Exhibit 10.5


 


EXECUTION
COPY


 




 


 





SECOND LIEN CREDIT AGREEMENT




dated as of



December 16, 2005,



among



WEIGHTWATCHERS.COM, INC.,



THE LENDERS PARTY HERETO



and



CREDIT SUISSE,

as Administrative Agent and Collateral Agent











CREDIT SUISSE,

as Sole Lead Arranger and Sole Bookrunner




 




 


 




















 


ARTICLE I



Definitions


 


	
  SECTION 1.01.

  	
  Defined Terms

  	
  1

  
	
  SECTION 1.02.

  	
  Terms Generally

  	
  19

  
	
  SECTION 1.03.

  	
  Pro Forma Calculations

  	
  19

  
	
  SECTION 1.04.

  	
  Classification of Loans and Borrowings

  	
  20

  



 


ARTICLE II


 


The Loans


 


	
  SECTION 2.01.

  	
  Commitments

  	
  20

  
	
  SECTION 2.02.

  	
  Loans

  	
  20

  
	
  SECTION 2.03.

  	
  Borrowing Procedure

  	
  21

  
	
  SECTION 2.04.

  	
  Evidence of Debt; Repayment of Loans

  	
  21

  
	
  SECTION 2.05.

  	
  Fees

  	
  22

  
	
  SECTION 2.06.

  	
  Interest on Loans

  	
  22

  
	
  SECTION 2.07.

  	
  Default Interest

  	
  23

  
	
  SECTION 2.08.

  	
  Alternate Rate of Interest

  	
  23

  
	
  SECTION 2.09.

  	
  Termination and Reduction of Commitments

  	
  23

  
	
  SECTION 2.10.

  	
  Conversion and Continuation of Borrowings

  	
  23

  
	
  SECTION 2.11.

  	
  Right to Require Prepayment

  	
  25

  
	
  SECTION 2.12.

  	
  Optional Prepayment

  	
  25

  
	
  SECTION 2.13.

  	
  Mandatory Prepayments

  	
  26

  
	
  SECTION 2.14.

  	
  Reserve Requirements; Change in Circumstances

  	
  27

  
	
  SECTION 2.15.

  	
  Change in Legality

  	
  28

  
	
  SECTION 2.16.

  	
  Indemnity

  	
  29

  
	
  SECTION 2.17.

  	
  Pro Rata Treatment

  	
  29

  
	
  SECTION 2.18.

  	
  Sharing of Setoffs

  	
  29

  
	
  SECTION 2.19.

  	
  Payments

  	
  30

  
	
  SECTION 2.20.

  	
  Taxes

  	
  31

  
	
  SECTION 2.21.

  	
  Assignment of Commitments Under Certain Circumstances; Duty to
  Mitigate

  	
  32

  



 


ARTICLE III



Representations and Warranties


 


	
  SECTION 3.01.

  	
  Organization; Powers

  	
  33

  
	
  SECTION 3.02.

  	
  Authorization

  	
  33

  
	
  SECTION 3.03.

  	
  Enforceability

  	
  34

  
	
  SECTION 3.04.

  	
  Governmental Approvals

  	
  34

  
	
  SECTION 3.05.

  	
  Financial Statements

  	
  34

  
	
  SECTION 3.06.

  	
  No Material Adverse Change

  	
  35

  



 

















 


	
  SECTION 3.07.

  	
  Title to Properties; Possession Under Leases

  	
  35

  
	
  SECTION 3.08.

  	
  Subsidiaries

  	
  35

  
	
  SECTION 3.09.

  	
  Litigation; Compliance with Laws

  	
  35

  
	
  SECTION 3.10.

  	
  Agreements

  	
  35

  
	
  SECTION 3.11.

  	
  Federal Reserve Regulations

  	
  36

  
	
  SECTION 3.12.

  	
  Investment Company Act

  	
  36

  
	
  SECTION 3.13.

  	
  Use of Proceeds

  	
  36

  
	
  SECTION 3.14.

  	
  Tax Returns

  	
  36

  
	
  SECTION 3.15.

  	
  No Material Misstatements

  	
  36

  
	
  SECTION 3.16.

  	
  Employee Benefit Plans

  	
  36

  
	
  SECTION 3.17.

  	
  Environmental Matters

  	
  36

  
	
  SECTION 3.18.

  	
  Insurance

  	
  37

  
	
  SECTION 3.19.

  	
  Security Documents

  	
  37

  
	
  SECTION 3.20.

  	
  Labor Matters

  	
  38

  
	
  SECTION 3.21.

  	
  Solvency

  	
  38

  
	
  SECTION 3.22.

  	
  Transaction Documents

  	
  38

  



 


ARTICLE IV



Conditions of Lending




ARTICLE V



Affirmative Covenants


 


	
  SECTION 5.01.

  	
  Existence; Compliance with Laws; Businesses and Properties

  	
  41

  
	
  SECTION 5.02.

  	
  Insurance

  	
  41

  
	
  SECTION 5.03.

  	
  Obligations and Taxes

  	
  42

  
	
  SECTION 5.04.

  	
  Financial Statements, Reports, etc

  	
  42

  
	
  SECTION 5.05.

  	
  Litigation and Other Notices

  	
  44

  
	
  SECTION 5.06.

  	
  Information Regarding Collateral

  	
  44

  
	
  SECTION 5.07.

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

  	
  45

  
	
  SECTION 5.08.

  	
  Use of Proceeds

  	
  45

  
	
  SECTION 5.09.

  	
  Employee Benefits

  	
  45

  
	
  SECTION 5.10.

  	
  Compliance with Environmental Laws

  	
  45

  
	
  SECTION 5.11.

  	
  Further Assurances

  	
  46

  
	
  SECTION 5.12.

  	
  Interest Rate Protection

  	
  46

  



 


ARTICLE VI



Negative Covenants




	
  SECTION 6.01.

  	
  Indebtedness

  	
  47

  
	
  SECTION 6.02.

  	
  Liens

  	
  48

  
	
  SECTION 6.03.

  	
  Sale and Lease-Back Transactions

  	
  49

  



 

















 


	
  SECTION 6.04.

  	
  Investments, Loans and Advances

  	
  49

  
	
  SECTION 6.05.

  	
  Mergers, Consolidations, Sales of Assets and Acquisitions

  	
  50

  
	
  SECTION 6.06.

  	
  Restricted Payments; Restrictive Agreements

  	
  51

  
	
  SECTION 6.07.

  	
  Transactions with Affiliates

  	
  52

  
	
  SECTION 6.08.

  	
  Business of the Borrower and Subsidiaries

  	
  52

  
	
  SECTION 6.09.

  	
  Certain Cash Payments

  	
  52

  
	
  SECTION 6.10.

  	
  Capital Expenditures

  	
  52

  
	
  SECTION 6.11.

  	
  Maximum Leverage Ratio

  	
  52

  
	
  SECTION 6.12.

  	
  Fiscal Year

  	
  53

  



 


ARTICLE VII



Events of Default




ARTICLE VIII



The Administrative Agent and the Collateral Agent




ARTICLE IX



Miscellaneous


 


	
  SECTION 9.01.

  	
  Notices

  	
  58

  
	
  SECTION 9.02.

  	
  Survival of Agreement

  	
  58

  
	
  SECTION 9.03.

  	
  Binding Effect

  	
  59

  
	
  SECTION 9.04.

  	
  Successors and Assigns

  	
  59

  
	
  SECTION 9.05.

  	
  Expenses; Indemnity

  	
  62

  
	
  SECTION 9.06.

  	
  Right of Setoff

  	
  64

  
	
  SECTION 9.07.

  	
  Applicable Law

  	
  64

  
	
  SECTION 9.08.

  	
  Waivers; Amendment

  	
  64

  
	
  SECTION 9.09.

  	
  Interest Rate Limitation

  	
  65

  
	
  SECTION 9.10.

  	
  Entire Agreement

  	
  65

  
	
  SECTION 9.11.

  	
  WAIVER OF JURY TRIAL

  	
  65

  
	
  SECTION 9.12.

  	
  Severability

  	
  66

  
	
  SECTION 9.13.

  	
  Counterparts

  	
  66

  
	
  SECTION 9.14.

  	
  Headings

  	
  66

  
	
  SECTION 9.15.

  	
  Jurisdiction; Consent to Service of Process

  	
  66

  
	
  SECTION 9.16.

  	
  Confidentiality

  	
  67

  
	
  SECTION 9.17.

  	
  USA PATRIOT Act Notice

  	
  67

  
	
  SECTION 9.18.

  	
  INTERCREDITOR AGREEMENT

  	
  68

  



 

















 


SCHEDULES


 


	
  Schedule 1.01

  	
  -

  	
  Guarantors

  
	
  Schedule 2.01

  	
  -

  	
  Lenders and Commitments

  
	
  Schedule 3.07(b)

  	
  -

  	
  Leased Real Property

  
	
  Schedule 3.08

  	
  -

  	
  Subsidiaries

  
	
  Schedule 3.09

  	
  -

  	
  Litigation

  
	
  Schedule 3.17

  	
  -

  	
  Environmental Matters

  
	
  Schedule 3.18

  	
  -

  	
  Insurance

  
	
  Schedule 3.19(a)

  	
  -

  	
  UCC Filing Offices

  
	
  Schedule 4.01

  	
  -

  	
  Local Counsel

  
	
  Schedule 6.01

  	
  -

  	
  Existing Indebtedness

  
	
  Schedule 6.02

  	
  -

  	
  Existing Liens

  
	
  Schedule 6.07

  	
  -

  	
  Certain Affiliate Transactions

  



 


EXHIBITS


 


	
  Exhibit A

  	
  -

  	
  Form of
  Administrative Questionnaire

  
	
  Exhibit B

  	
  -

  	
  Form of Assignment
  and Acceptance

  
	
  Exhibit C

  	
  -

  	
  Form of Borrowing
  Request

  
	
  Exhibit D

  	
  -

  	
  Form of Second Lien
  Guarantee Agreement

  
	
  Exhibit E

  	
  -

  	
  Form of Intercreditor
  Agreement

  
	
  Exhibit F

  	
  -

  	
  Form of Second Lien
  Pledge Agreement

  
	
  Exhibit G

  	
  -

  	
  Form of Second Lien
  Pledge and Security Agreement

  
	
  Exhibit H-1

  	
  -

  	
  Form of Opinion of
  Simpson Thacher & Bartlett LLP

  
	
  Exhibit H-2

  	
  -

  	
  Form of Local Counsel
  Opinion

  



 

















 


SECOND LIEN CREDIT AGREEMENT dated as of December 16, 2005 (this “Agreement”), among
WEIGHTWATCHERS.COM, INC., a Delaware corporation (the “Borrower”), the Lenders (as defined in Article I),
and CREDIT SUISSE, as administrative agent (in such capacity, the “Administrative Agent”) and as second lien collateral
agent (in such capacity, the “Collateral
Agent”) for the
Lenders.


 


Pursuant to a Redemption Agreement dated as
of June 13, 2005 (the “Redemption Agreement”),
among Artal Luxembourg S.A., a Luxembourg corporation (the “Seller”), the Borrower and Weight
Watchers International, Inc., a Virginia corporation (“Parent”), the Borrower intends to
redeem (the “Redemption”)
all of the outstanding shares of its common stock held by the Seller for
aggregate cash consideration of approximately $304,800,000 (the “Cash Consideration”).


 


In connection with the foregoing, the
Borrower has requested the Lenders to extend credit in the form of Loans (such
term and each other capitalized term used but not defined in this introductory
statement having the meaning given it in Article I) on the Closing Date,
in an aggregate principal amount not in excess of $45,000,000. The proceeds of
the Loans, together with cash on hand at the Borrower and the proceeds of the
loans under the First Lien Credit Agreement, are to be used solely to pay the
Cash Consideration and related fees and expenses.


 


The Lenders are willing to extend such credit
to the Borrower on the terms and subject to the conditions set forth herein. Accordingly,
the parties hereto agree as follows:


 


ARTICLE I



Definitions


 


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


 


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


 


“Adjusted LIBO Rate”
shall mean, with respect to any Eurodollar Borrowing for any Interest Period,
an interest rate per annum equal to the product of (a) the LIBO Rate in
effect for such Interest Period and (b) Statutory Reserves.


 


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


 


“Affiliate”
shall mean, when used with respect to a specified person, another person that
directly, or indirectly through one or more intermediaries, Controls or is


 

















 


Controlled by or is under
common Control with the person specified; provided, however,
that, for purposes of Section 6.07, the term “Affiliate” shall also
include any person that directly or indirectly owns 15% or more of any class of
Equity Interests of the person specified or that is an officer or director of
the person specified.


 


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


 


“Applicable Percentage”
shall mean, for any day, (a) with respect to any Eurodollar Loan, 4.75%
and (b) with respect to any ABR Loan, 3.75%.


 


“Applicable Prepayment Fee”
shall mean, for any day on which Loans are prepaid pursuant to Section 2.12
or assigned as contemplated by Section 2.21(a), the amount (expressed as a percentage of the
principal amount of the Loans to be so prepaid or assigned) set forth below
opposite the period in which such day occurs:


 




	
  Period

  	
   

  	
  Amount

  	
   

  
	
  Closing Date
  to and including March 16, 2007

  	
   

  	
  0.00

  	
  %

  
	
  March 17,
  2007 to and including December 16, 2007

  	
   

  	
  1.00

  	
  %

  
	
  December 17,
  2007 to and including December 16, 2008

  	
   

  	
  2.00

  	
  %

  
	
  December 17,
  2008 to and including December 16, 2009

  	
   

  	
  1.00

  	
  %

  






 


“Asset Sale”
shall mean the sale, transfer or other disposition (by way of merger, casualty,
condemnation or otherwise) by the Borrower or any of the Subsidiaries to any
person other than the Borrower or any Guarantor of (a) any Equity Interests
of any of the Subsidiaries (other than directors’ qualifying shares) or (b) any
other assets of the Borrower or any of the Subsidiaries (other than (i) inventory,
damaged, obsolete or worn out assets and Permitted Investments, in each case
disposed of in the ordinary course of business, (ii) dispositions between
or among Foreign Subsidiaries and (iii) any sale, transfer or other
disposition or series of related sales, transfers or other dispositions
having a value not in excess of $350,000).


 


2

















 


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


 


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


 


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


 


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


 


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


 


“Capital Expenditures”
shall mean, for any period, (a) the additions to property, plant and
equipment and other capital expenditures (including capitalized web site
development costs and capitalized software) of the Borrower and its
consolidated Subsidiaries that are (or should be) set forth in a consolidated
statement of cash flows of the Borrower for such period prepared in accordance
with GAAP and (b) Capital Lease Obligations or Synthetic Lease Obligations
incurred by the Borrower and its consolidated Subsidiaries during such period,
but excluding in each case any such expenditure made to restore, replace or
rebuild property to the condition of such property immediately prior to any
damage, loss, destruction or condemnation of such property, to the extent such
expenditure is made with insurance proceeds, condemnation awards or damage
recovery proceeds relating to any such damage, loss, destruction or
condemnation.


