate reasonably be expected
to result in a Material Adverse Effect on the part of the Loan Parties and their
Subsidiaries, as of the Closing Date, no Loan Party or any Subsidiary is
undertaking, and no Loan Party or any Subsidiary has completed, either
individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to any
actual or threatened release, discharge or disposal of Hazardous Materials at
any site, location or operation, either voluntarily or pursuant to the order of
any Governmental Authority or the requirements of any Environmental Law; and all
Hazardous Materials generated, used, treated, handled or stored by any Loan
Party or any Subsidiary at, or transported to or from by or on behalf of any
Loan Party or any Subsidiary, any property owned or operated by any Loan Party
or any Subsidiary have, to the knowledge of the Loan Parties, been disposed of
in a manner not, individually or in the aggregate, reasonably expected to result
in a Material Adverse Effect.

 

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5.09. Insurance and Casualty. The Loan Parties and their Subsidiaries maintain
insurance with financially sound and reputable insurance companies which are not
Affiliates of the Loan Parties, in such amounts, with such deductibles and
covering such risks (including, without limitation, workmen’s compensation,
public liability, business interruption and property damage insurance) as are
customarily carried under similar circumstances by such other Persons as
reasonably determined in good faith by the Borrowers. Schedule 5.09 sets forth a
description of all insurance maintained by or on behalf of the Loan Parties and
their Subsidiaries as of the Closing Date. As of the Closing Date, each
insurance policy listed on Schedule 5.09 is in full force and effect.

5.10. Taxes. Each Loan Party and each Subsidiary has filed all Federal income
Tax returns and other material Tax returns and reports required to be filed, and
has paid all Federal income and other material Taxes, assessments, fees and
other governmental charges levied or imposed upon it or its properties, income
or assets otherwise due and payable, except those which are being Properly
Contested.

5.11. ERISA Compliance.

(a) Except as would not have a Material Adverse Effect each Plan is in
compliance in all material respects with the applicable provisions of ERISA, the
Code and other Federal or state Laws. Except as would not have a Material
Adverse Effect each employee benefit plan that is not subject to United States
law (a “Foreign Plan”) is in compliance in all material respects with all
provisions of applicable Laws.

(b) As of the Closing Date, there are no pending or, to the best knowledge of
any Loan Party, threatened in writing, claims, actions or lawsuits, or action by
any Person, with respect to any Plan that would have a Material Adverse
Effect. There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or would have a
Material Adverse Effect.

(c) Except as would not have a Material Adverse Effect: (i) no ERISA Event has
occurred, and no Loan Party is aware of any fact, event or circumstance that
could reasonably be expected to constitute or result in an ERISA Event and
(ii) each Loan Party, each Subsidiary thereof and each ERISA Affiliate has met
all applicable requirements under the Pension Funding Rules in respect of each
Pension Plan, and no waiver of the minimum funding standards under the Pension
Funding Rules has been applied for or obtained. As of the most recent valuation
date preceding the Closing Date for any Pension Plan maintained by a Loan Party,
the funding target attainment percentage (as defined in Section 430(d)(2) of the
Code) is 60% or higher and no Loan Party knows of any facts or circumstances
that could reasonably be expected to cause the funding target attainment
percentage for any such plan to drop below 60% as of the most recent valuation
date. Except as would not have a Material Adverse Effect, no Loan Party, no
Subsidiary thereof nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or Section 4212(c) of ERISA.

 

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(d) As of the Closing Date, no Loan Party maintains or contributes to, or has
any unsatisfied obligation to contribute to, or liability under, any active or
terminated Pension Plan other than those listed on Schedule 5.11(d) hereto.

(e) As of the Closing Date, except as set forth on Schedule 5.11(e) hereto no
Loan Party maintains or contributes to any Foreign Plan.

(f) Except as would not result in a Material Adverse Effect, the fair market
value of the assets of each funded Foreign Plan, the liability of each insurer
for any Foreign Plan funded through insurance or the book reserve established
for any Foreign Plan, together with any accrued contributions, is sufficient to
procure or provide for the accrued benefit obligations, as of the date hereof,
with respect to all current and former participants in such Foreign Plan
according to the actuarial assumptions and valuations most recently used to
account for such obligations in accordance with applicable generally accepted
accounting principles.

5.12. Subsidiaries; Equity Interests; Capitalization. As of the Closing Date, no
Loan Party and no Subsidiary of any Loan Party (a) has any Subsidiaries other
than those disclosed on Schedule 5.12 (which Schedule sets forth the legal name,
jurisdiction of incorporation or formation and authorized Equity Interests of
each such Subsidiary), or (b) has any equity Investments in any other Person
other than those specifically disclosed on Schedule 5.12. All of the outstanding
Equity Interests of each Loan Party and each Subsidiary (a) have been validly
issued, are fully paid and non-assessable (if applicable) and (b) as of the
Closing Date, are owned by the Persons and in the amounts specified on
Schedule 5.12 free and clear of all Liens except for Permitted Liens.

5.13. Margin Regulations; Investment Company Ac. No Loan Party and no Subsidiary
of any Loan Party is engaged, principally or as one of its important activities,
in the business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of
purchasing or carrying margin stock. None of the Loan Parties, nor any
Subsidiary is or is required to be registered as an “investment company” under
the Investment Company Act of 1940.

5.14. Disclosure. No report, financial statement, certificate or other written
information furnished, in each case, in writing, by or on behalf of any Loan
Party or any Subsidiary (other than any Projections (defined below), budgets,
estimates or other forward looking statements) and information of a general
economic or industry nature) to Administrative Agent or any Lender in connection
with any Loan Documents or the transactions contemplated hereby (in each case,
as modified or supplemented by other information so furnished) when taken as a
whole contains any material misstatement of fact or omits to state any material
fact necessary to make the statements contained therein not materially
misleading in light of the circumstances under which they were made, provided
that, with respect to written projected financial information (“Projections”),
furnished by or on behalf of any Loan Party or any Subsidiary in connection with
the transactions contemplated hereby, each Loan Party represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time such Projections were delivered by any Loan Party to
Administrative Agent or any Lender, and it being recognized by the Lenders and
the Administrative Agent that such projections as to future events are not to be
viewed as facts or a guarantee of financial performance and no assurance can be
given that Projections will be realized and actual results may differ from the
Projections and such differences may be material.

 

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5.15. Compliance with Laws; Anti-Terrorism Laws and Foreign Asset Control
Regulations.

(a) Each Loan Party and each Subsidiary is in compliance with the requirements
of all Laws and all orders, writs, injunctions and decrees applicable to it or
to its properties, except in such instances in which (a) such requirement of Law
or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

(b) Each Loan Party and each Subsidiary is in compliance in all material
respects with, and the advances of the Loans and use of the proceeds thereof
will not result in a violation of, (a) the Trading With the Enemy Act (50 U.S.C.
§ 1 et seq., as amended) (the “Trading With the Enemy Act”) or any of the
foreign assets control regulations administered by the United States Treasury
Department, Office of Foreign Assets Control (“OFAC”) (31 C.F.R., Subtitle B,
Chapter V, as amended) (the “Foreign Assets Control Regulations”) and any other
enabling legislation or executive order relating thereto (which, for the
avoidance of doubt, shall include, but shall not be limited to, Executive Order
13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(Sept. 25, 2001)) (the “Executive Order”)) by any party hereto and/or (b) the
Uniting and Strengthening America by Providing Appropriate Tools Required To
Intercept And Obstruct Terrorism (USA PATRIOT) Act of 2001 (“USA PATRIOT Act”).
None of the Loan Parties or any of their Subsidiaries is a “blocked person” as
described in the Executive Order, the Trading With the Enemy Act or the Foreign
Assets Control Regulations. None of the Loan Parties will use any part of the
proceeds of the Loans 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 United
States Foreign Corrupt Practices Act of 1977.

5.16. Labor Matters. Except as set forth on Schedule 5.16, as of the Closing
Date no Loan Party or any Subsidiary is a party to or bound by any collective
bargaining agreement. There are no strikes, lockouts, slowdowns or other labor
disputes against any Loan Party or any Subsidiary pending or, to the knowledge
of any Loan Party, threatened in writing, in any case which, individually or in
the aggregate, would reasonably be expected to result in a Material Adverse
Effect. As of the Closing Date, there are no representation proceedings pending
or, to any Loan Party’s knowledge, threatened to be filed with the National
Labor Relations Board, and no labor organization or group of employees of any
Loan Party or any Subsidiary has made a pending demand for recognition. As of
the Closing Date, there are no complaints, unfair labor practice charges,
grievances, arbitrations, unfair employment practices charges or any other
claims or complaints against any Loan Party or any Subsidiary pending or, to the
knowledge of any Loan Party, threatened to be filed with any Governmental
Authority or arbitrator based on,

 

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arising out of, in connection with, or otherwise relating to the employment or
termination of employment of any employee of any Loan Party or any of its
Subsidiaries which individually or in the aggregate would reasonably be expected
to result in a Material Adverse Effect. The consummation of the transactions
contemplated by the Loan Documents will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which any Loan Party or any of its
Subsidiaries is bound.

5.17. [Reserved].

5.18. Intellectual Property. The Loan Parties own, possess, or have the right to
use all necessary Intellectual Property to conduct their businesses, except for
any such failure to so own, possess or have the right to use that could not
reasonably be expected to have a Material Adverse Effect.

5.19. Senior Indebtedness. All Obligations including those to pay principal of
and interest (including post-petition interest, whether or not allowed as a
claim under bankruptcy or similar laws) on the Loans and other Obligations, and
fees and expenses in connection therewith, constitute “Senior Indebtedness” or
similar term relating to the Obligations.

ARTICLE VI

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder or any Loan Obligation
(other than contingent indemnification claims for which no claim has been
asserted) hereunder shall remain unpaid or unsatisfied, each Loan Party shall,
and shall cause each Subsidiary to:

6.01. Financial Statements. Deliver to Administrative Agent, who shall
distribute to each Lender (provided, that, for the avoidance of doubt and
notwithstanding anything herein to the contrary, the Administrative Agent shall
have no obligation to, and shall not, distribute the financial projections
required to be delivered pursuant to clause (c) below, to any Lender that has
elected to be a public side investor through the Platform. For the avoidance of
doubt, any Lender that has elected to be a private side investor through the
Platform will continue to receive all financial projections required to be
delivered pursuant to clause (c) below and other private side information to be
provided under this Agreement:

(a) (x) if Holdings is required to file a Form 10-K under the Exchange Act, a
copy of the Form 10-K of Holdings within 2 Business Days after the date on which
Holdings files or is required to file its Form 10-K under the Exchange Act
(after giving effect to any extension pursuant to Rule 12b-25 under the Exchange
Act (or any successor rule)) and, unless the audit report and opinion of an
Auditor (as defined below) in such Form 10-K satisfies the requirements of
clauses (A) and (B) of Section 6.01(a)(y) below, a report and opinion of an
Auditor which satisfies such requirements, or (y) if Holdings is not required to
file a Form 10-K under the Exchange Act, within 120 days after the end of each
Fiscal Year as of the end of such Fiscal Year, and the related consolidated
statements of income or operations, and cash flows for such Fiscal Year, setting
forth in each case in comparative form the figure for the previous Fiscal Year,
all

 

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in reasonable detail and prepared in accordance with GAAP, audited and
accompanied by a report and opinion of an accounting firm of nationally
recognized standing or otherwise reasonably acceptable to the Administrative
Agent (the “Auditor”), which report and opinion shall (A) not be subject to any
“going concern” qualification or other qualification or exception or any
qualification or exception as to the scope of such audit (except for
qualifications relating to changes in accounting principles practice reflecting
changes in GAAP and required or approved by such Auditor or relating to the
financial statements for the fiscal year ending immediately prior to the final
stated maturity of the Loans (including, for the avoidance of doubt, any
Increases) and (B) shall state that such financial statements fairly present in
all material respects the financial condition of Holdings and its Subsidiaries
as of the dates indicated and the results of their operations and cash flow for
the periods indicated in conformity with GAAP;

(b) (x) if Holdings is required to file a Form 10-Q under the Exchange Act, a
copy of the Form 10-Q of Holdings, within 2 Business Days after the date on
which Holdings files or is required to file its Form 10-Q under the Exchange Act
(after giving effect to any extension pursuant to Rule 12b-25 under the Exchange
Act (or any successor rule)) and, unless otherwise included in such Form 10-Q,
comparative form figures for the preceding Fiscal Year or (y) if Holdings is not
required to file a Form 10-Q under the Exchange Act, within 45 days after the
end of each of the first three Fiscal Quarters of each Fiscal Year, commencing
with the Fiscal Quarter ending March 31, 2017, (i) unaudited consolidated
balance sheet of Holdings and its Subsidiaries as of the end of such Fiscal
Quarter and the related consolidated statements of income or operations and cash
flows for such Fiscal Quarter and for the portion of the Fiscal Year then
elapsed, setting forth in each case in comparative form figures for the
preceding Fiscal Year, certified by a Responsible Officer of Borrower Agent to
the effect that such statements fairly present in all material respects in
accordance with GAAP the financial condition of Holdings and its Subsidiaries as
of the dates indicated and the results of their operations for the periods
indicated, subject to year-end adjustments and the absence of footnotes and
(ii) a flash report of cash balances of Foreign Subsidiaries as of the last day
of such Fiscal Quarter; and

(c) within 60 days after the end of each Fiscal Year, commencing with the Fiscal
Year ending December 31, 2016, annual financial projections of Holdings and its
Subsidiaries on a consolidated basis, the contents of which shall be limited to
items that have been previously publicly disclosed in accordance with Holdings’
standard guidance practices.

6.02. Other Information. Deliver to Administrative Agent who shall distribute to
each Lender:

(a) concurrently with delivery of financial statements under Section 6.01(a) and
with the financial statements under Section 6.01(b), a Compliance Certificate
executed by a Responsible Officer of Borrower Agent which certifies compliance
with Section 7.12 and, solely with respect to the financial statements delivered
under Section 6.01(b), (i) a management report (x) describing the operations and
financial condition of Holdings and its Subsidiaries for the fiscal period
covered by such financial statements

 

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and the portion of the current Fiscal Year then elapsed and (y) discussing the
reasons for any significant variations as between the fiscal period covered and
the portion of the Fiscal Year then elapsed and the same periods during the
immediately preceding Fiscal Year, and as between such periods and the same
periods included in the financial projections delivered pursuant to Section
6.01(c), and (ii) a description of any material change in accounting policies or
financial reporting practices by any Loan Party or any Subsidiary (if any), all
such information in the preceding clauses (i) and (ii) to be presented in
reasonable detail;

(b) within ten (10) Business Days of delivery of financial statements under
Section 6.01(a), an Excess Cash Flow Certificate executed by a Responsible
Officer of Borrower Agent for such Fiscal Year (other than with respect to the
Fiscal Year ending December 31, 2016);

(c) promptly after the public filing thereof, copies of all annual, regular,
periodic and special reports and registration statements which Holdings, any
Borrower or any Subsidiary may file or be required to file with the SEC under
Section 13 or 15(d) of the Exchange Act, and not otherwise required to be
delivered to Administrative Agent pursuant hereto; and

(d) promptly, such additional information regarding the business, financial or
organizational affairs of any Loan Party or any Subsidiary, or compliance with
the terms of the Loan Documents (excluding information subject to
confidentiality obligations in favor of third parties which are not entered into
in contemplation of this clause (d) or attorney-client privilege, constituting
attorney work product or trade secrets or proprietary information or otherwise
prohibited by law from disclosure), as Administrative Agent or any Lender
through the Administrative Agent may from time to time reasonably request.

6.03. Notices. Promptly after a Responsible Officer of any Loan Party becomes
aware thereof notify Administrative Agent:

(a) of the occurrence of any Default or Event of Default;

(b) after the receipt thereof, a copy of any notice of any non-compliance with
any applicable law, regulation or guideline relating to Holdings or any
Subsidiary, or its business, including, without limitation, the FDA’s applicable
Good Manufacturing Practice regulations, complaint handling regulations and
requirements for cosmetic or “over the counter” drug products, which
non-compliance would reasonably be expected to have a Material Adverse Effect;

(c) the occurrence of any ERISA Event that would reasonably be expected to have
a Material Adverse Effect;

(d) after the receipt thereof, a copy of (i) any notice, complaint or inquiry
from the FDA or any other Government Authority relating to Holdings or any
Subsidiary, or its business, asserting that the manufacture, distribution,
marketing or sale of the products of any Loan Party or any of its Subsidiaries
is not in compliance with any

 

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applicable requirements of law, (ii) any notice from the FDA or any other
Governmental Authority limiting, suspending or revoking any registration of the
Loan Parties or their Subsidiaries, or (iii) any written notice asserting that a
product of any Loan Party or any of its Subsidiaries has been or is being
seized, withdrawn, recalled, detained, or subject to a suspension of
manufacturing by the FDA or any other Governmental Authority, or any written
notice of the commencement, or the threatened commencement, of any proceedings
in the United States or any other applicable jurisdiction seeking the
withdrawal, recall, suspension, import detention, or seizure of any product of
any of the Loan Parties or their Subsidiaries except, in each case of
(i) through (iii) above, where such non-compliance or action would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect; and

(e) the occurrence of any actual or threatened investigation, inquiry,
inspection or administrative or judicial action, hearing, or enforcement
proceeding by the FDA or any other Governmental Authority, against any Loan
Party or any Subsidiary in connection with legal or regulatory non-compliance,
except in each case, where such non-compliance or action would not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.

Each notice pursuant to this Section 6.03 shall be accompanied by a statement of
a Responsible Officer of Borrower Agent setting forth details of the occurrence
referred to therein and stating what action Borrowers have taken and propose to
take with respect thereto.

6.04. Payment of Taxes and Assessments. Pay and discharge as the same shall
become due and payable, all Federal, state and other tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being Properly Contested or unless the failure to so
pay and discharge would not be reasonably be expected to have a Material Adverse
Effect.

6.05. Preservation of Existence, Etc. (a) Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization or formation except in a transaction permitted
by Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary in the normal conduct of
its business except where the failure to do so would not reasonably be expected
to have a Material Adverse Effect; (c) preserve or renew all of its registered
Intellectual Property and rights to use Intellectual Property necessary in the
normal conduct of its business except where the failure to take such action
would not reasonably be expected to have a Material Adverse Effect; and (d) keep
in full force and effect each License the expiration or termination of which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect (each a “Material License”).

6.06. Maintenance of Properties. Maintain, preserve and protect all of its
tangible properties (other than insignificant properties) and equipment
necessary in the operation of its business in good working order and condition,
ordinary wear and tear and casualty and condemnation excepted, except (i) to the
extent that, in the reasonable business judgment of such Person, any such
property is no longer necessary for the proper conduct of the business of such
person or (ii) where the failure to do so would not reasonably be expected to
have a Material Adverse Effect.

 

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6.07. Maintenance of Insurance; Business Interruption Proceeds.

(a) Maintain with financially sound and reputable insurance companies that are
not Affiliates of the Loan Parties, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business and operating in the same or
similar locations or as is required by applicable Law, of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons as determined by management of the Loan Parties in their reasonable good
faith business judgment.

(b) (i) Promptly after the expiration or cancellation of any insurance policies
evidenced by the most recent insurance certificates delivered to the
Administrative Agent, deliver to Administrative Agent certificates (in a form
substantially similar to the insurance certificates delivered to the
Administrative Agent in connection with the consummation of the Transaction)
setting forth the nature and extent of all insurance maintained by the Loan
Parties and (ii) cause each issuer of an insurance policy (excluding directors
and officers policies, workers’ compensation policies and business interruption
insurance policies) to a Loan Party to provide Administrative Agent with a
customary endorsement showing, among other things, Administrative Agent as a
loss payee with respect to each applicable policy of property or casualty
insurance and naming Administrative Agent as an additional insured with respect
to each applicable policy of liability insurance; provided, that with respect to
any endorsements required to be delivered on the Closing Date with respect to
Holdings and its Subsidiaries, the Loan Parties shall have ninety (90) days
after the Closing Date (or such longer period as agreed to by Administrative
Agent in its sole discretion), to deliver or cause to be delivered, such
required endorsements to Administrative Agent in form and substance reasonably
satisfactory to Administrative Agent.

(c) Unless Borrower Agent provides Agent Administrative with evidence of the
continuing insurance coverage required by this Agreement, Administrative Agent
may purchase insurance at Borrowers’ expense to protect Administrative Agent’s
and Lenders’ interests in the Collateral. This insurance may, but need not,
protect Borrowers’ and each other Loan Party’s interests. The coverage that
Administrative Agent purchases may, but need not, pay any claim that is made
against a Borrower or any other Loan Party in connection with the Collateral.
Borrowers may later cancel any insurance purchased by Administrative Agent, but
only after providing Administrative Agent with evidence that Loan Parties have
obtained the insurance coverage required by this Agreement. If Agent purchases
insurance for the Collateral, as set forth above, Borrowers will be responsible
for the costs of that insurance, including interest and any other charges that
may be imposed with the placement of the insurance, until the effective date of
the cancellation or expiration of the insurance and the costs of the insurance
may be added to the principal amount of the Loans owing hereunder.

 

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6.08. Compliance with Laws Generally; Environmental Laws. Except in each case as
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, (a) comply with the requirements of all Laws (including
without limitation all applicable Environmental Laws) and all orders, writs,
injunctions and decrees applicable to it or to its business or property, except
in such instances in which such requirement of Law or order, writ, injunction or
decree is being Properly Contested; (b) maintain its Real Estate in compliance
with all Environmental Laws; (c) obtain and renew all environmental permits
required under requirements of Law for its operations and properties; and
(d) implement any and all investigation, remediation, removal and response
actions that are required to comply with Environmental Laws pertaining to the
presence, generation, treatment, storage, use, disposal, transportation or
release of any Hazardous Materials on, at, in, under or about any of its Real
Estate.

6.09. Books and Records. Maintain proper books of record and account, in which
full, true and correct entries, in all material respects, for the Loan Parties
taken as a whole and for the Loan Parties and their Subsidiaries taken as a
whole, in conformity with GAAP consistently applied (or such other customary
standard in such foreign jurisdiction where a Foreign Subsidiary does business)
shall be made.

6.10. Inspection Rights; Meetings with Administrative Agent. Permit
Administrative Agent or its designees or representatives from time to time,
subject to reasonable prior written notice and during normal business hours, to
conduct inspections of the operations and properties of the Loan Parties and
Subsidiaries and to examine its organizational, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers and auditors; provided that
representatives of Borrower Agent shall be given the opportunity to participate
in any discussions with the auditors. Administrative Agent shall not have any
duty to any Loan Party to share any results of any such inspection, examination
with any Loan Party. The Loan Parties acknowledge that all reports are prepared
by or for Administrative Agent and Lenders for their purposes, and Loan Parties
shall not be entitled to rely upon them. Notwithstanding anything to the
contrary in this Section 6.10, (i) none of the Loan Parties or any Subsidiary
will be required to disclose or permit the inspection or discussion of, any
document, information or other matter (a) that constitutes non-financial trade
secrets or non-financial proprietary information, (b) in respect of which
disclosure to the Administrative Agent or any Lender (or their respective
representatives or contractors) is prohibited by Law or (c) that is subject to
attorney client or similar privilege or constitutes attorney work product and
(ii) absent an Event of Default that has occurred and is continuing, the
Administrative Agent shall not exercise such rights more often than once per
calendar year, which visit or inspection shall be at the Borrowers’ expense.

6.11. Compliance with ERISA. Do, and cause each of its ERISA Affiliates to do,
each of the following, except if a Material Adverse Effect would not result from
the failure to do so: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other applicable
Laws; (b) cause each Plan which is qualified under section 401(a) of the Code to
maintain such qualification; (c) cause each Foreign Plan to maintain any
required approvals by any Governmental Authority regulating such Foreign Plan,
(d) make all required contributions to any Plan, and (e) make all required
contributions and payments to any Foreign Plans.

 

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6.12. Further Assurances.

(a) At Borrowers’ cost and expense, upon reasonable request of Administrative
Agent (or within thirty (30) days (or such longer period of time as the
Administrative Agent may agree in its sole discretion) of the consummation of
any Permitted Acquisition pursuant to which a Loan Party or Subsidiary has
acquired all or substantially all of the assets of a Person (or all or
substantially all of a line or lines of business of a Person)), duly execute and
deliver or cause to be duly executed and delivered, to Administrative Agent such
further instruments, documents, certificates and financing and continuation
statements, and do and cause to be done such further acts that may be reasonably
necessary in the reasonable opinion of Administrative Agent to grant, perfect
and maintain the validity, effectiveness and priority of any of the Liens
required by the Security Instruments and the other Loan Documents in accordance
with all applicable requirements of Law.

(b) Within thirty (30) days (or such longer period of time as the Administrative
Agent may agree in its sole discretion) of the acquisition or creation of any
Domestic Subsidiary (other than an Excluded Domestic Subsidiary or other
Excluded Subsidiary) or, pursuant to a Permitted Acquisition and in accordance
with clause (a) of the definition thereof, the merger of any Loan Party or
Subsidiary with and into any Person, with such Person as the surviving entity of
such merger, cause to be delivered to Administrative Agent each of the
following, as applicable, in each case, consistent with the documents delivered
on the Closing Date or otherwise reasonably acceptable to Administrative Agent
and, as applicable, duly executed by the parties thereto: (i) a joinder
agreement with respect to this Agreement, together with other Loan Documents
reasonably requested by Administrative Agent, including all Security Instruments
and other documents reasonably requested to establish and preserve the Lien of
Administrative Agent in all Collateral of such Domestic Subsidiary subject to
any limitations on Collateral set forth in the Loan Documents; (ii) Uniform
Commercial Code financing statements, Documents and original collateral
(including pledged Equity Interests, other securities and Instruments) and such
other documents and agreements as may be reasonably required by Administrative
Agent, all as necessary to establish and maintain a valid, perfected Lien under
U.S. law in all Collateral in which such Domestic Subsidiary has an interest
consistent with the terms of the Loan Documents executed on the Closing Date
(and subject to any limitations on Collateral set forth therein); (iii) upon the
reasonable request of the Administrative Agent, an opinion of counsel to such
Domestic Subsidiary addressed to Administrative Agent and the Lenders, in form
and substance reasonably acceptable to Administrative Agent and substantially
similar to those opinions of counsel delivered on the Closing Date; and
(iv) current copies of the Organization Documents of such Domestic Subsidiary
resolutions of the Board of Directors (and, if required by such Organization
Documents or applicable law, of the shareholders, members or partners) of such
Person authorizing the actions and the execution and delivery of documents
described in this Section 6.12, all certified by an appropriate officer. For the
avoidance of doubt, any Foreign Subsidiary, Excluded Domestic Subsidiary or
other Excluded Subsidiary shall not be required to guarantee or pledge its
assets for any obligations of a Loan Party; provided however, the shareholder or
shareholders of any such first tier Foreign Subsidiary, Excluded Domestic Holdco
or

 

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Excluded Domestic Subsidiary, as applicable, shall pledge 65% of all classes of
Equity Interests of such first tier Foreign Subsidiary, Excluded Domestic Holdco
or Excluded Domestic Subsidiary, as applicable, to support the Obligations of
such Loan Parties (and no other Equity Interests of a Foreign Subsidiary,
Excluded Domestic Holdco or Excluded Domestic Subsidiary shall be pledged).

(c) Within ninety (90) days (or such longer period of time as the Administrative
Agent may permit) of the acquisition by any Loan Party of any fee owned Real
Estate with an individual fair market value in excess of $2,000,000, deliver or
cause to be delivered to Administrative Agent (and, with respect to flood
documentation, each Lender), with respect thereto, in each case reasonably
acceptable to Administrative Agent, a mortgage or deed of trust, as applicable,
and an opinion of Borrowers’ counsel with respect thereto, an ALTA lender’s
title insurance policy insuring Administrative Agent’s first priority Lien
(subject to Permitted Liens), a current ALTA survey, certified to Administrative
Agent by a licensed surveyor, a certificate from a national certification agency
indicating whether such Real Estate is located in a special flood hazard area
(and, if applicable, flood insurance) and such other flood documentation or
other information reasonably requested by any Lender to permit such Lender to
comply with applicable flood Laws, and an environmental audit (to the extent
already prepared).

6.13. Use of Proceeds. The Borrowers shall use the proceeds of the Loans (other
than Revolving Loans and Increases) solely as follows: (a) first, to refinance
on the Closing Date, existing Indebtedness of the Loan Parties, (b) to pay fees,
costs and expenses of the Transactions and fees, costs and expenses required to
be paid pursuant to Section 4.01, (c) to finance the working capital needs of
the Borrowers and their Subsidiaries, (iv) for general corporate purposes
(including for expenditures not prohibited by the Loan Documents) and
(d) payment of fees and expenses related to the foregoing. The Borrowers shall
use the proceeds of the Revolving Loans solely as follows: (a) on the Closing
Date, to pay upfront fees (or OID) with respect to the Facilities and to
refinance on the Closing Date, existing Indebtedness of the Loan Parties (or, in
each case, any fees and expenses related thereto) and (b) after the Closing
Date, (i) to finance the working capital needs of the Borrowers and their
Subsidiaries, (ii) for general corporate purposes, capital expenditures
(including for expenditures not prohibited by the Loan Documents), of Borrowers
and their respective Subsidiaries not in violation of this Agreement, Permitted
Acquisitions, other permitted Investments, other permitted distributions on
account of the Equity Interests of the Borrowers (including, for the avoidance
of doubt, Restricted Payments permitted by Section 7.06 hereof), and prepayments
of Indebtedness permitted by Section 7.11 hereof, (iii) for Letters of Credit
and (iv) for payment of fees and expenses related to the foregoing. The
Borrowers shall use the proceeds of any Increase solely for general corporate
purposes (including for capital expenditures, Permitted Acquisitions and other
permitted Investments, permitted Restricted Payments, permitted prepayments of
Indebtedness, permitted refinancings of Indebtedness and any other transaction
not prohibited by this Agreement).

6.14. Control Agreements. Each Loan Party shall enter into, and cause each
depository, securities intermediary or commodities intermediary to enter into,
Control Agreements with respect to each deposit, securities, commodity or
similar account maintained by such Person (other than (a) zero balance accounts,
(b) any payroll account so long as the Loan Parties do not deposit or maintain
funds in any such payroll account in excess of amounts

 

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necessary for the purpose of funding up to two periods of payroll liabilities
(including payroll taxes) and amounts necessary to satisfy minimum balance
requirements, (c) accounts in which the amounts on deposit do not exceed
$1,000,000 in the aggregate at any one time and (d) withholding tax, benefits,
trust, escrow or fiduciary accounts, in each case, which hold funds solely
(i) for taxes required to be collected, remitted or withheld (including, without
limitation, federal and state withholding taxes (including the employer’s share
thereof)) or (ii) that are benefits accounts or held on behalf of another Person
or as an escrow or fiduciary for such Person, as applicable (such excluded
accounts, “Excluded Accounts”)) as of and after the Closing Date. It is agreed
and understood that the Loan Parties shall have until the date that is
(a) ninety (90) days following the Closing Date (or such later date as may be
agreed to by Administrative Agent in its sole discretion) to comply with the
provisions of this Section 6.14 with regard to accounts (other than Excluded
Accounts) of the Loan Parties existing on the Closing Date.

6.15. Collateral Access Agreements. Each Loan Party shall use commercially
reasonable efforts to obtain, (a) within ninety (90) days after the Closing
Date, a landlord waiver or collateral access agreement from the respective
lessors of the corporate headquarters of the Borrower Agent, which agreements
shall be reasonably satisfactory in form and substance to Administrative Agent
and (b) within ninety (90) days after the acquisition of, or execution and
delivery of a lease with respect to, leased locations acquired after the Closing
Date which at such time constitutes the corporate headquarters of the Borrower
Agent, a landlord waiver or collateral access agreement from the respective
lessors of such leased locations, which agreements shall be reasonably
satisfactory in form and substance to Administrative Agent; provided, that it
being understood and agreed that no Loan Party shall be required to take any
actions to obtain a landlord waiver or collateral access agreement with respect
to a leased location described in clause (b) above unless the applicable Loan
Party reasonably believes that such landlord waiver or collateral access
agreement is reasonably obtainable without paying any fees to the applicable
lessor and without incurring excessive costs and expenses within ninety
(90) days of requesting such a landlord waiver or collateral access agreement.
It is agreed and understood that the Loan Parties shall have until the date that
is ninety (90) days following the Closing Date (or such later date as may be
agreed to by Administrative Agent in its sole discretion) to use commercially
reasonable efforts to comply with the provisions of this Section 6.15 with
regard to the corporate headquarters of the Borrowers as of the Closing Date;
provided that in no event shall a Default or Event of Default occur as a result
of not delivering any such collateral access agreement so long as the Loan
Parties used commercially reasonable efforts to obtain the same within the
specific time frame.

ARTICLE VII

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder or any Loan Obligation
(other than contingent indemnification claims for which no claim has been
asserted) hereunder shall remain unpaid or unsatisfied, no Loan Party shall, nor
shall it permit any Subsidiary to, directly or indirectly:

7.01. Indebtedness. Create, incur, assume or suffer to exist any Indebtedness or
issue any Disqualified Equity Interest, except:

 

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(a) the Obligations, the Secured Obligations and the Indebtedness permitted
pursuant to Section 2.18;

(b) Indebtedness outstanding on the date hereof and listed on Schedule 7.01 and
any Permitted Refinancing thereof;

(c) (i) Guarantees by any Loan Party in respect of Indebtedness otherwise
permitted hereunder of any other Loan Party; provided that any Guarantee of
Indebtedness that is required to be subordinated to the Obligations shall be
subordinated to the Obligations on terms at least as favorable to Administrative
Agent and the Lenders as such subordinated Indebtedness and (ii) Guarantees by a
Subsidiary of Holdings which is not a Loan Party in respect of Indebtedness
otherwise permitted hereunder of another Subsidiary of Holdings which is not a
Loan Party;

(d) obligations (contingent or otherwise) of the Loan Parties and their
Subsidiaries existing or arising under any Swap Contract, provided that such
obligations are (or were) required hereunder or entered into by such Person in
the Ordinary Course of Business and not for purposes of speculation;

(e) Indebtedness in respect of Capital Leases and purchase money obligations
within the limitations set forth in Section 7.02(i) and Permitted Refinancings
thereof; provided, however, that the aggregate amount of all such Indebtedness
at any one time outstanding shall not exceed the greater of (i) $5,000,000 and
(ii) 10% of Adjusted Consolidated EBITDA for the four Fiscal Quarter period most
recently ended as to which financial statements were required to be delivered
pursuant to this Agreement; provided, further, that in no event shall such
Indebtedness incurred in reliance on this Section 7.01(e) exceed $10,000,000 in
the aggregate at any one time outstanding;

(f) the endorsement of negotiable instruments for deposit or collection or
similar transactions in the Ordinary Course of Business;

(g) Indebtedness of (i) any Loan Party owing to any other Loan Party, (ii) any
Subsidiary that is not a Loan Party owing to any other Subsidiary that is not a
Loan Party, (iii) any Subsidiary that is not a Loan Party owing to any Loan
Party; provided that (A) the aggregate principal amount of all such Indebtedness
under this clause (iii) of all such Subsidiaries shall not exceed the greater of
(i) $5,000,000 and (ii) 10% of Adjusted Consolidated EBITDA for the four Fiscal
Quarter period most recently ended as to which financial statements were
required to be delivered pursuant to this Agreement, in the aggregate at any
time outstanding and (B) such Indebtedness shall not be evidenced by promissory
notes unless such notes are delivered to the Administrative Agent and pledged to
Administrative Agent pursuant to the Security Agreement, and (iv) any Loan Party
owing to any Subsidiary that is not a Loan Party, so long as such Indebtedness
is subordinated in right of payment to the prior Payment in Full of the
Obligations pursuant to subordination provisions reasonably acceptable to the
Administrative Agent;

(h) (i) surety bonds, performance bonds or custom bonds or any guarantees in
connection with the foregoing, in each case, incurred in the Ordinary Course of
Business and (ii) appeal bonds in connection with the enforcement of rights or
claims of Borrower or any Subsidiary in connection with judgments that do not
result in an Event of Default;

 

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(i) Indebtedness (i) owing to insurance carriers and incurred to finance
insurance premiums of any Loan Party or any Subsidiary or (ii) consisting of
take or pay obligations contained in supply agreements, in the case of each of
the foregoing clauses (i) and (ii), incurred in the Ordinary Course of Business;

(j) (i) unsecured deferred purchase price obligations in the form of earnouts
and other similar contingent obligations and (ii) unsecured seller debt subject
to customary subordination terms as reasonably determined by the Borrowers,
which shall, in any event, provide that any such unsecured seller debt shall not
be payable while an Event of Default has occurred and is continuing, in the case
of each of the foregoing clauses (i) and (ii), incurred in connection with a
Permitted Acquisition, solely to the extent permitted pursuant to the defined
term “Permitted Acquisition” or other Investment permitted hereunder and;

(k) Indebtedness in respect of cash management obligations, netting services,
overdraft protections and other like services, in each case incurred in the
Ordinary Course of Business;

(l) Indebtedness of any Subsidiary that is not a Loan Party; provided that
(A) the aggregate principal amount of all such Indebtedness of all such
Subsidiaries shall not exceed the greater of (i) $10,000,000 and (ii) 5% of
Adjusted Consolidated EBITDA for the four Fiscal Quarter period most recently
ended as to which financial statements were required to be delivered pursuant to
this Agreement, in the aggregate at any time outstanding;

(m) Indebtedness representing any taxes, assessments or governmental charges to
the extent (i) the same are being Properly Contested or (ii) that payment
thereof shall not at any time be required to be made in accordance with
Section 6.04 hereof;

(n) Indebtedness of Borrowers or any Subsidiary which may be deemed to exist in
connection with agreements providing for indemnification, incentive,
non-compete, purchase price adjustments and similar obligations in connection
with the disposition of assets in the Ordinary Course of Business and in
accordance with the requirements of this Agreement, so long as any such
obligations are those of the Person making the respective sale, and are not
guaranteed by any other Person except as permitted hereunder;

(o) Indebtedness assumed in connection with any Permitted Acquisition or other
investment permitted under Section 7.03(z), provided that (x) such Indebtedness
(i) was not incurred in contemplation of such Permitted Acquisition or such
other investment, (ii) is secured only by the assets acquired in the applicable
Permitted Acquisition or other investment (including any acquired Equity
Interests), (iii) the only obligors with respect to any Indebtedness incurred
pursuant to this clause (o) shall be those Persons who were obligors of such
Indebtedness prior to such Permitted

 

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Acquisition or applicable investment, (y) both immediately prior and after
giving effect thereto no Event of Default shall exist or result therefrom, and
(z)(i) after giving effect to the assumption of such Indebtedness, the Loan
Parties shall be in compliance on a Pro Forma Basis with the covenant set forth
in Sections 7.12(a) for the Fiscal Quarter most recently ended as determined
based on the financial statements for the most recently ended fiscal period that
have been delivered or were required to be delivered pursuant to Section 6.01(a)
or (b) and after giving effect to such assumption, the Consolidated Total Net
Leverage Ratio is not greater than 2.75 to 1.00 on a Pro Forma Basis computed as
of the last day of the most recently ended fiscal period for which financial
statements have been delivered or were required to be delivered pursuant to
Section 6.01(a) or (b);

(p) unsecured Indebtedness representing deferred compensation, deferred
compensation plans or other similar arrangements to employees of the Borrowers
(or any direct parent of a Borrower) and their Subsidiaries, in each case,
incurred in the Ordinary Course of Business;

(q) unsecured Indebtedness of Holdings to current or former officers, directors,
partners, managers, consultants and employees, their respective estates, spouses
or former spouses to finance the purchase or redemption of Equity Interests of
Holdings (or any direct or indirect parent thereof) permitted by Section 7.06;

(r) Indebtedness incurred by Holdings, the Borrowers or any of their
Subsidiaries in a Permitted Acquisition or any other Investment expressly
permitted hereunder, in each case to the extent constituting reasonable and
customary indemnification obligations or obligations in respect of working
capital or other similar purchase price adjustments;

(s) Indebtedness incurred by the Borrowers or any of their Subsidiaries in
respect of letters of credit, bank guarantees, banker’s acceptances, warehouse
receipts or similar instruments issued or created in the Ordinary Course of
Business, including in respect of workers compensation claims, health,
disability or other employee benefits or property, casualty or liability
insurance or self-insurance or other Indebtedness with respect to
reimbursement-type obligations regarding workers compensation claims;

(t) [reserved];

(u) Indebtedness of Foreign Subsidiaries which is secured by the assets of any
Foreign Subsidiary as permitted under Section 7.02(z), in an aggregate principal
amount not to exceed $10,000,000 at any time outstanding;

(v) secured or unsecured subordinated Indebtedness; provided that any such
subordinated Indebtedness shall not exceed the greater of (i) $25,000,000 and
(ii) 50% of Adjusted Consolidated EBITDA for the four Fiscal Quarter period most
recently ended as to which financial statements were required to be delivered
pursuant to this Agreement, in the aggregate at any time outstanding, provided
further, that (i) such subordinated Indebtedness shall be subordinated in right
of payment to the Obligations and, if secured, lien subordinated to the Liens in
favor of Administrative Agent and the Lenders, in each

 

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case, on terms and pursuant to documentation reasonably satisfactory to
Administrative Agent, (ii) such subordinated indebtedness shall only be
guaranteed by Holdings or the Subsidiaries that are otherwise guarantors of the
Obligations, (iii) the other conditions and terms thereof shall be reasonably
acceptable to the Administrative Agent but in any case no scheduled principal
payments, redemptions or sinking fund or like payments of any such subordinated
Indebtedness shall be required prior to the date at least 6 months after the
later of the Revolving Credit Maturity Date or the Term Loan Maturity Date, and
(iv) no Event of Default shall exist immediately before and after giving effect
to the incurrence of such subordinated Indebtedness and the use of proceeds
therefrom on such date (any such subordinated Indebtedness, “Subordinated
Indebtedness”)

(w) additional Indebtedness in an aggregate outstanding principal amount at any
one time outstanding not to exceed the greater of (i) $7,500,000 and (ii) 12.5%
of Adjusted Consolidated EBITDA for the four Fiscal Quarter period most recently
ended as to which financial statements were required to be delivered pursuant to
this Agreement;

(x) all premiums (if any), interest (including post-petition interest), fees,
expenses, charges and additional or contingent interest on obligations described
in clauses (a) through (w) above; and

(y) interest and fees payable in kind or accrued on any of the foregoing.

For purposes of determining compliance with any restriction on the incurrence of
Indebtedness, the principal amount of Indebtedness denominated in a foreign
currency shall be calculated based on the relevant currency exchange rate in
effect on the date such Indebtedness was incurred, in the case of term debt, or
first committed, in the case of revolving credit debt; provided that if such
Indebtedness is incurred to extend, replace, refund, refinance, renew or defease
other Indebtedness denominated in a foreign currency, and such extension,
replacement, refunding, refinancing, renewal or defeasance would cause the
applicable restriction to be exceeded if calculated at the relevant currency
exchange rate in effect on the date of such extension, replacement, refunding,
refinancing, renewal or defeasance, such restriction shall be deemed not to have
been exceeded so long as the principal amount of such refinancing Indebtedness
does not exceed the principal amount of such Indebtedness being extended,
replaced, refunded, refinanced, renewed or defeased.

7.02. Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than the following (“Permitted Liens”):

(a) Liens in favor of Administrative Agent pursuant to any Loan Document and
pursuant to any documentation governing Indebtedness permitted to be incurred
pursuant to Section 2.18;

(b) Liens existing on the date hereof and set forth on Schedule 7.02 and any
renewals, extensions, modifications or replacements thereof; provided, with
respect to any renewals, extensions, modifications or replacements thereof,
(i) such Lien does not extend to any additional property other than
(A) after-acquired property that is affixed or

 

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incorporated into the property covered by such Lien or financed by Indebtedness
permitted under Section 7.01(b), and (B) proceeds and products thereof; and
(ii) the renewal, extension or refinancing of the obligations secured or
benefited by such Liens is permitted by Section 7.01(b);

(c) Liens for taxes, duties, levies, imposts, deductions, assessments or other
governmental charges, not yet due and payable or which are being Properly
Contested or otherwise not required to be paid pursuant to Section 6.04;

(d) Liens of carriers, warehousemen, processors, mechanics, materialmen,
repairmen, landlords or other like Liens imposed by Law or arising in the
Ordinary Course of Business which are not overdue for a period of more than 90
days or which are being Properly Contested;

(e) Liens, pledges or deposits in the Ordinary Course of Business in connection
with workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA or a foreign benefit law;

(f) Liens on deposits to secure the performance of bids, trade contracts and
leases, statutory obligations, surety bonds, performance bonds and other
obligations (other than obligations for the payment of borrowed money) of a like
nature incurred in the Ordinary Course of Business;

(g) Liens consisting of imperfections of title and easements, rights-of-way,
covenants, consents, reservations, encroachments, variations and zoning and
other similar restrictions, charges, encumbrances or title defects affecting
real property which, in the aggregate do not materially detract from the value
of the property subject thereto or materially interfere with the use by the Loan
Parties or their Subsidiaries in the Ordinary Course of Business of the property
subject to such encumbrance;

(h) Liens securing judgments not constituting an Event of Default under
Section 8.01 or securing appeal or other surety bonds related to such judgments;

(i) Liens securing Indebtedness permitted under Section 7.01(e); provided that
such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and replacements thereof and additions and
accessions to such property and the proceeds and the products thereof and
customary security deposits;

(j) licenses, sublicensees, operating leases or subleases (and precautionary UCC
filings with respect thereto) granted by or to the Loan Parties or any
Subsidiary to or from any other Person in the Ordinary Course of Business and
any renewals, extensions, modifications or replacements thereof;

(k) Liens in favor of collecting banks (including those arising under
Section 4-210 of the UCC) arising by operation of law;

(l) Liens (including the right of setoff) in favor of a bank or other depository
institution arising as a matter of law encumbering deposits;

 

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(m) Liens in favor of customs and revenue authorities to secure payment of
customs duties in connection with the importation of goods and arising in the
Ordinary Course of Business;

(n) Liens on insurance policies and the proceeds thereof securing the financing
of the premiums with respect thereto to the extent permitted under Section
7.01(i) and Liens arising out of deposits of cash and Cash Equivalents, security
deductibles, self-insurance, co-payment, co-insurance, retentions and similar
obligations to providers of insurance in the Ordinary Course of Business;

(o) other Liens as to which the aggregate amount of the obligations secured
thereby does not exceed at any time outstanding the greater of (x) $5,000,000
and (y) 10% of Adjusted Consolidated EBITDA for the four Fiscal Quarter period
most recently ended as to which financial statements were required to be
delivered pursuant to this Agreement;

(p) Liens (i) on cash advances in favor of the seller of any property to be
acquired in an Investment permitted pursuant to Section 7.03(f), (l), or (z) to
be applied against the purchase price for such Investment and (ii) consisting of
an agreement to Dispose of any property in a Disposition permitted under
Section 7.05, in each case, solely to the extent such Investment or Disposition,
as the case may be, would have been permitted on the date of the creation of
such Lien;

(q) Liens in favor of Holdings, the Borrowers or any Subsidiary that is a Loan
Party securing Indebtedness permitted under Section 7.01(g);

(r) Liens existing on property at the time of its acquisition or existing on the
property of any Person at the time such Person becomes a Subsidiary, in each
case after the date hereof; provided that (i) such Lien was not created in
contemplation of such acquisition or such Person becoming a Subsidiary,
(ii) such Lien does not extend to or cover any other assets or property (other
than the proceeds or products thereof and other than after-acquired property
subjected to a Lien securing Indebtedness and other obligations incurred prior
to such time and which Indebtedness and other obligations are permitted
hereunder that require, pursuant to their terms at such time, a pledge of
after-acquired property, it being understood that such requirement shall not be
permitted to apply to any property to which such requirement would not have
applied but for such acquisition), and (iii) the Indebtedness secured thereby is
permitted under Section 7.01(o);

(s) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for sale of goods entered into by the Borrowers or any
Subsidiaries in the Ordinary Course of Business;

(t) Liens that are customary contractual rights of set-off (i) relating to the
establishment of depository relations with banks or other financial institutions
in the Ordinary Course of Business, (ii) relating to pooled deposit or sweep
accounts of the Borrowers or any Subsidiary to permit satisfaction of overdraft
or similar obligations incurred in the ordinary course of business of the
Borrowers or Subsidiaries or (iii) relating to purchase orders and other
agreements entered into with customers of the Borrowers or any Subsidiary in the
Ordinary Course of Business;

 

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(u) Liens arising from precautionary Uniform Commercial Code financing statement
filings;

(v) Liens on specific items of inventory or other goods and the proceeds thereof
securing such Person’s obligations in respect of documentary letters of credit
issued for the account of such Person to facilitate the purchase, shipment or
storage of such inventory or goods in the Ordinary Course of Business;

(w) ground leases in respect of real property on which facilities owned or
leased by the Borrowers or any Subsidiaries are located;

(x) Liens on property of a Subsidiary that is not a Loan Party securing
Indebtedness of another Subsidiary that is not a Loan Party permitted to be
incurred by Section 7.01;

(y) Liens solely on any cash earnest money deposits made by the Borrowers or any
of their Subsidiaries in connection with any letter of intent or purchase
agreement for an Acquisition or other Investment that would be permitted
hereunder;

(z) Liens on the assets of Foreign Subsidiaries securing Indebtedness permitted
by Section 7.01(u); and

(aa) Liens securing Indebtedness permitted by Section 7.01(v) and subordinated
in right of priority to the Liens securing the Obligations hereunder, in each
case, pursuant to terms and pursuant to documentation reasonably satisfactory to
Administrative Agent.

7.03. Investments. Make any Investments, except:

(a) Investments held by the Loan Parties and their Subsidiaries in the form of
Cash Equivalents;

(b) loans and advances to officers, directors and employees of the Loan Parties
and Subsidiaries made in the Ordinary Course of Business in an aggregate amount
at any one time outstanding not to exceed $2,000,000;

(c) (i) Investments by the Loan Parties and their Subsidiaries in their
respective Subsidiaries solely to the extent outstanding on the date hereof,
(ii) additional Investments by a Loan Party in or to another Loan Party (in the
case of Investments in or to Holdings, solely pursuant to loans, advances,
Guarantees or assumptions of Indebtedness of Holdings or the acquisition of any
Equity Interests of a Subsidiary of Holdings, in each case, to the extent
permitted hereunder and constituting Investments), (iii) additional Investments
by any Subsidiary that is not a Loan Party in any other Subsidiary that is not a
Loan Party, (iv) additional Investments by the Loan Parties in

 

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Subsidiaries that are not Loan Parties in an aggregate amount not to exceed the
greater of (x) $5,000,000 and (y) 10% of Adjusted Consolidated EBITDA for the
four Fiscal Quarter period most recently ended as to which financial statements
were required to be delivered pursuant to this Agreement, in the aggregate at
any time outstanding; provided, that no Event of Default exists at the time of
or shall immediately result from the making of such Investment, and
(v) additional Investments by any Subsidiary that is not a Loan Party to a Loan
Party;

(d) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
Ordinary Course of Business (and, to the extent owing by a Foreign Subsidiary to
a Loan Party, made on customary arms-length terms), and Investments received in
satisfaction or partial satisfaction thereof from financially troubled or
delinquent account debtors or received in connection with disputes with
customers and suppliers, in each case, to the extent in furtherance of business
objectives determined in good faith by the Loan Parties or their Subsidiaries;

(e) Investments existing as of the date hereof (other than those set forth on
Schedule 5.12) to the extent set forth in Schedule 7.03 and extensions or
renewals thereof, provided that no such extension or renewal shall be permitted
if it would (i) increase the amount of such Investment at the time of such
extension or renewal or (ii) result in a Default or an Event of Default
hereunder;

(f) Investments consisting of a Permitted Acquisition;

(g) bank deposits and securities accounts maintained in accordance with the
terms of this Agreement and the other Loan Documents;

(h) Investments in securities of account debtors received pursuant to a plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
account debtors and Investments acquired in connection with the settlement of
delinquent accounts receivable in the Ordinary Course of Business;

(i) Investments received as the non-cash portion of consideration in connection
with a transaction permitted under Section 7.05;

(j) Investments constituting Indebtedness and Guarantees permitted under
Section 7.01 and transactions permitted by Section 7.04, Section 7.05 and
Section 7.06;

(k) deposits permitted under Section 7.02;

(l) other Investments (including Minority Interests) in an aggregate amount
outstanding at any time not to exceed the greater of (x) $15,000,000 and
(y) thirty percent (30%) of Adjusted Consolidated EBITDA for the four Fiscal
Quarter period most recently ended as to which financial statements were
required to be delivered pursuant to this Agreement; provided, that no Event of
Default exists at the time of or shall immediately result from the making of
such Investment; provided, that solely with respect to a Limited Condition
Acquisition, at the Borrower Agent’s election this clause

 

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(l) shall instead require that (x) no Specified Event of Default shall exist on
the execution date of the applicable acquisition agreement for such Limited
Condition Acquisition, and (y) no Event of Default under Section 8.01(a) or
8.01(f) shall exist on the date the Limited Condition Acquisition is
consummated;

(m) Investments to the extent solely reflecting an increase in the value of
Investments otherwise permitted hereunder;

(n) asset purchases (including purchases of inventory, supplies and materials)
and the licensing of Intellectual Property, in each case in the Ordinary Course
of Business;

(o) Investments in the Ordinary Course of Business consisting of Uniform
Commercial Code Article 3 endorsements for collection or deposit and Article 4
customary trade arrangements with customers consistent with past practices;

(p) advances of payroll payments to employees in the Ordinary Course of
Business;

(q) Investments held by a Subsidiary acquired after the Closing Date (including,
pursuant to a Permitted Acquisition) or of a Person merged into a Borrower or
merged or consolidated with a Subsidiary in accordance with Section 7.04 after
the Closing Date to the extent that such Investments were not made in
anticipation of, in contemplation of or in connection with such acquisition,
merger or consolidation and were in existence on the date of such acquisition,
merger or consolidation;

(r) Guarantee Obligations of Holdings or any of its Subsidiaries in respect of
leases (other than Capitalized Leases) or of other obligations that do not
constitute Indebtedness, in each case entered into in the Ordinary Course of
Business;

(s) Investments made with Qualified Equity Interests of Holdings (or of the
Borrowers or any direct or indirect parent company of Holdings after a Qualified
IPO of the Borrowers or such parent company as the case may be) to the extent of
such Qualified Equity Interests and to the extent not included in the Available
Amount and, with respect to any Investments under this clause (s) that are
Acquisitions or other acquisitions of the type described in clause (a) of the
definition of “Permitted Acquisition”, to the extent the conditions set forth in
the definition of “Permitted Acquisition” have been satisfied with respect to
any such Investment;

(t) interests in interest rate hedging agreements or currency exchange rate
hedging agreements, in each case, entered into in order to hedge interest rate
exposure or currency exchange rate exposure, as applicable, and for bona fide
and not for speculative purposes;

(u) prepaid expenses or lease, utility and other similar deposits, in each case
made in the Ordinary Course of Business;

 

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(v) securities acquired in connection with the satisfaction or enforcement of
indebtedness or claims due or owing or as security for any such indebtedness or
claim, so long as the same are pledged to the Administrative Agent to secure the
Obligations;

(w) accounts receivable owing to Borrower or any Subsidiary in the Ordinary
Course of Business or acquired in connection with a Permitted Acquisition or
other Investment permitted hereunder to the extent that such accounts receivable
were not made or acquired in anticipation of, in contemplation of or in
connection with such acquisition, merger or consolidation or Investment and were
in existence on the date of such acquisition, merger or consolidation or
Investment;

(x) (i) non-cash loans and advances to officers, directors and employees to
purchase equity of Holdings or any direct or indirect parent thereof (including
through the exercise of options or warrants of Holdings or any direct or
indirect parent thereof) and (ii) any cash loans and advances to officers,
directors and employees to pay taxes and related expenses associated with the
purchase by such employees of equity of Holdings or any direct or indirect
parent thereof (including through the exercise of options or warrants of
Holdings or any direct or indirect parent thereof) in an aggregate amount not to
exceed $2,000,000 plus the Available Amount in the aggregate at any time
outstanding for all such cash loans and advances;

(y) (i) reasonable earnest money deposits made in connection with the
acquisitions of property and assets not prohibited hereunder and (ii) deposits
made in the Ordinary Course of Business securing contractual obligations to the
extent constituting a Lien permitted hereunder;

(z) other Investments by a Loan Party or a Subsidiary in an aggregate amount
equal to the Available Amount as of the applicable date of such Investment;
provided, that the following conditions are satisfied after giving effect to
such Investment: (i) no Event of Default exists or shall immediately result from
the making of such Investment; provided, that solely with respect to a Limited
Condition Acquisition, at the Borrower Agent’s election this clause (z) shall
instead require that (x) no Specified Event of Default shall exist on the
execution date of the applicable acquisition agreement for such Limited
Condition Acquisition, and (y) no Event of Default under Section 8.01(a) or
8.01(f) shall exist on the date the Limited Condition Acquisition is
consummated, and (ii) the Loan Parties shall be in compliance on a Pro Forma
Basis with the covenants set forth in Sections 7.12(a) and (b) for the Fiscal
Quarter most recently ended computed as of the last day of the most recently
ended fiscal period for which financial statements have been delivered or were
required to be delivered pursuant to Section 6.01(a) or (b);

(aa) other Investments in joint ventures in an aggregate amount outstanding at
any time not to exceed the greater of (x) $2,500,000 and (y) five percent (5%)
of Adjusted Consolidated EBITDA for the four Fiscal Quarter period most recently
ended as to which financial statements were required to be delivered pursuant to
this Agreement, in any twelve-month period; provided, that no Event of Default
exists at the time of or shall immediately result from the making of such
Investment; and

 

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(bb) other Investments in an aggregate amount outstanding at any time not to
exceed $5,000,000; provided, that (x) no Event of Default shall have occurred
and be continuing, both immediately before or as a result of the making of such
Investment; provided, that solely with respect to a Limited Condition
Acquisition, at the Borrower Agent’s election this clause (bb) shall instead
require that (x) no Specified Event of Default shall exist on the execution date
of the applicable acquisition agreement for such Limited Condition Acquisition,
and (y) no Event of Default under Section 8.01(a) or 8.01(f) shall exist on the
date the Limited Condition Acquisition is consummated, (y) the Borrower Agent
shall have delivered to Administrative Agent a certificate demonstrating that
after giving effect to such Investment, (A) the Loan Parties are in compliance
on a Pro Forma Basis with the covenants set forth in Sections 7.12(a) and
(b) for the Fiscal Quarter most recently ended as determined based on the
financial statements for the most recently ended fiscal period that have been
delivered or were required to be delivered pursuant to Section 6.01(a) or
(b) and (B) the Consolidated Total Net Leverage Ratio is not greater than 3.00
to 1.00 on a Pro Forma Basis computed as of the last day of the most recently
ended fiscal period for which financial statements have been delivered or were
required to be delivered pursuant to Section 6.01(a) or (b), and (z) immediately
after giving effect thereto, Liquidity is at least $5,000,000.

For purposes of this Section 7.03, the amount of any Investments (other than
Permitted Acquisitions) shall be determined net of all actual returns on such
Investments, whether as principal, interest, dividends, distributions, proceeds
or otherwise (for the avoidance of doubt, other than increases in book value)
and loans and advances shall be taken at the principal amount thereof then
remaining unpaid, exclusive of any pay in kind or accrued interest or fees
thereon.

7.04. Mergers, Dissolutions, Etc.. Merge, dissolve, liquidate, consolidate with
or into another Person, except that:

(a) (i) any Subsidiary may merge or consolidate with or liquidate or dissolve
into a Loan Party, provided, that, the Loan Party shall be the continuing or
surviving Person, and (ii) any Subsidiary that is not a Loan Party may merge
into any other Subsidiary that is not a Loan Party, provided, that, (i) when any
wholly-owned Subsidiary is merging with another Subsidiary that is not
wholly-owned, the wholly-owned Subsidiary shall be the continuing or surviving
Person and (ii) in the case of any such merger to which any Domestic Subsidiary
is a party, such Domestic Subsidiary is the surviving Person unless, in the case
of this clause (ii), after giving pro forma effect to such merger, the creation
of a surviving Person that is not Domestic Subsidiary is otherwise permitted
under Section 7.03(c), (l), (s), (z), (aa) or (bb); and

(b) in connection with a Permitted Acquisition, any Subsidiary of a Loan Party
may merge with or into or consolidate with any other Person or permit any other
Person to merge with or into or consolidate with it; provided, that, (i) the
Person surviving such merger shall be a wholly-owned Subsidiary of a Loan Party
and (ii) in the case of any such merger to which any Loan Party is a party, such
Loan Party is the surviving Person unless, in the case of each of the foregoing
clauses (i) and (ii), the surviving entity has otherwise assumed all obligations
of such Loan Party or Subsidiary, as applicable, under the Loan Documents
pursuant to documentation reasonably

 

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acceptable to Administrative Agent; provided, further, that in the case of any
such merger to which any Domestic Subsidiary is a party, such Domestic
Subsidiary is the surviving Person unless, after giving pro forma effect to such
merger, the creation of a surviving Person that is not Domestic Subsidiary is
otherwise permitted under Section 7.03(f) or (z).

7.05. Dispositions. Make any Disposition, except:

(a) Dispositions of Cash Equivalents and Inventory in the Ordinary Course of
Business;

(b) (i) Dispositions in the Ordinary Course of Business of property that is
obsolete, worn out or no longer useful in the Ordinary Course of Business and
(ii) disposition of other assets, in each case for so long as (x) the aggregate
fair market value or a book value, whichever is more, of such equipment, fixed
assets and other assets does not exceed the greater of (A) $7,500,000 and (B)
15% of Adjusted Consolidated EBITDA for the four Fiscal Quarter period most
recently ended as to which financial statements were required to be delivered
pursuant to this Agreement, in any twelve-month period and (y) all proceeds
thereof are either (A) remitted to Administrative Agent for application to the
Obligations in accordance with Section 2.06(b)(ii) if required thereby or (B) to
the extent permitted by the applicable intercreditor or subordination provisions
or agreement reasonably satisfactory to the Administrative Agent executed or
entered into in connection with Subordinated Indebtedness incurred pursuant to
Section 7.01(v) and solely to the extent required by a corresponding mandatory
prepayment provision in the applicable documentation governing such Subordinated
Indebtedness, remitted to the applicable holders of such Subordinated
Indebtedness (or administrative agent for such holders) for application in
accordance with such corresponding mandatory prepayment provision;

(c) any Disposition that constitutes (i) an Investment permitted under
Section 7.03, (ii) a Lien permitted under Section 7.02, (iii) a merger,
dissolution, consolidation or liquidation permitted under Section 7.04, or
(iv) a Restricted Payment permitted under Section 7.06;

(d) such Disposition that results from a casualty or condemnation in respect of
such property or assets so long as all proceeds thereof are either (A) remitted
to Administrative Agent for application to the Obligations in accordance with
Section 2.06(b)(ii) if required thereby or (B) to the extent permitted by the
applicable intercreditor or subordination provisions or agreement reasonably
satisfactory to the Administrative Agent executed or entered into in connection
with Subordinated Indebtedness incurred pursuant to Section 7.01(v) and solely
to the extent required by a corresponding mandatory prepayment provision in the
applicable documentation governing such Subordinated Indebtedness, remitted to
the applicable holders of such Subordinated Indebtedness (or administrative
agent for such holders) for application in accordance with such corresponding
mandatory prepayment provision;

 

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(e) the sale or discount, in each case without recourse, of accounts receivable
arising in the Ordinary Course of Business, but only in connection with the
compromise or collection of delinquent accounts or other accounts which, in the
applicable Loan Party’s or Subsidiary’s reasonable business judgment, are
doubtful of collection,

(f) licenses, sublicenses, leases or subleases granted to third parties in the
Ordinary Course of Business;

(g) the lapse, abandonment or other dispositions of Intellectual Property that
is, in the reasonable good faith judgment of a Loan Party or Subsidiary, no
longer material to the conduct of the business of the Loan Parties or any of
their Subsidiaries;

(h) (i) Dispositions among the Loan Parties (other than to Holdings except in
respect of dispositions of Equity Interests) or by any Subsidiary to a Loan
Party (other than to Holdings except in respect of dispositions of Equity
Interests), and (ii) Dispositions by any Subsidiary that is not a Loan Party to
another Subsidiary that is not a Loan Party;

(i) Dispositions of property to the extent that (i) such property is exchanged
for credit against the purchase price of similar replacement property that is
promptly purchased or (ii) the proceeds of such Disposition are promptly applied
to the purchase price of such replacement property (which replacement property
is actually promptly purchased);

(j) Dispositions of Investments in joint ventures to the extent required by, or
made pursuant to customary buy/sell arrangements between, the joint venture
parties set forth in joint venture arrangements and similar binding
arrangements;

(k) the unwinding of any Swap Contract pursuant to its terms;

(l) Foreign Subsidiaries of the Borrowers may sell or dispose of Equity
Interests to qualify directors where required by applicable law or to satisfy
other requirements of applicable law with respect to the ownership of Equity
Interests;

(m) Permitted Sale Leasebacks; and

(n) other Dispositions of property; provided that (i) at least seventy-five
percent (75%) of the proceeds of such Disposition in aggregate amount at any
time in excess of $5,000,000 consist of cash or Cash Equivalents, (ii) the
applicable Loan Party receives fair market value for such property (as
determined by the Borrowers in good faith), (iii) all proceeds thereof are
remitted to Administrative Agent for application to the Obligations in
accordance with Section 2.06(b)(ii) if required thereby, and (iv) at the time of
such Disposition (other than any such Disposition made pursuant to a legally
binding commitment therefor entered into at a time when no Event of Default then
existed), no Event of Default shall exist at the time of or would result from
such Disposition.

To the extent any Collateral is Disposed of as expressly permitted by this
Section 7.05 to any Person other than the Borrowers or any Subsidiary, such
Collateral shall be sold free and clear of the Liens created by the Loan
Documents and the Administrative Agent shall be authorized to take and shall
take any actions deemed appropriate in order to effect the foregoing.