 


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


 


“Change in Control”
shall mean (a) any “person” or “group” (as such terms are used in Rule 13d-5
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Sections 13(d) and
14(d) of the Exchange Act) of persons (other than the Permitted ARTAL
Investor Group) becomes, directly or indirectly, in a single transaction or in
a related series of transactions by way of merger, consolidation, or other
business combination or otherwise, the “beneficial owner” (as such terms is
used in Rule 13d-3 of the Exchange Act) of more than 20% of the total
voting power in the


 


3

















 


aggregate of all classes of
Equity Interests of Parent then outstanding entitled to vote generally in
elections of directors of Parent; (b) at all times, as applicable,
individuals who on the Closing Date constituted the Board of Directors of
Parent (together with any new directors whose election to such Board or whose
nomination for election by the stockholders of Parent was approved by a member
of the Permitted ARTAL Investor Group or a vote of 66.67% of the directors then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors of Parent then in
office; or (c) Parent ceasing to own, beneficially and of record, 100% of
the Equity Interests of the Borrower.


 


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


 


“Closing Date”
shall mean December 16, 2005.


 


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


 


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


 


“Commitment”
shall mean, with respect to any Lender, such Lender’s commitment to make a Loan
hereunder as set forth on Schedule 2.01.


 


“Confidential Information
Memorandum” shall mean the Confidential Information Memorandum
of the Borrower dated November 2005.


 


“Consolidated EBITDA”
shall mean, for any period, Consolidated Net Income for such period plus (a) without
duplication and to the extent deducted in determining such Consolidated Net
Income, the sum of (i) consolidated interest expense for such period, (ii) consolidated
income tax expense for such period, (iii) all amounts attributable to
depreciation and amortization for such period, (iv) non-recurring office
relocation expenses during such period, (v) fees and expenses associated
with the Transactions during such period, (vi) fees and compensation
expenses related to employee stock options during such period and (vii) any
non-cash charges (other than the write-down of current assets) for such period,
and minus (b) without duplication (i) all cash payments made during
such period on account of reserves, restructuring charges and other non-cash
charges added to Consolidated Net Income pursuant to clause (a)(vii) above
in a previous period and (ii) to the extent included in determining such
Consolidated Net Income, any extraordinary gains and all non-cash items of
income for such period, all determined on a consolidated basis in accordance
with GAAP. For purposes of determining the Leverage Ratio as of or for the
periods ended on December 31, 2005, March 31, 2006 and June 30,


 


4

















 


2006, Consolidated EBITDA will
be deemed to be equal to (i) for the fiscal quarter ended March 31,
2005, $6,180,398, (ii) for the fiscal quarter ended June 30, 2005,
$11,006,852, and (iii) for the fiscal quarter ended September 30,
2005, $11,600,295.


 


“Consolidated Interest
Expense” shall mean, for any period, the sum of (a) the cash
interest expense (including imputed interest expense in respect of Capital
Lease Obligations and Synthetic Lease Obligations) of the Borrower and the
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP, plus (b) any interest accrued during such period in respect of
Indebtedness of the Borrower or any Subsidiary that is required to be
capitalized rather than included in consolidated interest expense for such
period in accordance with GAAP, plus (c) the aggregate amount of all
dividends in respect of Disqualified Stock paid in cash by the Borrower and the
Subsidiaries during such period.


 


“Consolidated Net Income”
shall mean, for any period, the net income or loss of the Borrower and the
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded (a) the
income of any Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by the Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, statute, rule or governmental regulation
applicable to such Subsidiary, (b) the income or loss of any person
accrued prior to the date it becomes a Subsidiary or is merged into or
consolidated with the Borrower or any Subsidiary or the date that such person’s
assets are acquired by the Borrower or any Subsidiary, (c) the income of
any person in which any other person (other than the Borrower or a wholly owned
Subsidiary or any director holding qualifying shares in accordance with
applicable law) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or a wholly
owned Subsidiary by such person during such period, and (d) any extraordinary
gains attributable to sales of assets.


 


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


 


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


 


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


 


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


 


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


 


5

















 


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


 


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


 


“dollars” or
“$” shall mean lawful money of the
United States of America.


 


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


 


“Eligible Assignee”
shall mean any commercial bank, insurance company, investment or mutual fund or
other entity that is an “accredited investor” (as defined in Regulation D
under the Securities Act of 1933, as amended) that extends credit or invests in
bank loans as one of its businesses; provided that
neither the Borrower nor any Affiliate thereof shall be an Eligible Assignee.


 


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


 


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


 


6

















 


“Equity Interests”
shall mean shares of capital stock, partnership interests, membership interests
in a limited liability company, beneficial interests in a trust or other equity
interests in any person.


 


“Equity Issuance”
shall mean any issuance or sale by the Borrower or any Subsidiary of any Equity
Interests (other than Disqualified Stock) of the Borrower or any such
Subsidiary, as applicable, except in each case for (a) any issuance or
sale to the Borrower or any Subsidiary, (b) any issuance of directors’
qualifying shares and (c) any issuance of Equity Interests to Parent, to
the extent the proceeds thereof are used substantially concurrently, and in any
event within five Business Days of such issuance, to finance a Permitted
Acquisition.


 


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


 


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


 


“ERISA Event”
shall mean (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412
of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of
ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan or the withdrawal or partial withdrawal of the
Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan; (e) the
receipt by the Borrower or any of its ERISA Affiliates from the PBGC or a plan
administrator of any notice relating to the intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the adoption of
any amendment to a Plan that would require the provision of security pursuant
to Section 401(a)(29) of the Code or Section 307 of ERISA; (g) the
receipt by the Borrower or any of its ERISA Affiliates of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any of its ERISA
Affiliates of any notice, concerning the imposition of Withdrawal Liability or
a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA; (h) the
occurrence of a “prohibited transaction” with respect to which the Borrower or
any of the Subsidiaries is a “disqualified person” (within the meaning of Section 4975
of the Code) or with respect to which the Borrower or any such Subsidiary could
otherwise be liable; or (i) any Foreign Benefit Event.


 


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


 


7

















 


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


 


“Excess Cash Flow”
shall mean, for any fiscal year of the Borrower, the excess of (a) the
sum, without duplication, of (i) Consolidated EBITDA for such fiscal year
and (ii) reductions to noncash working capital of the Borrower and the
Subsidiaries for such fiscal year (i.e., the
decrease, if any, in Current Assets minus Current Liabilities from the
beginning to the end of such fiscal year) over (b) the sum, without
duplication, of (i) the amount of any Taxes and Tax Payments payable in
cash by the Borrower and the Subsidiaries with respect to such fiscal year, (ii) Consolidated
Interest Expense for such fiscal year payable in cash, (iii) Capital
Expenditures made in cash in accordance with Section 6.10 during such
fiscal year, except to the extent financed with the proceeds of Indebtedness,
equity issuances, casualty proceeds, condemnation proceeds or other proceeds
that would not be included in Consolidated EBITDA, (iv) permanent
repayments of Indebtedness (other than prepayments of Loans) made by the
Borrower and the Subsidiaries during such fiscal year, but only to the extent
that such prepayments by their terms cannot be reborrowed or redrawn and do not
occur in connection with a refinancing of all or any portion of such
Indebtedness, (v) additions to noncash working capital for such fiscal
year (i.e., the increase, if any, in Current
Assets minus Current Liabilities from the beginning to the end of such fiscal
year) and (vi) investments by the Borrower and the Subsidiaries made in
compliance with Section 6.04(g).


 


“Excluded Taxes”
shall mean, with respect to the Administrative Agent, any Lender or any other
recipient of any payment to be made by or on account of any obligation of the
Borrower hereunder, (a) income or franchise taxes imposed on (or measured
by) its net income by the United States of America, or by the jurisdiction
under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable
lending office is located, (b) any branch profits taxes imposed by the
United States of America or any similar tax imposed by any other jurisdiction
described in clause (a) above and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under Section 2.21(a)),
any withholding tax that is imposed on amounts payable to such Foreign Lender
at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Lender’s
failure to comply with Section 2.20(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.20(a).


 


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


 


8

















 


“Fee Letter”
shall mean the Fee Letter dated November 2, 2005, between the Borrower and
the Administrative Agent.


 


“Fees” shall
have the meaning assigned to such term in Section 2.05.


 


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


 


“First Lien Collateral
Agent” shall mean the “Collateral Agent”, as defined in the
First Lien Loan Documents.


 


“First Lien Credit Agreement” shall
mean the First Lien Credit Agreement dated as of the date hereof among the
Borrower, the lenders from time to time party thereto and Credit Suisse, as
administrative agent and collateral agent, as the same may be amended, restated,
supplemented or otherwise modified from time to time.


 


“First Lien Loan Documents”
shall mean the “Loan Documents”, as defined in the First Lien Credit Agreement,
other than the Intercreditor Agreement.


 


“First Priority Liens”
shall have the meaning assigned to such term in the Intercreditor Agreement.


 


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


 


“Foreign Lender”
shall mean any Lender that is organized under the laws of a jurisdiction other
than that in which the Borrower is located. For purposes of this definition,
the United States of America, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.


 


“Foreign Pension Plan”
shall mean any benefit plan that under applicable law is required to be funded
through a trust or other funding vehicle other than a trust or funding vehicle
maintained by a Governmental Authority.


 


9

















 


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


 


“GAAP” shall
mean United States generally accepted accounting principles applied on a
consistent basis.


 


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


 


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


 


“Grantors”
shall mean (a) with respect to the Pledge Agreement, Parent and (b) with
respect to the Pledge and Security Agreement, the Borrower.


 


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


 


“Guarantee Agreement”
shall mean the Second Lien Guarantee Agreement, substantially in the form of
Exhibit D, among the Borrower, the Subsidiaries party thereto and the
Collateral Agent for the benefit of the Secured Parties.


 


“Guarantor”
shall mean each Subsidiary listed on Schedule 1.01, and each other
Subsidiary that is or becomes a party to the Guarantee Agreement.


 


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


 


“Hedging Agreement”
shall mean any interest rate protection agreement, foreign currency exchange
agreement, commodity price protection agreement or other interest or currency
exchange rate or commodity price hedging arrangement.


 


10

















 


“Indebtedness”
of any person shall mean, without duplication, (a) all obligations of such
person for borrowed money or with respect to deposits or advances of any kind, (b) all
obligations of such person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such person upon which interest
charges are customarily paid, (d) all obligations of such person under
conditional sale or other title retention agreements relating to property or
assets purchased by such person, (e) all obligations of such person issued
or assumed as the deferred purchase price of property or services (excluding
trade accounts payable and accrued obligations incurred in the ordinary course
of business), (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on property owned or acquired by such person, whether
or not the obligations secured thereby have been assumed, (g) all
Guarantees by such person of Indebtedness of others, (h) all Capital Lease
Obligations and Synthetic Lease Obligations of such person, (i) all
obligations of such person as an account party in respect of letters of credit,
(j) all obligations of such person in respect of bankers’ acceptances and
(k) all obligations of such person in respect of Disqualified Stock of
such person. The Indebtedness of any person shall include the Indebtedness of
any partnership in which such person is a general partner.


 


“Indemnified Taxes”
shall mean Taxes other than Excluded Taxes.


 


“Intercreditor Agreement”
shall mean the Intercreditor Agreement dated as of the date hereof,
substantially in the form of Exhibit E, among the Borrower, Parent,
the Collateral Agent and the First Lien Collateral Agent.


 


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


 


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


 


11

















 


“Lenders”
shall mean (a) the persons listed on Schedule 2.01 (other than any
such person that has ceased to be a party hereto pursuant to an Assignment and
Acceptance) and (b) any person that has become a party hereto pursuant to
an Assignment and Acceptance.


 


“Leverage Ratio”
shall mean, on any date, the ratio of Total Debt on such date to Consolidated
EBITDA for the period of four consecutive fiscal quarters most recently ended
on or prior to such date. In any period of four consecutive fiscal quarters in
which a Permitted Acquisition occurs, the Leverage Ratio shall be determined on
a pro forma basis in accordance with Section 1.03.


 


“LIBO Rate”
shall mean, with respect to any Eurodollar Borrowing for any Interest Period,
the rate per annum determined by the Administrative Agent at approximately
11:00 a.m. (London time) on the date that is two Business Days prior to
the commencement of such Interest Period by reference to the British Bankers’
Association Interest Settlement Rates for deposits in dollars (as set forth by
any service selected by the Administrative Agent that has been nominated by the
British Bankers’ Association as an authorized information vendor for the
purpose of displaying such rates) for a period equal to such Interest Period; provided that, to the extent that an interest rate is not
ascertainable pursuant to the foregoing provisions of this definition, the “LIBO
Rate” shall be the interest rate per annum determined by the Administrative
Agent to be the average of the rates per annum at which deposits in dollars are
offered for such relevant Interest Period to major banks in the London
interbank market in London, England by the Administrative Agent at
approximately 11:00 a.m. (London time) on the date that is two Business
Days prior to the beginning of such Interest Period.


 


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


 


“Loan Documents”
shall mean this Agreement, the Security Documents and the promissory notes, if
any, executed and delivered pursuant to Section 2.04(e).


 


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


 


“Loans”
shall mean the term loans made by the Lenders to the Borrower pursuant to Section 2.01.


 


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


 


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


 


12

















 


impairment of the rights of or
benefits available to the Lenders under any Loan Document.


 


“Material Indebtedness”
shall mean Indebtedness (other than the Loans), or obligations in respect of
one or more Hedging Agreements, of any one or more of the Borrower and the
Subsidiaries in an aggregate principal amount exceeding $4,000,000. For
purposes of determining Material Indebtedness, the “principal amount” of the
obligations of the Borrower or any Subsidiary in respect of any Hedging
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that the Borrower or such Subsidiary would be required
to pay if such Hedging Agreement were terminated at such time.


 


“Maturity Date”
shall mean June 16, 2011.


 


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


 


“Multiemployer Plan”
shall mean a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.


 


“Net Cash Proceeds”
shall mean (a) with respect to any Asset Sale, the cash proceeds
(including cash proceeds subsequently received (as and when received) in
respect of noncash consideration initially received), net of (i) selling
expenses (including reasonable broker’s fees or commissions, legal fees,
transfer and similar taxes and the Borrower’s good faith estimate of income
taxes paid or payable in connection with such sale), (ii) amounts provided
as a reserve, in accordance with GAAP, against any liabilities under any
indemnification obligations or purchase price adjustment associated with such
Asset Sale (provided that, to the extent and at the
time any such amounts are released from such reserve, such amounts shall
constitute Net Cash Proceeds) and (iii) the principal amount, premium or
penalty, if any, interest and other amounts on any Indebtedness for borrowed
money which is secured by the asset sold in such Asset Sale and which is
required to be repaid with such proceeds (other than any such Indebtedness
assumed by the purchaser of such asset); provided, however, that, if (x) the Borrower intends to reinvest
such proceeds in productive assets of a kind then used or usable in the
business of the Borrower and its Subsidiaries within 365 days of receipt of
such proceeds and (y) no Default or Event of Default shall have occurred
and shall be continuing at the time of receipt of such proceeds, such proceeds
shall not constitute Net Cash Proceeds except to the extent not so used at the
end of such 365-day period, at which time such proceeds shall be deemed to be
Net Cash Proceeds; and (b) with respect to any issuance or incurrence of
Indebtedness or any Equity Issuance, the cash proceeds thereof, net of all
taxes and customary fees, commissions, costs and other expenses incurred in
connection therewith.