 

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7.06. Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except:

(a) each Subsidiary may make Restricted Payments to a Loan Party or a Subsidiary
of a Loan Party (other than Holdings except Restricted Payments made to Holdings
the proceeds of which are used for Restricted Payments permitted hereunder) and,
in connection therewith, on a pro rata basis to any other equity holder of such
Subsidiary;

(b) Holdings and each of its Subsidiaries may declare and make dividend payments
or other distributions payable solely in the common stock or other common Equity
Interests of such Person;

(c) Holdings may (or may make a Restricted Payment to permit any direct or
indirect parent to) purchase, redeem or otherwise acquire shares of its (or of
any direct or indirect parent’s) stock or other Equity Interests in connection
with customary employee or management agreements, plans or arrangements for
future, present or former directors, officers, managers and employees (or any
Affiliates, spouses, former spouses, other immediate family members, successors,
executors, administrators, heirs, legatees, or distributes or transferees of any
of the foregoing including, without limitation, upon death, disability,
retirement, severance or termination of employment of such officers, directors,
managers or employees) of any of the Loan Parties and their Subsidiaries;
provided, that

(i) (A) no Event of Default shall have occurred and be continuing, both
immediately before or as a result of the making of such Restricted Payment,
(B) the Loan Parties shall be in compliance on a Pro Forma Basis with the
covenants set forth in Sections 7.12(a) and (b) for the Fiscal Quarter most
recently ended as determined based on the financial statements for the most
recently ended fiscal period that have been delivered or were required to be
delivered pursuant to Section 6.01(a) or (b), (C) immediately after giving
effect thereto, Liquidity is at least $5,000,000, and (D) cancellation of
Indebtedness owing to the Loan Parties (or any direct or indirect parent
thereof) or any Subsidiary in connection with the repurchase or Equity Interests
or stock hereunder will not be deemed to constitute a Restricted Payment for
purposes of this covenant or any other provision of this Agreement; or

(ii) (A) the amount of such Restricted Payments shall not exceed $4,000,000 in
the aggregate in any Fiscal Year; provided, that 50% of any unused amount under
this clause (ii)(A) (other than any unused carryover amount from the immediately
preceding Fiscal Year) in any Fiscal Year shall be permitted to be carried over
to the immediately succeeding Fiscal Year, with such amount carried over being
deemed to be the first amount expended in the Fiscal Year; and (B) cancellation
of Indebtedness owing to the Loan Parties (or any direct or

 

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indirect parent thereof) or any Subsidiary in connection with the repurchase or
Equity Interests or stock hereunder will not be deemed to constitute a
Restricted Payment for purposes of this covenant or any other provision of this
Agreement;

(d) Restricted Payments by Borrowers to the extent necessary to permit Holdings
or any direct or indirect holder of Equity Interests in the Borrowers to pay
administrative or corporate costs and expenses related to the business of
Borrowers and their Subsidiaries (including administrative, legal, accounting
and similar expenses and director or officer indemnification claims of any
direct or indirect parent of the Borrowers attributable to the direct or
indirect ownership or operations of the Borrowers and their Subsidiaries and
franchise or other taxes payable by Holdings or any parent entity of Holdings
whose sole material asset consists of the Equity Interests of Holdings (or
another similarly situated parent entity thereof) to maintain its corporate
existence) in each case, which are incurred in the Ordinary Course of Business;

(e) the Loan Parties may make payments (directly or through one or more direct
or indirect parents thereof) of out-of-pocket costs and expenses, reimbursements
and indemnification payments to Sponsor, its Controlled Investment Affiliates
and each of their Affiliates (other than, for the avoidance of doubt, any
portfolio companies of Sponsor, but without limitation of other payments to
portfolio companies of Sponsor by the Borrowers and their Subsidiaries in the
ordinary course of business) to pay expenses and indemnities payable to such
Persons in an aggregate amount not to exceed $250,000 per Fiscal Year;

(f) [reserved];

(g) Restricted Payments by Borrowers in an amount sufficient to permit Holdings
(or, if applicable, the direct or indirect parent of Holdings that is the parent
of the consolidated tax group for which Holdings is a member) to pay
consolidated tax liabilities of Holdings and its Subsidiaries relating to the
business of Borrowers and Borrowers’ Subsidiaries, in an amount not to exceed
the amount of any such Taxes that the Borrowers and their Subsidiaries would
have been required to pay on a separate group basis if the Borrowers and such
Subsidiaries were the only members of the consolidated tax group, less the
amount of any such Taxes that are paid directly by the Borrowers or their
Subsidiaries to the relevant Governmental Authority;

(h) Restricted Payments not otherwise permitted above in an amount not in excess
of the Available Amount, so long as (i) no Event of Default exists or shall
immediately result from the payment of such Restricted Payment, (ii) the Loan
Parties shall be in compliance on a Pro Forma Basis with the covenants set forth
in Sections 7.12(a) and (b) for the Fiscal Quarter most recently ended as
determined based on the financial statements for the most recently ended fiscal
period that have been delivered or were required to be delivered pursuant to
Section 6.01(a) or (b) and (iii) after giving effect to such payment, the
Consolidated Total Net Leverage Ratio is not greater than 2.75 to 1.00 on a Pro
Forma Basis computed as of the last day of the most recently ended fiscal period
for which financial statements have been delivered or were required to be
delivered pursuant to Section 6.01(a) or (b);

 

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(i) Holdings and the Borrowers may (or may make Restricted Payments to permit
any direct or indirect parent thereof to) redeem in whole or in part any of its
Equity Interests for another class of its (or such parent’s) Equity Interests or
rights to acquire its Equity Interests or with proceeds from substantially
concurrent equity contributions or issuances of new Equity Interests, provided
that any terms and provisions material to the interests of the Lenders, when
taken as a whole, contained in such other class of Equity Interests are at least
as advantageous to the Lenders as those contained in the Equity Interests
redeemed thereby;

(j) to the extent constituting Restricted Payments, Holdings, the Borrowers and
the Subsidiaries may enter into and consummate transactions expressly permitted
to be effected by such Person by any provision of Section 7.03, Section 7.04 or
Section 7.08;

(k) repurchases of Equity Interests in the Ordinary Course of Business in the
Borrowers (or any direct or indirect parent thereof) or any Subsidiary deemed to
occur upon exercise of stock options or warrants if such Equity Interests
represent a portion of the exercise price of such options or warrants;

(l) Holdings and its Subsidiaries may make Restricted Payments to any direct or
indirect holder of an Equity Interest in the Borrowers:

(i) to finance any Investment permitted to be made pursuant to Section 7.03;
provided that (A) such Restricted Payment shall be made substantially
concurrently with the closing of such Investment and (B) the Borrowers or such
parent shall, immediately following the closing thereof, cause (1) all property
acquired (whether assets or Equity Interests) to be held by or contributed to
the Borrowers or a Subsidiary or (2) the merger (to the extent permitted in
Section 7.04) of the Person formed or acquired into the Borrowers or a
Subsidiary in order to consummate such Permitted Acquisition, in each case, in
accordance with the requirements of Section 6.12; and

(ii) the proceeds of which shall be used to pay customary costs, fees and
expenses (other than to Affiliates) related to any unsuccessful equity or debt
offering permitted by this Agreement;

(m) the Borrowers may make other Restricted Payments in an aggregate amount not
to exceed $5,000,000; provided, that (x) no Default or Event of Default shall
have occurred and be continuing, both immediately before or as a result of the
making of such Restricted Payment, (y) the Borrower Agent shall have delivered
to Administrative Agent a Compliance Certificate demonstrating that, (A) after
giving effect to such payment, the Loan Parties shall be in compliance on a Pro
Forma Basis with the covenants set forth in Sections 7.12(a) and (b) for the
Fiscal Quarter most recently ended as to which financial statements have been
delivered or were required to be delivered pursuant to Section 6.01(a) or
(b) and (B) after giving effect to such payment, the Consolidated Total Net
Leverage Ratio is not greater than 2.50 to 1.00 on a Pro Forma Basis computed as
of the last day of the most recently ended fiscal period for which financial
statements have been delivered or were required to be delivered pursuant to
Section 6.01(a) or (b), and (z) immediately after giving effect thereto,
Liquidity is at least $5,000,000;

 

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(n) the Borrowers or any Subsidiary may (a) pay cash in lieu of fractional
Equity Interests in connection with any dividend, split or combination thereof
or any Permitted Acquisition and (b) honor any conversion request by a holder of
convertible Indebtedness and make cash payments in lieu of fractional shares in
connection with any such conversion and may make payments on convertible
Indebtedness in accordance with its terms;

(o) the payment of any dividend or distribution or the consummation of any
irrevocable redemption within sixty (60) days after the date of declaration of
the dividend or distribution or giving of the redemption notice, as the case may
be, if at the date of such declaration or notice, the dividend or redemption
payment would have complied with the provisions of this Agreement and was
permitted to be paid under this Agreement;

(p) additional Restricted Payments funded with the proceeds of Qualified Equity
Interests of Holdings which are not used to increase the Available Amount; and

(q) additional Restricted Payments in an aggregate amount not to exceed
$5,000,000 per Fiscal Year; provided that no Default or Event of Default has
occurred and is continuing or would result from the payment of such Restricted
Payment.

7.07. Change in Nature of Business. Engage in any material line of business
other than the Core Business.

7.08. Transactions with Affiliates. Enter into, or suffer to exist, any
transaction, arrangement or agreement of any kind with any Affiliate of any Loan
Party, other than (a) those described on Schedule 7.08, as in existence on the
date hereof, or any amendment thereto to the extent such an amendment is not
adverse to the Administrative Agent and/or the Lenders in any material respect,
(b) those expressly permitted by this Agreement and the other Loan Documents,
including pursuant to Section 7.06, (c) transactions between or among Loan
Parties, (d) employment and severance agreements and compensation to employees,
officers or directors (including stock ownership plans, awards or grants of
Equity Interests, employee benefit plans including vacation plans, health and
life insurance plans, deferred compensation plans, retirement or savings plans
and similar plans), (e) indemnification of officers, directors and employees in
the Ordinary Course of Business, (f) transactions between Loan Parties and
Subsidiaries that are not Loan Parties and/or any entity that becomes a
Subsidiary as a result of such transaction, subject to any limitations set forth
herein, (g) others on fair and reasonable terms substantially as favorable to
such Loan Party or such Subsidiary as would be obtainable by such Loan Party or
such Subsidiary at the time in a comparable arm’s length transaction with a
Person other than an Affiliate, (h) the Transaction and the payment of fees and
expenses related to the Transaction and (i) the payment of fees (solely to the
extent such fees are paid pursuant to, and in accordance with, the terms of a
management agreement or consulting agreement in form and substance reasonably
acceptable to Administrative Agent), expenses, reimbursements and
indemnification payments to Sponsor, in each case, to the extent not otherwise
prohibited hereunder.

 

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7.09. Inconsistent Agreements. Enter into any Contractual Obligation (other than
this Agreement or any other Loan Document or any documentation governing
Indebtedness permitted to be incurred pursuant to Section 2.18) that
(i) requires the grant of a Lien to secure an obligation of such Person if a
Lien is granted to secure another obligation of such Person; or (ii) limits the
ability (A) of any Subsidiary to make Restricted Payments to any Loan Party or
to otherwise transfer property to any Loan Party, (B) of any Subsidiary to
Guarantee the Indebtedness of any Loan Party or become a direct Borrower
hereunder, or (C) of any Borrower or any Subsidiary to create, incur, assume or
suffer to exist Liens on property of such Person; provided, however, that this
Section 7.09 shall not prohibit limitations:

(a) in respect of any negative pledge incurred or provided in favor of any
holder of Indebtedness permitted under Section 7.01(e) or 7.01(u) solely to the
extent any such negative pledge relates to the property financed by or the
subject of such Indebtedness;

(b) in respect of customary restrictions and conditions contained in any
agreement relating to any Disposition not prohibited hereunder (in which case
such restrictions or conditions shall relate only to the applicable property) or
otherwise relating to a Disposition that is conditioned upon the amendment,
restatement or replacement of this Agreement or the repayment in full of amounts
owing hereunder;

(c) consisting of restrictions regarding licenses or sublicenses by a Loan Party
or a Subsidiary of a Loan Party of Intellectual Property in the Ordinary Course
of Business (in which case such restrictions shall relate only to such
Intellectual Property);

(d) customary anti-assignment provisions found in Contractual Obligations
entered into in the Ordinary Course of Business

(e) in the documents entered into in connection with any Subordinated
Indebtedness incurred pursuant to Section 7.01(v) or any documents governing a
renewal, extension or refinancing thereof permitted by the terms of the
applicable intercreditor or subordination provisions or agreement reasonably
satisfactory to the Administrative Agent executed or entered into in connection
with such Subordinated Indebtedness; and

(f) governing Indebtedness outstanding on the date any Person first becomes a
Subsidiary of Holdings (so long as such agreement was not entered into solely in
contemplation of such person becoming a Subsidiary of such Person).

7.10. Reserved.

7.11. Prepayment of Indebtedness; Amendment to Organization Documents; Payment
of Earnouts and Other Deferred Purchase Price Obligations.

(a) Voluntarily prepay, redeem, purchase, repurchase, defease or otherwise
satisfy prior to the scheduled maturity thereof any Indebtedness that is
subordinated, or required to be subordinated, to any of the Obligations (or
secured by Liens that are subordinated, or required to be subordinated, to the
Liens securing the Obligations) except as set forth in clauses (i) through (iv)
below, or make any payment in violation of any subordination terms thereof:

 

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(i) the Borrowers may make prepayments or redemptions in respect of any
Subordinated Indebtedness in each case, in an amount not in excess of $500,000
in any Fiscal Year, so long as no Event of Default exists at the time of or
shall immediately result from the prepayment or redemption in respect of such
Indebtedness;

(ii) the Borrowers may make prepayments or redemptions in respect of any
Subordinated Indebtedness to the extent funded with the proceeds of Qualified
Equity Interests of Holdings and which are not used to increase the Available
Amount;

(iii) the Borrowers may make prepayments or redemptions in respect of any
Subordinated Indebtedness in each case, so long as (x) no Event of Default shall
have occurred and be continuing, both immediately before or as a result of the
making of such prepayment or redemption, (y) the Borrower Agent shall have
delivered to Administrative Agent a certificate executed by a Responsible
Officer demonstrating that, (A) after giving effect to such prepayment or
redemption, the Loan Parties are in compliance on a Pro Forma Basis with the
covenants set forth in Sections 7.12(a) and (b) for the Fiscal Quarter most
recently ended as determined based on the financial statements for the most
recently ended fiscal period that have been delivered or were required to be
delivered pursuant to Section 6.01(a) or (b) and (B) after giving effect to such
prepayment or redemption, the Consolidated Senior Net Leverage Ratio is not
greater than 2.50 to 1.00 on a Pro Forma Basis computed as of the last day of
the most recently ended fiscal period for which financial statements have been
delivered or were required to be delivered pursuant to Section 6.01(a) or (b),
and (z) immediately after giving effect thereto, Liquidity is at least
$5,000,000;

(iv) the Borrowers may make prepayments or redemptions in respect of any
Subordinated Indebtedness in each case, in an amount not in excess of the
Available Amount, so long as (i) no Event of Default exists or shall immediately
result from the prepayment or redemption in respect of such Indebtedness,
(ii) the Loan Parties shall be in compliance on a Pro Forma Basis with the
covenants set forth in Sections 7.12(a) and (b) for the Fiscal Quarter most
recently ended as determined based on the financial statements for the most
recently ended fiscal period that have been delivered or were required to be
delivered pursuant to Section 6.01(a) or (b) and (iii) the Consolidated Total
Net Leverage Ratio is not greater than 2.75 to 1.00 on a Pro Forma Basis
computed as of the last day of the most recently ended fiscal period for which
financial statements have been delivered or were required to be delivered
pursuant to Section 6.01(a) or (b); and

(v) make required regularly scheduled non-accelerated payments of interest, fees
and other amounts owed in respect of Subordinated Indebtedness as and when due
and payable (other than mandatory, voluntary or optional prepayments of
principal), in each case, solely to the extent permitted to be paid by the
applicable subordination or intercreditor provisions or agreement to which such
Subordinated Indebtedness is subject.

 

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(b) Amend, modify or change in any manner any term or condition of any
Subordinated Indebtedness or any other Indebtedness that is subordinated to any
of the Obligations (or secured by Liens that are subordinated to the Liens
securing the Obligations) in a manner that violates the subordination or
intercreditor terms thereof or, to the extent not covered by the applicable
subordination or intercreditor terms, is materially adverse to the Lenders.

(c) Amend or otherwise modify any Organization Documents of such Person, except
for such amendments or other modifications required by Law or which are not
materially adverse to the interests of Administrative Agent or any Lender.

(d) [reserved].

(e) Pay, redeem, purchase, repurchase, defease or otherwise satisfy any earnout
obligations or other similar deferred purchase price obligations unless all of
the following conditions have been satisfied:

(i) no Default or Event of Default exists or shall immediately result from such
payment, redemption, purchase, repurchase, defeasement or satisfaction of such
obligation; and

(ii) after giving effect to such payment, redemption, purchase, repurchase,
defeasement or satisfaction, the Loan Parties shall be in compliance on a Pro
Forma Basis with the covenants set forth in Sections 7.12(a) and (b) for the
Fiscal Quarter most recently ended as determined based on the financial
statements for the most recently ended fiscal period that have been delivered or
were required to be delivered pursuant to Section 6.01(a) or (b).

7.12. Financial Covenants.

(a) Consolidated Total Net Leverage Ratio. Permit the Consolidated Total Net
Leverage Ratio as of the end of any Measurement Period of Borrowers set forth
below to be greater than the ratio set forth below opposite the last day of such
Measurement Period:

 

Measurement Period Ending

   Maximum
Consolidated
Total Net
Leverage
Ratio  

March 31, 2017

     4.25 to 1.00   

June 30, 2017

     4.25 to 1.00   

September 30, 2017

     4.25 to 1.00   

December 31, 2017

     4.00 to 1.00   

 

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March 31, 2018

     4.00 to 1.00   

June 30, 2018

     4.00 to 1.00   

September 30, 2018

     3.75 to 1.00   

December 31, 2018

     3.75 to 1.00   

March 31, 2019

     3.75 to 1.00   

June 30, 2019

     3.75 to 1.00   

September 30, 2019

     3.25 to 1.00   

December 31, 2019

     3.25 to 1.00   

March 31, 2020

     3.25 to 1.00   

June 30, 2020

     3.25 to 1.00   

September 30, 2020 and each Fiscal Quarter ending thereafter

     2.75 to 1.00   

(b) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed
Charge Coverage Ratio as of the end of any Measurement Period (commencing with
the Fiscal Quarter ending March 31, 2017) of Borrowers set forth below to be
less than 1.15 to 1.00.

7.13. Anti-Terrorism Laws and Foreign Asset Control Regulations. (a) Become a
“blocked person” as described in the Executive Order, the Trading With the Enemy
Act or the Foreign Assets Control Regulations, (b) knowingly engage in any
dealings or transactions, or be otherwise associated, with any such “blocked
person” or in any manner violate any such order, or (c) use any part of the
proceeds of the Loans 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 United
States Foreign Corrupt Practices Act of 1977.

7.14. Fiscal Year. Change its Fiscal Year end, except in connection with
acquisitions to conform new Subsidiaries to the Borrowers’ Fiscal Year.

7.15. Holdings Covenant. Permit Holdings to engage in any business activities or
incur any Indebtedness other than (i) acting as a holding company and
transactions incidental thereto (including maintain its corporate existence),
(ii) entering into the Loan Documents and the transactions required herein or
permitted herein to be performed by Holdings, (iii) entering into the agreements
related to and consummating the Transactions and the transactions required
therein or permitted therein to be performed by Holdings, (iv) receiving and
distributing the dividends, distributions and payments permitted to be made to
Holdings pursuant to Section 7.06, (v) entering into engagement letters and
similar type contracts and agreements with attorneys, accountants and other
professionals (and participating thereunder), (vi) owning the Equity Interests
of the Borrowers and its Subsidiaries, (vii) issuing Equity Interests as
permitted hereunder (including pursuant to a Qualified IPO), (viii) engaging in
activities necessary or incidental to any director, officer and/or employee
option incentive plan at Holdings, (ix) providing guarantees for the benefit of
a Borrower to the extent such Person is otherwise permitted to enter into the
transaction under this Agreement (including guaranties of lease obligations),
(x) holding nominal deposits in Deposit Accounts in connection with consummating
any of the foregoing transactions, (xi) entering into documents governing any

 

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Subordinated Indebtedness permitted in accordance with Section 7.01(v) or any
other debt documents permitted hereunder to which it is a party or any documents
for a refinancing thereof permitted hereunder and to the extent applicable, the
subordination or intercreditor provisions or agreements governing such
Indebtedness or to which such Indebtedness is subject, (xii) [reserved], and
(xiii) obligations or activities incidental to the business or activities
described in the foregoing clauses (i) to (xii), including providing
indemnification of officers, directors, shareholders and employees.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

8.01. Events of Default. Any of the following shall constitute an Event of
Default:

(a) Non-Payment. Any Borrower fails to pay (i) when and as required to be paid
herein, any amount of principal of any Loan or any L/C Obligation, or
(ii) within five Business Days after the same becomes due, any interest on any
Loan or on any L/C Obligation, or any fee or other amount payable hereunder or
under any other Loan Document; or

(b) Specific Covenants. Any Loan Party fails to perform or observe any term,
covenant or agreement contained (i) in any of Sections 6.03 (solely with respect
to notices of Events of Default), 6.05(a) (solely with respect to the Loan
Parties), 6.07, 6.10, 6.16, 6.18, or Article VII (subject to Section 8.04
hereof), or (ii) in any of Sections 6.01, 6.02(a) or 6.02(b) and such failure
continues for five (5) or more days; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other term,
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days after the earlier of (i) receipt of written notice of such
failure by a Responsible Officer of Borrower Agent from Administrative Agent on
behalf of the Required Lenders, or (ii) any Responsible Officer of any Loan
Party becomes aware of such failure; or

(d) Representations and Warranties. Any representation or warranty made or
deemed made by or on behalf of any Loan Party or any Subsidiary herein, in any
other Loan Document, or in any document delivered in connection herewith or
therewith shall be incorrect or misleading in any material respect (without
duplication of other materiality qualifiers contained therein); or

(e) Cross-Default. Any Loan Party or any Subsidiary (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise, and after passage of any grace period) in
respect of any Indebtedness or Guarantee having an aggregate principal amount of
more than $5,000,000, or (B) fails to observe or perform any other material
agreement or condition relating to any such Indebtedness or Guarantee or any
other event occurs (other than, with respect to Indebtedness consisting of Swap
Contracts, termination events or equivalent events pursuant to the terms of such
Swap Contracts), and such event

 

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continues for more than the grace period, if any, therein specified, the effect
of which is to cause, or to permit the holder or holders of such Indebtedness or
the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), prior to its stated maturity, or such Guarantee to become payable or
cash collateral in respect thereof to be demanded; provided that this clause
(e)(i)(B) shall not apply to Indebtedness that becomes due solely as a result of
the voluntary sale or transfer of the property or assets securing such
Indebtedness, if such sale or transfer is permitted hereunder and under the
documents providing for such Indebtedness;

(f) Insolvency Proceedings, Etc. Any Loan Party or any Subsidiary institutes or
consents to the institution of any proceeding under any Debtor Relief Law, or
makes an assignment for the benefit of creditors; or applies for or consents to
the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under any Debtor Relief Law relating to any
such Person or to all or any material part of its property is instituted without
the consent of such Person and continues undismissed or unstayed for 60 calendar
days, or an order for relief is entered in any such proceeding; or

(g) [Reserved];

(h) Judgments. There is entered against any Loan Party or any Subsidiary one or
more final non-appealable judgments or orders for the payment of money, writs,
warrants of attachment or execution or similar process in an aggregate amount
exceeding $5,000,000 (except to the extent covered by insurance as to which the
insurer does not dispute coverage or third party indemnification reasonably
acceptable to Administrative Agent) and such judgments, orders, writs, warrants
of attachment or execution or similar process remain unsatisfied, unvacated and
unstayed for a period of 60 consecutive days after the entry, issue or levy
thereof; or

(i) ERISA. (i) An ERISA Event occurs which, together with any outstanding
liability incurred in connection with any other ERISA Event, has resulted in or
would have a Material Adverse Effect (ii) the existence of any Lien under
Section 430(k) of the Code or Section 303(k) or Section 4068 of ERISA on any
assets of a Loan Party or any Subsidiary thereof, (iii) a Loan Party, a
Subsidiary thereof or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan and a Material Adverse Effect would result, (iv) the benefit liabilities of
any Foreign Plan, at any time exceed all Foreign Plan’s assets, as computed in
accordance with applicable law as of the most recent valuation date for such
Foreign Plan, such that, when aggregated with such excess for all other Foreign
Plans, the aggregate excess equals more than $1,000,000, or (v) any other event
occurs or shall occur or exist with respect to a Plan, Foreign Plan, Pension
Plan or Multiemployer Plan that results in a Material Adverse Effect; or

 

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(j) Invalidity of Loan Documents. Any material provision of any Loan Document,
or any Lien granted thereunder, at any time after its execution and delivery and
for any reason, other than as expressly permitted under such Loan Document or
upon Payment in Full of all Obligations or as a result of the failure of
Administrative Agent or any Lender to take any action within its control, ceases
to be in full force and effect (except with respect to immaterial assets); or
any Loan Party or any Subsidiary thereof repudiates, challenges or contests in
writing the validity or enforceability of any material provision in any Loan
Document, any Loan Obligation or any Lien granted to Administrative Agent
pursuant to the Security Instruments (including the perfection or priority
thereof); or any Loan Party denies that it has any or further liability or
obligation under any material provision in any Loan Document, or purports in
writing to revoke, terminate or rescind any Loan Document (other than as a
result of a payment made hereunder or release expressly permitted hereunder); or

(k) Subordinated Indebtedness. The subordination or intercreditor provisions
relating to any Subordinated Indebtedness (the “Subordination Provisions”) shall
fail to be enforceable by Administrative Agent (except to the extent that the
Administrative Agent has effectively waived the benefits thereof) in accordance
with the terms thereof; or any Loan Party or any Subsidiary thereof (or any
representative of the foregoing) shall repudiate, challenge or contest in any
manner the effectiveness, validity or enforceability of any of the Subordination
Provisions; or

(l) Change of Control. There occurs any Change of Control.

8.02. Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, Administrative Agent with the consent of the Required Lenders, may,
and at the direction of the Required Lenders shall, take any or all of the
following actions: (a) declare the commitment of each Lender to make Loans and
any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitments and obligation shall be terminated; (b) declare the
unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by Borrowers; (c) require that Borrowers Cash Collateralize the L/C
Obligations in an amount equal to the Minimum Collateral Amount; and
(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable Law;
provided, however, that upon the occurrence of Event of Default under clause
(f) above, the obligation of each Lender to make Loans and any obligation of the
L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of Borrowers to Cash Collateralize the L/C Obligations as aforesaid
shall automatically become effective, in each case without further act of
Administrative Agent or any Lender.

 

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8.03. Application of Funds.

(a) After the exercise of any remedy provided for in Section 8.02 (or after the
Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized as set
forth in the proviso to Section 8.02), any amounts received on account of the
Obligations shall, subject to the provisions of Sections 2.16 and 2.17, be
applied by Administrative Agent in the following order:

First, to all fees, indemnities, expenses and other amounts (including all
reasonable fees, charges and disbursements of counsel to Administrative Agent
payable pursuant to Section 10.04 and amounts payable under Article III) due to
Administrative Agent in its capacity as such, until paid in full;

Second, to all amounts owing to the Swing Line Lender for outstanding Swing Line
Loans until paid in full;

Third, to that portion of the Obligations constituting fees, indemnities and
other amounts (other than principal, interest, fees and other Obligations
expressly described in clauses Fourth through Sixth below) payable to the
Lenders and the L/C Issuer (including reasonable fees, charges and disbursements
of counsel to the respective Lenders and the L/C Issuer and amounts payable
under Article III), ratably among them in proportion to the respective amounts
described in this clause Third payable to them until paid in full;

Fourth, to that portion of the Obligations constituting accrued and unpaid
Letter of Credit Fees and interest on the Loans, L/C Borrowings and other
Obligations, ratably among the Lenders and the L/C Issuer in proportion to the
respective amounts described in this clause Fourth payable to them until paid in
full;

Fifth, to (i) that portion of the Obligations constituting unpaid principal of
the Loans and L/C Borrowings and to Cash Collateralize that portion of L/C
Obligations comprising the aggregate undrawn amount of Letters of Credit to the
extent not otherwise Cash Collateralized by Borrowers and (ii) the payment of
Credit Product Obligations (provided that funds from, and proceeds of Collateral
owned by, any Person directly or indirectly liable for a Swap Obligation and
that was not an “eligible contract participant” as defined in the Commodity
Exchange Act at the time such Swap Obligation was incurred may not be used to
satisfy such Swap Obligation), ratably among the Lenders, L/C Issuer and the
Credit Product Providers in proportion to the respective amounts described in
this clause Fifth payable to them until paid in full;

Sixth, to all other Obligations of Borrowers owing under or in respect of the
Loan Documents, in each case, that are due and payable to Administrative Agent
and the other Lender Parties, or any of them, on such date (provided that funds
from, and proceeds of Collateral owned by, any Person directly or indirectly
liable for a Swap Obligation and that was not an “eligible contract participant”
as defined in the Commodity Exchange Act at the time such Swap Obligation was
incurred may not be used to satisfy such Swap Obligation), ratably based on the
respective aggregate amounts of all such Obligations owing to Administrative
Agent and the other Lender Parties on such date until paid in full; and

 

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Last, the balance, if any, after Payment in Full of the Obligations, to
Borrowers or as otherwise required by Law. Notwithstanding the foregoing,
amounts received from any Guarantor that is not an “Eligible Contract
Participant” (as defined in the Commodity Exchange Act) shall not be applied to
the obligations that are Excluded Swap Obligations.

(b) Subject to Sections 2.03(c) and 2.17, amounts used to Cash Collateralize the
aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above
shall be applied to satisfy drawings under such Letters of Credit as they occur.
Amounts distributed with respect to any Credit Product Obligations shall be the
lesser of (i) the maximum Credit Product Obligations last reported to
Administrative Agent or (ii) the actual Credit Product Obligations as calculated
by the methodology reported to Administrative Agent for determining the amount
due. Administrative Agent shall have no obligation to calculate the amount to be
distributed with respect to any Credit Product Obligations, and may request a
reasonably detailed calculation of such amount from the applicable Credit
Product Provider. The allocations set forth in this Section are solely to
determine the rights and priorities of Administrative Agent and Lender Parties
as among themselves, and may be changed by agreement among them without the
consent of any Borrower. This Section is not for the benefit of or enforceable
by any Loan Party.

(c) For purposes of Section 8.03(a), “paid in full” of a type of Obligation
means payment in cash or immediately available funds of all amounts owing on
account of such type of Obligation, including interest accrued after the
commencement of any insolvency proceeding, default interest, interest on
interest, and expense reimbursements, irrespective of whether any of the
foregoing would be or is allowed or disallowed in whole or in part in any
proceeding under Debtor Relief Laws but, excluding contingent indemnification
obligations for which no claim has been asserted.

8.04. Equity Cure Right. In the event Borrowers fail to comply with the
financial covenants set forth in Section 7.12, subject to the terms and
conditions hereof, Holdings shall have the right (the “Cure Right”) after the
first day of the applicable Fiscal Quarter for which such covenants are then
being tested until the expiration of the 15th Business Day subsequent to the
date the applicable financial statements are required to be delivered to
Administrative Agent with respect thereto (the “Cure Period”), to issue
Permitted Cure Securities for cash or otherwise receive, as additional paid in
capital, cash common equity contributions, in either case in an aggregate amount
equal to, but not greater than, the amount necessary to cure all relevant
financial covenants (including, without limitation all relevant financial
covenants contained in any documents governing Subordinated Indebtedness
permitted hereunder) (hereinafter, the “Cure Amount”), and upon the receipt by
any Borrower of the cash proceeds thereof, the financial covenants shall then be
recalculated giving effect to the following pro forma adjustments: (a) Adjusted
Consolidated EBITDA shall be increased for the applicable Fiscal Quarter and for
the subsequent three (3) consecutive Fiscal Quarters, solely for the purpose of
measuring compliance with the financial covenants and not for any other purpose
under this Agreement or any other Loan Document (including, without limitation,
calculating basket levels), by an amount equal to the Cure Amount contributed by
Holdings to the Borrowers; (b) if,

 

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after giving effect to the foregoing recalculations, Borrowers shall then be in
compliance with the requirements of all financial covenants, Borrowers shall be
deemed to have been in compliance with such financial covenants as of the
relevant date of determination with the same effect as though there had been no
failure to comply therewith at such date, and the applicable breach, Default or
Event of Default of such financial covenants that had occurred shall be deemed
not to have occurred for all purposes of this Agreement; and (c) there shall be
no pro forma or other reduction in Indebtedness with the proceeds of any Cure
Amount (including by way of netting) for measuring compliance with the financial
covenants in respect of the fiscal quarter in which the Cure Amount is made. In
the event that (i) no Event of Default exists other than that arising due to
failure of the Loan Parties to comply with the financial covenants set forth in
Section 7.12 or the failure to deliver a notice of Default in respect thereof),
and (ii) until the expiration of the Cure Period, then neither Administrative
Agent nor any Lender shall exercise any remedies set forth in Section 8.02
hereof or under any Loan Document until after the Borrowers’ ability to cure has
lapsed and the Borrowers have not exercised such Cure Right; provided, that no
extensions of credit under the Revolving Credit Facility (including the issuance
of any Letter of Credit) shall be required to be made during such Cure Period
unless the Cure Amount shall have been received by any Borrower. Notwithstanding
anything herein to the contrary, in no event shall Holdings or Borrowers be
permitted to exercise the Cure Right hereunder (x) more than 5 times in the
aggregate during the term of this Agreement or (y) more than 2 times in any 4
consecutive Fiscal Quarters.

ARTICLE IX

ADMINISTRATIVE AGENT

9.01. Appointment and Authority; Limitations on Lenders. Each of the Lenders and
the L/C Issuer hereby irrevocably appoints BMO to act on its behalf as
Administrative Agent hereunder and under the other Loan Documents and authorizes
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to Administrative Agent by the terms hereof or thereof,
together with such actions and powers as are reasonably incidental thereto. The
provisions of this Article are solely for the benefit of Administrative Agent,
the Lenders and the L/C Issuer, except for a Borrower’s consent right as
expressly permitted in Section 9.06 and no Loan Party shall have rights as a
third party beneficiary of any of such provisions (although each Loan Party
shall be bound by such provisions). Administrative Agent shall be authorized to
determine whether any conditions to funding any Loan or to issuance of a Letter
of Credit have been satisfied. Actions taken by Administrative Agent hereunder,
under the other Loan Documents or upon the instructions of Required Lenders (or
such other number or percentage of the Lenders as shall be necessary, or as
Administrative Agent shall believe in good faith shall be necessary), shall be
binding upon each Lender.

Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the
other Loan Documents against Borrowers or any of them shall be vested
exclusively in, and all actions and proceedings at law in connection with such
enforcement shall be instituted and maintained exclusively by, Administrative
Agent in accordance with Section 8.02 for the benefit of all the Lenders and the
L/C Issuer; provided, however, that the foregoing shall not prohibit
(a) Administrative Agent from exercising on its own behalf the rights and
remedies that inure to its benefit (solely in its capacity as Administrative
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Documents, (b) the L/C Issuer from exercising the rights and remedies that inure
to its benefit (solely in its capacity as L/C Issuer) hereunder and under the
other Loan Documents, (c) any Lender from exercising setoff rights in accordance
with Section 10.08 (subject to the terms of Section 2.13), or (d) any Lender
from filing proofs of claim or appearing and filing pleadings on its own behalf
during the pendency of a proceeding relative to any Borrower under any Debtor
Relief Law; and provided, further, that if at any time there is no Person acting
as Administrative Agent hereunder and under the other Loan Documents, then
(i) the Required Lenders shall have the rights otherwise ascribed to
Administrative Agent pursuant to Section 8.02 and (ii) in addition to the
matters set forth in clauses (b), (c) and (d) of the preceding proviso and
subject to Section 2.13, any Lender may, with the consent of the Required
Lenders, enforce any rights and remedies available to it and as authorized by
the Required Lenders.

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

9.03. Exculpatory Provisions. Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, Administrative
Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default or Event of Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, and shall not be required to take any action that, in its
opinion may expose Administrative Agent to liability or that is contrary to any
Loan Document or applicable law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any Loan Party or any of its Affiliates
that is communicated to or obtained by Administrative Agent or any of its
Affiliates in any capacity.

Administrative Agent shall not be liable for any action taken (including any
apportionment or distribution of payments) or not taken by it (i) with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as Administrative Agent
shall believe in good faith shall be necessary, under the circumstances as
provided in Sections 10.01 and 8.02) or (ii) in the absence of its own bad
faith, gross negligence or willful misconduct. Administrative Agent shall be
deemed not to have knowledge of any Default or Event of Default unless and until
written notice describing such Default or Event of Default is given to
Administrative Agent by Borrower Agent, a Lender or the

 

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L/C Issuer. Administrative Agent shall have no obligation to take any action if
it believes, in good faith, that such action would violate applicable Law or
expose Administrative Agent to any liability for which it has not received
satisfactory indemnification in accordance with the provisions of this
Agreement.

Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan 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 herein or
therein or the occurrence of any Default or Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to Administrative
Agent.

9.04. Reliance by Administrative Agent. Administrative Agent shall be entitled
to rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or made
by the proper Person. Administrative Agent also may rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan, or the issuance
of a Letter of Credit that by its terms must be fulfilled to the satisfaction of
a Lender or the L/C Issuer, Administrative Agent may presume that such condition
is satisfactory to such Lender or the L/C Issuer unless Administrative Agent
shall have received notice to the contrary from such Lender or the L/C Issuer
prior to the making of such Loan or the issuance of such Letter of Credit.
Administrative Agent may consult with legal counsel (who may be counsel for
Borrowers), independent accountants and other experts selected by it.

9.05. Delegation of Duties. Administrative Agent may perform any and all of its
duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by Administrative
Agent. Administrative Agent and any such sub-agent may perform any and all of
its duties and exercise its rights and powers by or through their respective
Related Parties. The exculpatory provisions of this Article shall apply to any
such sub-agent and to the Related Parties of Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.

9.06. Resignation of Administrative Agent. Administrative Agent may at any time
give notice of its resignation to the Lenders, the L/C Issuer and Borrower
Agent. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right to appoint a successor which shall be a Lender or a bank
with an office in the United States, or an Affiliate of any such bank with an
office in the United States and which shall, so long as no Event of Default
under Section 8.01(a) of 8.01(f) shall have occurred and be continuing, be
reasonably acceptable to the Borrower Agent. If no such successor shall have
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Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders and the L/C Issuer appoint a
successor Administrative Agent meeting the qualifications set forth above which
shall, so long as no Event of Default under Section 8.01(a) of 8.01(f) shall
have occurred and be continuing, be reasonably acceptable to the Borrower Agent.
If the Administrative Agent resigns and no successor is appointed, then such
resignation shall nonetheless become effective in accordance with such notice
and (1) the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Loan Documents and (2) all
payments, communications and determinations provided to be made by, to or
through Administrative Agent shall instead be made by or to each Lender and the
L/C Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance
of a successor’s appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by Borrowers to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between Borrowers and such successor. After the retiring
Administrative Agent’s resignation hereunder and under the other Loan Documents,
the provisions of this Article and Section 10.04 shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.

Any resignation by BMO as Administrative Agent pursuant to this Section shall
also constitute its resignation as L/C Issuer and Swing Line Lender. Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder,
(a) such successor shall succeed to and become vested with all of the rights,
powers and privileges and duties of the retiring L/C Issuer and Swing Line
Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged
from all of their respective duties and obligations hereunder or under the other
Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit
in substitution for the Letters of Credit, if any, outstanding at the time of
such succession or make other arrangements satisfactory to the retiring L/C
Issuer to effectively assume the obligations of the retiring L/C Issuer with
respect to such Letters of Credit.

9.07. Non-Reliance on Administrative Agent and Other Lenders. Each Lender and
the L/C Issuer acknowledges that it has, independently and without reliance upon
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender and
the L/C Issuer also acknowledges that it will, independently and without
reliance upon Administrative Agent or any other Lender or any of their Related
Parties and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or any
related agreement or any document furnished hereunder or thereunder.

 

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9.08. No Other Duties, Etc. Anything herein to the contrary notwithstanding,
none of the Bookrunners or Arrangers or Agents (other than Administrative Agent)
listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except
in its capacity, as applicable, as Administrative Agent, a Lender or the L/C
Issuer hereunder.

9.09. Administrative Agent May File Proofs of Claim; Credit Bidding. In case of
the pendency of any proceeding under any Debtor Relief Law or any other judicial
proceeding relative to any Loan Party, Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether Administrative Agent shall have made any demand on Borrowers) shall be
entitled and empowered, by intervention in such proceeding or otherwise (a) to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, L/C Obligations 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, the L/C Issuer and
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders, the L/C Issuer and
Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders, the L/C Issuer and Administrative Agent) allowed in
such judicial proceeding; and (b) to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to Administrative Agent
and, in the event that Administrative Agent shall consent to the making of such
payments directly to the Lenders and the L/C Issuer, to pay to Administrative
Agent any amount due for the reasonable compensation, expenses, disbursements
and advances of Administrative Agent and its agents and counsel, and any other
amounts due Administrative Agent under Section 10.04(c).

The Loan Parties and the Lender Parties hereby irrevocably authorize
Administrative Agent, based upon the instruction of the Required Lenders, to
(a) credit bid and in such manner purchase (either directly or through one or
more acquisition vehicles) all or any portion of the Collateral at any sale
thereof conducted under the provisions of the Bankruptcy Code, including under
Section 363 of the Bankruptcy Code or any similar Laws in any other
jurisdictions to which a Loan Party is subject, or (b) credit bid and in such
manner purchase (either directly or through one or more acquisition vehicles)
all or any portion of the Collateral at any other sale or foreclosure conducted
by (or with the consent or at the direction of) Administrative Agent (whether by
judicial action or otherwise) in accordance with applicable Law. In connection
with any such credit bid and purchase, the Obligations owed to the Lender
Parties shall be entitled to be, and shall be, credit bid on a ratable basis
(with Obligations with respect to contingent or unliquidated claims being
estimated for such purpose if the fixing or liquidation thereof would not unduly
delay the ability of Administrative Agent to credit bid and purchase at such
sale or other disposition of the Collateral and, if such claims cannot be
estimated without unduly delaying the ability of Administrative Agent to credit
bid, then such claims shall be disregarded, not credit bid, and not entitled to
any interest in the asset or assets purchased by means of such credit bid) and
the Lender Parties whose Obligations are credit bid shall be entitled to receive
interests (ratably based upon the proportion of their Obligations credit bid in
relation to the aggregate amount of Obligations so credit bid) in the asset or
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purchased (or in the Equity Interests of the acquisition vehicle or vehicles
that are used to consummate such purchase). Except as provided above and
otherwise expressly provided for herein or in the other Security Instruments,
Administrative Agent will not execute and deliver a release of any Lien on any
Collateral. Upon request by Administrative Agent or Borrowers at any time, the
Lender Parties will confirm in writing Administrative Agent’s authority to
release any such Liens on particular types or items of Collateral pursuant to
this Section 9.09.

9.10. Collateral Matters. The Lender Parties irrevocably authorize
Administrative Agent, at its option and in its discretion, (a) to release any
Lien on any Collateral (i) upon the occurrence of the Facility Termination Date,
(ii) at the time the property that is subject to such Lien is Disposed or to be
Disposed as part of or in connection with any Disposition permitted hereunder or
under any other Loan Document, or (iii) subject to Section 10.01, if the release
of such Lien is approved, authorized or ratified in writing by the Required
Lenders or (iv) if the property subject to such Lien is owned by a Guarantor,
upon release of such Guarantor from its obligations under its Guarantee pursuant
to clause (c) or (d) below; (b) (i) to subordinate any Lien on any property
granted to or held by Administrative Agent under any Loan Document to the holder
of any Lien on such property that is permitted under Section 7.02(i) and
(ii) that the Administrative Agent is authorized to release or subordinate any
Lien on any property granted to or held by the Administrative Agent in
accordance with the terms of the Security Agreement; and (c) to release any
Borrower or any Subsidiary from its obligations under the Loan Documents (and
all Liens granted by such Borrower or Subsidiary) if such Person ceases to be a
Borrower or a Subsidiary as a result of a transaction permitted hereunder. Upon
request by Administrative Agent at any time, the Required Lenders will confirm
in writing Administrative Agent’s authority to release or subordinate its
interest in particular types or items of property, or to release any Loan Party
from its obligations under the Loan Documents pursuant to this Section 9.10. In
each case as specified in this Section 9.10, each Lender irrevocably authorizes
the Administrative Agent to, at the Borrower’s expense, execute and deliver to
the applicable Loan Party such documents as such Loan Party may reasonably
request to evidence the release or subordination of such item of Collateral from
the assignment and security interest granted under the Security Instruments, or
to evidence the release of such Guarantor from its obligations under the
Guarantee, in each case in accordance with the terms of the Loan Documents and
this Section 9.10

9.11. Other Collateral Matters.

(a) Care of Collateral. Administrative Agent shall have no obligation to assure
that any Collateral exists or is owned by a Loan Party, or is cared for,
protected or insured, nor to assure that Administrative Agent’s Liens have been
properly created, perfected or enforced, or are entitled to any particular
priority, nor to exercise any duty of care with respect to any Collateral.

(b) Lenders as Agent For Perfection by Possession or Control. Administrative
Agent and Lender Parties appoint each Lender as agent (for the benefit of Lender
Parties) for the purpose of perfecting Liens in any Collateral held or
controlled by such Lender, to the extent such Liens are perfected by possession
or control. If any Lender obtains possession or control of any Collateral, it
shall notify Administrative Agent thereof and, promptly upon Administrative
Agent’s request, deliver such Collateral to Administrative Agent or otherwise
deal with it in accordance with Administrative Agent’s instructions.

 

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9.12. Right to Perform, Preserve and Protect. The obligations of the
Administrative Agent under the Loan Documents are only those expressly set forth
therein. Without limiting the generality of the foregoing, the Administrative
Agent shall not be required to take any action hereunder with respect to any
Default or Event of Default, except as expressly provided herein. Upon the
occurrence and during the continuation of an Event of Default, the
Administrative Agent shall take such action to enforce its Lien on the
Collateral and to preserve and protect the Collateral as may be directed by the
Required Lenders. Unless and until the Required Lenders give such direction, the
Administrative Agent may take (but shall not be obligated to take or refrain
from taking) such actions as it deems appropriate and in the best interest of
all the Lenders and L/C Issuer. Any instructions of the Required Lenders, or of
any other group of Lenders called for under the specific provisions of the Loan
Documents, shall be binding upon all the Lenders and the holders of the
Obligations. Each Lender agrees to reimburse Administrative Agent and each of
its Related Persons (to the extent not reimbursed by any Loan Party) promptly
upon demand, severally and ratably, for any costs and expenses (including fees,
charges and disbursements of financial, legal and other advisors paid in the
name of, or on behalf of, any Loan Party) that may be incurred by Administrative
Agent or any of its Related Persons in connection with the preparation,
execution, delivery, administration, modification, consent, waiver or
enforcement of, or the taking of any other action (whether through negotiations,
through any work out, bankruptcy, restructuring or other legal or other
proceeding (including without limitation, preparation for and/or response to any
subpoena or request for document production relating thereto) or otherwise) in
respect of, or legal advice with respect to, its rights or responsibilities
under, any Loan Document.

9.13. Credit Product Providers and Credit Product Arrangements.

(a) Each Credit Product Provider, by delivery of a notice to Administrative
Agent of the creation of a Credit Product Arrangement, agrees to be bound by
Section 8.03 and this Article IX. Each Credit Product Provider shall indemnify
Administrative Agent (and any sub-agent thereof) and each Related Party thereof
(each a “Credit Product Indemnitee”) against, and hold harmless each such Credit
Product Indemnitee from, any and all losses, claims, damages, liabilities and
related expenses (including the reasonable fees, charges and disbursements of
any counsel), incurred by any such Credit Product Indemnitee or asserted against
any Credit Product Indemnitee by any third party or by Borrowers or any other
Loan Party arising out of, in connection with, or as a result of such provider’s
Credit Product Obligations.

(b) Except as otherwise expressly set forth herein, no Credit Product Provider
that obtains the benefit of the provisions of Section 8.03, any Guarantee or any
Collateral by virtue of the provisions hereof or any other Loan Document shall
have any voting rights or right to notice of any action or to consent to, direct
or object to any action hereunder or under any other Loan Document or otherwise
(including with respect to the release or impairment of any Collateral or notice
of or consent to any amendment, waiver or modification of the provisions hereof
or of any other Loan Document) other than in its capacity as a Lender and, in
such case, only to the extent expressly provided in the Loan

 

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Documents. Administrative Agent shall not be required to verify the payment of,
or that other satisfactory arrangements have been made with respect to,
Obligations arising under Credit Product Arrangements in respect of any Payment
in Full of the Obligations or the Facility Termination Date.

9.14. Designation of Additional Agents. The Administrative Agent, subject to the
consent of the Borrowers (not to be unreasonably withheld), shall have the
continuing right, for purposes hereof, at any time and from time to time to
designate one or more of the Lenders (and/or its or their Affiliates) as
“syndication agents,” “documentation agents,” “joint book runners,” “joint lead
arrangers,” “joint arrangers” or other designations for purposes hereto, but
such designation shall have no substantive effect, and such Lenders and their
Affiliates shall have no additional powers, duties or responsibilities as a
result thereof.

9.15. Authorization to Enter into Intercreditor Agreements and Subordination
Agreements. Each Lender hereby irrevocably appoints, designates and authorizes
Administrative Agent to enter into intercreditor agreements and subordination
agreements on its behalf and to take such action on its behalf under the
provisions of any such agreement. Each Lender further agrees to be bound by the
terms and conditions of the intercreditor agreements and subordination
agreements. In the event of any specific conflict or inconsistency between the
provisions of any intercreditor agreement or any subordination agreement and
this Agreement, the provisions of such intercreditor agreement or such
subordination agreement shall control. Each Lender hereby authorizes and directs
Administrative Agent to issue blockage notices in connection with the
Subordinated Indebtedness at the direction of Administrative Agent or the
Required Lenders.

ARTICLE X

MISCELLANEOUS

10.01. Amendments, Etc. Except as provided with respect to any Increase or as
otherwise specifically provided herein, no amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent to any departure by
Borrowers, Borrower Agent or any other Loan Party therefrom, shall be effective
unless in writing signed by the Required Lenders (except as expressly set forth
in clause (c) below) and Borrowers, the applicable Borrower or the applicable
Loan Party, as the case may be, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such amendment, waiver or consent shall:

(a) extend or increase the Commitment of a Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such Lender
(it being understood that a waiver of any condition precedent in Section 4.01 or
Section 4.02 of this Agreement or the waiver of any covenant, Default, Event of
Default, the imposition of the Default Rate, mandatory prepayment or reductions
or any modification, waiver or amendment to the financial covenant definitions
or any component thereof in this Agreement, shall not constitute an increase of
any Commitment of a Lender);

 

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(b) postpone any date fixed by this Agreement or any other Loan Document for any
payment (but excluding the delay or waiver of any mandatory prepayment) of
principal, interest, fees or other amounts due to a Lender (or any of them),
including the Revolving Credit Maturity Date or the Term Loan Maturity Date, or
any scheduled reduction of the Commitments hereunder or under any other Loan
Document, in each case without the written consent of such Lender directly
affected thereby;

(c) reduce the principal of, or the rate of interest specified herein on, any
Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to this
Section 10.01) any fees or other amounts payable hereunder or under any other
Loan Document, without the written consent of such Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary to amend the definition of “Default Rate” (so long as such
amendment does not result in the Default Rate being lower than the interest rate
then applicable to Base Rate Loans or Eurodollar Rate Loans, as applicable) or
to waive any obligation of Borrowers to pay interest or Letter of Credit Fees at
the Default Rate; provided, further¸ that any waiver of any condition precedent
in Section 4.01 or Section 4.02 of this Agreement, any waiver of any covenant,
Default or Event of Default, the imposition of the Default Rate, mandatory
prepayment or reductions or any modification, waiver or amendment to the
financial covenant definitions or any component thereof in this Agreement shall
not constitute a reduction or forgiveness in the interest rates or the fees or
premiums for purposes of this clause (c); provided, further, that
notwithstanding the foregoing to the contrary, a Lender may agree to any
reduction described in this clause (c) solely with respect to the Loans or L/C
Borrowings of such Lender (and not any other Lenders or L/C Issuer) and solely
the written consent of such Lender (and not Required Lenders) and Borrowers
pursuant to mutually acceptable documentation (with prompt delivery of such
documentation to Administrative Agent) shall be required to effect such
reduction solely in respect of such consenting Lender’s Loans and/or L/C
Borrowings;

(d) change the provisions requiring pro rata payments to the Lenders set forth
herein without the written consent of each Lender directly affected thereby;

(e) (i) change any provision of this Section or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender or (ii) change the definition of “Required Revolving
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required for Revolving Lenders to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Revolving Lender;

(f) release any Borrower or any Guarantor from this Agreement without the
written consent of each Lender, except to the extent such Person is the subject
of a Disposition permitted by Section 7.05 (in which case such release may be
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(g) release all or substantially all of the Collateral without the written
consent of each Lender except with respect to Dispositions and releases of
Collateral permitted or required hereunder (including pursuant to Section 7.04
or 7.05) or as provided in the other Loan Documents (in which case such release
may be made by Administrative Agent acting alone);

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver
or consent shall, unless in writing and signed by Administrative Agent in
addition to the Lenders required above, affect the rights or duties of
Administrative Agent under this Agreement or any other Loan Document; (iv) the
Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed only by the respective parties thereto; and (v) no amendment,
waiver or consent shall, unless signed by the Required Revolving Lenders in
addition to the Lenders required above: (w) amend or waive compliance with the
conditions precedent to the obligations of Lenders to make any Revolving Loan
(or any L/C Issuer to issue any Letter of Credit) in Section 4.02; (x) amend or
waive non-compliance with any provision of Section 2.01(a); (y) waive any
Default or Event of Default for the purpose of satisfying the conditions
precedent to the obligations of Lenders to make any Revolving Loan (or any L/C
Issuer to issue any Letter of Credit) in Section 4.02 or (z) amend or waive
non-compliance with any provisions of the Loan Documents in a manner that
affects the rights and duties of the Revolving Lenders under the Revolving
Credit Facility more adversely than the rights and duties of the Lenders under
the Term Loan Facility. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder (and any amendment, waiver or consent which by its
terms requires the consent of all Lenders or each affected Lender may be
effected with the consent of the applicable Lenders other than Defaulting
Lenders), except that (x) the Commitment of any Defaulting Lender may not be
increased or extended without the consent of such Lender and (y) any waiver,
amendment or modification requiring the consent of all Lenders or each affected
Lender that by its terms affects any Defaulting Lender more adversely than other
affected Lenders shall require the consent of such Defaulting Lender.

If any Lender does not consent (a “Non-Consenting Lender”) to a proposed
amendment, waiver, consent or release with respect to any Loan Document that
requires the consent of each Lender, each directly affected Lender or any class
of Lenders and that has been approved by the Required Lenders, Borrowers may
replace such Non-Consenting Lender in accordance with Section 10.13; provided
that such amendment, waiver, consent or release can be effected as a result of
the assignment contemplated by such Section (together with all other such
assignments required by Borrowers to be made pursuant to this paragraph).

Notwithstanding the terms of this Agreement or any amendment, waiver, consent or
release with respect to any Loan Document, Non-Consenting Lenders shall not be
entitled to receive any fees or other compensation paid to the Lenders in
connection with any amendment, waiver, consent or release approved in accordance
with the terms of this Agreement by the Required Lenders.

 

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In addition, notwithstanding anything to the contrary in this Agreement,
including this Section 10.01, this Agreement and the other Loan Documents may be
amended (or amended and restated) by the Administrative Agent, the Borrowers and
the Lenders providing the applicable Credit Extension to increase the Term Loan
Facility or the Revolving Credit Facility, in each case pursuant to Section 2.18
hereof and (a) to permit the extensions of credit from time to time outstanding
thereunder and the accrued interest and fees in respect thereof to share ratably
in the benefits of this Agreement (including the rights of the Lenders to share
ratably in prepayments following any such increase to the Term Loan Facility or
the Revolving Credit Facility), the Security Agreement and the other Loan
Documents with the Loans and the accrued interest and fees in respect thereof,
(b) to include appropriately the Lenders holding such credit facility in any
determination of the Required Lenders and Required Revolving Lenders and (c) to
amend other provision of the Loan Documents so that such increase to the Term
Loan Facility or the Revolving Credit Facility pursuant to Section 2.18 are
appropriately incorporated herein (including this Section 10.01).

In addition, notwithstanding anything to the contrary in this Agreement, this
Agreement and the other Loan Documents may be amended (or amended and restated)
with the written consent of Administrative Agent, the Borrowers and the Required
Lenders to (a) add one or more additional credit facilities to this Agreement
and to permit the extensions of credit from time to time outstanding thereunder
and the outstanding principal and accrued interest and fees in respect thereof
to share ratably in the benefits of this Agreement (including the rights of the
Lenders to share ratably in prepayments following any such addition of an
additional credit facility), the Security Agreement and the other Loan Documents
with the Loans and the accrued interest and fees in respect thereof, (b) include
appropriately the Lenders holding such credit facilities in any determination of
the Required Lenders and Required Revolving Lenders and (c) to amend other
provision of the Loan Documents so that such additional credit facilities are
appropriately incorporated herein (including this Section 10.01).

In addition, notwithstanding anything to the contrary herein, this Agreement,
(a) the Borrower Agent may by written notice to the Administrative Agent, make
one or more offers (each, an “Extension Offer”) to all the Lenders holding Term
Loans with a like maturity date or all Revolving Lenders having Revolving Credit
Commitments with a like commitment termination date (each Loan or Commitment
subject to such an Extension Offer, an “Extension Request Class”) to make one or
more Extension Permitted Amendments pursuant to procedures specified by the
Borrowers. Such notice shall set forth (i) the terms and conditions of the
requested Extension Permitted Amendment and (ii) the date on which such
Extension Permitted Amendment is requested to become effective (which shall not
be less than 5 Business Days after the date of such notice, unless otherwise
reasonably agreed to by the Administrative Agent). Extension Permitted
Amendments shall become effective only with respect to the Loans and Commitments
of the Lenders of the Extension Request Class that accept the applicable
Extension Offer (such Lenders, the “Extending Lenders”) and, in the case of any
Extending Lender, only with respect to such Lender’s Loans and Commitments of
such Extension Request Class as to which such Lender’s acceptance has been made;
and (b) an Extension Permitted Amendment shall be effected pursuant to an
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Borrowers, each applicable Extending Lender and the Administrative Agent. No
consent of any Lender or the Administrative Agent shall be required to
effectuate any Extension Offer, other than (A) the consent of each Lender
agreeing to such Extension Offer with respect to its Term Loans and/or Revolving
Credit Commitment (or a portion thereof) and (B) with respect to any Extension
of the Revolving Credit Commitments, the consent of the L/C Issuer and Swing
Line Lender, which consent shall not be unreasonably withheld or delayed. The
Administrative Agent shall promptly notify each Lender as to the effectiveness
of each Extension Agreement. Each Extension Agreement may, without the consent
of any Lender other than the applicable Extending Lenders, effect such
amendments to this Agreement and the other Loan Documents as may be necessary or
appropriate, in the reasonable opinion of the Administrative Agent and the
Borrowers, to give effect to the provisions of this paragraph of Section 10.01,
including any amendments necessary to treat the applicable Loans and/or
Commitments of the Extending Lenders as a new “tranche” of loans and/or
commitments hereunder; provided that, in the case of any Extension Offer
relating to Revolving Credit Commitments or Revolving Loans, (A) except as
otherwise agreed by each L/C Issuer, the allocation of the participation
exposure with respect to any then-existing or subsequently issued Letter of
Credit as between the commitments of such new “tranche” and the remaining
Revolving Credit Commitments shall be made on a ratable basis as between the
commitments of such new “tranche” and the remaining Revolving Credit Commitments
and (B) except as otherwise agreed by each L/C Issuer, the Revolving Credit
Termination Date, as such term is used in reference to Letters of Credit of such
L/C Issuer, may not be extended without the prior written consent of such L/C
Issuer. With respect to all extensions consummated by Borrowers pursuant hereto,
(i) such extensions shall not constitute voluntary or mandatory payments or
prepayments for purposes of Section 2.06(a) or (b) and (ii) no Extension Offer
is required to be in any minimum amount or any minimum increment; provided that
Borrower Agent may at its election specify as a condition to consummating any
such extension that a minimum amount (to be determined and specified in the
relevant Extension Offer in Borrower Agent’s sole discretion and may be waived
by Borrower Agent) of Term Loans or Revolving Credit Commitments (as applicable)
of any or all applicable tranches be tendered. For the avoidance of doubt,
Lenders holding Extended Loans or Extended Commitments of the same tranche may
elect to have payments made to them on a non-pro rata basis to effectuate the
extended terms of such Extended Loans or Extended Commitments of the same
tranche.

In addition, notwithstanding anything to the contrary contained in
Section 10.01, if the Administrative Agent and the Borrowers shall have jointly
identified an obvious error or any error, defect or omission of a technical or
immaterial nature, in each case, in any provision of the Loan Documents, then
the Administrative Agent and the Borrowers shall be permitted to amend such
provision and such amendment shall become effective without any further action
or consent of any other party to any Loan Document.

10.02. Notices; Effectiveness; Electronic Communication.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone or in the case of notices otherwise
expressly provided herein (and except as provided in subsection (b) below), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or

 

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sent by telecopier or email (including as a .pdf or .tif file) as follows, and
all notices and other communications expressly permitted hereunder to be given
by telephone shall be made to the applicable telephone number, as follows:

if to a Loan Party, Administrative Agent, the L/C Issuer or the Swing Line
Lender, to the address, telecopier number, electronic mail address or telephone
number specified for such Person below, as changed pursuant to subsection
(d) below:

 

(i)     If to Administrative Agent, Swing Line Lender or L/C Issuer:

  

Bank of Montreal

115 S. LaSalle – 25th Floor

Chicago, Illinois 60603

Attention: ###

Telephone No. ###

Email: ###

With a copy to:

  

Katten Muchin Rosenman LLP

525 West Monroe Street, Suite 1900

Chicago, Illinois 60661

Attention: ###

Facsimile No.: ###

Telephone No. ###

Email: ###

(ii)    If to a Loan Party:

  

e.l.f. Cosmetics, Inc., as Borrower Agent

570 10th Street, 3rd Floor

Oakland, CA 94607

Attention: ###

Facsimile No.: ###

Telephone No.: ###

Email: ###

With a copy to

  

TPG Growth

345 California Street, Suite 3300

San Francisco, CA 94104

Attention: ###

Telephone No.: ###

Email: ###

With a copy to:

  

TPG Growth

345 California Street, Suite 3300

San Francisco, CA 94104

Attention: ###

Telephone No.: ###

Email: ###

 

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With a copy to:

  

Kirkland & Ellis LLP

333 S. Hope Street

Los Angeles, CA 90071

Attention: ###

Facsimile No.: ###

Telephone No. ###

Email: ###

if to any other Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire, as
changed pursuant to subsection (d) below (including, as appropriate, notices
delivered solely to the Person designated by a Lender on its Administrative
Questionnaire then in effect for the delivery of notices that may contain
material non-public information relating to Loan Parties).

Notices sent by hand or overnight courier service or by certified or registered
mail, shall be deemed to have been given when received; notices sent by
telecopier shall be deemed to have been given when sent (except that, if not
sent during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
and the L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by Administrative Agent, provided that the foregoing shall
not apply to notices to any Lender or the L/C Issuer pursuant to Article II if
such Lender or the L/C Issuer, as applicable, has notified Administrative Agent
that it is incapable of receiving notices under such Article by electronic
communication. Administrative Agent or Borrowers may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.

Unless Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed to have been given when
sent; provided that if such notice or other communication is not sent during the
normal business hours of the recipient, such notice or communication shall be
deemed to have been sent at the opening of business on the next Business Day for
the recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed given to the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.

(c) The Platform. Each Loan Party hereby acknowledges that Administrative Agent
and/or the Arranger will make available to the Lenders and the L/C Issuer
materials and/or information provided by or on behalf of Borrowers hereunder
(collectively, “Borrower Materials”) by posting Borrower Materials on SyndTrak,
IntraLinks or another similar electronic system (the “Platform”). THE PLATFORM
IS

 

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PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT
WARRANT THE ACCURACY OR COMPLETENESS OF BORROWER MATERIALS OR THE ADEQUACY OF
THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM
BORROWER MATERIALS. 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 ANY AGENT PARTY IN CONNECTION WITH BORROWER MATERIALS OR THE
PLATFORM. In no event shall Administrative Agent or any of its Related Parties
(collectively, the “Agent Parties”) have any liability to any Borrower, any
Lender, the L/C Issuer or any other Person for losses, claims, damages,
liabilities or expenses of any kind (whether in tort, contract or otherwise)
arising out of a Borrower’s or Administrative Agent’s transmission of Borrower
Materials through the Internet, except to the extent that such losses, claims,
damages, liabilities or expenses are determined by a court of competent
jurisdiction by a final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Agent Party; provided, however,
that in no event shall any Agent Party have any liability to any Borrower, any
Lender, the L/C Issuer or any other Person for indirect, special, incidental,
consequential or punitive damages (as opposed to direct or actual damages).

(d) Change of Address, Etc. Each of Borrowers, Administrative Agent, the L/C
Issuer and the Swing Line Lender may change its address, telecopier number,
electronic mail address or telephone number for notices and other communications
hereunder by notice to the other parties hereto. Each other Lender may change
its address, telecopier number, electronic mail address or telephone number for
notices and other communications hereunder by notice to Borrower Agent,
Administrative Agent, the L/C Issuer and the Swing Line Lender. In addition,
each Lender agrees to notify Administrative Agent from time to time to ensure
that Administrative Agent has on record (i) an effective address, contact name,
telephone number, telecopier number and electronic mail address to which notices
and other communications may be sent and (ii) accurate wire instructions for
such Lender.

(e) Reliance by Administrative Agent, L/C Issuer and Lenders. Administrative
Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any
notices (including telephonic Committed Loan Notices and Swing Line Loan
Notices) purportedly given by or on behalf of Borrowers even if (i) such notices
were not made in a manner specified herein, were incomplete or were not preceded
or followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof.
All telephonic notices to and other telephonic communications with
Administrative Agent may be recorded by Administrative Agent, and each of the
parties hereto hereby consents to such recording.

10.03. No Waiver; Cumulative Remedies. No failure by any Lender, the L/C Issuer
or Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

 

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10.04. Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. Borrowers shall pay (i) all reasonable and documented
out-of-pocket expenses of the Administrative Agent and the Arranger incurred on
or after the Closing Date (promptly following a written demand therefor,
together with backup documentation supporting such reimbursement request)
associated with the syndication of the Facilities and the preparation,
execution, delivery and administration of the Loan Documents and any amendment
or waiver with respect thereto (but limited, in the case of legal fees and
expenses, to the reasonable and documented fees, disbursements and other charges
of one counsel to the Administrative Agent and the Arranger taken as a whole,
one regulatory counsel and, if necessary, of one local counsel in each relevant
jurisdiction) and (ii) after the Closing Date, upon presentation of a summary
statement, together with any supporting documentation reasonably requested by
the Borrowers, all reasonable and documented out-of-pocket expenses of the
Administrative Agent and the Lenders promptly following a written demand
therefor (but limited, in the case of legal fees and expenses, to the reasonable
and documented fees, disbursements and other charges of one counsel to the
Administrative Agent and the Lenders taken as a whole, and, if necessary, of one
local counsel to the Administrative Agent and the Lenders taken as a whole in
each relevant jurisdiction and solely in the case of a conflict of interest, one
additional counsel in each relevant jurisdiction to each group of affected
Lenders similarly situated taken as a whole) in connection with the enforcement
of the Loan Documents or protection of rights thereunder; provided that the
foregoing indemnity will not apply to expenses (i) to the extent resulting from
the willful misconduct, bad faith or gross negligence of Administrative Agent or
any Lender, (ii) to the extent arising from a material breach of the obligations
by Administrative Agent or any Lender under the Loan Documents (in the case of
each of preceding clauses (i) and (ii), as determined by a court of competent
jurisdiction in a final judgment) or (iii) to the extent arising from any
dispute solely among Administrative Agent and any Lenders or among Lenders,
other than any claims against any Administrative Agent in such capacity or any
Lender in its capacity or in fulfilling its role as an administrative agent or
arranger or any similar role under any Facility and other than any claims
arising out of any act or omission on the part of any Loan Party or its
Affiliates (as determined by a court of competent jurisdiction in a final
judgment).

(b) Indemnification by Loan Parties. The Loan Parties shall indemnify
Administrative Agent, the Arranger, each Issuing Bank and the Lenders and their
respective affiliates, and each Related Party (each such Person being called an
“Indemnitee”) against, and hold them harmless from and against all costs and
expenses (including, any and all losses, claims, damages, liabilities and
related expenses (including the reasonable and documented out-of-pocket fees,
charges and disbursements of one primary counsel for the Indemnitees taken as a
whole (absent an actual conflict of interest in which case affected Persons may
engage and be reimbursed for one additional counsel for each such group of
affected Indemnitees similarly situated taken as a whole), and, if

 

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reasonably necessary, a single local counsel for all Indemnitees taken as a
whole in each relevant jurisdiction and, solely in the case of a conflict of
interest, one additional counsel in each relevant jurisdiction to each group of
affected Indemnitees similarly situated taken as a whole)), incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by Borrowers
or any other Loan Party arising out of, in connection with, or as a result of
(i) the execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder, the
consummation of the transactions contemplated hereby or thereby or, in the case
of Administrative Agent (and any sub-agent thereof) and its Related Parties
only, the administration and enforcement of this Agreement and the other Loan
Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the L/C Issuer to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from any property owned or operated by any Loan Party or any of its
Subsidiaries, or any Environmental Liability related in any way to any Loan
Party or any of its Subsidiaries, (iv) any claims of, or amounts paid by
Administrative Agent to, a Controlled Account Bank or other Person which has
entered into a control agreement with Administrative Agent hereunder or (v) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory,
whether brought by a third party, the Sponsor or any of its Affiliates or by
Borrowers or any other Loan Party, and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
expenses (w) result from any settlement of any claim, litigation, investigation
or proceeding without the consent of the Loan Parties (such consent not to be
unreasonably withheld, conditioned or delayed), (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence, bad faith, willful misconduct or material breach of the
Loan Documents of or by any Indemnitee or any of its Related Parties or (y) any
dispute solely among any Indemnitees (other than claims of an Indemnitee against
Administrative Agent, in its capacity as such or any Lender in its capacity or
fulfilling its role as an arranger or any similar role under the Loan Documents
and other than any claims arising out of any act or omissions on the part of any
Loan Party or any of its Affiliates (as determined by a court of competent
jurisdiction by final judgment). No Indemnitee, Loan Party or any Subsidiary of
a Loan Party or Related Party of a Loan Party or a Subsidiary of a Loan Party
shall have any liability for any special, punitive, indirect or consequential
damages relating to this Agreement or any other Loan Document or arising out of
its activities in connection herewith or therewith (whether before or after the
Closing Date); provided that nothing contained in this sentence shall limit any
such Person’s indemnification obligations set forth in this Agreement or any
other Loan Document to the extent such special, indirect, punitive or
consequential damages are included in any third party claim in connection with
which an Indemnitee is entitled to indemnification hereunder (whether before or
after the Closing Date). For the avoidance of doubt, this Section 10.04(b) shall
not apply to Taxes other than Taxes that represent liabilities, obligations,
losses, damages, etc., with

 

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respect to a non-Tax claim. Notwithstanding the foregoing, each Indemnitee shall
be obligated to refund and return promptly to the applicable Borrower, Holdings,
Sponsor or Affiliate any and all amounts paid by any Borrower, Holdings, the
Sponsor or any of their Affiliates under this clause (b) to such Indemnitee for
any such fees, expenses or damages to the extent such Indemnitee is not entitled
to payment of such amounts in accordance with the terms hereof. The Loan Parties
shall not, without the prior written consent of an Indemnitee (which consent
shall not be unreasonably withheld or delayed), effect any settlement of any
pending or threatened claim, litigation, investigation or proceeding in respect
of which indemnity could have been sought hereunder by such Indemnitee unless
such settlement (i) includes an unconditional release of such Indemnitee in form
and substance reasonably satisfactory to such Indemnitee (which approval shall
not be unreasonably withheld or delayed) from all liability on claims that are
the subject matter of such claim, litigation, investigation or proceeding and
(ii) does not include any statement as to or any admission of fault, culpability
or a failure to act by or on behalf of such Indemnitee.