 


“Obligations”
shall mean all obligations defined as “Obligations” in the Pledge and Security
Agreement and the other Security Documents.


 


“Other Taxes”
shall mean any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any


 


13

















 


payment made under any Loan
Document or from the execution, delivery or enforcement of, or otherwise with
respect to, any Loan Document.


 


“Parent”
shall have the meaning assigned to such term in the introductory statement to
this Agreement.


 


“Parent Credit Agreement” shall
mean the Fifth Amended and Restated Credit Agreement dated as of January 21,
2004, among Parent, the lenders party thereto, Credit Suisse, as syndication
agent and a lead arranger, and The Bank of Nova Scotia, as administrative agent
and a lead arranger, as amended from time to time.


 


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


 


“Perfection Certificate”
shall mean the Perfection Certificate substantially in the form of Exhibit B
to the Pledge and Security Agreement.


 


“Permitted Acquisition”
shall have the meaning assigned to such term in Section 6.04(g).


 


“Permitted ARTAL Investor
Group” means the Seller or any of its direct or indirect wholly
owned Subsidiaries and ARTAL Group S.A., a Luxembourg corporation, or any of
its direct or indirect wholly owned Subsidiaries.


 


“Permitted Investments”
shall mean:


 


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


 


(b) investments in commercial paper
maturing within 270 days from the date of acquisition thereof and having, at
such date of acquisition, the highest credit rating obtainable from S&P or
from Moody’s;


 


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


 


(d) fully collateralized repurchase
agreements with a term of not more than 30 days for securities described in
clause (a) above and entered into with a financial institution
satisfying the criteria of clause (c) above;


 


14

















 


(e) investments in “money market funds”
within the meaning of Rule 2a-7 of the Investment Company Act of 1940, as
amended, substantially all of whose assets are invested in investments of the
type described in clauses (a) through (d) above;


 


(f) investments in so-called “auction
rate” securities rated AAA or higher by S&P or Aaa or higher by Moody’s and
which have a reset date not more than 90 days from the date of acquisition
thereof; and


 


(g) other short-term investments
utilized by Foreign Subsidiaries in accordance with normal investment practices
for cash management in investments of a type analogous to the foregoing.


 


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


 


“Plan” shall
mean any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the
Code or Section 307 of ERISA, and in respect of which the Borrower or any
ERISA Affiliate is (or, if such plan were terminated, would under Section 4069
of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.


 


“Pledge Agreement”
shall mean the Second Lien Pledge Agreement, substantially in the form of Exhibit F,
between Parent and the Collateral Agent for the benefit of the Secured Parties.


 


“Pledge and Security
Agreement” shall mean the Second Lien Pledge and Security
Agreement, substantially in the form of Exhibit G, between the
Borrower and the Collateral Agent for the benefit of the Secured Parties.


 


“Pledged Collateral”
shall mean (a) all the “Collateral” as defined in the Pledge Agreement and
(b) all the “Pledged Collateral” as defined in the Pledge and Security
Agreement.


 


“Prime Rate”
shall mean the rate of interest per annum determined from time to time by
Credit Suisse as its prime rate in effect at its principal office in
New York City and notified to the Borrower.


 


“Redemption” shall have the meaning assigned
to such term in the introductory statement to this Agreement.


 


“Redemption
Agreement” shall have the meaning assigned to such term in the
introductory statement to this Agreement.


 


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


 


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


 


15

















 


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


 


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


 


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


 


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


 


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


 


“Required Lenders”
shall mean, at any time, Lenders having Loans and Commitments representing more
than 50% of the sum of all Loans and Commitments at such time.


 


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


 


“Restricted Indebtedness”
shall mean Indebtedness of the Borrower or any Subsidiary, the payment,
prepayment, repurchase or defeasance of which is restricted under Section 6.09(b).


 


“Restricted Payment”
shall mean any dividend or other distribution (whether in cash, securities or
other property) with respect to any Equity Interests in the Borrower or any
Subsidiary, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancelation or termination of any Equity
Interests in the Borrower or any Subsidiary or any option, warrant or other
right to acquire any such Equity Interests in the Borrower or any Subsidiary; provided, however, that the Redemption shall not be a
Restricted Payment.


 


“Secured Parties”
shall have the meaning assigned to such term in any Security Document.


 


“Security Documents”
shall mean the Pledge and Security Agreement, the Guarantee Agreement, the
Pledge Agreement, the Intercreditor Agreement and each of the security
agreements, mortgages and other instruments and documents executed and
delivered pursuant to any of the foregoing or pursuant to Section 5.11.


 


16

















 


“Seller”
shall have the meaning assigned to such term in the introductory statement to
this Agreement.


 


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


 


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


 


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


 


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


 


“Subsidiary”
shall mean any subsidiary of the Borrower.


 


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


 


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


 


“Synthetic Purchase
Agreement” shall mean any swap, derivative or other agreement or
combination of agreements pursuant to which the Borrower or any Subsidiary is
or may become obligated to make (a) any payment in connection with a
purchase by any third party from a person other than the Borrower or any
Subsidiary of any Equity Interest or Restricted Indebtedness or (b) any
payment (other than on account


 


17

















 


of a permitted purchase by it
of any Equity Interest or Restricted Indebtedness) the amount of which is
determined by reference to the price or value at any time of any Equity
Interest or Restricted Indebtedness; provided that
no phantom stock or similar plan providing for payments only to current or
former directors, officers or employees of the Borrower or the Subsidiaries (or
to their heirs or estates) shall be deemed to be a Synthetic Purchase
Agreement.


 


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


 


“Tax Payments”
shall mean net payments in cash by the Borrower to Parent in respect of Taxes attributable
to the operations of the Borrower and the Subsidiaries pursuant to tax sharing
arrangements in effect from time to time.


 


“Total Debt”
shall mean, at any time, the total Indebtedness of the Borrower and the
Subsidiaries at such time (excluding Indebtedness of the type described in
clause (i) of the definition of such term, except to the extent of
any unreimbursed drawings thereunder) minus the amount of cash and Permitted
Investments held by the Borrower and the Subsidiaries as of such date, in an
aggregate amount not to exceed $5,500,000.


 


“Transactions”
shall mean, collectively, (a) the performance by the Borrower of the
Redemption Agreement and the consummation of the transactions contemplated
thereby, (b) the execution, delivery and performance by the Loan Parties
of the Loan Documents to which they are or will be a party and the making of
the Borrowings hereunder, (c) the execution, delivery and performance of
the First Lien Credit Agreement by the parties thereto and the making of the
borrowings thereunder, (d) the execution, delivery and performance by
Parent of the Pledge Agreement and the pledge of the Equity Interest of the
Borrower thereunder and (e) the payment of related fees and expenses.


 


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


 


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


 


“Voluntary Prepayment”
shall mean a prepayment of principal of Loans pursuant to Section 2.12.


 


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


 


18

















 


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


 


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


 


SECTION 1.03. Pro
Forma Calculations. With respect to any period of four
consecutive fiscal quarters during which any Permitted Acquisition occurs (and
for purposes of determining whether an acquisition is a Permitted Acquisition
under Section 6.04(g) or would result in a Default or an Event of
Default), the Leverage Ratio shall be calculated with respect to such period on
a pro forma basis after giving effect to such Permitted Acquisition (including,
without duplication, (a) all pro forma adjustments permitted or required
by Article 11 of Regulation S-X under the Securities Act of 1933, as
amended, and (b) pro forma adjustments for cost savings (net of continuing
associated expenses) to the extent such cost savings are factually supportable
and have been realized or are reasonably expected to be realized within
12 months following such Permitted Acquisition, provided that all such adjustments shall be set forth in a
reasonably detailed certificate of a Financial Officer of the Borrower), using,
for purposes of making such calculations, the historical financial statements
of the Borrower and the Subsidiaries which shall be reformulated as if such
Permitted Acquisition, and any other Permitted Acquisitions that have been
consummated during the period, had been consummated on the first day of such
period.


 


19





















 


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


 


ARTICLE II



The Loans


 


SECTION 2.01. Commitments.
Subject to the terms and conditions and relying upon the representations and
warranties herein set forth, each Lender agrees, severally and not jointly, to
make a Loan to the Borrower on the Closing Date in a principal amount not
to exceed its Commitment. Amounts paid or prepaid in respect of Loans may not
be reborrowed.


 


SECTION 2.02. Loans.
(a)  Each Loan shall be made as part of a Borrowing consisting of
Loans made by the Lenders ratably in accordance with their Commitments; provided, however, that the failure of any
Lender to make any Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to make any Loan
required to be made by such other Lender). The Loans comprising any Borrowing
shall be in an aggregate principal amount that is an integral multiple of
$1,000,000 and not less than $5,000,000.


 


(b)  
Subject to Sections 2.08 and 2.15, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request
pursuant to Section 2.03. Each Lender may at its option make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided
that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement.
Borrowings of more than one Type may be outstanding at the same time; provided, however, that the Borrower shall
not be entitled to request any Borrowing that, if made, would result
in more than three Eurodollar Borrowings outstanding hereunder at any
time. For purposes of the foregoing, Borrowings having different Interest
Periods, regardless of whether they commence on the same date, shall be
considered separate Borrowings.


 


(c)  
Each Lender shall make the Loan to be made by it hereunder on the
Closing Date by wire transfer of immediately available funds to such account in
New York City as the Administrative Agent may designate not later than
1:00 p.m., New York City time, and the Administrative Agent shall promptly
credit the amounts so received to an account designated by the Borrower in the
Borrowing Request or, if the Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the
amounts so received to the respective Lenders.


 


(d)  
Unless the Administrative Agent shall have received notice from a Lender
prior to the date of Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s portion of the Borrowing, the Administrative
Agent may assume that such Lender has made such portion available to the
Administrative


 


20





















 


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


 


SECTION 2.03. Borrowing
Procedure. In order to request the Borrowing, the Borrower shall
notify the Administrative Agent of such request by telephone (a) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the proposed Borrowing, and (b) in
the case of an ABR Borrowing, not later than 12:00 noon, New York City
time, one Business Day before the proposed Borrowing. A telephonic Borrowing
Request shall be irrevocable, and shall be confirmed promptly by hand delivery
or fax to the Administrative Agent of a written Borrowing Request and shall
specify the following information: (i) whether such Borrowing is to be a
Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing
(which shall be a Business Day); (iii) the number and location of the
account to which funds are to be disbursed; (iv) the amount of such
Borrowing; and (v) if such Borrowing is to be a Eurodollar Borrowing, the
Interest Period with respect thereto. If no election as to the Type of
Borrowing is specified in any such notice, then the requested Borrowing shall
be an ABR Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing is specified in such notice, then the Borrower shall be deemed to
have selected an Interest Period of one month’s duration. The Administrative
Agent shall promptly advise the applicable Lenders of any notice given pursuant
to this Section 2.03 (and the contents thereof), and of each Lender’s
portion of the requested Borrowing.


 


SECTION 2.04. Evidence
of Debt; Repayment of Loans. (a)  The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the outstanding principal amount of each Loan of such Lender on the
Maturity Date.


 


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


 


(c)  
The Administrative Agent shall maintain accounts in which it will record
(i) the amount of each Loan made hereunder, the Type thereof and, if
applicable, the


 


21





















 


Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or
to become due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder from the
Borrower or any Guarantor and each Lender’s share thereof.


 


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


 


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


 


SECTION 2.05. Fees.
The Borrower agrees to pay to the Administrative Agent, for its own account,
the fees (the “Fees”)
set forth in the Fee Letter at the times and in the amounts specified therein. Once
paid, none of the Fees shall be refundable under any circumstances.


 


SECTION 2.06. Interest
on Loans. (a)  Subject to the provisions of Section 2.07,
the Loans comprising each ABR Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a year of 365 or
366 days, as the case may be, when the Alternate Base Rate is
determined by reference to the Prime Rate and over a year of 360 days at
all other times and calculated from and including the date of such Borrowing to
but excluding the date of repayment thereof) at a rate per annum equal to the
Alternate Base Rate plus the Applicable Percentage.


 


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


 


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


 


22





















 


SECTION 2.07. Default
Interest. If the Borrower shall default in the payment of any
principal of or interest on any Loan or any other amount due hereunder, by
acceleration or otherwise, or under any other Loan Document, then, until such
defaulted amount shall have been paid in full, to the extent permitted by law,
such amount shall bear interest (after as well as before judgment), payable on
demand, (a) in the case of principal, at the rate otherwise applicable to
such Loan pursuant to Section 2.06 plus 2.00% per annum and (b) in all
other cases, at a rate per annum (computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as the case may be, when
determined by reference to the Prime Rate and over a year of 360 days at all
other times) equal to the rate that would be applicable to an ABR Loan plus
2.00% per annum.


 


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


 


SECTION 2.09. Termination
and Reduction of Commitments. (a)  The Commitments shall
automatically terminate upon the earlier to occur of (i)  the making of
the Loans on the Closing Date and (ii)  5:00 p.m., New York City time,
on December 30, 2005.


 


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


 


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


 


SECTION 2.10. Conversion
and Continuation of Borrowings. The Borrower shall have the
right at any time upon prior irrevocable notice to the Administrative Agent by
telephone (a) not later than 12:00 (noon), New York City time, one
Business Day prior to conversion, to convert any Eurodollar Borrowing into an
ABR Borrowing, (b) not later than 12:00 (noon), New York City time, three
Business Days prior to conversion or continuation, to convert any ABR Borrowing
into a Eurodollar Borrowing


 


23





















 


or to continue
any Eurodollar Borrowing as a Eurodollar Borrowing for an additional Interest
Period, and (c) not later than 12:00 (noon), New York City time, three
Business Days prior to conversion, to convert the Interest Period with respect
to any Eurodollar Borrowing to another permissible Interest Period, subject in
each case to the following:


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Each telephonic request pursuant to this Section 2.10
shall be confirmed promptly in writing by hand delivery or fax to the
Administrative Agent, shall be irrevocable and shall refer to this Agreement
and specify (i) the identity and amount of the Borrowing that the Borrower
requests be converted or continued, (ii) whether such Borrowing is to be
converted to or continued as a Eurodollar Borrowing or an ABR Borrowing, (iii) if
such notice requests a conversion, the date of such conversion (which shall be
a Business Day) and (iv) if such Borrowing is to be converted to or continued
as a Eurodollar Borrowing, the Interest Period with respect thereto. If no
Interest Period is specified in any such notice with respect to any conversion
to or continuation as a Eurodollar


 


24

















 


Borrowing, the Borrower shall
be deemed to have selected an Interest Period of one month’s duration. The
Administrative Agent shall advise the Lenders of any notice given pursuant to
this Section 2.10 and of each Lender’s portion of any converted or
continued Borrowing. If the Borrower shall not have given notice in accordance
with this Section 2.10 to continue any Borrowing into a subsequent
Interest Period (and shall not otherwise have given notice in accordance with
this Section 2.10 to convert such Borrowing), such Borrowing shall, at the
end of the Interest Period applicable thereto (unless repaid pursuant to the
terms hereof), automatically be continued into an ABR Borrowing.