(c) Reimbursement by Lenders. To the extent that (i) the Loan Parties for any
reason fail to indefeasibly pay any amount required under subsection (a) or (b)
of this Section to be paid by it, or (ii) any liabilities, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever are imposed on, incurred by, or asserted against,
Administrative Agent, the L/C Issuer or a Related Party in any way relating to
or arising out of this Agreement or any other Loan Document or any action taken
or omitted to be taken by Administrative Agent, the L/C Issuer or a Related
Party in connection therewith, then, in each case, each Lender severally agrees
to pay to Administrative Agent (or any such sub-agent), the L/C Issuer or such
Related Party, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought based on such Lender’s portion of Loans, commitments and risk
participations with respect to the Revolving Credit Facility) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against Administrative Agent (or any such sub-agent) or the L/C Issuer
in its capacity as such, or against any Related Party of any of the foregoing
acting for Administrative Agent (or any such sub-agent) or L/C Issuer in
connection with such capacity; and provided, further, that, the obligation of
the Lenders to so indemnify shall not be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence, bad faith or willful misconduct of such
Administrative Agent, L/C Issuer or Related Party. The obligations of the
Lenders under this subsection (c) are subject to the provisions of
Section 2.12(d).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, no party or Indemnitee shall assert, and each hereby waive any
claim against any other party, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any

 

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Loan or Letter of Credit or the use of the proceeds thereof; provided that
nothing contained in this sentence shall limit any such Person’s indemnification
obligations set forth in this Agreement or any other Loan Document to the extent
such special, indirect, punitive or consequential damages are included in any
third party claim in connection with which an Indemnitee is entitled to
indemnification hereunder (whether before or after the Closing Date). No
Indemnitee referred to in subsection (b) above shall be liable for any damages
arising from the use by unintended recipients of any information or other
materials distributed by it through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the other
Loan Documents or the transactions contemplated hereby or thereby.

(e) Payments. All amounts due under this Section shall be payable not later than
20 Business Days after demand therefor.

(f) Survival. The agreements in this Section shall survive the resignation of
Administrative Agent, the L/C Issuer and the Swing Line Lender, the replacement
of any Lender and the occurrence of the Facility Termination Date.

10.05. Marshalling; Payments Set Aside. None of Administrative Agent or Lenders
shall be under any obligation to marshal any assets in favor of any Loan Party
or against any Obligations. To the extent that any payment by or on behalf of
any Loan Party is made to a Lender Party, or a Lender Party exercises its right
of setoff, and such payment or the proceeds of such setoff or any part thereof
is subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by such
Lender Party in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to
Administrative Agent upon demand its applicable share (without duplication) of
any amount so recovered from or repaid by Administrative Agent, plus interest
thereon from the date of such demand to the date such payment is made at a rate
per annum equal to the applicable Overnight Rate from time to time in effect.
The obligations of the Lenders and the L/C Issuer under clause (b) of the
preceding sentence shall survive the occurrence of the Facility Termination
Date.

10.06. Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that unless in connection with a
transaction permitted by Section 7.04, an Investment permitted hereunder to the
extent the surviving or succeeding Person or assignee, as applicable, of such
Investment has assumed all obligations of such Loan Party under the Loan
Documents pursuant to documentation reasonably acceptable to Administrative
Agent, or Permitted Acquisition and in accordance with the requirements thereof,
no Loan Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of Administrative Agent and each
Lender and no Lender may assign or otherwise transfer

 

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any of its rights or obligations hereunder except (i) to any Person (other than
any of the Persons described in Subsection (b)(iv) of this Section) in
accordance with the provisions of subsection (b) of this Section (such an
assignee, an “Eligible Assignee”), (ii) by way of participation in accordance
with the provisions of subsection (d) of this Section, (iii) by way of pledge or
assignment of a security interest subject to the restrictions of subsection
(f) of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void), (iv) to Sponsor or any Affiliate of Sponsor
(other than a Debt Fund Affiliate) (each an “Affiliated Lender” and collectively
the “Affiliated Lenders”) in accordance with the provisions of subsection (g) of
this Section or (v) in the case of any Eligible Assignee that, immediately prior
to or upon giving effect to such assignment, is a Debt Fund Affiliate,
subsection (h). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants and SPVs to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Lender Parties) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment(s) and the Loans (including for
purposes of this Section 10.06(b), participations in L/C Obligations and in
Swing Line Loans) at the time owing to it); provided that any such assignment
shall be subject to the following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment under any Facility and the Loans at the time owing to it
under such Facility or in the case of an assignment to a Lender, an Affiliate of
a Lender or an Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in subsection (b)(i)(A) of this Section or in
Section 10.06(g), the aggregate amount of the Commitment (which for this purpose
includes Loans outstanding thereunder) or, if the Commitment is not then in
effect, the principal outstanding balance of the Loans of the assigning Lender
subject to each such assignment, determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to Administrative Agent
or, if “Trade Date” is specified in the Assignment and Assumption, as of the
Trade Date, shall not be less than (x) with respect to Term Loans, $1,000,000
and (y) with respect to the Revolving Credit Facility, $5,000,000, in the case
of any assignment in respect of the Revolving Credit Facility or Term Loan
Facility or any Increase, unless such assignment is made to an existing Lender
or an Affiliate or Approved Fund of any existing Lender, such assignment is of
the assigning Lender’s entire interest in such facility or each of
Administrative Agent and, so long as no Event of Default under

 

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Section 8.01(a), 8.01(b) (solely with respect to the failure to perform or
comply with Section 7.12) or 8.01(f) has occurred and is continuing, Borrower
Agent otherwise consents (each such consent not to be unreasonably withheld or
delayed); provided, however, that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to a
single assignee (or to an assignee and members of its Assignee Group) will be
treated as a single assignment for purposes of determining whether such minimum
amount has been met.

(ii) Required Consents. No consent shall be required for any assignment except
to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of Borrower Agent (such consent not to be unreasonably withheld
or delayed) shall be required unless (1) an Event of Default under Section
8.01(a) or 8.01(f) has occurred and is continuing at the time of such assignment
or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved
Fund; provided that Borrower Agent shall be deemed to have consented to any such
assignment unless it shall object thereto by written notice to Administrative
Agent within ten (10) Business Days after having received notice thereof;
provided, further, that the Borrower Agent’s consent shall be required with
respect to any assignment to a Disqualified Institution notwithstanding the
existence of an Event of Default under Section 8.01(a) or 8.01(f) and Borrower
Agent’s refusal to consent to an assignment to any Disqualified Institution (to
the extent such consent is required) shall not be deemed to be unreasonable;

(B) the consent of Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of (i) any
Term Loan Commitment (excluding pursuant to Section 2.18), Revolving Credit
Commitment or Revolving Loan if such assignment is to a Person that is not a
Lender with a Commitment or Loan in respect of the applicable Facility, an
Affiliate of such Lender or an Approved Fund with respect to such Lender or
(ii) any Term Loan to a Person that is not a Lender, an Affiliate of a Lender or
an Approved Fund except for any assignments pursuant to Section 10.06(g) or
(h) hereof;

(C) the consent of the L/C Issuer (such consent not to be unreasonably withheld
or delayed) shall be required for any assignment that increases the obligation
of the assignee to participate in exposure under one or more Letters of Credit
(whether or not then outstanding) or assignments in respect of any Revolving
Credit Commitment or Revolving Loan if such assignment is to a Person that is
not a Lender with a Revolving Credit Commitment, an Affiliate of such Lender or
an Approved Fund with respect to such Lender; and

 

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(D) the consent of the Swing Line Lender (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment in respect of the
Revolving Credit Facility.

(iii) Assignment and Assumption. The parties to each assignment shall execute
and deliver to Administrative Agent an Assignment and Assumption, together with
(except for any assignments pursuant to Section 10.06(g) hereof) a processing
and recordation fee in the amount of $3,500; provided, however, that
Administrative Agent may, in its sole discretion, elect to waive such processing
and recordation fee in the case of any assignment and provided, further, that
such fee shall not be payable in connection with an assignment to an Affiliate
of a Lender or an Approved Fund. The assignee, if it is not a Lender, shall
deliver to Administrative Agent an Administrative Questionnaire.

(iv) No Assignment to Certain Persons. No such assignment shall be made to
(A) Sponsor, any Affiliate of Sponsor, any Borrower or any of a Borrower’s
Affiliates or Subsidiaries (except as provided in subsection (g) or (h) of this
Section or Section 2.19), (B) any Defaulting Lender or any of its Subsidiaries,
or any Person who, upon becoming a Lender hereunder, would constitute any of the
foregoing Persons described in this clause (B), (C) a natural person or
(D) without Borrower Agent’s consent, any Disqualified Institution. Upon request
by any Lender to the Administrative Agent, as to whether a potential assignee is
on the Disqualified Institution List, the Administrative Agent is authorized to
share the then applicable Disqualified Institution List with such Lender for
purposes of such Lender confirming whether such potential assignee is on such
Disqualified Institution List. Administrative Agent shall not have any
responsibility or liability for monitoring the Disqualified Institution List (or
identities of parties on such list), or enforcing provisions relating to such
list or Disqualified Institutions. Notwithstanding anything to the contrary
herein, any assignment or sale of a participation by a Lender without the
consent of the Borrower Agent (solely to the extent such consent is required,
including, for the avoidance of doubt, in connection with any assignment to a
Disqualified Institution) shall be void ab initio and the Borrowers shall be
entitled to seek specific performance to unwind any such assignment or
participation in addition to, solely in respect of the assignee, any other
remedies available to the Borrowers at law or in equity.

(v) Certain Additional Payments. In connection with any assignment of rights and
obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to Administrative Agent in an aggregate amount sufficient, upon distribution
thereof as appropriate (which may be outright payment, purchases by the assignee
of participations or subparticipations, or other compensating actions, including
funding, with the consent of Borrower Agent and Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby

 

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irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to Administrative Agent or any Lender
hereunder (and interest accrued thereon) and (y) acquire (and fund as
appropriate) its full pro rata share of all Loans and participations in Letters
of Credit and Swing Line Loans in accordance with its Applicable Percentage.
Notwithstanding the foregoing, in the event that any assignment of rights and
obligations of any Defaulting Lender hereunder shall become effective under
applicable Law without compliance with the provisions of this paragraph, then
the assignee of such interest shall be deemed to be a Defaulting Lender for all
purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by Administrative Agent in the
Register pursuant to subsection (c) of this Section, from and after the
effective date specified in each Assignment and Assumption, the assignee
thereunder shall be a party to this Agreement and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment). Upon request, each Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
Section 10.06(d); provided that an assignment or transfer not in compliance with
Section 10.06(b)(iv) shall be void and of no force or effect.

(c) Register. Administrative Agent, acting solely for this purpose as a
non-fiduciary agent of Borrowers (in such capacity, subject to Section 10.17),
shall maintain at Administrative Agent’s Office in the U.S. a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts and stated interest of the Loans and Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive absent manifest error, and Borrowers,
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. In
addition, Administrative Agent shall maintain on the Register information
regarding the designation, and revocation of designation, of any Lender as a
Defaulting Lender. The Register shall be available for inspection by Borrower
Agent at any reasonable time and from time to time upon reasonable prior notice.
In addition, at any time that a request for a consent for a material or
substantive change to the Loan Documents is pending, any Lender may request and
receive from Administrative Agent a copy of the Register.

 

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(d) Participations and SPVs. Any Lender may at any time, (x) without the consent
of, or notice to, any Borrower or Administrative Agent, sell participations to
any Person (other than a natural person, a Defaulting Lender, Sponsor, any
Affiliate of Sponsor, a Borrower or any of Borrowers’ Affiliates or Subsidiaries
(except as provided in subjection (g) or (h) of this Section) or a Disqualified
Institution) (each, a “Participant”) in all or a portion of such Lender’s rights
and/or obligations under this Agreement (including all or a portion of its
Revolving Credit Commitment and/or the Loans (including such Lender’s
participations in L/C Obligations and/or Swing Line Loans) owing to it) and
(y) with notice to Administrative Agent, grant to an SPV (other than a natural
person, a Defaulting Lender, Sponsor, any Affiliate of Sponsor, a Borrower or
any of Borrowers’ Affiliates or Subsidiaries (except as provided in subjection
(g) or (h) of this Section) or a Disqualified Institution) the option to make
all or any part of any Loan that such Lender would otherwise be required to make
hereunder (and the exercise of such option by such SPV and the making of Loans
pursuant thereto shall satisfy the obligation of such Lender to make such Loans
hereunder) and such SPV may assign to such Lender the right to receive payment
with respect to any Obligation; provided that (i) no such SPV or participant
shall have a commitment, or be deemed to have made an offer to commit, to make
Loans hereunder, and, except as provided in the applicable option or
participation agreement, none shall be liable for any obligation of such Lender
hereunder, (ii) such Lender’s obligations under this Agreement shall remain
unchanged, (iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iv) Borrowers,
Administrative Agent, the Lenders and the L/C Issuer shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation or grants a right to an SPV shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant or the SPV, as
applicable, agree to any amendment, waiver or other modification described in
the first proviso to Section 10.01 that affects such Participant or such SPV.
Subject to subsection (e) of this Section, Borrowers agree that each Participant
and each SPV shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section. Each Participant and each
SPV agrees to be subject to Section 10.07 as though it were a Lender. Each
Lender granting a participation or an option to an SPV shall as a non-fiduciary
agent of the Borrowers maintain in the U.S. a register (“Participation and SPV
Register”) with respect to the ownership and transfer of each participation or
grant of an option, as applicable, containing the information set forth in the
Register described in Section 10.06(c). No Lender shall have any obligation to
disclose all or any portion of the Participation and SPV Register (including any
such portion containing the identity of any Participant or any SPV or any
information relating to a Participant’s or an SPV’s interest in any rights or
obligations under this Agreement) to any Person except to the extent that such
disclosure is necessary to establish that the Loans or other rights or
obligations under this Agreement are in registered form under Section
5f.103-1(c) or Section 1.871-14(c) of the Treasury Regulations. The entries in
the Participation and SPV Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participation and SPV 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 Participation and SPV
Register.

 

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(e) Limitations upon Participant and SPV Rights. A Participant or an SPV shall
not be entitled to receive any greater payment under Section 3.01 or 3.04 than
the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant or the option granted to such SPV, as
applicblae, except to the extent such entitlement to receive a greater payment
results from a Change in Law that occurs after the Participant acquired the
applicable participation or the SPV was granted the option, as applicable,. A
Participant or an SPV that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 3.01 unless Borrower Agent is
notified of the participation sold to such Participant or the option granted to
such SPV, as applicable, and such Participant or such SPV, as applicable,
agrees, for the benefit of Borrowers, to comply with Section 3.01(e) as though
it were a Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(g) Assignments to Sponsor. Subject to clauses (A), (B) and (C) below, any
Lender may assign all or a portion of the Term Loan (subject to the limitations
contained in Sections 10.06(b)(i)) to the Sponsor or any of its Affiliates
(excluding Holdings and its Subsidiaries), without the consent of any Person but
subject to acknowledgment by the Administrative Agent; provided that (i) the
assigning Lender and the assignee shall execute and deliver to the
Administrative Agent an Assignment and Assumption, (ii) at no time may the
aggregate principal amount of the Term Loan held by the Sponsor and its
Affiliates (other than Holdings and its Subsidiaries and Debt Fund Affiliates)
exceed 25% of the aggregate principal amount of the Term Loans and incremental
term loans then outstanding, and (iii) after giving effect to an assignment the
number of Sponsor and its Affiliates (other than Debt Fund Affiliates) holding
the Term Loans and incremental term loans shall not constitute 50% or more of
the aggregate number of Lenders holding a portion of the Term Loans and
incremental term loans at the time of such assignment.

(A) Notwithstanding anything to the contrary in this Section 10.06, but subject
to the rights contained in clause (C) below, the Sponsor and its Affiliates
shall not have any right to (1) attend (including by telephone or electronic
means) any meeting or discussions (or portion thereof) among the Administrative
Agent and any Lender to which representatives of the Sponsor, the Borrowers or
the Guarantors are not invited, or (2) receive any information or material
prepared by the Administrative Agent or any Lender or any communication by or
among the Administrative Agent and/or one or more Lenders, except to the extent
such information or materials have been made available to the Sponsor, the
Borrowers or the Guarantors or their representatives.

 

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(B) Notwithstanding anything to the contrary in this Section 10.06 or the
definition of “Required Lenders”, for purposes of determining whether the
Required Lenders have (1) consented (or not consented) to any amendment,
modification, waiver, consent or other action with respect to any of the terms
of any Loan Document or any departure by any Borrower or any Guarantor
therefrom, (2) otherwise acted on any matter related to any Loan Document, or
(3) directed or required the Administrative Agent or any Lender to undertake any
action (or refrain from taking any action) with respect to or under any Loan
Document, all or any portion of the Term Loan held by the Sponsor and its
Affiliates shall be deemed, to the extent not adversely affecting the Sponsor
and its Affiliates (other than Holdings and its Subsidiaries) disproportionately
as compared to other Lenders, to be not outstanding; provided that no amendment,
modification, waiver, consent or other action with respect to any Loan Document
shall deprive the Sponsor and its Affiliates of its pro rata share of any
payments to which the Sponsor or such Affiliate is entitled under the Loan
Documents or any vote which affects the Sponsor and its Affiliates
disproportionately without the Sponsor or the applicable Affiliate providing its
consent; (x) solely with respect to any amendment, modification, waiver, consent
or other action in which fees are paid or otherwise received by consenting
Lenders and solely in connection with determining to which Lenders such fees
shall be paid, the Sponsor and any of its Affiliates shall be treated as having
consented thereto, (y) the Sponsor and each of its Affiliates agrees to execute
and deliver to the Administrative Agent any instrument reasonably requested by
the Administrative Agent to evidence the voting of its interest as a Lender in
accordance with the provisions of this Section 10.06(g); provided that if the
Sponsor or such Affiliate fails to promptly execute such instrument such failure
shall in no way prejudice any of the Administrative Agent’s rights under this
paragraph and (z) the Administrative Agent is hereby appointed (such appointment
being coupled with an interest) by the Sponsor and its Affiliates as each such
Person’s attorney in fact, with full authority in the place and stead of such
Person and in the name of such Person, from time to time in the Administrative
Agent’s reasonable discretion to take any action and to execute and instrument
that the Administrative Agent may deem reasonably necessary to carry out the
provisions of this Section 10.06(g) and (ii) Sponsor and its Affiliates in their
capacities as a Lender shall retain the right to consent to an extension of the
maturity date of their Term Loans, reduction in the principal amount of their
Term Loans, reduction in the interest rate thereof or postponement of the
scheduled due date therefor). Sponsor or its Affiliates may, with the consent of
Borrower Agent and pursuant to documentation reasonably satisfactory to the
Administrative Agent, contribute the Term Loans held by them as an equity
contribution to the Borrowers (whether through any of its direct or indirect
parent companies

 

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or otherwise) in exchange for debt or equity securities of the Borrowers or such
parent company that are otherwise permitted to be issued by such Person at such
time. If any Borrower or any Guarantor is the subject of any proceeding under
any Debtor Relief Laws no Affiliated Lender shall (i) vote in opposition to a
plan of reorganization of such Borrower or Guarantor that has been approved by
all Lenders (exclusive of all Affiliated Lenders) unless such plan of
reorganization affects such Affiliated Lender in its capacity as a Lender in a
disproportionately adverse manner than its effect on other Lenders or (ii) vote
in favor of any plan of reorganization of such Borrower or Guarantor that has
not been approved by Lenders (exclusive of all Affiliated Lenders) holding a
majority of the outstanding principal amount of the Loans (exclusive of the
amount held by all Affiliated Lenders).

(C) The Sponsor or any of its Affiliates (other than Holdings and its
Subsidiaries), in its capacity as a Lender of a portion of the Term Loan, in its
sole and absolute discretion and with Borrower Agent’s consent, may, but is not
required to, make one or more capital contributions or assignments of the
portion of the Term Loan that it acquires in accordance with this Section 10.06
to Holdings solely in exchange for (x) equity interests of Holdings or (y) to
the extent permitted to be incurred under this Agreement, unsecured Subordinated
Indebtedness issued by Holdings to Sponsor or such Affiliate of Sponsor, as
applicable, in each case, upon no less than 3 Business Days’ prior written
notice to the Administrative Agent. Immediately upon the acquisition by Holdings
of such portion of the Term Loan, it shall transfer such portion to the
Borrowers. Immediately upon any Borrower or any of a Borrower’s Subsidiaries’
acquisition of any portion of the Term Loan, (x) such portion of the Term Loan
and all rights and obligations as a Lender related thereto shall for all
purposes (including under this Agreement, the other Loan Documents and
otherwise) be deemed to be irrevocably prepaid, terminated, extinguished,
cancelled and of no further force and effect and such Borrower or such
Borrower’s Subsidiary shall neither obtain nor have any rights as a Lender
hereunder or under the other Loan Documents by virtue of such capital
contribution or assignment and (y) Borrowers shall deliver to the Administrative
Agent a written acknowledgement and agreement executed by a Responsible Officer
and in form and substance reasonably acceptable to the Administrative Agent
acknowledging the irrevocable prepayment, termination, extinguishment and
cancellation of such portion of the Term Loan and confirming that such Borrowers
have no rights as a Lender under this Agreement, the other Loan Documents or
otherwise. The parties hereto agree that any prepayment, termination,
extinguishment and/or cancellation of any Loans as contemplated by this
Section 10.06 shall be disregarded for purposes of calculating each of Adjusted
Consolidated EBITDA and Excess Cash Flow for any applicable period of
calculation.

 

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(D) No Sponsor acquiring Loans through an assignment shall be required to make
any representation that it is not in possession of material non-public
information with respect to Holdings or its Subsidiaries or their respective
securities.

(h) Although Debt Fund Affiliates shall be Eligible Assignees and shall not be
subject to the provisions of Section 10.06(g), any Lender may, at any time,
assign all or a portion of its rights and obligations with respect to Term Loans
under this Agreement to a Person who is or will become, after such assignment, a
Debt Fund Affiliate only through (x) Dutch auctions or other offers to purchase
or take by assignment open to all Lenders on a pro rata basis in accordance with
procedures of the type described in Section 2.19 (for the avoidance of doubt,
without requiring any representation as to the possession of material non-public
information by such Affiliate) or (y) open market purchase on a non-pro rata
basis. Notwithstanding anything in Section 10.01 or the definition of “Required
Lenders” to the contrary, for purposes of determining whether the Required
Lenders have (i) consented (or not consented) to any amendment, modification,
waiver, consent or other action with respect to any of the terms of any Loan
Document or any departure by any Loan Party therefrom, (ii) otherwise acted on
any matter related to any Loan Document or (iii) directed or required the
Administrative Agent or any Lender to undertake any action (or refrain from
taking any action) with respect to or under any Loan Document, all Term Loans,
Revolving Credit Commitments and Revolving Loans held by Debt Fund Affiliates,
in the aggregate, may not account for more than 49.9% of the amounts (including
the amounts of Term Loans, Revolving Credit Commitments and Revolving Loans)
included in determining whether applicable Lenders have consented to any action
pursuant to Section 10.01.

(i) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

(j) Resignation as L/C Issuer and/or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time BMO
assigns all of its Revolving Credit Commitment or Revolving Loans pursuant to
subsection (b) above, such Person may, (i) upon 30 days’ notice to Borrower
Agent and the Lenders, resign as L/C Issuer and/or (ii) in the case of BMO, upon
30 days’ notice to Borrower Agent, resign as Swing Line Lender. In the event of
any such resignation as L/C Issuer, or Swing Line Lender, Borrower Agent shall
be entitled to appoint from among the Lenders willing to serve in such capacity
a successor L/C Issuer or Swing Line Lender hereunder, as the case may be;
provided, however, that no failure by Borrower Agent to appoint any such
successor shall affect the resignation of such Person as L/C Issuer or Swing
Line Lender, as the case may be. If BMO resigns as L/C Issuer, such Person shall

 

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retain all the rights, powers, privileges and duties of the L/C Issuer hereunder
with respect to all Letters of Credit outstanding as of the effective date of
its resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If BMO
resigns as Swing Line Lender, it shall retain all the rights of the Swing Line
Lender provided for hereunder with respect to Swing Line Loans made by it and
outstanding as of the effective date of such resignation, including the right to
require the Lenders to make Base Rate Loans or fund risk participations in
outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the appointment
of a successor L/C Issuer and/or Swing Line Lender, (a) such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and
(b) the successor L/C Issuer shall issue letters of credit in substitution for
the Letters of Credit, if any, outstanding at the time of such succession or
make other arrangements satisfactory to the retiring L/C Issuer to effectively
assume the obligations of such L/C Issuer with respect to such Letters of
Credit.

10.07. Treatment of Certain Information; Confidentiality. Each of the Lender
Parties agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to
its and its Affiliates’ respective partners, directors, trustees, officers,
employees, agents, advisors and representatives on a “need to know” basis (it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process (in which case such Lender Party agrees to use
commercially reasonable efforts (to the extent permitted by law and practical to
do so) to notify the Borrower Agent promptly thereof), (d) to any other party
hereto, (e) in connection with the exercise of any remedies hereunder or under
any other Loan Document or any action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to a written agreement containing provisions substantially the same
as those of this Section, to (i) any assignee of, Participant in or SPV, or any
prospective assignee of, Participant in or SPV, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to Borrowers and their
obligations, (g) with the consent of Borrower Agent, (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to the Lender Parties or any of their
respective Affiliates on a nonconfidential basis from a source other than the
Loan Parties other than as a result of a breach of any duty of confidentiality,
(i) to rating agencies if requested or required by such agencies in connection
with a rating or credit estimate relating to the Loans or Commitments hereunder
or (j) to a Person that is (i) an investor or prospective investor in a
Securitization that agrees that its access to information regarding the Borrower
and the Loans and Commitments is solely for purposes of evaluating an investment
in such Securitization and who agrees to treat such information as confidential
or (ii) a trustee, collateral agent, collateral manager, servicer, noteholder,
equityholder or secured party in a Securitization in connection with the
administration, servicing and evaluation of, and reporting on, the assets
serving as collateral for such Securitization.

 

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For purposes of this Section, “Information” means all information received from
Sponsor, any Loan Party or any Subsidiary relating to a Loan Party or any
Subsidiary or any of their respective businesses, other than any such
information that is available to any Lender Party on a nonconfidential basis
prior to disclosure by a Loan Party or any Subsidiary, provided that, in the
case of information received from Sponsor, a Loan Party or any Subsidiary after
the date hereof, any information not marked “PUBLIC” at the time of delivery
will be deemed to be confidential; provided, that any information marked
“PUBLIC” may also be marked “Confidential”. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information but in any event a
reasonable level.

Each of the Lender Parties acknowledges that (a) the Information may include
material non-public information concerning a Loan Party or a Subsidiary, as the
case may be, (b) it has developed compliance procedures regarding the use of
material non-public information and (c) it will handle such material non-public
information in accordance with applicable Law, including Federal and state
securities Laws.

The Administrative Agent may publish the name and logo of any Loan Party and the
amount of the credit facility provided hereunder in any “tombstone” or
comparable advertisement which Administrative Agent elects to publish provided
the Loan Parties consent in advance in writing to the publication of such
tombstone or other advertising materials by the Administrative Agent.
Administrative Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements.

10.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the L/C Issuer and each of their respective Affiliates
is hereby authorized at any time and from time to time, only after obtaining the
prior written consent of Administrative Agent, to the fullest extent permitted
by applicable law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final, in whatever currency but other
than any Excluded Accounts) at any time held and other obligations (in whatever
currency) at any time owing by such Lender, the L/C Issuer or any such Affiliate
to or for the credit or the account of any Loan Party against any and all of the
obligations of Borrowers now or hereafter existing under this Agreement or any
other Loan Document to such Lender or the L/C Issuer, but only to the extent
then due and owing; provided that in the event that any Defaulting Lender shall
exercise any such right of setoff, (x) all amounts so set off shall be paid over
immediately to Administrative Agent for further application in accordance with
the provisions of Section 2.17 and, pending such payment, shall be segregated by
such Defaulting Lender from its other funds and deemed held in trust for the
benefit of Administrative Agent and the Lenders, and (y) the Defaulting Lender
shall provide promptly to Administrative Agent a statement describing in
reasonable detail the Obligations owing to such Defaulting Lender as to which it
exercised such right of setoff. The rights of each Lender, the L/C Issuer and
their respective Affiliates under this Section are in addition to other rights
and remedies (including other rights of setoff) that such Lender, the L/C Issuer
or their respective Affiliates may have. Each Lender and the L/C Issuer agrees
to notify Borrower Agent and Administrative Agent promptly after any such setoff
and application, provided that the failure to give such notice shall not affect
the validity of such setoff and application.

 

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10.09. Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If Administrative Agent or any
Lender shall receive interest in an amount that exceeds the Maximum Rate, the
excess interest shall be applied to the principal of the Loans or, if it exceeds
such unpaid principal, refunded to Borrowers. In determining whether the
interest contracted for, charged, or received by 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.

10.10. Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan 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. Subject to Section 4.01, this
Agreement shall become effective when it shall have been executed by
Administrative Agent and when Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement and each other Loan Document by telecopy or other
electronic means (including .pdf or .tif files) shall be effective as delivery
of a manually executed counterpart of this Agreement.

10.11. Survival. All representations and warranties made hereunder and in any
other Loan Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery hereof
and thereof. Such representations and warranties have been or will be relied
upon by the Lender Parties, regardless of any investigation made by any Lender
Party or on their behalf and notwithstanding that any Lender Party may have had
notice or knowledge of any Default or Event of Default at the time of any Credit
Extension, and shall continue in full force and effect as long as any Loan or
any other Loan Obligation (other than contingent indemnification obligations for
which no claim has been asserted) hereunder shall remain unpaid or unsatisfied
or any Letter of Credit shall remain outstanding.

Further, the provisions of Sections 3.01, 3.04, 3.05, 10.02, 10.03, 10.04,
10.05, 10.06, 10.09, 10.10, 10.11, 10.12, 10.14, 10.15, 10.16, 10.17 and 10.18
shall survive and remain in full force and effect regardless of the repayment of
the Obligations, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.

 

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10.12. Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Without limiting the foregoing provisions of this
Section 10.12, if and to the extent that the enforceability of any provisions in
this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief
Laws, as determined in good faith by Administrative Agent, the L/C Issuer or the
Swing Line Lender, as applicable, then such provisions shall be deemed to be in
effect only to the extent not so limited.

10.13. Replacement of Lenders. If any Lender requests compensation under
Section 3.04, if Borrowers are required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, if any Lender is a Defaulting Lender, or if any Lender fails to
approve any amendment, waiver or consent requested by Borrower Agent pursuant to
Section 10.01 that has received the written approval of not less than the
Required Lenders but also requires the approval of such Lender, then in each
such case Borrower Agent may, at its sole expense and effort, upon notice to
such Lender and Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 10.06), all of its interests,
rights and obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that:

(a) Borrower Agent shall have paid to Administrative Agent the assignment fee
specified in Section 10.06(b);

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or
Borrower Agent (in the case of all other amounts);

(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter;

(d) in the case of any such assignment resulting from the refusal of a Lender to
approve a requested amendment, waiver or consent, the Person to whom such
assignment is being made has agreed to approve such requested amendment, waiver
or consent; and

(e) such assignment does not conflict with applicable Laws.

 

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A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling Borrowers to require such assignment and delegation
cease to apply. Subject to the immediately preceding sentence, any assignment or
delegation made in compliance with this Section 10.13 should nonetheless be
effective for all purposes hereunder and under the Loan Documents, regardless of
whether a Lender being replaced fails to execute and deliver any documents in
connection therewith.

10.14. Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) SUBMISSION TO JURISDICTION. EACH PARTY HERETO IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY
AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK,
AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN
ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ADMINISTRATIVE AGENT, ANY
LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST BORROWERS OR THEIR
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c) WAIVER OF VENUE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT
REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

 

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(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15. Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

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

10.17. No Advisory or Fiduciary Responsibility. In connection with all aspects
of each transaction contemplated hereby (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document),
each Loan Party acknowledges and agrees, and acknowledges its Affiliates’
understanding, that: (i) (A) the arranging and other services regarding this
Agreement provided by the Lender Parties are arm’s-length commercial
transactions between each Loan Party, on the one hand, and the Lender Parties,
on the other hand, (B) each Loan Party has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate, and
(C) each Loan Party is capable of evaluating, and understands and accepts, the
terms, risks and conditions of the transactions contemplated hereby and by the
other Loan Documents; (ii) (A) each Lender Party is and has been acting solely
as a principal and, except as expressly agreed in writing by the relevant
parties, has not been, is not, and will not be acting as an advisor, agent or
fiduciary for any Loan Party or any of its Affiliates or any other Person and
(B) no Lender Party has any obligation to any Loan Party or any of its
Affiliates with respect to the transactions contemplated hereby except those
obligations expressly set forth herein and in the other Loan Documents,
(iii) the Lender Parties may be engaged in a broad range of transactions that
involve interests that differ from those of the Loan Parties and their
Affiliates, and no Lender Party has any obligation to disclose any of such
interests to any Loan Party or its Affiliates and (iv) the Lender Parties have
not provided and will not provide any legal, accounting, regulatory or tax
advice with respect to any of the transactions

 

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contemplated hereby (including any amendment, waiver or other modification
hereof or of any other Loan Document) and each of the Loan Parties has consulted
its own legal, accounting, regulatory and tax advisors to the extent it has
deemed appropriate. Each Loan Party hereby agrees that it will not claim that
any of the Lender Parties and their respective Affiliates has rendered advisory
services of any nature or respect or owes a fiduciary duty or similar duty to it
in connection with any aspect of any transaction contemplated hereby.

10.18. Attachments. Any exhibits, schedules and annexes attached to this
Agreement are incorporated herein and shall be considered a part of this
Agreement for the purposes stated herein; except, that, in the event of any
conflict between any of the provisions of such exhibits and the provisions of
this Agreement, the provisions of this Agreement shall prevail.

ARTICLE XI

CONTINUING GUARANTEE

11.01. Guarantee.

(a) Holdings and each Subsidiary Guarantor hereby absolutely and unconditionally
guarantees, as a guarantee of payment and performance and not merely as a
guarantee of collection, prompt payment when due, whether at stated maturity, by
required prepayment, upon acceleration, demand or otherwise, and at all times
thereafter, of any and all of the Secured Obligations, whether for principal,
interest, premiums, fees, indemnities, damages, costs, expenses or otherwise, of
Borrowers to the Lender Parties, arising hereunder or under any other Loan
Document (including all renewals, extensions, amendments, refinancings and other
modifications thereof and all costs, attorneys’ fees and expenses incurred by
the Lender Parties in connection with the collection or enforcement thereof,
subject to the limitations set forth in Section 10.04(a) hereof).

(b) Each Qualified ECP Guarantor hereby jointly and severally absolutely,
unconditionally and irrevocably undertakes to provide such funds or other
support as may be needed from time to time by each other Loan Party to honor all
of its obligations under this Guarantee in respect of Swap Obligations;
provided, however, that each Qualified ECP Guarantor shall only be liable under
this Section 11.01(b) for the maximum amount of such liability that can be
hereby incurred without rendering its obligations under this Section 11.01(b),
or otherwise hereunder, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount). The
obligations of each Qualified ECP Guarantor under this Section 11.01(b) shall
remain in full force and effect until Payment in Full of the Obligations. Each
Qualified ECP Guarantor intends that this Section 11.01(b) constitute, and this
Section 11.01(b) shall be deemed to constitute, a “keepwell, support, or other
agreement” for the benefit of each other Loan Party for all purposes of Section
1a(18)(A)(v)(II) of the Commodity Exchange Act.