 


SECTION 2.11. Right
to Require Prepayment. The Borrower shall notify the Administrative
Agent of the occurrence of a Change in Control within one Business Day thereof,
and the Administrative Agent shall promptly thereafter notify the Lenders
thereof. At anytime prior to the 60- day
following delivery of the notice by the Administrative Agent pursuant to the
preceding sentence, each Lender shall have the right, upon not less than five
Business Days’ prior notice to the Administrative Agent and the Borrower, to
require the Borrower to prepay in full, and not in part, the outstanding
principal amount of such Lender’s Loans at a purchase price equal to 101% of
the principal amount thereof, together with accrued and unpaid interest on the
principal amount thereof to but excluding the date of payment, and all other
amounts then due to such Lender or outstanding with respect to the Loans of
such Lender (including amounts payable under Section 2.16) under the Loan
Documents.


 


SECTION 2.12. Optional
Prepayment. (a)  The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, upon
at least three Business Days’ prior written or fax notice (or telephone notice
promptly confirmed by written or fax notice) in the case of Eurodollar Loans,
or written or fax notice (or telephone notice promptly confirmed by written or
fax notice) at least one Business Day prior to the date of prepayment in the
case of ABR Loans, to the Administrative Agent before 11:00 a.m., New York
City time; provided, however,
that each partial prepayment shall be in an amount that is an integral multiple
of $1,000,000.


 


(b)  
Optional prepayments of Loans made prior to the fourth anniversary of
the Closing Date shall be accompanied by the Applicable Prepayment Fee.


 


(c)  
Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the
amount stated therein on the date stated therein; provided
that any such notice delivered by the Borrower may state that such notice
is conditioned upon the effectiveness of other financing arrangements, in which
case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such condition
is not satisfied. All prepayments under this Section 2.12 shall be subject
to Section 2.16 but otherwise without premium or penalty, except as
provided in Section 2.12(b). All prepayments under this Section 2.12
shall be accompanied by accrued and unpaid interest on the principal amount to
be prepaid to but excluding the date of payment.


 


25





















 


SECTION 2.13. Mandatory
Prepayments. (a)  Subject to paragraph (g) of this Section 2.13,
not later than the fifth Business Day following the receipt of Net Cash
Proceeds in respect of any Asset Sale, the Borrower shall apply 100% of the Net
Cash Proceeds received with respect thereto to prepay outstanding Loans in
accordance with Section 2.13(e).


 


(b)  
Subject to paragraph (g) of this Section 2.13, in the event
and on each occasion that an Equity Issuance occurs, the Borrower shall,
substantially simultaneously with (and in any event not later than the fifth
Business Day next following) the occurrence of such Equity Issuance, apply 50%
(or, if after giving effect to the use of the proceeds of such Equity Issuance,
the Leverage Ratio would be less than 4.50 to 1.0, 25%) of the Net Cash
Proceeds therefrom to prepay outstanding Loans in accordance with Section 2.13(e);
provided that no prepayment under this
paragraph shall be required if after giving effect to the use of the proceeds
of such Equity Issuance, the Leverage Ratio would be less than 3.50 to 1.0.


 


(c)  
Subject to paragraph (g) of this Section 2.13, no later than
the earlier of (i) 90 days after the end of each fiscal year of the
Borrower, commencing with the fiscal year ending on December 31, 2006, and
(ii) the date on which the financial statements with respect to such
period are delivered pursuant to Section 5.04(a), the Borrower shall
prepay outstanding Loans in accordance with Section 2.13(e) in an
aggregate principal amount equal to the excess, if any, of (i) 50% of
Excess Cash Flow for the fiscal year then ended over (ii) Voluntary
Prepayments made during such fiscal year; provided that (A) such
percentage shall be reduced to 25% if the Leverage Ratio as of the end of such
fiscal year was less than 4.50 to 1.00 and (B) no prepayment under this
paragraph shall be required if the Leverage Ratio as of the end of such fiscal
year was less than 3.50 to 1.00.


 


(d)  
Subject to paragraph (g) of this Section 2.13, in the event
that any Loan Party or any subsidiary of a Loan Party shall receive Net Cash
Proceeds from the issuance or incurrence of Indebtedness for money borrowed or
Disqualified Stock of any Loan Party or any subsidiary of a Loan Party (other
than any cash proceeds from the issuance of Indebtedness or Disqualified Stock permitted
pursuant to Section 6.01), the Borrower shall, substantially simultaneously
with (and in any event not later than the fifth Business Day next following)
the receipt of such Net Cash Proceeds by such Loan Party or such subsidiary,
apply an amount equal to 100% of such Net Cash Proceeds to prepay outstanding
Loans in accordance with Section 2.13(e).


 


(e)  
Mandatory prepayments of outstanding Loans under this Agreement shall be
allocated ratably among the Lenders that accept the same. Any Lender may elect,
by notice to the Administrative Agent at or prior to the time and in the manner
specified by the Administrative Agent, prior to any prepayment of Loans
required to be made by the Borrower pursuant to this Section 2.13, to
decline all (but not a portion) of its pro rata share of such prepayment (such
declined amounts, the “Declined
Proceeds”). Any Declined Proceeds shall be offered to the
Lenders not so declining such prepayment (with such Lenders having the right to
decline any prepayment with Declined Proceeds at the time and in the manner
specified by the Administrative Agent). Any remaining Declined Proceeds may be
retained by the Borrower.


 


26





















 


(f)  
The Borrower shall deliver to the Administrative Agent, at the time of
each prepayment required under this Section 2.13, (i) a certificate
signed by a Financial Officer of the Borrower setting forth in reasonable
detail the calculation of the amount of such prepayment and (ii) to the
extent practicable, at least five Business Days prior written notice of such
prepayment. Each notice of prepayment shall specify the prepayment date, the
Type of each Loan being prepaid and the principal amount of each Loan (or
portion thereof) to be prepaid; provided, however, that, if at the time of any prepayment pursuant to
this Section 2.13 there shall be outstanding Borrowings of different Types
or Eurodollar Borrowings with different Interest Periods, and if some but not
all Lenders shall have accepted such mandatory prepayment, then the aggregate
amount of such mandatory prepayment shall be allocated ratably to each
outstanding Borrowing of the accepting Lenders. All prepayments of Borrowings
under this Section 2.13 shall be subject to Section 2.16, but shall
otherwise be without premium or penalty, and shall be accompanied by accrued
and unpaid interest on the principal amount to be prepaid to but excluding the
date of payment.


 


(g)  
Notwithstanding anything in this Section 2.13 to the contrary,
until all obligations under the First Lien Loan Documents shall have been paid
in full, (i) no mandatory prepayments of outstanding Loans that would
otherwise be required under this Section 2.13 shall be required to be
made, except with respect to the portion (if any) of the proceeds of the event
giving rise to such mandatory prepayment as shall have been rejected by the lenders
under the First Lien Credit Agreement in accordance with Section 2.13(e) of
the First Lien Credit Agreement, and (ii) the date by which any prepayment
pursuant to this Section 2.13 shall be required to be made shall be the fifth
Business Day following the date of determination that proceeds of the event
giving rise to such mandatory prepayment may be applied to prepayments of
the Loans in accordance with Section 2.13(e) of the First Lien Credit
Agreement.


 


SECTION 2.14. Reserve
Requirements; Change in Circumstances. (a)  Notwithstanding
any other provision of this Agreement, if any Change in Law shall impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of or credit extended by
any Lender (except any such reserve requirement which is reflected in the
Adjusted LIBO Rate) or shall impose on such Lender or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans made by
such Lender, and the result of any of the foregoing shall be to increase the
cost to such Lender of making or maintaining any Eurodollar Loan or to reduce
the amount of any sum received or receivable by such Lender hereunder (whether
of principal, interest or otherwise) by an amount deemed by such Lender to be
material, then the Borrower will pay to such Lender upon demand such additional
amount or amounts as will compensate such Lender for such additional costs
incurred or reduction suffered.


 


(b)  
If any Lender shall have determined that any Change in Law regarding
capital adequacy has or would have the effect of reducing the rate of return on
such Lender’s capital or on the capital of such Lender’s holding company, if
any, as a consequence of this Agreement or the Loans made by such Lender
pursuant hereto to a level below that which such Lender or such Lender’s
holding company could have


 


27





















 


achieved but for such Change in Law (taking into consideration such
Lender’s policies and the policies of such Lender’s holding company with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such Lender’s holding
company for any such reduction suffered.


 


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


 


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


 


SECTION 2.15. Change
in Legality. (a)  Notwithstanding any other provision of
this Agreement, if any Change in Law shall make it unlawful for any Lender
to maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written
notice to the Borrower and to the Administrative Agent:


 


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


 


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


 


28





















 


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


 


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


 


SECTION 2.16. Indemnity.
The Borrower shall indemnify each Lender against any loss or expense that such
Lender may sustain or incur as a consequence of (a) any event, other
than a default by such Lender in the performance of its obligations hereunder,
which results in (i) such Lender receiving or being deemed to receive any
amount on account of the principal of any Eurodollar Loan prior to the end of
the Interest Period in effect therefor, (ii) the conversion of any
Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period with
respect to any Eurodollar Loan, in each case other than on the last day of the
Interest Period in effect therefor, or (iii) any Eurodollar Loan to be
made by such Lender (including any Eurodollar Loan to be made pursuant to a
conversion or continuation under Section 2.10) not being made after notice
of such Loan shall have been given by the Borrower hereunder (any of the events
referred to in this clause (a) being called a “Breakage Event”) or (b) any
default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its
cost of obtaining funds for the Eurodollar Loan that is the subject of such
Breakage Event for the period from the date of such Breakage Event to the last
day of the Interest Period in effect (or that would have been in effect) for
such Loan over (ii) the amount of interest likely to be realized by such
Lender in redeploying the funds released or not utilized by reason of such
Breakage Event for such period. A certificate of any Lender setting forth any
amount or amounts which such Lender is entitled to receive pursuant to this Section 2.16
shall be delivered to the Borrower and shall be conclusive absent manifest
error.


 


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


 


SECTION 2.18. Sharing
of Setoffs. Each Lender agrees that if it shall, through the
exercise of a right of banker’s lien, setoff or counterclaim against the
Borrower or any other Loan Party, or pursuant to a secured claim under Section 506
of Title 11 of the 


 


29





















 


United States
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, obtain payment
(voluntary or involuntary) in respect of any Loan or Loans as a result of which
the unpaid principal portion of its Loans shall be proportionately less than
the unpaid principal portion of the Loans of any other Lender, it shall be
deemed simultaneously to have purchased from such other Lender at face value,
and shall promptly pay to such other Lender the purchase price for, a
participation in the Loans of such other Lender, so that the aggregate unpaid
principal amount of the Loans and participations in Loans held by each Lender
shall be in the same proportion to the aggregate unpaid principal amount of all
Loans then outstanding as the principal amount of its Loans prior to such
exercise of banker’s lien, setoff or counterclaim or other event was to the
principal amount of all Loans outstanding prior to such exercise of banker’s
lien, setoff or counterclaim or other event; provided,
however, that if any such
purchase or purchases or adjustments shall be made pursuant to this Section 2.18
and the payment giving rise thereto shall thereafter be recovered, such
purchase or purchases or adjustments shall be rescinded to the extent of such
recovery and the purchase price or prices or adjustment restored without
interest. The Borrower expressly consents to the foregoing arrangements and
agrees that any Lender holding a participation in a Loan deemed to have been so
purchased may exercise any and all rights of banker’s lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower to such
Lender by reason thereof as fully as if such Lender had made a Loan directly to
the Borrower in the amount of such participation.


 


SECTION 2.19. Payments.
(a)  The Borrower shall make each payment (including principal of or
interest on any Borrowing or any Fees or other amounts) hereunder and under any
other Loan Document not later than 12:00 (noon), New York City time, on
the date when due in immediately available dollars, without setoff, defense or
counterclaim. Each such payment shall be made to the Administrative Agent at
its offices at Eleven Madison Avenue, New York, NY 10010. The Administrative
Agent shall promptly distribute to each Lender any payments received by the
Administrative Agent on behalf of such Lender.


 


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


 


(c)  
Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders the amount due. In such event, if
the Borrower does not in fact make such payment, then each of the Lenders
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender, in immediately available


 


30





















 


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 the
Administrative Agent, at a rate determined by the Administrative Agent to
represent its cost of overnight or short-term funds (which determination shall
be conclusive absent manifest error).


 


SECTION 2.20. Taxes.
(a)  Any and all payments by or on account of any obligation of the
Borrower or any other Loan Party hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that if
the Borrower or any other Loan Party shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent or Lender (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii) the
Borrower or such Loan Party shall make such deductions and (iii) the
Borrower or such Loan Party shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.


 


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


 


(c)  
The Borrower shall indemnify the Administrative Agent and each Lender,
within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on
account of any obligation of the Borrower or any other Loan Party hereunder or
under any other Loan Document (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability
delivered to the Borrower by a Lender, or by the Administrative Agent on behalf
of itself or a Lender, shall be conclusive absent manifest error.


 


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


 


(e)  
Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as


 


31





















 


will permit such payments to be made without withholding or at a
reduced rate of withholding.


 


SECTION 2.21. Assignment
of Commitments Under Certain Circumstances; Duty to Mitigate. (a) 
In the event (i) any Lender delivers a certificate requesting compensation
pursuant to Section 2.14, (ii) any Lender delivers a notice described
in Section 2.15, (iii) the Borrower is required to pay any additional
amount to any Lender or any Governmental Authority on account of any Lender
pursuant to Section 2.20 or (iv) any Lender refuses to consent to any
amendment, waiver or other modification of any Loan Document requested by the Borrower
that requires the consent of a greater percentage of the Lenders than the
Required Lenders and such amendment, waiver or other modification is consented
to by the Required Lenders, the Borrower may, at its sole expense and effort
(including with respect to the processing and recordation fee referred to in Section 9.04(b)),
upon notice to such Lender and the Administrative Agent, require such Lender to
transfer and assign, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all of its interests, rights and
obligations under this Agreement to an Eligible Assignee that shall assume such
assigned obligations (which Eligible Assignee may be another Lender, if a
Lender accepts such assignment); provided that
(x) such assignment shall not conflict with any law, rule or
regulation or order of any court or other Governmental Authority having
jurisdiction, (y) the Borrower shall have received the prior written
consent of the Administrative Agent, which consent shall not unreasonably be
withheld or delayed, and (z) the Borrower or such assignee shall have paid
to the affected Lender in immediately available funds an amount equal to the
sum of the principal of and interest accrued to the date of such payment on the
outstanding Loans of such Lender plus all Fees and other amounts accrued for
the account of such Lender hereunder with respect thereto (including any
amounts under Sections 2.14 and 2.16 and, if such assignment occurs prior
to the fourth anniversary of the Closing Date, the Applicable Prepayment Fee
that would have been payable pursuant to Section 2.12(b) if the Loans
of such Lenders subject to such assignment had been prepaid pursuant to Section 2.12);
provided further that, if prior
to any such transfer and assignment the circumstances or event that resulted in
such Lender’s claim for compensation under Section 2.14, notice under Section 2.15
or the amounts paid pursuant to Section 2.20, as the case may be,
cease to cause such Lender to suffer increased costs or reductions in amounts
received or receivable or reduction in return on capital, or cease to have the
consequences specified in Section 2.15, or cease to result in amounts
being payable under Section 2.20, as the case may be (including as a
result of any action taken by such Lender pursuant to paragraph (b) below),
or if such Lender shall waive its right to claim further compensation under Section 2.14
in respect of such circumstances or event or shall withdraw its notice under Section 2.15
or shall waive its right to further payments under Section 2.20 in respect
of such circumstances or event or shall consent to the proposed amendment,
waiver, consent or other modification, as the case may be, then such
Lender shall not thereafter be required to make any such transfer and
assignment hereunder. Each Lender hereby grants to the Administrative Agent an
irrevocable power of attorney (which power is coupled with an interest) to
execute and deliver, on behalf of such Lender as assignor, any Assignment and
Acceptance necessary to effectuate any assignment of such Lender’s interests
hereunder in the circumstances contemplated by this Section 2.21(a).


 


32





















 


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


 


ARTICLE III



Representations and Warranties


 


The Borrower represents and warrants to the
Administrative Agent, the Collateral Agent and each of the Lenders that:


 


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


 


SECTION 3.02. Authorization.
The Transactions (a) have been duly authorized by all requisite corporate
and, if required, stockholder action and (b) will not (i) violate (A) any
provision of law, statute, rule or regulation, or of the certificate or
articles of incorporation or other constitutive documents or by-laws of the
Borrower or any Subsidiary, (B) any order of any Governmental Authority or
(C) any provision of any indenture, agreement or other instrument to which
the Borrower or any Subsidiary is a party or by which any of them or any of
their property is or may be bound, (ii) be in conflict with, result
in a breach of or constitute (alone or with notice or lapse of time or both) a
default under, or give rise to any right to accelerate or to require the
prepayment, repurchase or redemption of any obligation under any such
indenture, agreement or other instrument or (iii) result in the creation
or imposition of any Lien upon or with respect to any property or assets now
owned or hereafter acquired by the Borrower or any


 


33





















 


Subsidiary
(other than Liens created hereunder or under the Security Documents and the First
Priority Liens).


 


SECTION 3.03. Enforceability.
This Agreement has been duly executed and delivered by the Borrower and
constitutes, and each other Loan Document when executed and delivered by each
Loan Party that is or will be a party thereto will constitute, a legal, valid
and binding obligation of such Loan Party enforceable against such Loan Party
in accordance with its terms.


 


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


 


SECTION 3.05. Financial
Statements. (a)  The Borrower has heretofore furnished to
the Administrative Agent its consolidated balance sheets and related statements
of income, stockholder’s equity and cash flows (i) as of and for the
fiscal years ended December 31, 2002, December 31, 2003 and December 31,
2004, audited by and accompanied by the opinion of PricewaterhouseCoopers LLP,
independent public accountants, and (ii) as of and for the fiscal quarter
and the portion of the fiscal year ended September 30, 2005, and each
fiscal month ended after September 30, 2005 and at least 30 days
before the Closing Date. Such financial statements present fairly the financial
condition and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such dates and for such periods. Such balance
sheets and the notes thereto disclose all material liabilities, direct or
contingent, of the Borrower and its consolidated Subsidiaries as of the dates
thereof. Such financial statements were prepared in accordance with GAAP
applied on a consistent basis, subject, in the case of unaudited financial
statements, to year-end audit adjustments and the absence of footnotes.


 


(b)  
The Borrower has heretofore delivered to the Administrative Agent its
unaudited pro forma consolidated balance sheet and related pro forma statements
of income, stockholder’s equity and cash flows as of and for the fiscal quarter
ended September 30, 2005, prepared giving effect to the Transactions as if
they had occurred, with respect to such balance sheet, on such date and, with
respect to such other financial statements, on the first day of the four-fiscal
quarter period ending on such date. Such pro forma financial statements have
been prepared in good faith by the Borrower, based on the assumptions used to
prepare the pro forma financial information contained in the Confidential
Information Memorandum (which assumptions are believed by the Borrower on the
date hereof and on the Closing Date to be reasonable), are based on the best
information available to the Borrower as of the date of delivery thereof,
accurately reflect all adjustments required to be made to give effect to the
Transactions and present fairly on a pro forma basis the estimated consolidated
financial position of the Borrower and its consolidated Subsidiaries as of such
date and for such period, assuming that the


 


34





















 


Transactions had actually occurred at such date or at the beginning of
such period, as the case may be.


 


SECTION 3.06. No
Material Adverse Change. No event, change or condition has
occurred that has had, or could reasonably be expected to have, a material
adverse effect on the business, assets, liabilities, operations, condition
(financial or otherwise) or operating results of the Borrower and the
Subsidiaries, taken as a whole, since December 31, 2004.


 


SECTION 3.07. Title
to Properties; Possession Under Leases. (a)  As of the
Closing Date, neither the Borrower nor any of the Subsidiaries owns any real
property in fee.


 


(b)  
Each of the Borrower and the Subsidiaries has complied with all
obligations under all material leases to which it is a party and all such
leases are in full force and effect. Each of the Borrower and the Subsidiaries
enjoys peaceful and undisturbed possession under all such material leases. Schedule 3.07(b) lists
completely and correctly as of the Closing Date all real property leased by the
Borrower and the Subsidiaries and the addresses thereof.


 


SECTION 3.08. Subsidiaries.
Schedule 3.08 sets forth as of the Closing Date a list of all Subsidiaries
and the percentage ownership interest of the Borrower therein. The shares of
capital stock or other ownership interests so indicated on Schedule 3.08
are fully paid and non-assessable and are owned by the Borrower, directly or
indirectly, free and clear of all Liens (other than Liens created under the
Security Documents and any First Priority Liens).


 


SECTION 3.09. Litigation;
Compliance with Laws. (a)  Except as set forth on Schedule 3.09,
there are no actions, suits or proceedings at law or in equity or by or before
any Governmental Authority now pending or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any Subsidiary or any business,
property or rights of any such person (i) that involve any Loan Document
or the Transactions or (ii) that, if adversely determined, could reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect.


 


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


 


SECTION 3.10. Agreements.
Neither the Borrower nor any of the Subsidiaries is in default in any manner
under any provision of any indenture or other agreement or instrument
evidencing Material Indebtedness, or any other material agreement or instrument
to which it is a party or by which it or any of its properties or assets are or
may be bound, where such default could reasonably be expected to result in
a Material Adverse Effect.


 


35





















 


SECTION 3.11. Federal
Reserve Regulations. (a)  Neither the Borrower nor any of
the Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of buying or carrying
Margin Stock.


 


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


 


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


 


SECTION 3.13. Use
of Proceeds. The Borrower will use the proceeds of the Loans
only for the purposes specified in the introductory statement to this
Agreement.


 


SECTION 3.14. Tax
Returns. Each of the Borrower and the Subsidiaries has filed or
caused to be filed all Federal and all material state, local and foreign tax
returns or materials required to have been filed by it and has paid or caused
to be paid all taxes due and payable by it and all assessments received by it,
except taxes that are being contested in good faith by appropriate proceedings
and for which the Borrower or such Subsidiary, as applicable, shall have set
aside on its books adequate reserves.


 


SECTION 3.15. No
Material Misstatements. None of (a) the Confidential
Information Memorandum or (b) any other information, report, financial
statement, exhibit or schedule furnished by or on behalf of the
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto, taken as a whole, contained, contains or will contain any material
misstatement of fact or omitted, omits or will omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are or will be made, not misleading; provided that to the extent any such
information, report, financial statement, exhibit or schedule was
based upon or constitutes a forecast or projection, the Borrower represents
only that it acted in good faith and utilized reasonable assumptions and due
care in the preparation of such information, report, financial statement, exhibit or
schedule.


 


SECTION 3.16. Employee
Benefit Plans. Each of the Borrower and its ERISA Affiliates is,
with respect to all Plans and Multiemployer Plans, in compliance in all
material respects with the applicable provisions of ERISA and the Code and the
regulations and published interpretations thereunder. No ERISA Event has
occurred or is reasonably expected to occur that, when taken together with all
other such ERISA Events, could reasonably be expected to result in material
liability of the Borrower or any of its Subsidiaries or ERISA Affiliates.


 


SECTION 3.17. Environmental
Matters. (a)  Except as set forth in Schedule 3.17 and
except with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, none


 


36





















 


of the
Borrower or any of the Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any
claim with respect to any Environmental Liability or (iv) knows of any
basis for any Environmental Liability.


 


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


 


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


 


SECTION 3.19. Security
Documents. (a)  Each of the Pledge and Security Agreement
and the Pledge Agreement, upon execution and delivery thereof by the parties
thereto, will create in favor of the Collateral Agent, for the ratable benefit
of the Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined therein) and the proceeds thereof and (i) when the
Pledged Collateral is delivered to the First Lien Collateral Agent, the Lien
created under such Security Document shall constitute a fully perfected second
priority Lien on, and security interest in, all right, title and interest of
the Grantors in such Pledged Collateral, in each case prior and superior in right
to any other person other than the First Lien Secured Parties (as defined in
Intercreditor Agreement), and (ii) when financing statements in
appropriate form are filed in the offices specified on Schedule 3.19(a),
the Lien created under the Pledge and Security Agreement will constitute a
fully perfected second priority Lien on, and security interest in, all right,
title and interest of the Borrower in such Collateral (other than Intellectual
Property, as defined in the Pledge and Security Agreement), in each case prior
and superior in right to any other person, other than with respect to Liens
expressly permitted by Section 6.02.


 


(b)  
Upon the recordation of the Pledge and Security Agreement with the
United States Patent and Trademark Office and the United States Copyright
Office, together with the financing statements in appropriate form filed
in the offices specified on Schedule 3.19(a), the Lien created under the Pledge
and Security Agreement shall constitute a fully perfected second priority Lien on,
and security interest in, all right, title and interest of the Borrower in the
Intellectual Property (as defined in the Pledge and Security Agreement) in
which a security interest may be perfected by filing in the United States
and its territories and possessions, in each case prior and superior in right
to any other person (it being understood that subsequent recordings in the
United States Patent and Trademark Office and the United States Copyright
Office may be necessary to perfect a Lien on registered trademarks and
patents, trademark and patent applications and registered copyrights acquired
by the Borrower after the date hereof).


 


37





















 


SECTION 3.20. Labor
Matters. As of the Closing Date, there are no strikes, lockouts
or slowdowns against the Borrower or any Subsidiary pending or, to the
knowledge of the Borrower, threatened. Except as could not reasonably be
expected to have a Material Adverse Effect, (a) the hours worked by and
payments made to employees of the Borrower and the Subsidiaries have not been
in violation of the Fair Labor Standards Act or any other applicable Federal,
state, local or foreign law dealing with such matters, and (b) all
payments due from the Borrower or any Subsidiary or for which any claim may be
made against the Borrower or any Subsidiary on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of the Borrower or such Subsidiary. The consummation of
the Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining
agreement to which the Borrower or any Subsidiary is bound.


 


SECTION 3.21. Solvency.
Immediately after the consummation of the Transactions to occur on the Closing
Date and immediately following the making of each Loan and after giving effect
to the application of the proceeds of each Loan, (a) the fair value of the
assets of the Borrower and the Subsidiaries determined on a consolidated basis,
at a fair valuation, will exceed their debts and liabilities, subordinated,
contingent or otherwise; (b) the present fair saleable value of the
property of the Borrower and the Subsidiaries determined on a consolidated basis
will be greater than the amount that will be required to pay the probable
liability of their debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured; (c) the
Borrower and the Subsidiaries determined on a consolidated basis will be able
to pay their debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured; and (d) each Loan
Party will not have unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Closing Date.


 


SECTION 3.22. Transaction
Documents. The Borrower has delivered to the Administrative
Agent a complete and correct copy of the Redemption Agreement (including all
schedules, exhibits, amendments, supplements and modifications thereto) as in
effect on the Closing Date. Neither the Borrower nor, to the knowledge of the
Borrower, any other person party thereto is in default in the performance or
compliance with any material provisions thereof. The Redemption Agreement
complies in all material respects with all applicable laws.


 


ARTICLE IV



Conditions of Lending


 


The obligations of the Lenders to make the Loans
hereunder are subject to the satisfaction of the following conditions:


 


(a)  
The Administrative Agent shall have received a notice of Borrowing as
required by Section 2.03.


 


38





















 


(b)  
The representations and warranties set forth in Article III and in
each other Loan Document shall be true and correct in all material respects on
and as of the date of the making of such Loans with the same effect as though
made on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date.


 


(c)  
At the time of and immediately after the making of such Loans, no
Default or Event of Default shall have occurred and be continuing.


 


(d)  
The Administrative Agent shall have received, on behalf of itself and
the Lenders, a favorable written opinion of (i) Simpson Thacher & Bartlett
LLP, counsel for the Borrower, substantially to the effect set forth in Exhibit H-1,
and (ii) each local counsel listed on Schedule 4.01, substantially to
the effect set forth in Exhibit H-2, in each case (A) dated the
Closing Date, (B) addressed to the Administrative Agent and the Lenders
and (C) covering such matters relating to the Loan Documents and the
Transactions as the Administrative Agent shall reasonably request, and the
Borrower hereby requests each of its counsel to deliver such opinions.


 


(e)  
All legal matters incident to this Agreement, the Borrowings and
extensions of credit hereunder and the other Loan Documents shall be
satisfactory to the Lenders and to the Administrative Agent.


 


(f)  
The Administrative Agent shall have received (i) a copy of the
certificate of incorporation, including all amendments thereto, of each Loan
Party, certified as of a recent date by the Secretary of State of the State of
Delaware, and a certificate as to the good standing of each Loan Party as of a
recent date, from such Secretary of State; (ii) a certificate of the
Secretary or Assistant Secretary of each Loan Party dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
bylaws of such Loan Party as in effect on the Closing Date and at all times
since a date prior to the date of the resolutions described in clause (B) below,
(B) that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of such Loan Party authorizing the execution,
delivery and performance of the Loan Documents to which such person is a party
and, in the case of the Borrower, the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in full force
and effect, (C) that the certificate of incorporation of such Loan Party
have not been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above,
and (D) as to the incumbency and specimen signature of each officer
executing any Loan Document or any other document delivered in connection
herewith on behalf of such Loan Party; (iii) a certificate of another
officer as to the incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant to clause (ii) above;
and (iv) such other documents as the Lenders or the Administrative Agent may reasonably
request.