11.02. Rights of Lenders. Holdings and each Subsidiary Guarantor consents and
agrees that the Lender Parties may, at any time and from time to time, and
without affecting the enforceability or continuing effectiveness hereof and
subject only to the terms of this Agreement: (a) amend, extend, renew,
compromise, discharge, accelerate or otherwise change the time for

 

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payment or the terms of the Loan Obligations or any part thereof; (b) take,
hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise
dispose of any security for the payment of this Guarantee or any Secured
Obligations; (c) apply such security and direct the order or manner of sale
thereof as Administrative Agent, the L/C Issuer and the Lenders in their sole
discretion may determine in accordance with the terms of the Loan Documents; and
(d) release or substitute one or more of any endorsers or other guarantors of
any of the Loan Obligations. Without limiting the generality of the foregoing,
Holdings and each Subsidiary Guarantor consents to the taking of, or failure to
take, any action which might in any manner or to any extent vary the risks of
Holdings or any Subsidiary Guarantor under this Guarantee or which, but for this
provision, might operate as a discharge of Holdings or any Subsidiary Guarantor.

11.03. Certain Waivers.

(a) Holdings and each Subsidiary Guarantor waives, to the fullest extent
permitted by law, (i) any defense arising by reason of any disability or other
defense of any Borrower or any other Guarantor, or the cessation from any cause
whatsoever (including any act or omission of any Lender Party) of the liability
of Borrowers; (ii) any defense based on any claim that Holdings’ or any
Subsidiary Guarantor’s obligations exceed or are more burdensome than those of
any Borrower; (iii) the benefit of any statute of limitations affecting
Holdings’ or any Subsidiary Guarantor’s liability hereunder; (iv) any right to
require any Lender Party to proceed against any Borrower, proceed against or
exhaust any security for the Secured Obligations, or pursue any other remedy in
the power of any Lender Party whatsoever; (v) any benefit of and any right to
participate in any security now or hereafter held by any Lender Party; and
(vi) to the fullest extent permitted by law, any and all other defenses (other
than a defense of payment in full) or benefits that may be derived from or
afforded by applicable law limiting the liability of or exonerating guarantors
or sureties. Holdings and each Subsidiary Guarantor expressly waives, to the
fullest extent permitted by law, all setoffs and counterclaims and all
presentments, demands for payment or performance, notices of nonpayment or
nonperformance, protests, notices of protest, notices of dishonor and all other
notices or demands of any kind or nature whatsoever with respect to the Secured
Obligations, and all notices of acceptance of this Guarantee or of the
existence, creation or incurrence of new or additional Secured Obligations,
except as otherwise expressly set forth in this Agreement.

(b) Holdings and each Subsidiary Guarantor agrees that its obligations hereunder
are absolute and unconditional, irrespective of (i) the genuineness, validity,
regularity, enforceability, subordination or any future modification of, or
change in, any Loan Obligations or Loan Document, or any other document,
instrument or agreement to which any Borrower or other Loan Party is or may
become a party or be bound; (ii) the absence of any action to enforce this
Agreement (including this Section) or any other Loan Document, or any waiver,
consent or indulgence of any kind by Administrative Agent or any Lender with
respect thereto; (iii) the existence, value or condition of, or failure to
perfect a Lien or to preserve rights against, any security or guarantee for the
Loan Obligations or any action, or the absence of any action, by Administrative
Agent or any Lender in respect thereof (including the release of any security or
guarantee); (iv) the insolvency of any Borrower or any other Loan Party; (v) any
election by Administrative

 

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Agent or any Lender in proceeding under Debtor Relief Laws for the application
of Section 1111(b)(2) of the Bankruptcy Code; (vi) any borrowing or grant of a
Lien by any Borrower or other Loan Party, as debtor-in-possession under
Section 364 of the Bankruptcy Code or otherwise; (vii) the disallowance of any
claims of Administrative Agent or any Lender against any Borrower for the
repayment of any Obligations under Section 502 of the Bankruptcy Code or
otherwise; or (viii) any other action or circumstances that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
except defense of payment in full.

(c) Holdings and each Subsidiary Guarantor expressly waives, to the fullest
extent permitted by law, all rights that it may have now or in the future under
any statute, at common law, in equity or otherwise, to compel Administrative
Agent or Lenders to marshal assets or to proceed against any Borrower, or any
other Person or security for the payment or performance of any Secured
Obligations before, or as a condition to, proceeding against Holdings or such
Subsidiary Guarantor. Holdings and each Subsidiary Guarantor waives, to the
fullest extent permitted by law, all defenses available to a surety, guarantor
or accommodation co-obligor other than defense of payment in full. It is agreed
among Holdings and each Subsidiary Guarantor, Administrative Agent and Lenders
that the provisions of this Article XI are essential to the transaction
contemplated by the Loan Documents and that, but for such provisions,
Administrative Agent and Lenders would decline to make Loans and issue Letters
of Credit. Holdings and each Subsidiary Guarantor acknowledges that its
guarantee pursuant to this Section is necessary to the conduct and promotion of
its business, and can be expected to benefit such business.

(d) Administrative Agent and Lenders may, in their discretion, pursue such
rights and remedies as they deem appropriate, including realization upon
Collateral by judicial foreclosure or non-judicial sale or enforcement, without
affecting any rights and remedies under this Article XI. If, in taking any
action in connection with the exercise of any rights or remedies, Administrative
Agent or any Lender shall forfeit any other rights or remedies, including the
right to enter a deficiency judgment against any Loan Party or other Person,
whether because of any applicable Laws pertaining to “election of remedies” or
otherwise, Holdings and each Subsidiary Guarantor consents to such action and
waives any claim based upon it, even if the action may result in loss of any
rights of subrogation that Holdings or any Subsidiary Guarantor might otherwise
have had. Any election of remedies that results in denial or impairment of the
right of Administrative Agent or any Lender to seek a deficiency judgment
against any Borrower shall not impair Holdings’ and each Subsidiary Guarantor’s
obligation to pay the full amount of the Loan Obligations.

11.04. Obligations Independent. The obligations of Holdings and each Subsidiary
Guarantor hereunder are those of primary obligor, and not merely as surety, and
are independent of the Loan Obligations and the obligations of any other
guarantor, and a separate action may be brought against Holdings and each
Subsidiary Guarantor to enforce this Guarantee whether or not any Borrower or
any other person or entity is joined as a party.

 

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11.05. Subrogation. Neither Holdings nor any Subsidiary Guarantor shall exercise
any right of subrogation or similar rights with respect to any payments it makes
under this Guarantee until the Facility Termination Date. If any amounts are
paid to Holdings or any Subsidiary Guarantor in violation of the foregoing
limitation, then such amounts shall be held in trust for the benefit of the
Lender Parties and shall forthwith be paid to Administrative Agent for the
benefit of the Lender Parties to reduce the amount of the Secured Obligations,
whether matured or unmatured.

11.06. Termination; Reinstatement. This Guarantee is a continuing and
irrevocable guarantee of all Secured Obligations now or hereafter existing and
shall remain in full force and effect until the Facility Termination Date (or,
as to any applicable Guarantor, until the sale or Disposition of such Guarantor
in a transaction permitted hereunder). Notwithstanding the foregoing, this
Guarantee shall continue in full force and effect or be revived, as the case may
be, if any payment by or on behalf of a Borrower or Holdings or any Subsidiary
Guarantor is made, or any of the Lender Parties exercises its right of setoff,
in respect of the Secured Obligations and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by any of the Lender Parties in their discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Laws or otherwise, all as if such payment had
not been made or such setoff had not occurred and whether or not the Lender
Parties are in possession of or have released this Guarantee and regardless of
any prior revocation, rescission, termination or reduction. The obligations of
Holdings and each Subsidiary Guarantor under this paragraph shall survive
termination of this Guarantee.

11.07. Subordination. If the Required Lenders so request after the occurrence
and during the continuance of any Event of Default, any such obligation or
indebtedness of any Borrower owing to Holdings or any Subsidiary Guarantor,
whether now existing or hereafter arising, including but not limited to any
obligation of any Borrower to Holdings or any Subsidiary Guarantor as subrogee
of the Lender Parties or resulting from Holdings’ or any Subsidiary Guarantor’s
performance under this Guarantee (and, in each case, the payment thereof), shall
be subordinated to the Payment in Full of the Obligations and shall be enforced
and performance received by Holdings or any Subsidiary Guarantor as trustee for
the Lender Parties and the proceeds thereof shall be paid over to the
Administrative Agent to be applied to the Secured Obligations, but without
reducing or affecting in any manner the liability of Holdings or any Subsidiary
Guarantor under this Guarantee.

11.08. Condition of Borrowers. Holdings and each Subsidiary Guarantor
acknowledges and agrees that it has the sole responsibility for, and has
adequate means of, obtaining from each Borrower and any other guarantor such
information concerning the financial condition, business and operations of
Borrowers and any such other guarantor as Holdings and each Subsidiary Guarantor
requires, and that none of the Lender Parties has any duty, and neither Holdings
nor any Subsidiary Guarantor is relying on the Lender Parties at any time, to
disclose to Holdings or any Subsidiary Guarantor any information relating to the
business, operations or financial condition of Borrowers or any other guarantor
(Holdings and each Subsidiary Guarantor waiving any duty on the part of the
Lender Parties to disclose such information and any defense relating to the
failure to provide the same).

 

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11.09. Limitation of Liability. Notwithstanding any provision of this Article XI
to the contrary, it is intended that the provisions of this Article XI not
constitute a “Fraudulent Conveyance” (as defined below). Consequently, each
Lender Party and Loan Party agrees that if the provisions of this Article XI, or
any Liens securing the obligations and liabilities arising pursuant to this
Article XI, would, but for the application of this sentence, constitute a
Fraudulent Conveyance, this Agreement and each such Lien shall be valid and
enforceable only to the maximum extent that would not cause such provisions or
such Lien to constitute a Fraudulent Conveyance, and such provisions shall
automatically be deemed to have been amended accordingly at all relevant times.
For purposes hereof, “Fraudulent Conveyance” means a fraudulent conveyance or
fraudulent transfer under Section 548 of the Bankruptcy Code or a fraudulent
conveyance or fraudulent transfer under the provisions of any applicable
fraudulent conveyance or fraudulent transfer law or similar law of any
Governmental Authority as in effect from time to time.

[Remainder of page is intentionally left blank; signature pages follow.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

BORROWERS: E.L.F. COSMETICS, INC., a Delaware corporation By:  

/s/ John Bailey

Name: John Bailey Title: President and Chief Financial Officer JA 139 FULTON
STREET CORP., a New York corporation By:  

/s/ John Bailey

Name: John Bailey Title: President and Chief Financial Officer JA 741 RETAIL
CORP., a New York corporation By:  

/s/ John Bailey

Name: John Bailey Title: President and Chief Financial Officer J.A. CHERRY HILL,
LLC, a Delaware limited liability company By:  

/s/ John Bailey

Name: John Bailey Title: President and Chief Financial Officer J.A. RF, LLC, a
Delaware limited liability company By:  

/s/ John Bailey

Name: John Bailey Title: President and Chief Financial Officer JA COSMETICS
RETAIL, INC., a New York corporation By:  

/s/ John Bailey

Name: John Bailey Title: President and Chief Financial Officer

 

 

Signature Page to Credit Agreement

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

OTHER LOAN PARTIES: E.L.F. BEAUTY, INC., a Delaware corporation By:  

/s/ John Bailey

Name: John Bailey Title: President and Chief Financial Officer

 

 

Signature Page to Credit Agreement

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ADMINISTRATIVE AGENT:

BANK OF MONTREAL, as Administrative Agent

By:

 

/s/ Joan Murphy

Name:

  Joan Murphy

Title:

  Director

 

Signature Page to Credit Agreement

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LENDERS: BANK OF MONTREAL, as a Lender, an L/C Issuer and Swing Line Lender

By:

 

/s/ Joan Murphy

Name:

  Joan Murphy

Title:

  Director

 

Signature Page to Credit Agreement

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LENDERS (cont’d):

United Bank, as a Lender

By:

 

/s/ Tom Wolcott

Name:

  Tom Wolcott

Title:

  SVP Shared National Credit

 

Signature Page to Credit Agreement

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

LENDERS (cont’d):

Morgan Stanley Senior Funding Inc., as a Lender

By:

 

/s/ Michael King

Name:

  Michael King

Title:

  Vice President

 

Signature Page to Credit Agreement

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

LENDERS (cont’d):

Wells Fargo Bank, N.A., as a Lender

By:

 

/s/ Maribelle Villaseñor

Name:

  Maribelle Villaseñor

Title:

  Director

 

Signature Page to Credit Agreement

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

LENDERS (cont’d):

Stifel Bank & Trust, as a Lender

By:

 

/s/ Juli Van Hook

Name:

  Juli Van Hook

Title:

  Senior Vice President

 

Signature Page to Credit Agreement

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

LENDERS (cont’d):

U.S. Bank National Association, as a Lender

By:

 

/s/ Jason Nadler

Name:

  Jason Nadler

Title:

  Managing Director

 

Signature Page to Credit Agreement

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

LENDERS (cont’d):

JPMorgan Chase Bank, N.A., as a Lender

By:

 

/s/ Tony Yung

Name:

  Tony Yung

Title:

  Executive Director

 

Signature Page to Credit Agreement

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

Exhibit A

Form of Committed Loan Notice

Date:                     ,             

 

To: Bank of Montreal, as Administrative Agent for the Lenders parties to the
Credit Agreement dated as of December 23, 2016 (as extended, renewed, modified,
supplemented, amended or restated from time to time, the “Credit Agreement”), by
and among e.l.f. Cosmetics, Inc., a Delaware corporation, JA 139 Fulton Street
Corp., a New York corporation, JA 741 Retail Corp., a New York corporation, JA
Cosmetics Retail, Inc., a New York corporation, J.A. RF, LLC, a Delaware limited
liability company, J.A. Cherry Hill, LLC, a Delaware limited liability company,
and each Domestic Subsidiary of e.l.f. Beauty, Inc., a Delaware corporation
(“Holdings”), who hereafter becomes a “Borrower” under the Credit Agreement
pursuant to a Joinder Agreement, are referred to herein individually as a
“Borrower” and collectively as the “Borrowers”), Holdings, the other Guarantors
party thereto, certain Lenders which are signatories thereto, and Bank of
Montreal, as Administrative Agent. Capitalized terms used herein but not
otherwise defined herein shall have the respective meanings ascribed to such
terms in the Credit Agreement.

Ladies and Gentlemen:

[The undersigned refers to the Credit Agreement, the terms defined therein being
used herein as therein defined, and hereby gives you notice irrevocably,
pursuant to Section 2.02 of the Credit Agreement, of a Borrowing requested by
            1 and, in connection therewith, sets forth the following
information:

1. The Business Day of the proposed Borrowing is             ,             .

2. The aggregate amount of the proposed Borrowing is $                    .

3. The aggregate principal amount of requested Revolving Loans is $            ,
of which $            consists of [Base Rate Loans] and $            consists of
[Eurodollar Rate Loans] having an initial Interest Period of             months.

4. The aggregate principal amount of Term Loans is $            , of which
$            consists of [Base Rate Loans] and $            consists of
[Eurodollar Rate Loans] having an initial Interest Period of
            months.]

[The undersigned refers to the Credit Agreement, the terms defined therein being
used herein as therein defined, and hereby gives you notice irrevocably,
pursuant to Section 2.02 of the Credit Agreement, of the [conversion]
[continuation] of the Loans specified herein, that:

1. The conversion/continuation Date is             ,             .

 

1  Include relevant Borrower.

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

2. The aggregate amount of the [Revolving] [Term] Loans to be [converted]
[continued] is $            .

3. The Loans are to be [converted into] [continued as] [Eurodollar] [Base Rate]
Loans.

4. [If applicable:] The duration of the Interest Period for the [Revolving]
[Term] Loans included in the [conversion] [continuation] shall be
            months.]

[The undersigned hereby certifies that the following statements will be true on
the date of the proposed [Borrowing][continuation], immediately before and after
giving effect thereto and to the application of the proceeds therefrom:

(a) the representations and warranties of the Loan Parties contained in Article
V of the Credit Agreement or any other Loan Document are true and correct in all
material respects (or in all respects for such representations and warranties
that are by their terms already qualified as to materiality) on and as of the
date of such Credit Extension, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they are be
true and correct in all material respects (or in all respects for such
representations and warranties that are by their terms already qualified as to
materiality) as of such earlier date (or, solely with respect to any Incremental
Term Loan (including any Limited Condition Incremental Facility), the applicable
conditions set forth in Section 2.18(e) of the Credit Agreement have been
satisfied); and

(b) no Default or Event of Default has occurred and is continuing or would
immediately result from such proposed Credit Extension (or, solely with respect
to any Incremental Term Loan (including any Limited Condition Incremental
Facility), the applicable conditions set forth in Section 2.18(e) of the Credit
Agreement have been satisfied).]2

 

E.L.F. COSMETICS, INC., a Delaware corporation By  

 

  Name  

 

  Title  

 

 

 

2  Certification not required if this Committed Loan Notice is being submitted
only in connection with the conversion of Loans to the other Type or a
continuation of Eurodollar Rate Loans.

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

Exhibit B

Form of Swing Line Loan Notice

                                  , 201_

 

To: Bank of Montreal, as Administrative Agent for the Lenders parties to the
Credit Agreement dated as of December 23, 2016 (as extended, renewed, modified,
supplemented, amended or restated from time to time, the “Credit Agreement”), by
and among e.l.f. Cosmetics, Inc., a Delaware corporation, JA 139 Fulton Street
Corp., a New York corporation, JA 741 Retail Corp., a New York corporation, JA
Cosmetics Retail, Inc., a New York corporation, J.A. RF, LLC, a Delaware limited
liability company, J.A. Cherry Hill, LLC, a Delaware limited liability company,
and each Domestic Subsidiary of e.l.f. Beauty, Inc., a Delaware corporation
(“Holdings”), who hereafter becomes a “Borrower” under the Credit Agreement
pursuant to a Joinder Agreement, are referred to herein individually as a
“Borrower” and collectively as the “Borrowers”), Holdings, the other Guarantors
party thereto, certain Lenders which are signatories thereto, and Bank of
Montreal, as Administrative Agent. Capitalized terms used herein but not
otherwise defined herein shall have the respective meanings ascribed to such
terms in the Credit Agreement.

The Borrower Agent, hereby gives you irrevocable notice pursuant to
Section 2.04(b) of the Credit Agreement that it requests Swing Line Loans under
the Credit Agreement (the “Proposed Advance”) to be made to             3 and,
in connection therewith, sets forth the following information:

A. The date of the Proposed Advance is             ,             (the “Funding
Date”).

B. The aggregate principal amount of Proposed Advance is $            .

The undersigned hereby certifies that, except as set forth on Schedule A
attached hereto, the following statements will be true on the date of the
Proposed Advance both immediately before and after giving effect to the Proposed
Advance to be issued on the Funding Date:

(i) the representations and warranties of the Loan Parties contained in Article
V of the Credit Agreement or any other Loan Document are true and correct in all
material respects (or in all respects for such representations and warranties
that are by their terms already qualified as to materiality) on and as of the
date of such Credit Extension, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they are be
true and correct in all material respects (or in all respects for such
representations and warranties that are by their terms already qualified as to
materiality) as of such earlier date;

 

3  Include relevant Borrower.

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

(ii) the Revolving Credit Outstandings of any Revolving Lender do not exceed
such Revolving Lender’s Revolving Credit Commitment; and

(iii) no Default or Event of Default is continuing.

 

Sincerely,   E.L.F. COSMETICS, INC., a Delaware corporation, as the Borrower
Agent   By  

 

    Name  

 

    Title  

 

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

Exhibit C-1

Form of Revolving Loan Note

 

U.S. $_______________    ____________, ______

FOR VALUE RECEIVED, the undersigned, e.l.f. Cosmetics, Inc., a Delaware
corporation, JA 139 Fulton Street Corp., a New York corporation, JA 741 Retail
Corp., a New York corporation, JA Cosmetics Retail, Inc., a New York
corporation, J.A. RF, LLC, a Delaware limited liability company, J.A. Cherry
Hill, LLC, a Delaware limited liability company (collectively as the “Borrowers”
and each individually a “Borrower”), hereby jointly and severally promise to pay
to             (the “Lender”) or its registered assigns on the Revolving Credit
Termination Date of the hereinafter defined Credit Agreement, at the principal
office of the Administrative Agent in Chicago, Illinois (or such other location
as the Administrative Agent may designate to the Borrowers or Borrower Agent),
in immediately available funds, the principal sum of             Dollars
($            ) or, if less, the aggregate unpaid principal amount of all
Revolving Loans made by such Lender to the Borrowers pursuant to the Credit
Agreement, together with interest on the principal amount of each Revolving Loan
from time to time outstanding hereunder at the rates, and payable in the manner
and on the dates, specified in the Credit Agreement.

This Note is one of the Revolving Loan Notes referred to in the Credit Agreement
dated as of December 23, 2016 (as extended, renewed, modified, supplemented,
amended or restated from time to time, the “Credit Agreement”), by and among the
Borrowers, the other parties from time to time party thereto as “Borrowers”,
e.l.f. Beauty, Inc., a Delaware corporation (“Holdings”), the other Guarantors
from time to time party thereto, certain Lenders which are signatories thereto,
and Bank of Montreal, as Administrative Agent, and this Note and the holder
hereof are entitled to all the benefits and security provided for thereby or
referred to therein, to which Credit Agreement reference is hereby made for a
statement thereof. All defined terms used in this Note, except terms otherwise
defined herein, shall have the same meaning as in the Credit Agreement. This
Note shall be governed by and construed in accordance with the internal laws of
the State of New York.

Voluntary prepayments may be made hereon, certain prepayments are required to be
made hereon, and this Note may be declared due prior to the expressed maturity
hereof, all in the events, on the terms and in the manner as provided for in the
Credit Agreement.

Each Borrower hereby waives to the extent permitted by applicable law demand,
presentment, protest or notice of any kind hereunder.

[Signature Page Follows]

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

IN WITNESS WHEREOF, Borrowers have duly executed and delivered this Note as of
the date appearing on the first page of this Note.

 

BORROWERS: E.L.F. COSMETICS, INC., a Delaware corporation By:  

 

Name:  

 

Title:  

 

JA 139 FULTON STREET CORP., a New York corporation By:  

 

Name:  

 

Title:  

 

JA 741 RETAIL CORP., a New York corporation By:  

 

Name:  

 

Title:  

 

J.A. CHERRY HILL, LLC, a Delaware limited liability company By:  

 

Name:  

 

Title:  

 

J.A. RF, LLC, a Delaware limited liability company By:  

 

Name:  

 

Title:  

 

JA COSMETICS RETAIL, INC., a New York corporation By:  

 

Name:  

 

Title:  

 

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

Exhibit C-2

Form of Term Loan Note

 

U.S. $_______________    ____________, ______

FOR VALUE RECEIVED, the undersigned, e.l.f. Cosmetics, Inc., a Delaware
corporation, JA 139 Fulton Street Corp., a New York corporation, JA 741 Retail
Corp., a New York corporation, JA Cosmetics Retail, Inc., a New York
corporation, J.A. RF, LLC, a Delaware limited liability company, J.A. Cherry
Hill, LLC, a Delaware limited liability company (collectively as the “Borrowers”
and each individually a “Borrower”), hereby jointly and severally promise to pay
to             (the “Lender”) or its registered assigns at the principal office
of the Administrative Agent in Chicago, Illinois (or such other location as the
Administrative Agent may designate to the Borrowers or Borrower Agent), in
immediately available funds, the principal sum of             Dollars
($            ) or, if less, the aggregate unpaid principal amount of all Term
Loans made or maintained by such Lender to the Borrowers pursuant to the Credit
Agreement, in installments in the amounts called for by Section 2.05(a) of the
Credit Agreement, commencing on March 31, 2017, together with interest on the
principal amount of such Term Loan from time to time outstanding hereunder at
the rates, and payable in the manner and on the dates, specified in the Credit
Agreement.

This Note is one of the Term Loan Notes referred to in the Credit Agreement
dated as of December 23, 2016 (as extended, renewed, modified, supplemented,
amended or restated from time to time, the “Credit Agreement”), by and among the
Borrowers, the other parties from time to time party thereto as “Borrowers”,
e.l.f. Beauty, Inc., a Delaware corporation (“Holdings”), the other Guarantors
from time to time party thereto, certain Lenders which are signatories thereto,
and Bank of Montreal, as Administrative Agent, and this Note and the holder
hereof are entitled to all the benefits and security provided for thereby or
referred to therein, to which Credit Agreement reference is hereby made for a
statement thereof. All defined terms used in this Note, except terms otherwise
defined herein, shall have the same meaning as in the Credit Agreement. This
Note shall be governed by and construed in accordance with the internal laws of
the State of New York.

Voluntary prepayments may be made hereon, certain prepayments are required to be
made hereon, and this Note may be declared due prior to the expressed maturity
hereof, all in the events, on the terms and in the manner as provided for in the
Credit Agreement.

Each Borrower hereby waives to the extent permitted by applicable law demand,
presentment, protest or notice of any kind hereunder.

[Signature Page Follows]

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

IN WITNESS WHEREOF, Borrowers have duly executed and delivered this Note as of
the date appearing on the first page of this Note.

 

BORROWERS: E.L.F. COSMETICS, INC., a Delaware corporation By:  

 

Name:  

 

Title:  

 

JA 139 FULTON STREET CORP., a New York corporation By:  

 

Name:  

 

Title:  

 

JA 741 RETAIL CORP., a New York corporation By:  

 

Name:  

 

Title:  

 

J.A. CHERRY HILL, LLC, a Delaware limited liability company By:  

 

Name:  

 

Title:  

 

J.A. RF, LLC, a Delaware limited liability company By:  

 

Name:  

 

Title:  

 

JA COSMETICS RETAIL, INC., a New York corporation By:  

 

Name:  

 

Title:  

 

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

EXHIBIT D

TO

CREDIT AGREEMENT

COMPLIANCE CERTIFICATE

e.l.f. Cosmetics, Inc.

Date:                     , 20        

This certificate is given by             , a             , in its capacity as
Borrower Agent, pursuant to Section 6.02(a) of that certain Credit Agreement
dated as of December 23, 2016 among Borrower Agent, the Borrowers party thereto
from time to time, the other Loan Parties from time to time party thereto, the
Lenders from time to time party thereto, and Bank of Montreal, as Administrative
Agent for Lenders (as such agreement may have been amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”).
Capitalized terms used herein without definition shall have the meanings set
forth in the Credit Agreement.

The undersigned Responsible Officer hereby certifies to Administrative Agent and
Lenders, solely as an officer of Borrower Agent and not individually, as of the
date hereof, that:

(a) the financial statements delivered with this certificate in accordance with
Section 6.01(a) and/or 6.01(b) of the Credit Agreement were prepared in
accordance with GAAP and fairly present in all material respects the financial
condition of Holdings and its Subsidiaries as of the dates indicated therein [,
subject to year-end adjustments and the absence of footnotes] [note: delete
bracketed text where the Compliance Certificate is delivered in conjunction with
the annual audited financial statements.]

(b) I have reviewed the terms of the Credit Agreement and have made, or caused
to be made under my supervision, a review in reasonable detail of the
transactions and conditions of Holdings and its Subsidiaries during the
accounting period covered by such financial statements;

(c) such review has not disclosed the existence as of the date hereof of a
Default or an Event of Default, except as set forth in Schedule 1 hereto, which
includes a description of the nature of such Default or Event of Default and
what action Borrowers have taken, are undertaking and/or propose to take with
respect thereto;

(d) Borrowers are in compliance with the covenants contained in Section 7.12(a)
and 7.12(b) of the Credit Agreement, as demonstrated by the calculation of such
covenants below, except as set forth below;

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

(e) subsequent to the delivery of the last Compliance Certificate submitted
pursuant to the Credit Agreement, except as set forth in Schedule 2 hereto, no
Loan Party has (i) obtained any U.S. Federal registration of a patent or
trademark, or (ii) applied for the U.S. Federal registration of a patent or
trademark;

(f) subsequent to the delivery of the last Compliance Certificate submitted
pursuant to the Credit Agreement, except as set forth in Schedule 3 hereto,
(i) no Subsidiary of a Loan Party has merged or consolidated with or liquidated
or dissolved into a Loan Party and (ii) no Subsidiary that is not a Loan Party
has merged into any other Subsidiary that is not a Loan Party;

(g) subsequent to the delivery of the last Compliance Certificate submitted
pursuant to the Credit Agreement, except as set forth in Schedule 4 hereto
(which shall set forth the information in reasonable detail), there has been no
material change in accounting policies or financial reporting practices by any
Loan Party or any Subsidiary; and

(h) [attached hereto as Schedule 5 is a correct calculation of the Available
Amount as of [            ].]1

IN WITNESS WHEREOF, the undersigned officer has executed and delivered this
certificate, solely as an officer of Borrower Agent and not individually, this
            day of             ,             .

E.L.F. COSMETICS, INC. By  

 

Name  

 

Title  

 

  of the Borrower Agent

 

1  To be included only for compliance certificate deliveries in connection with
financial statements delivered pursuant to Section 6.01(a).

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

CONSOLIDATED TOTAL NET LEVERAGE RATIO

(Section 7.12(a))

 

Consolidated Total Net Funded Debt is defined as follows:                 
                                 The sum (but without duplication) of the
aggregate principal amount of Indebtedness of Holdings and its Subsidiaries as
of the last day of the Measurement Period, determined on a consolidated basis in
accordance with GAAP (but excluding the effects of any discounting of
Indebtedness resulting from the application of purchase accounting in connection
with any Permitted Acquisition or other permitted Investment), solely to the
extent consisting of (a) obligations for borrowed money, (b) obligations under
Capital Leases and synthetic or other similar financing leases, (c) obligations
evidenced by bonds, debentures, notes, loan agreements or other similar
instruments, (d) direct or contingent obligations arising under letters of
credit (including standby and commercial but excluding all Letters of Credit),
bankers’ acceptances, bank guarantees and similar instruments, (e) obligations
to pay the deferred purchase price of property or services (other than
(i) accrued expenses and trade payables incurred in the Ordinary Course of
Business, (ii) any working capital adjustment or any earnout obligation,
deferred compensation, non-compete or similar obligations under employment
agreements of such Person and (iii) any earnout obligations and other similar
deferred purchase price obligations (other than obligations with respect to
seller notes) solely to the extent such earnout obligations and other similar
deferred purchase price obligations (other than obligations with respect to
seller notes) either (x) are subordinated in right of payment to the Obligations
on terms reasonably satisfactory to the Administrative Agent or (y) are payable
(including with respect to principal, interest and fees) no earlier than the
date that is 180 days after the Facility Termination Date), in each case, only
if due and payable, (f) obligations with respect to seller notes,
(g) obligations with respect to the redemption, repayment or other repurchase or
payment in respect of any Disqualified Equity Interest; provided, Consolidated
Total Net Funded Debt shall not include obligations under Swap Contracts entered
into in the Ordinary Course of Business for bona fide hedging purposes and not
for speculative purposes (“Consolidated Total Funded Debt”)    

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

Less:     Unrestricted cash and Cash Equivalents of any Loan Party (other than
any Net Cash Proceeds from the issuance by Holdings of any Permitted Cure
Securities, or cash common equity contributions received by Holdings pursuant to
Section 8.04 of the Credit Agreement) with respect to which Administrative Agent
has a first priority perfected Lien, not to exceed $15,000,000 in the aggregate;
provided, that notwithstanding the foregoing, until the expiration of the time
period permitted under Section 6.14 of the Credit Agreement, such cash and Cash
Equivalents shall be deducted for purposes of calculating Consolidated Total Net
Funded Debt regardless of whether Administrative Agent has a first priority
perfected Lien on such cash and Cash Equivalents (it being agreed and understood
that after the expiration of such time period any unrestricted cash and Cash
Equivalents in an Excluded Account shall not be deducted for purposes of
calculating Consolidated Total Net Funded Debt unless the Administrative Agent
has a first priority perfected Lien on such unrestricted cash and Cash
Equivalents in any such Excluded Account)

      __________ Consolidated Total Net Funded Debt as of the last day of the
Measurement Period     $                         Adjusted Consolidated EBITDA
for the Measurement Period is defined as follows2:     Consolidated net income
(or loss) for the Measurement Period of Holdings, the Borrowers, and their
Subsidiaries, but excluding: (a) the income (or loss) of any Person that is not
a Subsidiary, provided that consolidated net income shall be increased by the
amount of dividends or distributions or other payments that are actually paid in
cash to a Borrower or Subsidiary thereof from a Person that is not a Subsidiary
in respect of such period and (b) except as otherwise provided below, the income
(or loss) of any Person accrued prior to the date it became a Subsidiary of a
Borrower or is merged into or consolidated with Borrower or a Subsidiary of a
Borrower; provided, non-recurring or unusual gains, losses, charges or expenses
shall be excluded from the calculation of consolidated net income (or loss) (it
being understood, for the avoidance of doubt, that items that are subject to a
cap in other areas of the calculation of Adjusted Consolidated EBITDA shall not
be permitted to be added-back on the basis of being “unusual” or
“non-recurring”)     $__________

 

2  To include Acquired EBITDA and exclude Disposed EBITDA per the paragraph on
page 10 of this certificate.

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

Plus (without duplication):

 

Any provision for taxes based on income, profits or capital, including but not
limited to federal, provincial, state, franchise and similar taxes and foreign
withholding taxes of such Person paid or accrued during such period (including
penalties, interest, costs and expenses related to such taxes or arising from
any tax examinations) deducted in the determination of consolidated net income
for the Measurement Period

      __________

Interest expense (including but not limited to (i) net payments, if any,
pursuant to interest rate Swap Contracts entered into for the purpose of hedging
interest rate risk, (ii) bank fees, (iii) costs of surety bonds in connection
with financing activities, and (iv) fees, charges, commissions, and discounts
owed with respect to letters of credit or bankers acceptances) (less, interest
income) deducted (or included) in the determination of consolidated net income
for the Measurement Period

      __________

Amortization and depreciation (including but not limited to the amortization of
deferred financing fees or costs and the amortization of original issue discount
resulting from the issuance of Indebtedness at less than par and, to the extent
a synthetic or other similar financing lease is Indebtedness, rental payments in
connection with such leases that are expensed) deducted in the determination of
consolidated net income for the Measurement Period

      __________

Losses (less gains) from asset Dispositions (other than asset Dispositions in
the Ordinary Course of Business) included in the determination of consolidated
net income for the Measurement Period