 


(g)  
The Administrative Agent shall have received a certificate, dated the
Closing Date and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and
(c) of this Article IV.


 


39





















 


(h)  
The Administrative Agent shall have received all Fees and other amounts
due and payable on or prior to the Closing Date, including, to the extent
invoiced, reimbursement or payment of all reasonable out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder or under any other
Loan Document.


 


(i)  
The Security Documents shall have been duly executed by the Borrower,
each Loan Party that is to be a party thereto and, in the case of the Pledge
Agreement, Parent, and shall be in full force and effect on the Closing Date. The
Collateral Agent on behalf of the Secured Parties shall have a security
interest in the Collateral of the type and priority described in each Security
Document.


 


(j)   The
Collateral Agent shall have received a Perfection Certificate with respect to
the Loan Parties dated the Closing Date and duly executed by a Responsible
Officer of the Borrower, and shall have received the results of a search of the
Uniform Commercial Code filings (or equivalent filings) made with respect
to the Loan Parties in the states (or other jurisdictions) of formation of such
persons, in which the chief executive office of each such person is located and
in the other jurisdictions in which such persons maintain property, in each
case as indicated on such Perfection Certificate, together with copies of the
financing statements (or similar documents) disclosed by such search, and
accompanied by evidence satisfactory to the Collateral Agent that the Liens
indicated in any such financing statement (or similar document) would be
permitted under Section 6.02 or have been or will be contemporaneously
released or terminated.


 


(k)   The
Administrative Agent shall have received a copy of, or a certificate as to
coverage under, the insurance policies required by Section 5.02 and the
applicable provisions of the Security Documents, each of which shall be
endorsed or otherwise amended to include a customary lender’s loss payable
endorsement and to name the Collateral Agent as additional insured, in form and
substance satisfactory to the Administrative Agent.


 


(l)   The
Redemption shall have been, or substantially simultaneously with the funding of
Loans on the Closing Date shall be, consummated in accordance with the
Redemption Agreement and applicable law, without giving effect to any
modification or waiver that is materially adverse to the interests of the
Lenders of any terms or conditions of the Redemption Agreement unless otherwise
approved by the Required Lenders. The Administrative Agent shall have received
copies of the Redemption Agreement and all certificates, opinions and other
documents delivered thereunder, certified by a Financial Officer as being
complete and correct.


 


(m)   Immediately
after giving effect to the Transactions and the other transactions contemplated
hereby, the Borrower and the Subsidiaries shall have outstanding no
Indebtedness or preferred stock other than (a) Indebtedness outstanding
under this Agreement and the First Lien Credit Agreement and (b) Indebtedness
set forth on Schedule 6.01.


 


(n)   The
Lenders shall have received the financial statements and opinion referred to in
Section 3.05.


 


40





















 


(o)   The
Administrative Agent shall have received a certificate from the chief financial
officer of the Borrower certifying that the Borrower and its subsidiaries, on a
consolidated basis after giving effect to the Transactions to occur on the
Closing Date, are solvent.


 


(p)   All
requisite Governmental Authorities and third parties shall have approved or
consented to the Transactions and the other transactions contemplated hereby to
the extent required, all applicable appeal periods shall have expired and there
shall not be any pending or threatened litigation, governmental, administrative
or judicial action that could reasonably be expected to restrain, prevent or
impose burdensome conditions on the Transactions or the other transactions
contemplated hereby.


 


(q)   The
Lenders shall have received, at least five days prior to the Closing Date, all
documentation and other information required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and
regulations, including the USA PATRIOT Act.


 


ARTICLE V



Affirmative Covenants


 


The Borrower covenants and agrees with each
Lender that so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each Loan
and all Fees and all other expenses or amounts payable under any Loan Document
shall have been paid in full, unless the Required Lenders shall otherwise
consent in writing, the Borrower will, and will cause each of the Subsidiaries
to:


 


SECTION 5.01. Existence;
Compliance with Laws; Businesses and Properties. (a)  Do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence, except as otherwise expressly permitted under Section 6.05.


 


(b)  
Do or cause to be done all things necessary to obtain, preserve, renew,
extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; comply in all material respects with
all applicable laws, rules, regulations and decrees and orders of any
Governmental Authority, whether now in effect or hereafter enacted; and at all
times maintain and preserve all property material to the conduct of such
business and keep such property in good repair, working order and condition and
from time to time make, or cause to be made, all needed and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in connection therewith may be properly
conducted at all times.


 


SECTION 5.02. Insurance.
(a)  Keep its insurable properties adequately insured at all times by
financially sound and reputable insurers; maintain such other insurance, to
such extent and against such risks, including fire and other risks insured
against by extended coverage, as is customary with companies in the same or
similar businesses


 


41





















 


operating in
the same or similar locations, including public liability insurance against
claims for personal injury or death or property damage occurring upon, in,
about or in connection with the use of any properties owned, occupied or
controlled by it; and maintain such other insurance as may be required by
law.


 


(b)  
Cause all such policies covering any Collateral to be endorsed or
otherwise amended to include a customary lender’s loss payable endorsement and
other customary provisions, in form and substance reasonably satisfactory
to the Administrative Agent and the Collateral Agent; deliver original or
certified copies of all such policies to the Collateral Agent; deliver to the
Administrative Agent and the Collateral Agent, prior to the cancellation,
modification or nonrenewal of any such policy of insurance, a copy of a renewal
or replacement policy (or other evidence of renewal of a policy previously
delivered to the Administrative Agent and the Collateral Agent) together with
evidence satisfactory to the Administrative Agent and the Collateral Agent of
payment of the premium therefor.


 


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


 


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


 


SECTION 5.04. Financial
Statements, Reports, etc. In the case of the Borrower, furnish
to the Administrative Agent for distribution to each Lender:


 


(a)  
within 90 days after the end of each fiscal year, its consolidated
balance sheet and related statements of income, stockholders’ equity and cash
flows showing the financial condition of the Borrower and its consolidated
Subsidiaries as of the close of such fiscal year and the results of its
operations and the operations of such Subsidiaries during such year, together
with comparative figures for the immediately preceding fiscal year, all audited
by PricewaterhouseCoopers LLP or other independent public accountants of
recognized national standing and accompanied by an opinion of such accountants
(which opinion shall be without a “going concern” or like qualification or
exception and without any qualification or exception as to the scope of such
audit) to the


 


42





















 


effect that such consolidated financial statements fairly present the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;


 


(b)  
within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated balance sheet and related
statements of income, stockholders’ equity and cash flows showing the financial
condition of the Borrower and its consolidated Subsidiaries as of the close of
such fiscal quarter and the results of its operations and the operations of
such Subsidiaries during such fiscal quarter and the then elapsed portion of the
fiscal year, and comparative figures for the same periods in the immediately
preceding fiscal year, all certified by one of its Financial Officers as fairly
presenting the financial condition and results of operations of the Borrower
and its consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end audit adjustments;


 


(c)  
within 30 days after the end of each of the first two fiscal months of
each fiscal quarter, its consolidated balance sheet and related statements of
income and cash flows showing the financial condition of the Borrower and its
consolidated Subsidiaries during such fiscal month and the then elapsed portion
of the fiscal year, all certified by one of its Financial Officers as fairly
presenting the financial condition and results of operations of the Borrower
and its consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end audit adjustments;


 


(d)  
concurrently with any delivery of financial statements under paragraph
(a), (b) or (c) above, a letter of the accounting firm (if such
accounting firm is then providing similar letters for other corporate clients) (in
the case of paragraph (a)) and a certificate of a Financial Officer (in
the case of paragraph (a), (b) or (c)) opining on or certifying such
statements (which letter, when furnished by an accounting firm, may be
limited to accounting matters with respect to Section 6.11 and disclaim
responsibility for legal interpretations) (i) certifying that no Event of
Default or Default has occurred or, if such an Event of Default or Default has
occurred, specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto, (ii) setting forth
computations in reasonable detail satisfactory to the Administrative Agent
demonstrating compliance with the covenant contained in Section 6.11 and,
in the case of a certificate delivered with the financial statements required
by paragraph (a) above, setting forth the Borrower’s calculation of
Excess Cash Flow, and (iii) in the case of any certificate delivered by a
Financial Officer, describing any Asset Sales that were consummated during the
preceding period and the amount and the use or the intended use of the Net Cash
Proceeds thereof;


 


(e)  
within 90 days after the commencement of each fiscal year of the
Borrower, a consolidated budget for such fiscal year (including a projected
consolidated balance sheet and related statements of projected operations and
cash flows as of the end of and for such fiscal year and summarizing the
assumptions used for purposes of preparing such budget);


 


43





















 


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


 


(g)  
promptly after the receipt thereof by the Borrower or any of the
Subsidiaries, a copy of any “management letter” received by any such person from
its certified public accountants and the management’s response thereto;


 


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


 


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


 


SECTION 5.05. Litigation
and Other Notices. Furnish to the Administrative Agent and each
Lender prompt written notice of the following:


 


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


 


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


 


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


 


(d)  
any notice of any change in the ratings of the Credit Facility by
S&P or Moody’s, or any notice from either such agency indicating its intent
to effect such a change or to place the Borrower or the Credit Facility on a “CreditWatch”
or “WatchList” or any similar list, in each case with negative implications, or
its cessation of, or its intent to cease, rating the Credit Facility.


 


SECTION 5.06. Information
Regarding Collateral. (a)  Furnish to the Administrative
Agent prompt written notice of any change (i) in any Loan Party’s
corporate name, (ii) in the jurisdiction of organization or formation of
any Loan Party, (iii) in any Loan Party’s identity or corporate structure
or (iv) in any Loan Party’s Federal Taxpayer Identification Number. The
Borrower agrees not to effect or permit any change referred to in the preceding
sentence unless all filings have been made under the Uniform Commercial
Code or otherwise that are required in order for the Collateral Agent to


 


44





















 


continue at
all times following such change to have a valid, legal and perfected security
interest in all the Collateral.


 


(b)  
In the case of the Borrower, each year, at the time of delivery of the
annual financial statements with respect to the preceding fiscal year pursuant
to Section 5.04(a), deliver to the Administrative Agent a certificate of a
Financial Officer setting forth the information required pursuant to Section 2
of the Perfection Certificate or confirming that there has been no change in
such information since the date of the Perfection Certificate delivered on the
Closing Date or the date of the most recent certificate delivered pursuant to
this Section 5.06.


 


SECTION 5.07. Maintaining
Records; Access to Properties and Inspections; Maintenance of Ratings.
(a)  Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law are made of
all dealings and transactions in relation to its business and activities. Each
Loan Party will, and will cause each of its subsidiaries to, permit any
representatives designated by the Administrative Agent or, during the existence
of any Event of Default, any Lender to visit and inspect the financial records
and the properties of such person at reasonable times and as often as
reasonably requested and to make extracts from and copies of such financial
records, and permit any representatives designated by the Administrative Agent
or, during the existence of any Event of Default, any Lender to discuss the
affairs, finances and condition of such person with the officers thereof and
independent accountants therefor.


 


(b)  
In the case of the Borrower, use commercially reasonable efforts to
cause the Credit Facility to be rated by S&P and Moody’s.


 


SECTION 5.08. Use
of Proceeds. Use the proceeds of the Loans only for the purposes
specified in the introductory statement to this Agreement.


 


SECTION 5.09. Employee
Benefits. (a) With respect to all Plans, Multiemployer
Plans and Foreign Pension Plans, comply in all material respects with the
applicable provisions of ERISA and the Code and the laws applicable to any
Foreign Pension Plan and (b) furnish to the Administrative Agent as soon
as possible after, and in any event within ten days after any responsible
officer of the Borrower or any ERISA Affiliate knows or has reason to know that,
any ERISA Event has occurred that, alone or together with any other ERISA Event
could reasonably be expected to result in material liability of the Borrower or
any Subsidiary, a statement of a Financial Officer of the Borrower setting
forth details as to such ERISA Event and the action, if any, that the Borrower
proposes to take with respect thereto.


 


SECTION 5.10. Compliance
with Environmental Laws. Except as could not reasonably be
expected to result in a Material Adverse Effect, (a) comply, and cause all
lessees and other persons occupying its properties to comply, in all material
respects with all Environmental Laws applicable to its operations and
properties; and (b) obtain and renew all material environmental permits
necessary for its operations and properties; and conduct any remedial action in
accordance with Environmental Laws.


 


45





















 


SECTION 5.11. Further
Assurances. Execute any and all further documents, financing
statements, agreements and instruments, and take or cause to be taken all
further action (including filing Uniform Commercial Code and other
financing statements, mortgages and deeds of trust) that may be required
under applicable law, or that the Required Lenders, the Administrative Agent or
the Collateral Agent may reasonably request, in order to effectuate the
transactions contemplated by the Loan Documents and in order to grant,
preserve, protect and perfect the validity and first priority of the security
interests created or intended to be created by the Security Documents. The
Borrower will cause any subsequently acquired or organized Domestic Subsidiary
to become a Loan Party by executing the Guarantee Agreement. In addition, from
time to time, the Borrower will, at its cost and expense, promptly secure the
Obligations by pledging or creating, or causing to be pledged or created,
perfected security interests with respect to such of its assets and properties
as the Administrative Agent or the Required Lenders shall designate (it being understood
that it is the intent of the parties that the Obligations shall be secured by,
among other things, substantially all the assets of the Borrower (including
real and other properties acquired subsequent to the Closing Date)). Such
security interests and Liens will be created under the Security Documents and
other security agreements, mortgages, deeds of trust and other instruments and
documents in form and substance satisfactory to the Collateral Agent, and
the Borrower shall deliver or cause to be delivered to the Lenders all such
instruments and documents (including legal opinions, title insurance policies
and lien searches) as the Collateral Agent shall reasonably request to evidence
compliance with this Section. The Borrower agrees to provide such evidence as
the Collateral Agent shall reasonably request as to the perfection and priority
status of each such security interest and Lien. In furtherance of the
foregoing, the Borrower will give prompt notice to the Administrative Agent of
the acquisition by it of any real property (or any interest in real property)
having a value in excess of $250,000.


 


SECTION 5.12. Interest
Rate Protection. No later than the 180th day after the Closing
Date, the Borrower shall enter into, and for a minimum of one year thereafter
maintain, Hedging Agreements acceptable to the Administrative Agent that result
in at least 50% of the aggregate principal amount of its funded long-term
Indebtedness being effectively subject to a fixed or maximum interest rate
acceptable to the Administrative Agent.


 


ARTICLE VI



Negative Covenants


 


The Borrower covenants and agrees with each
Lender that, so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document have
been paid in full, unless the Required Lenders shall otherwise consent in
writing, the Borrower will not, nor will it cause or permit any of the
Subsidiaries to:


 


46

















 


SECTION 6.01. Indebtedness.
Incur, create, assume or permit to exist any Indebtedness (including any
Disqualified Stock), except:


 


(a) Indebtedness
existing on the date hereof and set forth in Schedule 6.01 and any
extensions, renewals or replacements of such Indebtedness to the extent the
principal amount of such Indebtedness is not increased, neither the final
maturity nor the weighted average life to maturity of such Indebtedness is
decreased, such Indebtedness, if subordinated to the Obligations, remains so
subordinated on terms no less favorable to the Lenders, and the original
obligors in respect of such Indebtedness remain the only obligors thereon;


 


(b) Indebtedness
created hereunder and under the other Loan Documents;


 


(c) Indebtedness
under the First Lien Credit Agreement;


 


(d) intercompany
Indebtedness of the Borrower and the Subsidiaries to the extent permitted by Section 6.04(c);


 


(e) Indebtedness
of the Borrower or any Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, and extensions,
renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof; provided
that (i) such Indebtedness is incurred prior to or within 90 days after
such acquisition or the completion of such construction or improvement and (ii) the
aggregate principal amount of Indebtedness permitted by this Section 6.01(e),
when combined with the aggregate principal amount of all Capital Lease
Obligations and Synthetic Lease Obligations incurred pursuant to Section 6.01(f) shall
not exceed $5,000,000 at any time outstanding;


 


(f) Capital
Lease Obligations and Synthetic Lease Obligations in an aggregate principal
amount, when combined with the aggregate principal amount of all Indebtedness
incurred pursuant to Section 6.01(e), not in excess of $5,000,000 at any
time outstanding;


 


(g) Indebtedness
under performance bonds or with respect to workers’ compensation claims, in
each case incurred in the ordinary course of business;


 


(h) Indebtedness
acquired or assumed by the Borrower or any Subsidiary in connection with any
Permitted Acquisition in an aggregate principal amount not in excess of $15,000,000
at any time outstanding; provided
that such Indebtedness existed at the time of such Permitted Acquisition and
was not created in connection therewith or in contemplation thereof;


 


(i) Guarantees
of Indebtedness of the Borrower or any of its Subsidiaries that is incurred in
compliance with this Section 6.01; provided,
however, that any such Guarantee by the Borrower of Indebtedness of
a Subsidiary shall be deemed to be an investment in such Subsidiary for
purposes of Section 6.04(a); and


 


47





















 


(j) other
Indebtedness of the Borrower or the Subsidiaries in an aggregate principal
amount not exceeding $7,500,000 at any time outstanding.


 


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


 


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


 


(b) any
Lien created under the Loan Documents;


 


(c) the First
Priority Liens;


 


(d) Liens
for taxes not yet due or which are being contested in compliance with Section 5.03;


 


(e) landlords’,
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like
Liens arising in the ordinary course of business and securing obligations that
are not due overdue by more than 30 days or which are being contested in
compliance with Section 5.03;


 


(f) pledges
and deposits made in the ordinary course of business in compliance with workmen’s
compensation, unemployment insurance and other social security laws or
regulations;


 


(g) deposits
to secure the performance of bids, trade contracts (other than for
Indebtedness), leases (other than Capital Lease Obligations), statutory
obligations, surety and appeal bonds, performance bonds and other obligations
of a like nature incurred in the ordinary course of business;


 


(h) zoning
restrictions, easements, rights-of-way, restrictions on use of real property
and other similar encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and do not materially
detract from the value of the property subject thereto or interfere with the
ordinary conduct of the business of the Borrower or any of its Subsidiaries;


 


(i) purchase
money security interests in real property, improvements thereto or equipment
hereafter acquired (or, in the case of improvements, constructed) by the
Borrower or any Subsidiary; provided
that (i) such security interests secure Indebtedness permitted by Section 6.01,
(ii) such security interests are incurred, and the Indebtedness secured
thereby is created, within 180 days after such acquisition (or
construction), (iii) the Indebtedness secured thereby does not exceed the
lesser of the cost or the fair market value of such real property, improvements
or equipment at the time of such acquisition (or 


 


48





















 


construction) and (iv) such
security interests do not apply to any other property or assets of the Borrower
or any Subsidiary;


 


(j) Liens
arising out of judgments that do not constitute an Event of Default under
paragraph (i) of Article VII; and


 


(k) other
Liens that do not, individually or in the aggregate, secure obligations (or
encumber property with a fair market value) in excess of $5,000,000.


 


SECTION 6.03. Sale
and Lease-Back Transactions. Enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned
or hereafter acquired, and thereafter rent or lease such property or other
property which it intends to use for substantially the same purpose or purposes
as the property being sold or transferred.


 


SECTION 6.04. Investments,
Loans and Advances. Purchase, hold or acquire any Equity
Interests, evidences of indebtedness or other securities of, make or permit to
exist any loans or advances to, or make or permit to exist any investment or
any other interest in, any other person, except:


 


(a) (i) investments
by the Borrower and the Subsidiaries existing on the date hereof in the Equity
Interests of the Subsidiaries and (ii) additional investments by the
Borrower and the Subsidiaries in the Equity Interests of the Subsidiaries; provided that (A) any such Equity
Interests held by the Borrower shall be pledged pursuant to the Pledge and Security
Agreement (subject to the limitations applicable to voting stock of a Foreign
Subsidiary referred to therein) and (B) the aggregate amount of investments
made after the Closing Date by the Borrower in, and loans and advances made
after the Closing Date by the Borrower to, Subsidiaries (determined without
regard to any write-downs or write-offs of such investments, loans and
advances) shall not exceed $12,500,000 at any time outstanding (net of
intercompany royalties, service fees and dividends, in each case paid by any
Subsidiary to the Borrower);


 


(b) Permitted
Investments;


 


(c) loans
or advances made by the Borrower to any Subsidiary and made by any Subsidiary
to the Borrower or any other Subsidiary; provided
that (i) any such loans and advances made by the Borrower shall be
evidenced by a promissory note pledged to the Collateral Agent for the ratable
benefit of the Secured Parties pursuant to the Pledge and Security Agreement
and (ii) the amount of such loans and advances made by the Borrower to
Subsidiaries shall be subject to the limitation set forth in clause (a) above;


 


(d) investments
received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts and disputes with, customers and suppliers, in each case
in the ordinary course of business;


 


49





















 


(e) the
Borrower and the Subsidiaries may make loans and advances in the ordinary
course of business to their respective employees so long as the aggregate
principal amount thereof at any time outstanding (determined without regard to
any write-downs or write-offs of such loans and advances) shall not exceed $1,000,000;


 


(f) the
Borrower and the Subsidiaries may enter into Hedging Agreements that (i) are
required by Section 5.12 or (ii) are not speculative in nature;


 


(g) the
Borrower or any Subsidiary may acquire all or substantially all the assets
of a person or line of business of such person, or not less than 100% of the
Equity Interests (other than directors’ qualifying shares) of a person
(referred to herein as the “Acquired Entity”); provided
that (i) such acquisition was not preceded by an unsolicited tender offer
for such Equity Interests by, or proxy contest initiated by, the Borrower or
any Subsidiary; and (ii) at the time of such transaction (A) both
before and after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing; (B) the Borrower would be in compliance
with the covenant set forth in Section 6.11 as of the most recently
completed period of four consecutive fiscal quarters ending prior to such
transaction for which the financial statements and certificates required by Section 5.04(a) or
5.04(b) have been delivered, after giving pro forma effect to such
transaction and to any other event occurring after such period as to which pro
forma recalculation is appropriate (including any other transaction described
in this Section 6.04(g) occurring after such period) as if such
transaction had occurred as of the first day of such period; (C) the total
consideration paid in connection with such acquisition and any other
acquisitions pursuant to this Section 6.04(g) (including any
Indebtedness of the Acquired Entity that is assumed by the Borrower or any
Subsidiary following such acquisition) shall not in the aggregate exceed $35,000,000;
and (D) the Borrower shall have delivered a certificate of a Financial
Officer, certifying as to the foregoing and containing reasonably detailed
calculations in support thereof, in form and substance satisfactory to the
Administrative Agent (any acquisition of an Acquired Entity meeting all the
criteria of this Section 6.04(g) being referred to herein as a “Permitted Acquisition”);
and


 


(h) in
addition to investments permitted by paragraphs (a) through (g) above,
additional investments, loans and advances by the Borrower and the Subsidiaries
so long as the aggregate amount invested, loaned or advanced pursuant to this
paragraph (h) (determined without regard to any write-downs or write-offs
of such investments, loans and advances) does not exceed $10,000,000 in the
aggregate (plus any returns of capital actually received by the Borrower or the
Subsidiary investor in respect of investments theretofore made by it pursuant
to this paragraph (h)).


 


SECTION 6.05. Mergers,
Consolidations, Sales of Assets and Acquisitions. (a)  Merge
into or consolidate with any other person, or permit any other person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one 


 


50





















 


transaction or
in a series of transactions) all or substantially all the assets (whether
now owned or hereafter acquired) of the Borrower or less than all the Equity
Interests of any Subsidiary, or purchase, lease or otherwise acquire (in one
transaction or a series of transactions) all or any substantial part of
the assets of any other person, except that (i) the Borrower and any
Subsidiary may purchase and sell inventory in the ordinary course of
business and (ii) if at the time thereof and immediately after giving
effect thereto no Event of Default or Default shall have occurred and be
continuing (x) any Subsidiary may merge into the Borrower or a wholly
owned Subsidiary in a transaction in which the surviving entity is the Borrower
or a wholly owned Subsidiary and no person other than the Borrower or a wholly
owned Subsidiary receives any consideration (provided
that if any party to any such transaction is a Loan Party, the surviving entity
of such transaction shall be a Loan Party) and (y) the Borrower and the
Subsidiaries may make investments and acquisitions permitted by Section 6.04.


 


(b)  
Make any Asset Sale not otherwise permitted under paragraph (a) above
unless (i) such Asset Sale is for consideration at least 75% of which is
cash or cash equivalents promptly converted to cash and (ii) such
consideration is at least equal to the fair market value of the assets being
sold, transferred, leased or disposed of.


 


SECTION 6.06. Restricted
Payments; Restrictive Agreements. (a)  Declare or make, or
agree to declare or make, directly or indirectly, any Restricted Payment
(including pursuant to any Synthetic Purchase Agreement), or incur any
obligation (contingent or otherwise) to do so; provided,
however, that (i) any
Subsidiary may declare and pay dividends or make other distributions
ratably to its equity holders, (ii) the Borrower and the Subsidiaries may pay
dividends in respect of Disqualified Stock permitted to be issued hereunder and
(iii) the Borrower may make Tax Payments to Parent; provided, however,
that the amount of such Tax Payments shall not exceed the amount that the
Borrower and the Subsidiaries would be required to pay in respect of Federal,
State and local taxes were the Borrower and the Subsidiaries to pay such taxes
as stand-alone taxpayers.


 


(b)  
Enter into, incur or permit to exist any agreement or other arrangement
that prohibits, restricts or imposes any condition upon (i) the ability of
the Borrower or any Subsidiary to create, incur or permit to exist any Lien
upon any of its property or assets, or (ii) the ability of any Subsidiary
to pay dividends or other distributions with respect to any of its Equity
Interests or to make or repay loans or advances to the Borrower or any other
Subsidiary or to Guarantee Indebtedness of the Borrower or any other
Subsidiary; provided that (A) the foregoing
shall not apply to restrictions and conditions imposed by law or by any Loan
Document, (B) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending
such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (C) the foregoing shall not apply to restrictions and
conditions imposed on any Foreign Subsidiary by the terms of any Indebtedness
of such Foreign Subsidiary permitted to be incurred hereunder, (D) clause (i) of
the foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness, (E) the foregoing shall


 


51





















 


not apply to restrictions and conditions contained in the First Lien Loan
Documents, (F) clause (i) of the foregoing shall not apply to
customary provisions in leases and other contracts restricting the assignment
thereof and (G) clause (i) of the foregoing shall not apply to
restrictions and conditions contained in the Parent Credit Agreement.


 


SECTION 6.07. Transactions
with Affiliates. Except for transactions described on Schedule 6.07,
sell or transfer any property or assets to, or purchase or acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates other than the Borrower or any of its wholly owned Subsidiaries, except
that the Borrower or any Subsidiary may engage in any of the foregoing
transactions at prices and on terms and conditions not less favorable to the
Borrower or such Subsidiary than could be obtained on an arm’s-length basis
from unrelated third parties.


 


SECTION 6.08. Business
of the Borrower and Subsidiaries. Engage at any time in any
business or business activity other than the business currently conducted by it
and business activities reasonably incidental or ancillary thereto.


 


SECTION 6.09. Certain
Cash Payments. Pay in cash any amount in respect of any
Indebtedness or preferred Equity Interests that may at the obligor’s
option be paid in kind or in other securities.


 


SECTION 6.10. Capital
Expenditures. (a)  Permit the aggregate amount of Capital
Expenditures made by the Borrower and the Subsidiaries in any fiscal year to
exceed $12,000,000.


 


(b)  
The unused amount of permitted Capital Expenditures set forth in
paragraph (a) above in respect of any fiscal year commencing with the
fiscal year ending on December 31, 2006, may be carried forward and
used in the next succeeding fiscal year. For purposes of this paragraph, the
amount of Capital Expenditures made in any fiscal year shall be allocated first, to the amount carried forward to such fiscal year
from the immediately preceding fiscal year, and second,
to the scheduled amount permitted under paragraph (a) above for such
fiscal year.


 


SECTION 6.11. Maximum
Leverage Ratio. Permit
the Leverage Ratio at the end of any fiscal quarter set forth below to be
greater than the ratio set forth below for such fiscal quarter:


 


	
  Fiscal Year

  	
   

  	
  First Quarter

  	
   

  	
  Second Quarter

  	
   

  	
  Third Quarter

  	
   

  	
  Fourth Quarter

  	
   

  
	
  2006

  	
   

  	
  7.00:1

  	
   

  	
  7.00:1

  	
   

  	
  7.00:1

  	
   

  	
  7.00:1

  	
   

  
	
  2007

  	
   

  	
  6.50:1

  	
   

  	
  6.25:1

  	
   

  	
  6.00:1

  	
   

  	
  5.75:1

  	
   

  
	
  2008

  	
   

  	
  4.75:1

  	
   

  	
  4.75:1

  	
   

  	
  4.75:1

  	
   

  	
  4.75:1

  	
   

  
	
  2009 and
  thereafter

  	
   

  	
  4.00:1

  	
   

  	
  4.00:1

  	
   

  	
  4.00:1

  	
   

  	
  4.00:1

  	
   

  



 


52





















 


SECTION 6.12. Fiscal
Year. With respect to the Borrower, change its fiscal year-end
to a date other than December 31 (or a date that is no more than five days
before or after December 31).