      __________

Non-cash expenses, charges or losses (less non-cash gains or income), including
any non-cash equity compensation expense and any write-offs or write-downs,
including impairment charges, deducted (or included) in the determination of
consolidated net income for the Measurement Period but excluding any write-offs
or write-downs of accounts receivable; provided that if any such amount
represents an accrual or reserve for a potential cash item in any future period,
the cash payment in respect thereof that is paid in a subsequent Measurement
Period shall be deducted from Adjusted Consolidated EBITDA to such extent in
such subsequent Measurement Period

      __________

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

Expenses and fees deducted in the determination of consolidated net income and
incurred during the Measurement Period to consummate the Transaction, whether
occurring before or within 180 days after the Closing Date or subsequently
required to account for the Transaction from a GAAP perspective and in
accordance with GAAP

      __________

Expenses and fees (including expenses and fees paid to Administrative Agent and
Lenders and the lenders under any other Indebtedness) deducted in the
determination of consolidated net income and incurred during the Measurement
Period and after the Closing Date in connection with the consummation or
administration of the Loan Documents or the documents governing such other
Indebtedness (including in connection with any actual or proposed amendment,
supplement, waiver or other modification to the Loan Documents or any other
Indebtedness, whether or not consummated)

      __________

Fees, expenses and indemnifications of directors, in each case permitted under
the Credit Agreement and deducted in the determination of consolidated net
income during the Measurement Period

      __________

Expenses deducted in the determination of consolidated net income during the
Measurement Period and covered by indemnification or other reimbursement
provisions, or purchase price adjustments in connection with any Permitted
Acquisition or other permitted Investment (to the extent deducted from the
determination of consolidated net income during the Measurement Period), in each
case to the extent actually received in cash during such Measurement Period, or
to the extent that Borrower Agent reasonably expects a payment in respect of the
applicable indemnification or other reimbursement provision, or purchase price
adjustment will be received in cash within 180 days after the date such expense
is incurred (with a deduction in the applicable future period for any amount so
added back to the extent not actually paid, indemnified or reimbursed in a
subsequent period and added back hereto in a prior period, and such amount shall
not be permitted to be added back for such subsequent period)

      __________

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

Reasonable fees, costs and expenses deducted in the determination of
consolidated net income during the Measurement Period and which are incurred in
connection with (x) the consummation (or attempted or proposed or anticipated
consummation) of any Permitted Acquisitions or any Acquisitions which would
reasonably be expected to have (if they had been consummated) satisfied the
requirements of the defined term “Permitted Acquisition” but for the fact they
are not consummated, (y) the consummation (or attempted or proposed or
anticipated consummation) of any issuance of debt or equity, restricted payment,
Investment permitted under Section 7.03(b), (c) (solely to the extent such
Investment is made in an Unrestricted Subsidiary or joint venture), (f) (without
duplication of any such Investment included in clause (x) above), (l), (s), (z),
(aa), or (bb) of the Credit Agreement or Dispositions (other than Dispositions
in the Ordinary Course of Business), and (z) in connection with any Qualifying
IPO (including costs to become Sarbanes-Oxley compliant); provided that the
add-back for all amounts attributable to all such non-consummated transactions
in the foregoing clauses in the aggregate shall not exceed $15,000,000 (or such
higher amount reasonably acceptable to Administrative Agent) in any Fiscal Year

      __________

Without duplication of any other add-back set forth herein, losses, charges or
expenses deducted in the determination of consolidated net income during the
Measurement Period, but for which insurance or indemnity recovery is actually
received in cash during the Measurement Period or to the extent that Borrower
Agent reasonably expects such insurance or indemnity recovery will be received
in cash within 180 days after the date such loss, charge or expense is incurred
(with a deduction in the applicable future period for any amount so added back
to the extent not actually indemnified or recovered in a subsequent period and
added back hereto in a prior period, and such amount shall not be permitted to
be added back for such subsequent period)

      __________

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

Without duplication of any other add-back set forth herein, expenses, charges or
losses deducted in the determination of consolidated net income during the
Measurement Period and reimbursed by third parties to the extent such
reimbursements are actually received in cash during the Measurement Period or to
the extent that Borrower Agent reasonably expects such reimbursement will be
received in cash within 180 days after the date such loss, charge or expense is
incurred (with a deduction in the applicable future period for any amount so
added back to the extent not actually reimbursed in a subsequent period and
added back hereto in a prior period, and such amount shall not be permitted to
be added back for such subsequent period)

      __________

Non-cash exchange or translation losses (less non-cash gains) deducted (or
included) in the determination of consolidated net income during the Measurement
Period and arising from foreign currency hedging transactions or currency
fluctuations

      __________

Non-cash deductions or charges (less non-cash gains or positive adjustments,
excluding any non-cash gains to the extent they represent the reversal of an
accrual or reserve for a potential cash item that reduced Adjusted Consolidated
EBITDA in any prior Measurement Period and excluding any non-cash gains with
respect to cash actually received in a prior period so long as such cash did not
increase Adjusted Consolidated EBITDA in such prior period) to net income
attributable to purchase accounting adjustments made in accordance with GAAP

      __________

the amount of any earn out or other similar deferred purchase price obligation
(other than obligations constituting salary payments pursuant to ordinary course
employment agreements and salary bonuses payable thereunder) which was reserved
or paid during such Measurement Period and deducted in the calculation of
consolidated net income for such Measurement Period, to the extent such
obligations and, if paid, the payment thereof are permitted under the Credit
Agreement

      __________

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

(i) the amount of any deferred compensation, signing bonuses, completion
bonuses, transitions costs, retention and relocation costs and expenses,
restructuring charges, severance, integration costs or other business
optimization expenses, costs associated with establishing new facilities,
systems and distribution space or reserves, including any one-time costs
incurred in connection with acquisitions, and costs related to the closure
and/or consolidation of facilities and curtailments or modifications to pension
and post-retirement employee benefit plans (including any settlement of pension
liabilities), in each case, to the extent deducted in the calculation of
consolidated net income for the Measurement Period (collectively, the
“Restructuring Charges, Business Optimization Expenses and Reserves”), as
calculated in the good faith determination of the Borrowers and as certified by
the Borrower Agent’s chief financial officer, chief executive officer,
controller or other comparable executive and (ii) the amount of cost savings and
operating expense reductions projected by the Borrowers in good faith to be
realized as a result of specified actions taken or with respect to which
substantial steps have been taken or are expected to be taken (in the good faith
determination of the Borrowers) prior to or during the 12-month period following
the date thereof (which will be added to Adjusted Consolidated EBITDA as so
projected until fully realized and calculated on a Pro Forma Basis as though
such cost savings and operating expense reductions had been realized during such
period), net of the amount of actual benefits realized during such period from
such actions; provided that (x) such cost savings and operating expense
reductions are reasonably identifiable and factually supportable (in the good
faith determination of the Borrowers) and are net of any realized benefits and
(y) such actions have been taken or initiated or are reasonably expected to be
taken, no later than 12 months after the last day of the relevant Measurement
Period (it being agreed and understood that no add-back for Restructuring
Charges, Business Optimization Expenses and Reserves shall be permitted in any
subsequent Measurement Period where any such action is discontinued or is no
longer reasonably expected to be taken) (collectively, the “Cost Savings”);
provided, that the add-backs pursuant to this clause shall not be duplicative of
other adjustments for the same Measurement Period; provided, further, that the
aggregate amount of add-backs made for Restructuring Charges, Business
Optimization Expenses and Reserves and Cost Savings during any Measurement
Period, together with the aggregate Pro Forma Adjustments during such
Measurement Period, shall not exceed 20% of Adjusted Consolidated EBITDA on a
Pro Forma Basis for that period calculated prior to giving pro forma effect to
the inclusion of the add-backs pursuant to this clause and, without duplication,
prior to giving effect to the Pro Forma Adjustments as set forth below

      __________

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

any costs or expense incurred by Holdings, the Borrowers or a Subsidiary
pursuant to any management equity plan or stock option plan or any other
management or employee benefit plan or agreement or any stock subscription or
shareholder agreement, to the extent that such cost or expenses are funded with
cash proceeds contributed to the capital of Holdings (or the Borrowers through
Holdings) or Net Cash Proceeds of an issuance of Equity Interests (other than
Disqualified Equity Interests) of Holdings or the Borrowers

      __________

proceeds received during such Measurement Period by Holdings and its
Subsidiaries of business interruption insurance or business interruption
proceeds that Borrower Agent reasonably expects will be received in cash within
180 days after the date of the business interruption event giving rise to such
proceeds (with a deduction in the applicable future Measurement Period for any
amount so added back to the extent not actually received in a subsequent
Measurement Period and added back hereto in a prior Measurement Period,
provided, that if such proceeds are actually received in a subsequent
Measurement Period and previously added back in a prior Measurement Period, such
amount shall not be permitted to be added back for such subsequent Measurement
Period), in each case, to the extent not already included in consolidated net
income

      __________

payments to or on behalf of Holdings or any indirect parent company of the
Borrowers for out-of-pocket legal, accounting and filing costs, director fees,
expenses and indemnities and other overhead expenses incurred in the Ordinary
Course of Business for the benefit of Borrowers and their Subsidiaries or
otherwise related to Holdings’ or such indirect parent company’s ownership of
Borrowers and their Subsidiaries, in each case, to the extent deducted in the
calculation of consolidated net income

      __________

Pro Forma Adjustments (as defined in the Credit Agreement)

      __________

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

cost of slotting fees, fixtures and related freight and labor expenses related
to the acquisition of new retail distribution (which shall, for the avoidance of
doubt, include both new retail doors or locations with new or existing retailers
as well as additional distribution related to incremental space within existing
retail doors or locations); provided, that the aggregate amount of add-backs
made pursuant to this clause shall not exceed an amount equal to the greater of
(a) $10,000,000 and (b) twenty percent (20%) of Adjusted Consolidated EBITDA on
a Pro Forma Basis for that period calculated prior to giving pro forma effect to
the inclusion of the add-backs pursuant to this clause; provided, that the
add-backs pursuant to this clause shall not be duplicative of other adjustments
for the same Measurement Period

      __________

for purposes of compliance with the financial covenants set forth in Sections
7.12(a) and (b), the amount of any proceeds from the issuance of Permitted Cure
Securities or any cash common equity contributions received in connection with
an exercise of a Cure Right pursuant to Section 8.04 of the Credit Agreement in
respect of such Measurement Period

      __________

Less:

 

Cash payments made during such Measurement Period in respect of an accrual or
reserve added back to consolidated net income in the calculation of Adjusted
Consolidated EBITDA in a prior Measurement Period

      __________ Adjusted Consolidated EBITDA for the Measurement Period (for
use in Section 7.12(b) of the Compliance Certificate)3    
$                     

 

33  Notwithstanding the foregoing, Adjusted Consolidated EBITDA for each period
set forth below shall be deemed to be the amount set forth below opposite such
month (subject to Pro Forma Adjustments and as a result of acquisitions, all as
set forth above):

 

Period    Consolidated EBITDA  

Quarter ending December 31, 2015

   $ 17,565,158   

Quarter ending March 31, 2016

   $ 11,566,797   

Quarter ending June 30, 2016

   $ 8,397,826   

Quarter ending September 30, 2016

   $ 11,688,171   

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

Notwithstanding the foregoing there shall be included in determining Adjusted
Consolidated EBITDA for any period, without duplication, (A) the Acquired EBITDA
of any Person, all or substantially all of the assets of a Person, or any
business unit, line of business or division of any Person acquired by the
Borrowers or any Subsidiary during such period (but not the Acquired EBITDA of
any related Person, property, business or assets to the extent not so acquired),
to the extent not subsequently sold, transferred or otherwise disposed of by the
Borrowers or such Subsidiary during such Measurement Period (each such Person,
property, business or asset acquired and not subsequently so disposed of, an
“Acquired Entity or Business”), based on the actual Acquired EBITDA of such
Acquired Entity or Business for such Measurement Period (including the portion
thereof occurring prior to such acquisition), (B) an adjustment in respect of
each Acquired Entity or Business equal to the amount of the Pro Forma Adjustment
with respect to such Acquired Entity or Business for such period (including the
portion thereof occurring prior to such acquisition) and (C) (i) the Acquired
EBITDA of any other Investment consummated and not subsequently disposed of
during such Measurement Period, based on the actual Acquired EBITDA of such
Investment for such Measurement Period and (ii) an adjustment in respect of any
other Investment consummated and not subsequently disposed of during such
Measurement Period equal to the amount of the Pro Forma Adjustment with respect
to such Investment for such period, in the case of each of the foregoing clauses
(A), (B) and (C), as specified in a certificate executed by a Responsible
Officer and delivered to the Administrative Agent; provided, that the aggregate
amount of Pro Forma Adjustments for such period, together with the aggregate
add-backs to consolidated net income made for Restructuring Charges, Business
Optimization Expenses and Reserves and Cost Savings during such period, shall
not exceed 20% of Adjusted Consolidated EBITDA on a Pro Forma Basis for that
period calculated prior to giving pro forma effect to the Pro Forma Adjustments
pursuant to this clause and, without duplication, the add-backs to consolidated
net income made for Restructuring Charges, Business Optimization Expenses and
Reserves and Cost Savings, and the Pro Forma Adjustments pursuant to this clause
shall not be duplicative of other adjustments for the same period. There shall
be excluded in determining Adjusted Consolidated EBITDA for any period the
Disposed EBITDA of any Person, all or substantially all of the assets of a
Person, or any business unit, line of business or division of any Person sold,
transferred or otherwise disposed of, closed or classified as discontinued
operations by the Borrowers or any Subsidiary during such Measurement Period
(each such Person, property, business or asset so sold or disposed, a “Sold
Entity or Business”), or any other Disposition during such Measurement Period,
in each case, based on the actual Disposed EBITDA of such Sold Entity or
Business or other Disposition, as applicable, for such Measurement Period
(including the portion thereof occurring prior to such sale, transfer,
disposition or conversion).

 

Consolidated Total Net Leverage Ratio (ratio of Consolidated Total Net Funded
Debt as of the last day of the Measurement Period to Adjusted Consolidated
EBITDA for the Measurement Period)     ____ to 1.0 Maximum Permitted
Consolidated Total Net Leverage Ratio for the Measurement Period     ____ to 1.0
In Compliance     Yes/No

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

CONSOLIDATED FIXED CHARGE COVERAGE RATIO

(Section 7.12(b))

 

Fixed Charges (calculated for Holdings and its Subsidiaries on a consolidated
basis) for the Measurement Period is defined as follows:

 

Interest expense paid (or required to be paid) in cash ($        ), net of (x)
interest income received in cash ($        ) and (y) net payments, if any,
received pursuant to interest rate obligations under any Swap Contracts with
respect to Indebtedness ($        ), in each case, by Holdings and its
Subsidiaries for the Measurement Period (“Total Interest Expense”)

    $__________ Plus (without duplication):    

Scheduled payments of principal for the Measurement Period with respect to all
Consolidated Total Funded Debt (including the portion of scheduled payments
under Capital Leases allocable to principal and calculated in the manner
required by Section 7.12(a) of the Compliance Certificate but excluding
(x) earnout payments (y) intercompany indebtedness by and among the Loan Parties
and their Subsidiaries and (z) any scheduled repayments of Revolving Loans and
other Indebtedness subject to reborrowing to the extent not accompanied by a
concurrent and permanent reduction of the Revolving Credit Commitment (or
equivalent loan commitment))

    ___________ Fixed Charges4     $                    

Consolidated Operating Cash Flow:

 

Adjusted Consolidated EBITDA for the Measurement Period (calculated in the
manner required by Section 7.12(a) of the Compliance Certificate)

    $__________

 

4  Each component of Fixed Charges shall exclude the operating results of any
target of a Permitted Acquisition prior to the date the target became a
Subsidiary of a Borrower, in the case of Permitted Acquisitions consummated as a
purchase of the capital stock of such target.

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

Less:     Consolidated Maintenance Capital Expenditures (as calculated below)
($        ), excluding the portion thereof financed during the Measurement
Period with the proceeds of Equity Interests or financed under Capital Leases or
other Indebtedness (excluding drawings under the Revolving Credit Facility
except to the extent such drawings under the Revolving Credit Facility are
refinanced within 90 days of such capital expenditure with other Indebtedness
that are not drawings under the Revolving Credit Facility or any other revolving
indebtedness) ($        ) (“Unfinanced Maintenance Capital Expenditures”)5

    _____________

 

5  For purposes of calculating the Fixed Charge Coverage Ratio for the
Measurement Periods ending December 31 2016, March 31, 2017, June 30, 2017 and
September 30, 2017, Fixed Charges and Unfinanced Maintenance Capital
Expenditures for each such Measurement Period shall be calculated as follows:

(i) interest shall be calculated by taking the amount of interest for the period
from January 1, 2017 through the last day of the Measurement Period and
multiplying such amount by (A) four in the case of the Measurement Period ending
March 31, 2017, (B) two in the case of the Measurement Period ending June 30,
2017, and (C) four thirds in the case of the Measurement Period ending September
30, 2017;

(ii) tax items shall be calculated as the actual amount of such payments paid on
and after the Closing Date;

(iii) scheduled principal payments of Indebtedness and scheduled payments of
other Consolidated Total Debt (excluding earnout payments) shall be the greater
of (A) the actual amounts paid on and after the Closing Date and (B) the amounts
scheduled to be paid during the one-year period commencing on the Closing Date;
and

(iv) Unfinanced Maintenance Capital Expenditures shall equal the sum of (i) the
actual amounts paid on and after the Closing Date for Unfinanced Maintenance
Capital Expenditures, plus (ii) the sum of the applicable respective amounts as
set forth below for each of the full calendar quarters (or other periods)
occurring prior to the Closing Date and included in such Measurement Period:

 

Period    Pre-Closing Unfinanced
Maintenance Capital
Expenditures  

Quarter ending December 31, 2015

   $ 77,229   

Quarter ending March 31, 2016

   $ 52,727   

Quarter ending June 30, 2016

   $ 55,029   

Quarter ending September 30, 2016

   $ 10,148   

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

Any taxes based on income, profits or capital, including but not limited to
federal, provincial, state, franchise and similar taxes and foreign withholding
taxes, paid or payable in cash and included in the determination of consolidated
net income for the Measurement Period, net of any cash tax credit or other cash
tax benefits received during the Measurement Period

    ___________

Consolidated Operating Cash Flow

    $                         Consolidated Fixed Charge Coverage Ratio (Ratio of
Consolidated Operating Cash Flow to Fixed Charges) for the Measurement Period  
  ___ to 1.0

Minimum required Consolidated Fixed Charge Coverage Ratio for the Measurement
Period

    ___ to 1.0

In Compliance

    Yes/No

******

 

Consolidated Maintenance Capital Expenditures for the Measurement Period are
defined as follows:

    Expenditures capitalized or required to be capitalized under GAAP during the
Measurement Period by Holdings and its Subsidiaries that are not Growth Capital
Expenditures (as defined below) (“Maintenance Capital Expenditures”). “Growth
Capital Expenditures” means expenditures capitalized or required to be
capitalized under GAAP during the Measurement Period by Holdings and its
Subsidiaries that are made in connection with the construction, build-out,
fixturing, furnishing or opening of new retail locations or office space or
company-wide remodeling or refurbishment of existing retail locations or office
space, the remodeling of existing locations in connection with lease renewals or
existing store or office relocations, IT projects, capitalized fixturing costs,
including, in each case, the Capital Expenditures made in connection with
corporate, distribution or warehouse facility expansions or new facilities, but
in any case excluding purchase price payments with respect to any Permitted
Acquisition     $__________

Plus:      deposits made in the Measurement Period in connection with
Maintenance Capital Expenditures; less deposits of a prior period included above

    ___________

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

Less (without duplication):

 

Net Cash Proceeds of Dispositions received during the Measurement Period which
(i) Borrowers or a Subsidiary are permitted to reinvest pursuant to the terms of
the Credit Agreement and (ii) are included in amount capitalized above

    ___________

Proceeds of property insurance policies and condemnation awards received during
the Measurement Period which (i) Borrowers or a Subsidiary are permitted to
reinvest pursuant to the terms of the Credit Agreement and (ii) are included in
amount capitalized above

    ___________

To the extent included in amounts capitalized above, expenditures to the extent
financed with (i) cash indemnity payments or third party reimbursements received
during the Measurement Period, or (ii) trade-ins of property, plant and
equipment Disposed of in a manner permitted by the Credit Agreement

    ___________ Consolidated Maintenance Capital Expenditures (for use in
Section 7.12(b) of the Compliance Certificate)     $                    

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

CALCULATION OF CONSOLIDATED SENIOR NET LEVERAGE RATIO

 

Consolidated Senior Net Debt is defined as follows:     Consolidated Total Net
Funded Debt (calculated in Section 7.12(a) of the Compliance Certificate) as of
the last day of the Measurement Period     $___________

Less:     the outstanding principal balance of all Subordinated Indebtedness as
of the last day of the Measurement Period

    $___________ Consolidated Senior Net Debt as of the last day of the
Measurement Period     $                      Adjusted Consolidated EBITDA
(calculated in Section 7.12(a) of the Compliance Certificate) for the
Measurement Period     $___________ Consolidated Senior Net Leverage Ratio
(ratio of Consolidated Senior Net Debt as of the last day of the Measurement
Period to Adjusted Consolidated EBITDA for the Measurement Period)     ____ to
1.0

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

Schedule 1 to

Compliance Certificate

[Borrowers to list any existing Defaults or Events of Default, specifying the
nature of each, and the actions Borrowers have taken, are undertaking and
propose to take in respect thereof. If no Defaults and no Events of Default are
then in existence, such schedule should read “None”.]

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

Schedule 2 to

Compliance Certificate

Patent and Trademark Registrations and Applications

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

Schedule 3 to

Compliance Certificate

Mergers, consolidations, liquidations or dissolutions

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

Schedule 4 to

Compliance Certificate

Changes to Accounting Policies or Financial Reporting Practices

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

Schedule 5 to

Compliance Certificate

Calculation of Available Amount

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

EXHIBIT E

TO

CREDIT AGREEMENT

EXCESS CASH FLOW CERTIFICATE

e.l.f. Cosmetics, Inc.

Date:                     , 20        

This certificate is given by [            ], a [            ], in its capacity
as Borrower Agent, pursuant to Section 6.02(b) of that certain Credit Agreement
dated as of December 23, 2016 among Borrower Agent, the Borrowers from time to
time party thereto, the other Loan Parties from time to time party thereto, the
Lenders from time to time party thereto, and Bank of Montreal, as Administrative
Agent for Lenders (as such agreement may have been amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”).
Capitalized terms used herein without definition shall have the meanings set
forth in the Credit Agreement.

The undersigned Responsible Officer hereby certifies to Administrative Agent and
Lenders, solely as an officer of Borrower Agent and not individually, as of the
date hereof that:

 

  (a) set forth below is a correct calculation of Excess Cash Flow for the year
ended December 31, 20            and a correct calculation of the required
prepayment of:

$                    ; and

 

  (b) Schedule I attached hereto is based on the audited financial statements
which have been delivered to the Administrative Agent in accordance with
subsection 6.01(a) of the Credit Agreement.

[Remainder of page intentionally blank; signature page follows]

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

IN WITNESS WHEREOF, the undersigned officer has executed and delivered this
certificate, solely as an officer of Borrower Agent and not individually, this
            , 20    .

 

E.L.F. COSMETICS, INC., as Borrower Agent By  

 

Name  

 

Title  

 

 

 

 

2

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

Schedule I

to Excess Cash Flow Certificate

e.l.f. Cosmetics, Inc. (formerly known as J.A. Cosmetics US, Inc.)

Calculations as of         , 201_

Excess Cash Flow Calculation

 

A.     Cash Flow

  

1.      Adjusted Consolidated EBITDA for the applicable Fiscal Year (calculated
in the manner set forth in the Compliance Certificate, but for the avoidance of
doubt, excluding any Cure Amount included in the calculation of Adjusted
Consolidated EBITDA)

 

Less, in each case, during the applicable Fiscal Year and without duplication:1

   $____________

2.      Unfinanced Capital Expenditures (calculated in the manner set forth in
Schedule III hereto)

   $____________

3.      Any taxes based on income, profits or capital, including but not limited
to federal, provincial, state, franchise and similar taxes and foreign
withholding taxes paid during such period (including penalties, interest, costs
and expenses related to such taxes or arising from any tax examination) paid in
cash and deducted in the determination of net income, net of any cash tax credit
or other cash tax benefits received

   $____________

4.      Interest expense (including but not limited to (i) net payments, if any,
pursuant to interest rate Swap Contracts entered into for the purpose of hedging
interest rate risk, (ii) bank fees, (iii) costs of surety bonds in connection
with financing activities, and (iv) fees, charges, commissions, and discounts
owed with respect to letters of credit or bankers acceptances) paid in cash, net
of interest income received in cash, by Holdings and its Subsidiaries

   $____________

5.      The aggregate amount of amortization payments required to be made, and
actually made, by Holdings and its Subsidiaries in respect of all principal on
all Indebtedness

   $____________

 

1  For the avoidance of doubt, (a) the deductions set forth in items A2 through
A10 shall exclude such amounts attributable to the target of a Permitted
Acquisition prior to the consummation of such Acquisition and (b) any amounts
included as Unfinanced Capital Expenditures shall not be included as a deduction
in any other item.

 

3

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

6.      (i) Fees and expenses paid pursuant to the Management Agreement and (ii)
directors’ fees, expenses and indemnifications, in case of each of the foregoing
clauses (i) and (ii), to the extent paid in cash, permitted to be paid pursuant
to the Credit Agreement and added back to net income in the calculation of
Adjusted Consolidated EBITDA

   $____________

7.      Purchase price paid in cash in respect of all Permitted Acquisitions or
Investments made in cash, in each instance permitted pursuant to
Section 7.03(b), (f), (l), (aa) or (bb) of the Credit Agreement to the extent
(a) not funded with proceeds from the incurrence of Indebtedness (other than
Revolving Loans), the issuance of Equity Interests (including capital
contributions) or the Available Amount and (b) not deducted in the calculation
of the required Excess Cash Flow prepayment for a prior Fiscal Year (i.e. not
included in the Contract Consideration Deduction (as defined below) for a prior
Fiscal Year)

   $____________

8.      Transaction fees, costs and expenses paid in cash and incurred in
connection with (i) the consummation (or attempted or proposed or anticipated
consummation) of any Permitted Acquisitions or any Acquisitions which would
reasonably be expected to have (if they had been consummated) satisfied the
requirements of the defined term “Permitted Acquisition” but for the fact that
they are not consummated and (ii) any proposed or actual issuance of debt or
equity, restricted payment or other Investment permitted pursuant to
Section 7.03(b), (l), (aa) or (bb) or any Qualified IPO, in each instance in
(i) and (ii) to the extent (a) not funded with proceeds of Indebtedness (other
than Revolving Loans), from the issuance of Equity Interests (including capital
contributions) or the Available Amount and (b) added back to net income in the
determination of Adjusted Consolidated EBITDA

   $____________

9.      Fees and expenses (including those paid to Administrative Agent and the
Lenders and the lenders or agent for such lenders under any other Indebtedness)
paid in cash in connection with the consummation or administration of the Loan
Documents (including, but not limited to fees and expenses in connection with
the Transaction) or any other Indebtedness (including in connection with any
actual or proposed amendment, supplement, waiver or other modification to the
Loan Documents or any other Indebtedness, whether or not consummated), to the
extent added back to net income in the determination of Adjusted Consolidated
EBITDA, in each instance to the extent not funded with proceeds of Indebtedness
(other than Revolving Loans) or from the issuance of Equity Interests (including
capital contributions)

   $____________

 

4

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

10.    Purchase price adjustments in connection with any Permitted Acquisition
or other permitted Investment, in each case to the extent paid in cash during
such Fiscal Year not funded with proceeds of Indebtedness (other than Revolving
Loans) or from the issuance of Equity Interests (including capital
contributions)

   $____________

11.    the amount of any earn out obligation paid in cash during such Fiscal
Year

   $____________

12.    Restructuring Charges, Business Optimization Expenses and Reserves (as
defined in Exhibit D to the Credit Agreement) to the extent paid in cash and
added back to net income in the determination of Adjusted Consolidated EBITDA

   $____________

13.    Cost Savings (as defined in Exhibit D to the Credit Agreement) to the
extent added back to net income in the determination of Adjusted Consolidated
EBITDA

   $____________

14.    proceeds received by Holdings and its Subsidiaries of business
interruption insurance to the extent added back to net income in the
determination of Adjusted Consolidated EBITDA

   $____________

15.    Restricted Payments paid in cash and permitted by Section 7.06(c), (d) or
(e) of the Credit Agreement

   $____________

16.    Any increases in working capital of Holdings and its Subsidiaries (as
calculated pursuant to Schedule II below)

   $____________

17.    Amount of any proceeds from the issuance of Permitted Cure Securities or
cash common equity contributions received in connection with an Equity Cure
pursuant to Section 8.04 of the Credit Agreement, to the extent added back to
net income in the determination of Adjusted Consolidated EBITDA and without
duplication of amounts excluded pursuant to A.1. above

   $____________

18.    All other add backs to Adjusted Consolidated EBITDA to the extent paid in
cash and added back to net income in the determination of Adjusted Consolidated
EBITDA, in each instance to the extent not funded with proceeds from the
incurrence of Indebtedness (other than Revolving Loans), the issuance of Equity
Interests (including capital contributions), the Available Amount, insurance
proceeds, indemnity payments or other third party reimbursements

   $____________

19.    cash losses from non-recurring or unusual items

   $____________

20.    the amount paid in cash in respect of any item for which, in a prior
Fiscal Year, a non-cash loss, expense, accrual or charge (other than any
non-cash accrual for a potential cash item in any future period, the cash
payment of which was paid in the applicable Fiscal Year) was included in
determining Adjusted Consolidated EBITDA in such prior Fiscal Year

   $____________

 

5

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

21.    cost of slotting fees, fixtures and related freight and labor expenses
related to the acquisition of new retail distribution which shall, for the
avoidance of doubt, include both new retail doors or locations with new or
existing retailers as well as additional distribution related to incremental
space within existing retail doors or locations) and paid in cash, to the extent
(i) not funded with the proceeds of the incurrence of Indebtedness (other than
Revolving Loans), the issuance of Equity Interests (including capital
contributions), or third party reimbursements and (ii) added back to net income
in the determination of Adjusted Consolidated EBITDA

   $____________

22.    at the Borrowers’ option, the sum of, without duplication, (i) capital
expenditures and Investments (other than Investments in cash or Cash Equivalents
and Investments in a Borrower or a Guarantor and, for the avoidance of doubt,
including Permitted Acquisitions) made during the Fiscal Year immediately
succeeding the applicable Excess Cash Flow period and prior to the required date
of payment of the Excess Cash Flow prepayment for such Excess Cash Flow period
(such date of payment, the “Applicable ECF Payment Date”) that is not financed
with long-term Indebtedness (other than Revolving Loans), equity proceeds or
using the Available Amount) and (ii) any capital expenditures and Investments
(other than Investments in cash or Cash Equivalents and Investments in a
Borrower or a Guarantor and, for the avoidance of doubt, including Permitted
Acquisitions) budgeted (pursuant to the annual financial projection required to
be delivered pursuant to Section 6.01(c)) to be made during the first six months
of the Fiscal Year immediately succeeding the applicable Excess Cash Flow period
that is not (or, in the case of any such capital expenditure or Investment
budgeted to be made after the Applicable ECF Payment Date, is not expected to
be) financed with long-term Indebtedness (other than Revolving Loans), equity
proceeds or using the Available Amount) (collectively, the “Contract
Consideration Deduction”)

   $____________

B.     Total deductions from Adjusted Consolidated EBITDA (sum of A2 through A22
above)

   $____________

C.     Any cash gains from non-recurring or unusual items, other than any
business interruption proceeds

   $____________

D.     Any decreases in working capital of Holdings and its Subsidiaries for the
applicable Fiscal Year (as calculated pursuant to Schedule II below)

   $____________

 

6

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

E.     Excess Cash Flow (A1 minus B plus C plus D above)

   $____________

F.      Applicable ECF Percentage

   [50%][25%][0%]2

G.     Gross Excess Cash Flow Prepayment Amount (result of E multiplied by F
above)

   $____________

H.     The aggregate amount of voluntary prepayments of the Term Loan (and in
the case of any Discounted Voluntary Prepayments solely to the extent of the
actual Cash amount paid in such Discounted Voluntary Prepayment) and, to the
extent accompanied by a corresponding permanent reduction in the Revolving
Credit Commitment, the Revolving Credit Facility, in each case, made (i) during
such Fiscal Year (other than any voluntary prepayments made during the first 120
days of such Fiscal Year to the extent such voluntary prepayments were credited
in the calculation of the Excess Cash Flow prepayment for the prior Fiscal Year)
or (ii) within 120 days after the end of the Fiscal Year for which such Excess
Cash Flow is being calculated that are applied in the manner set forth in
Section 2.06(b)(v) of the Credit Agreement, in each case, to the extent not
financed with equity proceeds or the proceeds from the incurrence of Long-term
Indebtedness (other than Revolving Loans)

   $____________

I.       Net Excess Cash Flow Prepayment Amount (G minus H above)

 

For the avoidance of doubt, for purposes of calculating Excess Cash Flow for any
Fiscal Year, for each Permitted Acquisition or other Investment constituting an
Acquisition permitted to be made under the Credit Agreement consummated during
such Fiscal Year, the Adjusted Consolidated EBITDA of a target of any such
Permitted Acquisition or Investment shall be included in such calculation only
from and after the date of the consummation of such Permitted Acquisition and/or
Investment and (y) for the purposes of calculating Net Working Capital, the (A)
total assets of a target of such Permitted Acquisition (other than cash and Cash
Equivalents), as calculated as at the date of consummation of the applicable
Permitted Acquisition, which may properly be classified as current assets on a
consolidated balance sheet of Holdings and its Subsidiaries in accordance with
GAAP (assuming, for the purpose of this clause (A), that such Permitted
Acquisition has been consummated) and (B) the total liabilities of Holdings and
its Subsidiaries, as calculated as at the date of consummation of the applicable
Permitted Acquisition, which may properly be classified as current liabilities
on a consolidated balance sheet of Holdings and its Subsidiaries in accordance
with GAAP (assuming, for the purpose of this clause (B), that such Permitted
Acquisition has been consummated), shall, in the case of both immediately
preceding clauses (A) and (B), be calculated as the difference between the Net
Working Capital at the end of the applicable Fiscal Year from the date of
consummation of the Permitted Acquisition.

   $____________

 

2  Choose applicable percentage pursuant to Section 2.06(b)(i) of the Credit
Agreement.

 

7

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

Schedule II

to Excess Cash Flow Certificate

Decrease (increase) in Working Capital, for the purposes of the calculation of
Excess Cash Flow, means the following:

 

   Beg. of Period    End of Period Consolidated current assets:    $____________
   $____________ Less (to the extent included in current assets):      

Cash

   ____________    _____________

Cash Equivalents

   ____________    _____________

Deferred Tax Assets

   ____________    _____________ Adjusted current assets    $____________   
$____________ Consolidated current liabilities:    $____________   
$____________ Less (to the extent included in current liabilities):      

Revolving Loans

   ____________    _____________

Current portion of Indebtedness and accrued interest thereon

   ____________    _____________

Deferred Tax Liabilities

   ____________    _____________

Current liabilities consisting of deferred revenue

   ____________    _____________ Adjusted current liabilities    $____________
   $____________ Working Capital (adjusted current assets minus adjusted current
liabilities)    $____________    $____________ Decrease (Increase) in Working
Capital (beginning of period minus end of period Working Capital)      
$____________

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

Schedule III

to Excess Cash Flow Certificate

Calculation of Unfinanced Capital Expenditures

 

Expenditures capitalized during the Fiscal Year by Holdings and its Subsidiaries
that, in conformity with GAAP, are or are required to be included as additions
to property, plant or equipment or other long-term assets    $____________ Less,
in each instance to the extent included above and without duplication:   
____________

(i)       expenditures made in connection with the replacement, substitution,
restoration or repair of assets to the extent financed with (x) insurance
proceeds paid on account of the loss of or damage to the assets being replaced,
restored or repaired or (y) awards of compensation arising from the taking by
eminent domain or condemnation of the assets being replaced

   ____________

(ii)      the purchase price of equipment that is purchased substantially
concurrently with the trade-in of existing equipment to the extent that the
gross amount of such purchase price is reduced by the credit granted by the
seller of such equipment for the equipment being traded in at such time

   ____________

(iii)     the purchase of plant, property or equipment to the extent financed
with the proceeds of Dispositions that are not required to be applied to prepay
Term Loans pursuant to Section 2.06(b)(ii) of the Credit Agreement

   ____________

(iv)     expenditures that are accounted for as capital expenditures by
Holdings, the Borrowers or any Subsidiary and that actually are paid for or
reimbursed by a Person other than Holdings, the Borrowers or any Subsidiary

   ____________

(v)      expenditures that are paid with proceeds of Equity Interests (including
capital contributions) or the Available Amount

   ____________

(vi)     the book value of any asset owned by the Borrowers or any Subsidiary
prior to or during such period to the extent that such book value is included as
a capital expenditure during such period as a result of such Person reusing or
beginning to reuse such asset during such period without a corresponding
expenditure actually having been made in such period; provided that (x) any
expenditure necessary in order to permit such asset to be reused shall be
included as a Consolidated Capital Expenditure during the period in which such
expenditure actually is made and (y) such book value shall have been included in
Consolidated Capital Expenditures when such asset was originally acquired

   ____________

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

(vii)    any capitalized interest expense reflected as additions to property,
plant or equipment in the consolidated balance sheet of Holdings, the Borrowers
and their Subsidiaries

   ____________

(viii)  any non-cash compensation or other non-cash costs reflected as additions
to property, plant or equipment in the consolidated balance sheet of Holdings,
the Borrowers and their Subsidiaries

   ____________ Equals: Consolidated Capital Expenditures    $___________

Less:    Consolidated Capital Expenditures financed during the Fiscal Year under
Capital Leases or other Indebtedness (excluding drawings under the Revolving
Credit Facility)

   ____________

Consolidated Capital Expenditures deducted in the calculation of the Excess Cash
Flow prepayment for any prior Fiscal Year (i.e. included in the Contract
Consideration Deduction for a prior Fiscal Year)

   Equals: Unfinanced Capital Expenditures    $___________

 

11

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Exhibit F

Form of Assignment and Assumption

Dated                     ,             

Reference is made to the Credit Agreement dated as of December 23, 2016 (as
extended, renewed, modified, supplemented, amended or restated from time to
time, the “Credit Agreement”), by and among e.l.f. Cosmetics, Inc., a Delaware
corporation, JA 139 Fulton Street Corp., a New York corporation, JA 741 Retail
Corp., a New York corporation, JA Cosmetics Retail, Inc., a New York
corporation, J.A. RF, LLC, a Delaware limited liability company, J.A. Cherry
Hill, LLC, a Delaware limited liability company, and each Domestic Subsidiary of
e.l.f. Beauty, Inc., a Delaware corporation (“Holdings”), who hereafter becomes
a “Borrower” under the Credit Agreement pursuant to a Joinder Agreement, are
referred to herein individually as a “Borrower” and collectively as the
“Borrowers”), Holdings, the other Guarantors party thereto, certain Lenders
which are signatories thereto, and Bank of Montreal, as Administrative Agent.
Terms defined in the Credit Agreement are used herein with the same meaning,
except terms otherwise defined herein.

                                                                 
                                                                     (the
“Assignor”) and                                         (the “Assignee”) agree
as follows:

1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, the amount and specified
percentage interest shown on Annex I hereto of the Assignor’s rights and
obligations under the Credit Agreement as of the Effective Date (as defined
herein), including, without limitation, the Assignor’s Commitments as in effect
on the Effective Date and the Loans, if any, owing to the Assignor on the
Effective Date and the Assignor’s Revolver Percentage of any outstanding L/C
Obligations.

2. The Assignor (i) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim, lien, or encumbrance of any kind;
(ii) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any Subsidiary or the performance or
observance by the Borrower or any Subsidiary of any of their respective
obligations under the Credit Agreement or any other instrument or document
furnished pursuant thereto.

3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered to the Lenders pursuant to Section 6.01(a) and (b) thereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption;
(ii) agrees that it will, independently and without reliance upon the
Administrative Agent, the Assignor or any other Lender and based on such
documents and information as it

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

shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) appoints and
authorizes the Administrative Agent to take such action as Administrative Agent
on its behalf and to exercise such powers under the Credit Agreement and the
other Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto;
(iv) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; and (v) specifies as its lending office (and
address for notices) the offices set forth on its Administrative Questionnaire.

[4. The Assignee further:4

(a) represents and warrants to Assignor and Agent that (i) it is Sponsor or an
Affiliate of Sponsor (an “Affiliated Lender” and together with Sponsor and all
other Affiliates of Sponsor that are Lenders under the Credit Agreement,
collectively, the “Affiliated Lenders”) and (ii) after giving effect to such
assignment, (A) the aggregate principal amount of the Term Loan held by the
Affiliated Lenders (other than Holdings and its Subsidiaries and Debt Fund
Affiliates) does not exceed twenty-five percent (25%) of the aggregate principal
amount of all Term Loans and incremental term loans then outstanding under the
Credit Agreement and (B) the aggregate number of Affiliated Lenders (other than
Debt Fund Affiliates) holding the Term Loans and incremental term loans does not
constitute fifty percent (50%) or more of the aggregate number of all Lenders
holding a portion of the Term Loans and incremental term loans at the time of
such assignment;

(b) acknowledges and agrees that it shall have no right to (i) attend (including
by telephone or electronic means) any meeting or discussions (or portion
thereof) among the Administrative Agent or any Lender to which representatives
of the Sponsor, the Borrowers or the Guarantors are not invited or (B) receive
any information or material prepared by the Administrative Agent or any Lender
or any communication by or among the Administrative Agent and/or one or more
Lenders, except to the extent such information or materials have been made
available to the Sponsor, the Borrowers or the Guarantors or any of their
representatives; and

(c) acknowledges and agrees that for purposes of the Credit Agreement and for
purposes of determining whether the Required Lenders have (i) consented (or not
consented) to any amendment, modification, waiver, consent or other action with
respect to any of the terms of any Loan Document or any departure by any Loan
Party therefrom, (ii) otherwise acted on any matter related to any Loan Document
or (iii) directed or required the Administrative Agent or any Lender to
undertake any action (or refrain from taking any action) with respect to or
under any Loan Document, all or any portion of the Term Loan held by an
Affiliated Lender shall be deemed, to the extent not adversely affecting such
Affiliated Lender (other than Holdings and its Subsidiaries) disproportionately
as compared to other

 

 

4  Include only if Assignment is to Sponsor or any of its Affiliates (other than
Debt Fund Affiliates) pursuant to Section 10.06(g) of the Credit Agreement.

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

Lenders, to be not outstanding; provided, that no (i) amendment, modification,
waiver or other action with respect to any Loan Document shall deprive any
Affiliated Lender of its pro rata share of any payments to which such Affiliated
Lender in entitled under the Loan Documents or any vote which affects such
Affiliated Lender disproportionately without such Affiliated Lender providing
its consent; (x) solely with respect to any amendment, modification, waiver,
consent or other action in which fees are paid or otherwise received by
consenting Lenders and solely in connection with determining to which Lenders
such fees shall be paid, such Affiliated Lender shall be treated as having
consented thereto, (y) such Affiliated Lender agrees to execute and deliver to
the Administrative Agent any instrument reasonably requested by the
Administrative Agent to evidence the voting of its interest as a Lender in
accordance with the provisions of Section 10.06(g) of the Credit Agreement;
provided that if such Affiliated Lender fails to promptly execute such
instrument such failure shall in no way prejudice any of the Administrative
Agent’s rights under Section 10.06(g)(B) of the Credit Agreement and (z) the
Administrative Agent is hereby appointed (such appointment being coupled with an
interest) by such Affiliated Lender as such Affiliated Lender’s attorney in
fact, with full authority in the place and stead of such Affiliated Lender and
in the name of such Affiliated Lender, from time to time in the Administrative
Agent’s reasonable discretion to take any action and to execute and instrument
that the Administrative Agent may deem reasonably necessary to carry out the
provisions of Section 10.06(g) of the Credit Agreement; and (ii) such Affiliated
Lender in its capacity as a Lender shall retain the right to consent to, in
addition to any other action which would affect such Affiliated Lender in a
disproportionately adverse manner than the effect of such action on other
Lenders that are not Affiliated Lenders, an extension of the maturity date of
its Term Loans, reduction in the principal amount of its Term Loans, reduction
in the interest rate thereof or postponement of the scheduled due date
therefor.]

5. As consideration for the assignment and sale contemplated in Annex I hereof,
the Assignee shall pay to the Assignor on the Effective Date in Federal funds
the amount agreed upon between them. It is understood that commitment and/or
letter of credit fees accrued to the Effective Date with respect to the interest
assigned hereby are for the account of the Assignor and such fees accruing from
and including the Effective Date are for the account of the Assignee. Each of
the Assignor and the Assignee hereby agrees that if it receives any amount under
the Credit Agreement which is for the account of the other party hereto, it
shall receive the same for the account of such other party to the extent of such
other party’s interest therein and shall promptly pay the same to such other
party.

6. The effective date for this Assignment and Assumption shall be
                    (the “Effective Date”). Following the execution of this
Assignment and Assumption, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent and, if required, the
Borrower.

7. Upon such acceptance and recording, as of the Effective Date, (i) the
Assignee shall be a party to the Credit Agreement and, to the extent provided in
this Assignment and Assumption, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Assumption, relinquish its rights and be released from its
obligations under the Credit Agreement.

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

8. Upon such acceptance and recording, from and after the Effective Date, the
Administrative Agent shall make all payments under the Credit Agreement in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest and commitment fees with respect thereto) to the
Assignee. The Assignor and Assignee shall make all appropriate adjustments in
payments under the Credit Agreement for periods prior to the Effective Date
directly between themselves.

9. This Assignment and Assumption shall be governed by, and construed in
accordance with, the laws of the State of New York.

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

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

        [Assignor Lender]         By  

 

          Name                                     
                                                                         
Title                                     
                                                                         
[Assignee Lender]         By  

 

          Name                                     
                                                                         
Title                                     
                                                                  [Accepted and
consented this             day of                      E.L.F. COSMETICS, INC., a
Delaware corporation, as Borrower Agent         By  

 

          Name                                     
                                                                         
Title]5          Accepted and consented to by the Administrative Agent [and L/C
Issuer]6 this             day of                      BANK OF MONTREAL, as
Administrative Agent [and L/C Issuer]         By  

 

          Name                                     
                                                                         
Title                                     
                                                                         

 

 

5  Include only if required pursuant to Section 10.06 of the Credit Agreement.

6  Include only if required pursuant to Section 10.06 of the Credit Agreement.

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

Annex I

to Assignment and Assumption

The assignee hereby purchases and assumes from the assignor the following
interest in and to all of the Assignor’s rights and obligations under the Credit
Agreement as of the effective date.

 

Facility Assigned    Aggregate
Commitment/Loans
For All Lenders      Amount of
Commitment/Loans
Assigned      Percentage Assigned
of
Commitment/Loans  

Revolving Credit7

   $                            $                                           % 

Term Loan

   $                            $                                           % 

 

 

7  May not be assigned to Affiliated Lenders

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

 

 

EXHIBIT G

CLOSING CHECKLIST

CREDIT AGREEMENT

Dated as of December 23, 2016

among

E.L.F. COSMETICS, INC., JA 139 FULTON STREET CORP., JA 741 RETAIL CORP.,

JA COSMETICS RETAIL, INC., J.A. RF, LLC, J.A. CHERRY HILL, LLC,

and each other Person that becomes a Borrower hereunder by execution of a
Joinder Agreement,

as the Borrowers,

THE OTHER PERSONS PARTY HERETO THAT ARE DESIGNATED AS LOAN

PARTIES,

as Guarantors,

CERTAIN FINANCIAL INSTITUTIONS,

as Lenders,

BANK OF MONTREAL,

as Administrative Agent, Swing Line Lender and an L/C Issuer

and

BANK OF MONTREAL, ACTING UNDER ITS TRADE NAME

BMO CAPITAL MARKETS,

as Arranger and Bookrunner

 

 

 

Capitalized terms used herein and otherwise not defined

have the meanings ascribed to them in the Credit Agreement.

Items in bold indicate items to be prepared or obtained

by the Borrowers or the Borrowers’ counsel

 

1

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

PARTIES TO THE TRANSACTION:

 

ADMINISTRATIVE AGENT:   

BANK OF MONTREAL

Three Times Square

New York, NY 10036

 

###

###

 

115 S. LaSalle St, 25th Fl.

Chicago, IL 60603

 

###

###

 

###

###

 

###

###

ADMINISTRATIVE AGENT’S COUNSEL:   

KATTEN MUCHIN ROSENMAN LLP

525 West Monroe Street

Chicago, Illinois 60661

 

###

Phone: ###

Email: ###

 

###

Phone: ###

Email: ###

 

###

Phone: ###

Email: ###

 

###

Phone: ###

Email: ###

 

2

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

BORROWERS:   

E.L.F. COSMETICS, INC.

JA 139 FULTON STREET CORP.

JA 741 RETAIL CORP.

JA COSMETICS RETAIL, INC.

J.A. RF, LLC

J.A. CHERRY HILL, LLC

10 West 33rd Street, Suite 802

New York, NY 10001

 

###

Email: ###

SPONSOR:   

TPG GROWTH II ADVISORS

345 California Street, Suite 3300

San Francisco, California 94104

 

###

Email: ###

 

###

Email: ###

 

3

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

BORROWERS’ AND SPONSOR’S COUNSEL:   

KIRKLAND & ELLIS LLP

333 South Hope Street

Los Angeles, California 90071

 

###

Phone: ###

Email: ###

 

###

Phone: ###

Email: ###

 

###

Phone: ###

Email: ###

 

4

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

PARTIES TO THE TRANSACTION:

 

ADMINISTRATIVE AGENT    BMO, as Administrative Agent BMO    Bank of Montreal
BORROWERS    Elf Cosmetics, JA 139 Fulton, JA 741 Retail, JA Cosmetics Retail,
J.A. RF and J.A. Cherry Hill ELF CANADA    9298-4442 Québec Inc., a corporation
organized under the laws of Quebec, Canada ELF COSMETICS    e.l.f. Cosmetics,
Inc., a Delaware corporation (f/k/a J.A. Cosmetics US, Inc.) GUARANTORS   
Holdings JA 139 FULTON    JA 139 FULTON STREET CORP., a New York corporation JA
741 RETAIL    JA 741 RETAIL CORP., a New York corporation J.A. CHERRY HILL   
J.A. Cherry Hill, LLC, a Delaware limited liability company J.A. CHINA HOLDINGS
   J.A. China Holdings LLC, a Delaware limited liability company JA COSMETICS
RETAIL    JA COSMETICS RETAIL, INC., a New York corporation J.A. RF    J.A. RF,
LLC, a Delaware limited liability company J.A. SHANGHAI    J.A. Cosmetics
Trading (Shanghai) Co., Ltd., a corporation existing under the laws of China
HOLDINGS    e.l.f. Beauty, Inc., a Delaware corporation (f/k/a J.A. Cosmetics
Holdings, Inc.) LENDERS    BMO and each of the Lenders party to the Credit
Agreement from time to time LOAN PARTIES    Borrowers, Holdings and any other
Person who becomes a Borrower by Joinder to the Credit Agreement and each
Guarantor SPONSOR    TPG Growth II Advisors and its Controlled Investment
Affiliates SWING LINE LENDER    BMO

 

I. PRIMARY LOAN DOCUMENTS

 

  1. Credit Agreement by and among Administrative Agent, Lenders, Borrowers and
the other Loan Parties

 

  (a) Schedules to Credit Agreement

 

Schedule 1.01

   —    Existing Letters of Credit

Schedule 2.01

   —    Commitments and Applicable Percentages

Schedule 5.05

   —    Litigation

 

5

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

Schedule 5.07(b)(1)

   —    Owned Real Estate

Schedule 5.07(b)(2)

   —    Leased Real Estate

Schedule 5.09

   —    Insurance

Schedule 5.11(d)

   —    Pension Plans

Schedule 5.11(e)

   —    Foreign Plans

Schedule 5.12

   —    Subsidiaries; Capitalization; Other Equity Investments

Schedule 5.16

   —    Labor Matters

Schedule 7.01

   —    Existing Indebtedness

Schedule 7.02

   —    Existing Liens

Schedule 7.03

   —    Existing Investments

Schedule 7.08

   —    Affiliate Transactions

Schedule 10.02

   —   

Administrative Agent’s Office (and Account)

 

  (b) Exhibits to Credit Agreement

 

Exhibit A    Form of Committed Loan Notice Exhibit B    Form of Swing Line Loan
Notice Exhibit C-1    Form of Revolving Loan Note Exhibit C-2    Form of Term
Loan Note Exhibit D    Form of Compliance Certificate Exhibit E    Form of
Excess Cash Flow Certificate Exhibit F    Form of Assignment and Assumption
Exhibit G    Closing Checklist Exhibit H    Form of Joinder to Credit Agreement

 

  2. Revolving Notes in the aggregate principal amount of up to $35,000,000,
payable to the following Lenders:

 

(a)

  

BMO

   $ 11,375,000.00   

(b)

  

Stifel Bank & Trust

   $ 3,500,000.00   

 

  3. Term Notes in the aggregate principal amount of $165,000,000, payable to
the following Lenders:

 

(a)

  

BMO

   $ 53,625,000.00   

(b)

  

Stifel Bank & Trust

   $ 16,500,000.00   

 

II. PRIMARY COLLATERAL DOCUMENTS

 

  4. Pledge and Security Agreement by and among Borrowers, the other Loan
Parties and Administrative Agent, for the benefit of the Lender Parties

 

  (a) Schedules to Pledge and Security Agreement

 

6

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

(i)    Schedule I    —    Legal Names; Organizational Identification Numbers;
States or Jurisdictions of Organization (ii)    Schedule II    —    United
States Registered Copyrights (iii)    Schedule III    —    U.S. Federal Patents
and Applications (iv)    Schedule IV    —    U.S. Federal Registered Trademarks
and Applications (v)    Schedule V    —    Location of Grantors (vi)    Schedule
VI    —    Deposit Accounts, Securities Accounts and Commodities Accounts (vii)
   Schedule VII    —    UCC Financing Statements (viii)    Schedule VIII    —   
Commercial Tort Claims (ix)    Schedule IX    —    Pledged Debt (x)    Schedule
X    —    Pledged Shares

 

  (b) Exhibits to Pledge and Security Agreement

 

(i)      Exhibit A       —    Pledge Amendment

(ii)

     Exhibit B       —    Grant of a Security Interest –
[Trademarks][Copyrights][Patents]

(iii)

     Exhibit C       —    Form of Security Agreement Supplement

 

  (c) Stock Certificate No. C-2, representing 100% of the issued and outstanding
stock of ELF Cosmetics

 

  (i) Irrevocable Proxy executed by Holdings with respect to its equity
interests in ELF Cosmetics

 

  (ii) Stock Power, undated and executed in blank

 

  (d) Irrevocable Proxy executed by ELF Cosmetics with respect to its equity
interests in J.A. China Holdings

 

  (e) Irrevocable Proxy executed by ELF Cosmetics Retail with respect to its
equity interests in J.A. Cherry Hill

 

  (f) Irrevocable Proxy executed by ELF Cosmetics Retail with respect to its
equity interests in J.A. RF

 

  (g) Stock Certificate No. 1, representing 100% of the issued and outstanding
stock of JA Cosmetics Retail

 

  (i) Irrevocable Proxy executed by ELF Cosmetics with respect to its equity
interests in JA Cosmetics Retail

 

  (ii) Stock Power, undated and executed in blank

 

7

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

  (h) Stock Certificate No. 1, representing 100% of the issued and outstanding
stock of JA 741 Retail

 

  (i) Irrevocable Proxy executed by JA Cosmetics Retail with respect to its
equity interests in JA 741 Retail

 

  (ii) Stock Power, undated and executed in blank

 

  (i) Stock Certificate No. 1, representing 100% of the issued and outstanding
stock of JA 139 Fulton

 

  (i) Irrevocable Proxy executed by JA Cosmetics Retail with respect to its
equity interests in JA 139 Fulton

 

  (ii) Stock Power, undated and executed in blank

 

  (j) Stock Certificate No. C-4, representing 65% of the issued and outstanding
capital stock of ELF Canada

 

  (i) Irrevocable Proxy executed by ELF Cosmetics with respect to its equity
interests in ELF Canada

 

  (ii) Stock Power, undated and executed in blank

 

  5. Trademark Security Agreement by ELF Cosmetics

 

Schedule 1

   -    Description of Trademarks and Trademark Applications

 

  6. Patent Security Agreement by ELF Cosmetics

 

Schedule 1

   -    Description of Patents and Patent Applications

 

III. ANCILLARY DOCUMENTS

 

  7. Initial Notice of Borrowing

 

  8. Funds Flow Memorandum

 

  9. Officer’s Closing Certificate

 

  10. Solvency Certificate

 

  11. Fee Letter executed by Borrowers and acknowledged by Administrative Agent

 

  12. Insurance Certificates

 

  (a) Property Insurance Certificates naming Administrative Agent, for the
benefit of the Lender Parties, as mortgagee and lender’s loss payee

 

8

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

  (b) Liability Insurance Certificates naming Administrative Agent, for the
benefit of the Lender Parties, as additional insured

 

IV. ORGANIZATIONAL DOCUMENTS

 

  13. OMNIBUS SECRETARY’S CERTIFICATE OF ELF COSMETICS, HOLDINGS, J.A. RF, J.A.
CHERRY HILL, JA 139 FULTON, JA 741 RETAIL AND JA COSMETICS RETAIL

 

Exhibit A    -    Certificates of Incorporation/Formation certified by the
applicable Secretaries of State Exhibit B    -    Bylaws/Operating Agreements,
as amended through the Closing Date Exhibit C    -    Good Standing Certificates
issued by the applicable Secretaries of State Exhibit D    -    Resolutions
Exhibit E    -    Incumbency

 

V. DUE DILIGENCE

 

  14. Perfection Certificate

 

  (a) Schedules to Perfection Certificate

 

  15. UCC, State and Federal Tax Lien and Judgment Searches for the entities and
in the locations listed on Exhibit A attached hereto

 

  16. Intellectual Property Search Results for the entities listed on Exhibit A
attached hereto

 

  17. Financing Statements listed on Exhibit B hereto

 

  18. W-9 for Holdings and each of the Loan Parties

 

  19. KYC Information

 

VI. DEBT REPAYMENT AND TERMINATION DOCUMENTS

 

  20. Payoff Letter executed and delivered by BMO

 

  21. UCC Terminations and Intellectual Property Security Agreement Terminations
listed on Exhibit C attached hereto

 

  22. Deposit Account Control Agreement Terminations executed among the
applicable Loan Parties, Administrative Agent and US Bank

 

VII. LEGAL OPINIONS

 

9

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  23. Opinion of Counsel to the Loan Parties (Kirkland & Ellis) in connection
with the Loan Documents, addressed to Administrative Agent and the other Lender
Parties

 

VIII. POST-CLOSING OBLIGATIONS

 

  24. Post-Closing Lien Search Reports

 

  25. Insurance Endorsements

 

  26. Deposit Account Control Agreements executed among the applicable Loan
Parties, Administrative Agent and the applicable financial institutions

 

  27. Landlord Waiver and Collateral Access Agreements

 

10

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EXHIBIT A

 

Debtor    Jurisdiction JA RF, LLC   

DE SOS

New York County, NY

JA Cherry Hill, LLC   

DE SOS

New York County, NY

e.l.f. Beauty, Inc.   

DE SOS

SOS NY

New York County, NY

SOS CA

Alameda County, CA

e.l.f. Cosmetics, Inc.   

DE SOS

SOS NY

New York County, NY

SOS CA

Alameda County, CA

JA Cosmetics Retail, Inc.   

NY SOS

New York County, NY

JA 741 Retail Corp.   

NY SOS

New York County, NY

JA 139 Fulton Street Corp.   

NY SOS

New York County, NY

J.A. China Holdings, LLC    DE SOS J.A. Cosmetics Holdings, Inc.   

DE SOS

New York County, NY

J.A. Cosmetics US, Inc.   

DE SOS

New York County, NY

 

11

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

EXHIBIT B

FINANCING STATEMENTS

 

Name    Jurisdiction      Type of
Filing    Filing
Date    Filing No.    Post-filing
Search e.l.f. Beauty, Inc.    DE SOS          Blanket                    e.l.f.
Cosmetics, Inc.    DE SOS      Blanket                JA COSMETICS RETAIL, INC.
   NY SOS      Blanket                JA 741 RETAIL CORP.    NY SOS      Blanket
               JA 139 FULTON STREET CORP.    NY SOS      Blanket               
JA RF, LLC    DE SOS      Blanket                JA Cherry Hill, LLC    DE SOS
     Blanket               

 

12

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

EXHIBIT C

LIEN RELEASES

 

Debtor Name   Secured Party       Jurisdiction      

Orig.

Filing

Date

 

Orig. Filing

No.

   Termination
Filing No./Date e.l.f. Beauty, Inc.   Bank of Montreal, as Administrative Agent
  DE SOS   1/31/14   20140403774      e.l.f. Cosmetics, Inc.   Bank of Montreal,
as Administrative Agent   DE SOS   1/31/14   20140403808      JA Cosmetics
Retail, Inc.   Bank of Montreal, as Administrative Agent   NY SOS   1/31/14  
    201401315109421          JA 741 Retail Corp.   Bank of Montreal, as
Administrative Agent   NY SOS       1/31/14       201401315109394      JA 139
Fulton Street Corp.   Bank of Montreal, as Administrative Agent   NY SOS  
1/31/14   201401315109382      J.A. RF, LLC   Bank of Montreal, as
Administrative Agent  

Delaware

SOS

  8/1/14   20143081924      JA Cherry Hill, LLC   Bank of Montreal, as
Administrative Agent  

Delaware

SOS

  8/1/14   20143081932     

 

13

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INTELLECTUAL PROPERTY RELEASES

 

Debtor Name   Secured Party   Filing
Office  

    Orig.    

    Filing    
Date

 

    Orig. Filing    

No.

 

Termination

Filing No./ Date

E.L.F. Cosmetics, Inc.   Bank of Montreal, as Administrative Agent  
    USPTO           1/31/14      

    Reel/Frame    

5205/0188

    E.L.F. Cosmetics, Inc.   Bank of Montreal, as Administrative Agent   USPTO  
1/31/14  

Reel/Frame

032145/0174

    E.L.F. Cosmetics, Inc.   Bank of Montreal, as Administrative Agent   USPTO  
6/7/16   Reel/Frame 038831, 0962     E.L.F. Cosmetics, Inc.   Bank of Montreal,
as Administrative Agent   USPTO   6/7/16  

Reel/Frame

5808, 0105

   

 

14

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

Exhibit H

Form of Joinder to Credit Agreement

                    ,         

This Joinder to Credit Agreement (this “Agreement”) dated as of this [    ] day
of [                    ], [            ] is made by [                    , a
                     and                     , a                      (each a
“New Borrower” and collectively, the “New Borrowers”)] and
[                    , a                      and                      a
                     (each a “New Loan Party” and collectively, the “New Loan
Parties”)] to and in favor of Bank of Montreal, in its capacity as
Administrative Agent for the Lenders and L/C Issuer parties under the Credit
Agreement referred to below.

Reference hereby is made to that certain Credit Agreement, dated as of
December 23, 2016 (as extended, renewed, modified, supplemented, amended or
restated from time to time, the “Credit Agreement”) by and among e.l.f.
Cosmetics, Inc., a Delaware corporation (“elf Cosmetics”), JA 139 Fulton Street
Corp., a New York corporation (“JA 139 Fulton”), JA 741 Retail Corp., a New York
corporation (“JA 741 Retail”), JA Cosmetics Retail, Inc., a New York corporation
(“JA Cosmetics Retail”), J.A. RF, LLC, a Delaware limited liability company (“JA
RF”), J.A. Cherry Hill, LLC, a Delaware limited liability company (“JA Cherry
Hill”; elf Cosmetics, JA 139 Fulton, JA 741 Retail, JA Cosmetics Retail, JA RF,
JA Cherry Hill may be referred to individually, as a “Borrower” and collectively
herein, as “Borrowers”), the Guarantors party thereto, certain Lenders which are
signatories thereto, and Bank of Montreal, as Administrative Agent for the
Lenders and L/C Issuer. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings ascribed to such terms in the Credit
Agreement.

[Each New Borrower hereby (i) acknowledges, agrees and elects to be a “Borrower”
and a “Loan Party” for all purposes of and under the Credit Agreement, each of
the Notes referenced therein and each of the other Loan Documents and delivered
in connection therewith, effective from the date hereof and (ii) appoints elf
Cosmetics, to act on its behalf as the “Borrower Agent” for each New Borrower,
under and in accordance with the terms and conditions of the Credit Agreement.
All references in the Credit Agreement and the other Loan Documents to the terms
“Borrower” or “Borrowers” and “Loan Party” or “Loan Parties” shall be deemed to
include each New Borrower. By its execution of this Agreement, each New Borrower
hereby confirms that the representations and warranties contained in Article V
of the Credit Agreement are true and correct in all material respects (except
that such materiality qualifier shall not be applicable to any representations
or warranties that already are qualified or modified as to “materiality” or
“Material Adverse Effect” in the text thereof, which representations and
warranties shall be true and correct in all respects subject to such
qualification) as to such New Borrower as of the effective date of this
Agreement, except to the extent that any such representation or warranty
expressly relates solely to an earlier date (in which case such representation
or warranty shall be true and correct in all material respects (except that such
materiality qualifier shall not be applicable to any representations or
warranties that already are qualified or modified as to “materiality” or
“Material Adverse Effect” in the text thereof, which representations and
warranties shall be true and correct in all respects subject to such
qualification) on and as of such earlier date). Without limiting the generality
of the foregoing, each New Borrower hereby agrees to perform all the obligations
of a Borrower and a Loan Party under, and to be bound in all

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

respects by the terms of, the Credit Agreement, each of the Notes and the Fee
Letter to the same extent and with the same force and effect as if it were a
signatory party thereto as a Borrower and a Loan Party and hereby acknowledges
and agrees that it is jointly and severally liable for all of the now existing
and hereafter arising Secured Obligations.]

[Each New Loan Party hereby (i) acknowledges, agrees and elects to be a “Loan
Party” and a “Guarantor” for all purposes of and under the Credit Agreement and
each of the other Loan Documents and delivered in connection therewith,
effective from the date hereof. All references in the Credit Agreement and the
other Loan Documents to the terms “Loan Party”, “Loan Parties”, “Guarantor” or
“Guarantors” shall be deemed to include each New Loan Party. By its execution of
this Agreement, each New Loan Party hereby confirms that the representations and
warranties contained in Article V of the Credit Agreement are true and correct
in all material respects (except that such materiality qualifier shall not be
applicable to any representations or warranties that already are qualified or
modified as to “materiality” or “Material Adverse Effect” in the text thereof,
which representations and warranties shall be true and correct in all respects
subject to such qualification) as to such New Loan Party as of the effective
date of this Agreement, except to the extent that any such representation or
warranty expressly relates solely to an earlier date (in which case such
representation or warranty shall be true and correct in all material respects
(except that such materiality qualifier shall not be applicable to any
representations or warranties that already are qualified or modified as to
“materiality” or “Material Adverse Effect” in the text thereof, which
representations and warranties shall be true and correct in all respects subject
to such qualification) on and as of such earlier date). Without limiting the
generality of the foregoing, each New Loan Party hereby agrees to perform all
the obligations of a Loan Party and a Guarantor under, and to be bound in all
respects by the terms of, the Credit Agreement to the same extent and with the
same force and effect as if it were a signatory party thereto as a Loan Party
and a Guarantor.]

Except as specifically modified hereby, all of the terms and conditions of the
Credit Agreement and other Loan Documents shall remain unchanged and in full
force and effect.

No reference to this Agreement need be made in the Credit Agreement or in any
other Loan Document or other document or instrument making reference to the
same, any reference to Loan Documents in any of such to be deemed a reference to
the Credit Agreement, or other Loan Documents, as applicable, as modified
hereby.

Each of the undersigned acknowledges that this Agreement shall be effective upon
execution by each New Loan Party and the Administrative Agent. This Agreement
shall be construed in accordance with and governed by the internal laws of the
State of New York.

This Agreement may be executed in any number of counterparts and by different
parties in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart. Delivery of an executed
signature page of this Agreement by facsimile transmission or electronic
transmission shall be as effective as delivery of a manually executed
counterpart hereof.

[Remainder of Page Intentionally Left Blank; Signature Page to Follow]

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

Very truly yours, [NEW BORROWER(S): [                                    
                                                 ] By:  

 

Name:  

 

Title:                                         
                                                  ] Very truly yours, [NEW LOAN
PARTY: [                                    
                                                 ] By:  

 

Name:  

 

Title:                                         
                                                  ]

Joinder to Credit Agreement

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

BANK OF MONTREAL,

as Administrative Agent

By:

 

 

Name:

 

 

Title:

 

 

Joinder to Credit Agreement

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

Acknowledged and accepted as of thedate first written above:

[E.L.F. COSMETICS, INC.]

 

By:

 

 

Name:

 

 

Title:

 

 

[JA 139 FULTON STREET CORP.]

 

By:

 

 

Name:

 

 

Title:

 

 

[JA 741 RETAIL CORP.]

 

By:

 

 

Name:

 

 

Title:

 

 

[J.A. CHERRY HILL, LLC]

 

By:

 

 

Name:

 

 

Title:

 

 

[J.A. RF, LLC]

 

By:

 

 

Name:

 

 

Title:

 

 

[JA COSMETICS RETAIL, INC.]

 

By:

 

 

Name:

 

 

Title:

 

 

Joinder to Credit Agreement