 


ARTICLE VII



Events of Default


 


In case of the happening of any of the
following events (each, an “Event of Default”):


 


(a) any
representation or warranty made or deemed made in or in connection with any
Loan Document or the borrowings hereunder, or any representation, warranty,
statement or information contained in any report, certificate, financial
statement or other instrument furnished in connection with or pursuant to any
Loan Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;


 


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


 


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


 


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


 


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


 


(f) (i)  the
Borrower or any Subsidiary shall fail to pay any principal or interest,
regardless of amount, due in respect of any Material Indebtedness, when and as
the same shall become due and payable, or (ii) any other event or
condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (ii) shall
not apply to secured Indebtedness that becomes due as a


 


53





















 


result of the voluntary sale or
transfer of the property or assets securing such Indebtedness; provided further that an Event of Default
under and as defined in the First Lien Credit Agreement (a “First Lien Event of Default”)
shall not in and of itself constitute an Event of Default under this paragraph
until the earlier to occur of (x) a period of 45 days has elapsed following
notice of such First Lien Event of Default from the administrative agent or any
lender under the First Lien Credit Agreement to the Borrower, or from the
Borrower to such administrative agent or any such lender, and (y) the
acceleration of the maturity of any of the loans under the First Lien Credit
Agreement as a result of such First Lien Event of Default;


 


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


 


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


 


(i) one
or more judgments shall be rendered against the Borrower, any Subsidiary or any
combination thereof and the same shall remain undischarged for a period of 60 consecutive
days during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to levy upon assets or properties
of the Borrower or any Subsidiary to enforce any such judgment and such
judgment is for the payment of money in an aggregate amount in excess of $2,500,000;


 


54





















 


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


 


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


 


(l) any
security interest purported to be created by any Security Document shall cease
to be, or shall be asserted by the Borrower, any other Loan Party or Parent not
to be, a valid, perfected, security interest of the priority required by the
Security Documents in the securities, assets or properties covered thereby,
except to the extent that any such loss of perfection or priority results from
the failure of the First Lien Collateral Agent or the Collateral Agent to
maintain possession of certificates representing securities pledged under such
Security Document;


 


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


 


ARTICLE VIII



The Administrative Agent and the Collateral Agent


 


Each Lender hereby irrevocably appoints the
Administrative Agent and the Collateral Agent (for purposes of this Article VIII,
the Administrative Agent and the Collateral Agent are referred to collectively
as the “Agents”) its agent and
authorizes the Agents to take such actions on its behalf and to exercise such
powers as are delegated to such Agent by the terms of the Loan Documents,
together with such actions and powers


 


55

















 


as are reasonably incidental
thereto. Without limiting the generality of the foregoing, the Agents are
hereby expressly authorized to execute any and all documents (including
releases) with respect to the Collateral and the rights of the Secured Parties
with respect thereto, as contemplated by and in accordance with the provisions
of this Agreement and the Security Documents. Each of the Lenders acknowledges
and agrees that the Collateral Agent shall also act, subject to and in
accordance with the terms of the Intercreditor Agreement, as the First Lien Collateral
Agent.


 


The bank serving as the Administrative Agent
and/or the Collateral Agent hereunder shall have the same rights and powers in
its capacity as a Lender as any other Lender and may exercise the same as
though it were not an Agent, and such bank and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if it were not an
Agent hereunder.


 


Neither Agent shall have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) neither Agent shall be
subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) neither Agent shall have any
duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated hereby that such
Agent is instructed in writing to exercise by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.08), and (c) except as
expressly set forth in the Loan Documents, neither Agent shall have any duty to
disclose, nor shall it be liable for the failure to disclose, any information
relating to the Borrower or any of the Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent and/or Collateral Agent or
any of its Affiliates in any capacity. Neither Agent shall be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.08) or in the
absence of its own gross negligence or willful misconduct. Neither Agent shall
be deemed to have knowledge of any Default unless and until written notice
thereof is given to such Agent by the Borrower or a Lender, and neither Agent
shall be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth
in Article IV or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to such Agent.


 


Each 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 believed
by it to be genuine and to have been signed or sent by the proper person. Each
Agent may also rely upon any statement made to it orally or by telephone


 


56

















 


and believed by it to have been
made by the proper person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be
counsel for the Borrower), independent accountants and other experts selected
by it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.


 


Each Agent may perform any and all
its duties and exercise its rights and powers by or through any one or more
sub-agents appointed by it. Each Agent and any such sub-agent may perform any
and all its duties and exercise its rights and powers by or through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of each
Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facility provided for herein as
well as activities as Agent.


 


Subject to the appointment and acceptance of
a successor Agent as provided below, either Agent may resign at any time
by notifying the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, with the consent of the Borrower (not to
be unreasonably withheld or delayed and so long as no Event of Default shall
have occurred and be continuing), to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a bank with an office in New York, New York, or
an Affiliate of any such bank. Upon the acceptance of its appointment as Agent
hereunder by a successor, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations hereunder.
The fees payable by the Borrower to a successor Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor. After an Agent’s resignation hereunder, the provisions of
this Article and Section 9.05 shall continue in effect for the
benefit of such retiring Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while acting as Agent.


 


Each Lender acknowledges that it has,
independently and without reliance upon the Agents or any other Lender 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 also
acknowledges that it will, independently and without reliance upon the Agents
or any other Lender 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 or any other
Loan Document, any related agreement or any document furnished hereunder or
thereunder.


 


57

















 


ARTICLE IX



Miscellaneous


 


SECTION 9.01. Notices.
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 sent by fax, as follows:


 


(a)  
if to the Borrower, to it at 11 Madison Avenue, 17- Floor, New York, NY 10010, Attention of General
Counsel (Fax No. (212) 589-2601);


 


(b)  
if to the Administrative Agent or the Collateral Agent, to Credit
Suisse, Eleven Madison Avenue, New York, NY 10010, Attention of Agency Group
(Fax No. (212) 325-8304); and


 


(c)  
if to a Lender, to it at its address (or fax number) set forth on Schedule 2.01
or in the Assignment and Acceptance pursuant to which such Lender shall have
become a party hereto.


 


All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt if delivered by hand or
overnight courier service or sent by fax or on the date five Business Days
after dispatch by certified or registered mail if mailed, in each case delivered,
sent or mailed (properly addressed) to such party as provided in this Section 9.01
or in accordance with the latest unrevoked direction from such party given in
accordance with this Section 9.01. As agreed to among the Borrower, the
Administrative Agent and the applicable Lenders from time to time, notices and
other communications may also be delivered by e-mail to the e-mail address
of a representative of the applicable person provided from time to time by such
person.


 


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


 


58





















 


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


 


SECTION 9.04. Successors
and Assigns. (a)  Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of the Borrower, the Administrative Agent, the
Collateral Agent or the Lenders that are contained in this Agreement shall bind
and inure to the benefit of their respective successors and assigns.


 


(b)  
Each Lender may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing
to it), with the prior written consent of the Borrower and the Administrative
Agent (in each case not to be unreasonably withheld or delayed); provided, however, that (i) the
amount of the Commitment or Loans of the assigning Lender subject to each such
assignment and after giving effect to such assignment (in each case determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $1,000,000 (provided that the Loans and Commitments of Lenders that are
Affiliates or Related Funds shall be aggregated for purposes of determining
such minimum amount), (ii) the parties to each such assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance
via an electronic settlement system acceptable to the Administrative Agent (or,
if previously agreed with the Administrative Agent, manually) and shall pay to
the Administrative Agent a processing and recordation fee of $3,500 (which fee may be
waived or reduced in the sole discretion of the Administrative Agent), provided that only one such fee shall be payable in the
cause of concurrent assignments to persons that, after giving effect to such
assignments, will be Related Funds, (iii) the assignee, if it shall not be
a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire and all applicable tax forms and (iv) the consent of the
Borrower shall not be required (A) if such assignment is made to another
Lender or an Affiliate or Related Fund of a Lender or (B) after the
occurrence and during the continuance of an Event of Default. Upon acceptance
and recording pursuant to paragraph (e) of this Section 9.04,
from and after the effective date specified in each Assignment and Acceptance, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of
a Lender under this Agreement and (B) the assigning Lender thereunder
shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of
an assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.16, 2.20 and 9.05.


 


(c)  
By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree


 


59





















 


with each other and the other parties hereto as follows:  (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that
its Commitment, and the outstanding balances of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as
set forth in such Assignment and Acceptance, (ii) except as set forth in (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is an Eligible Assignee, legally authorized to
enter into such Assignment and Acceptance; (iv) such assignee confirms
that it has received a copy of this Agreement, together with copies of the most
recent financial statements referred to in Section 3.05(a) or
delivered pursuant to Section 5.04, the Intercreditor Agreement and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (v) such
assignee will independently and without reliance upon the Administrative Agent,
the Collateral Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (vi) such assignee agrees to be bound by the terms of the
Intercreditor Agreement; (vii) such assignee appoints and authorizes the
Administrative Agent and the Collateral Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are delegated to
the Administrative Agent and the Collateral Agent, respectively, by the terms
hereof, together with such powers as are reasonably incidental thereto; and (viii) such
assignee agrees that it will perform in accordance with their terms all
the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.


 


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


 


(e)  
Upon its receipt of, and consent to, a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a


 


60





















 


Lender hereunder), the processing and recordation fee referred to in
paragraph (b) above and the written consent of the Administrative
Agent and, if required, the Borrower to such assignment and any applicable tax forms,
the Administrative Agent shall (i) accept such Assignment and Acceptance
and (ii) record the information contained therein in the Register. No
assignment shall be effective unless it has been recorded in the Register as
provided in this paragraph (e).


 


(f)  
Each Lender may without the consent of the Borrower or the
Administrative Agent sell participations to one or more banks or other persons
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it); provided, however, that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participating banks or other
persons shall be entitled to the benefit of the cost protection provisions
contained in Sections 2.14, 2.16 and 2.20 to the same extent as if they
were Lenders (but, with respect to any particular participant, to no greater
extent than the Lender that sold the participation to such participant) and (iv) the
Borrower, the Administrative Agent and the Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement, and such Lender shall retain the sole
right to enforce the obligations of the Borrower relating to the Loans and to
approve any amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications or waivers decreasing the
amount of principal of or the rate at which interest is payable on the Loans in
which such participating bank or person has an interest, extending any
scheduled principal payment date or date fixed for the payment of interest on
the Loans in which such participating bank or person has an interest,
increasing or extending the Commitments in which such participating bank or
person has an interest or releasing any Guarantor (other than in connection
with the sale of such Guarantor in a transaction permitted by Section 6.05)
or all or substantially all of the Collateral).


 


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


 


(h)  
Any Lender may at any time assign all or any portion of its rights
under this Agreement to secure extensions of credit to such Lender or in
support of obligations owed by such Lender; provided that
no such assignment shall release a Lender from any of its obligations hereunder
or substitute any such assignee for such Lender as a party hereto.


 


61





















 


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


 


(j)  
The Borrower shall not assign or delegate any of its rights or duties
hereunder without the prior written consent of the Administrative Agent and
each Lender, and any attempted assignment without such consent shall be null
and void.


 


SECTION 9.05. Expenses;
Indemnity. (a)  The Borrower agrees to pay all reasonable out-of-pocket
expenses incurred by the Administrative Agent and the Collateral Agent in
connection with the syndication of the Credit Facility and the preparation and
administration of this Agreement and the other Loan Documents or in connection
with any amendments, modifications or waivers of the provisions hereof or
thereof (whether or not the transactions hereby or thereby contemplated shall
be consummated) or incurred by the Administrative Agent, the Collateral Agent
or, during the existence of an Event of Default, any Lender in connection with
the enforcement or protection of its rights in connection with this Agreement and
the other Loan Documents or in connection with the Loans made hereunder,
including the fees, charges and disbursements of Cravath, Swaine &
Moore LLP, counsel for the Administrative Agent and the Collateral Agent, and,
in connection with any such enforcement or protection, the reasonable fees,
charges and disbursements of any other counsel for the Administrative Agent,
the Collateral Agent or any Lender.


 


62





















 


(b)  
The Borrower agrees to indemnify the Administrative Agent, the
Collateral Agent, each Lender and each Related Party of any of the foregoing
persons (each such person being called an “Indemnitee”) against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees, charges and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument
contemplated thereby, the performance by the parties thereto of their
respective obligations thereunder or the consummation of the Transactions and
the other transactions contemplated thereby (including the syndication of the
Credit Facility), (ii) the use of the proceeds of the Loans, (iii) any
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto (and regardless of
whether such matter is initiated by a third party or by the Borrower, any other
Loan Party or any of their respective Affiliates), or (iv) any actual or
alleged presence or Release of Hazardous Materials on any property currently or
formerly owned or operated by the Borrower or any of the Subsidiaries, or any
Environmental Liability related in any way to the Borrower or the Subsidiaries;
provided that such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or wilful misconduct of such Indemnitee or (y) result
from a claim brought by the Borrower or any of its Subsidiaries against an
Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder
or under any other Loan Document, if the Borrower or such Subsidiary has
obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.


 


(c)  
To the extent that the Borrower fails to pay any amount required to be
paid by it to the Administrative Agent or the Collateral Agent under paragraph (a) or
(b) of this Section 9.05, each Lender severally agrees to pay to the
Administrative Agent or the Collateral Agent, as the case may be, such
Lender’s pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was
incurred by or asserted against the Administrative Agent or the Collateral
Agent in its capacity as such. For purposes hereof, a Lender’s “pro rata share”
shall be determined based upon its outstanding Loans at the time.


 


(d)  
To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or the use of the proceeds thereof.


 


(e)  
The provisions of this Section 9.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the


 


63





















 


expiration of the Commitments, the invalidity or unenforceability of
any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent or any Lender. All amounts due under this Section 9.05 shall be
payable on written demand therefor.


 


SECTION 9.06. Right
of Setoff. If an Event of Default shall have occurred and be
continuing under paragraph (b), (c), (g) or (h) of Article VII
or, with the consent of the Administrative Agent or the Required Lenders, upon
the occurrence of any other Event of Default, each Lender is hereby authorized
at any time and from time to time, except to the extent prohibited by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the Borrower against any
of and all the obligations of the Borrower now or hereafter existing under this
Agreement and other Loan Documents held by such Lender, irrespective of whether
or not such Lender shall have made any demand under this Agreement or such
other Loan Document and although such obligations may be unmatured. The
rights of each Lender under this Section 9.06 are in addition to other
rights and remedies (including other rights of setoff) which such Lender may have.


 


SECTION 9.07. Applicable
Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS
EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.


 


SECTION 9.08. Waivers;
Amendment. (a)  No failure or delay of the Administrative
Agent, the Collateral Agent or any Lender in exercising any power or right
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrower or any other Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on the Borrower in any case shall entitle the Borrower to any
other or further notice or demand in similar or other circumstances.


 


(b)  
Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders; provided,
however, that no such agreement
shall (i) decrease the principal amount of, or extend the maturity
of, or any date for the payment of any interest on or fee with respect to, any
Loan, or waive or excuse any such payment or any part thereof, or decrease
the Applicable Prepayment Fee or the rate of interest on any Loan, without the
prior written consent of each Lender directly adversely


 


64





















 


affected thereby, (ii) increase or extend the Commitment of
any Lender without the prior written consent of such Lender, (iii) amend
or modify the pro rata requirements of Section 2.17, the provisions of Section 9.04(j)
or the provisions of this Section or release any Guarantor (other than in
connection with the sale of such Guarantor in a transaction permitted by Section 6.05)
or all or substantially all of the Collateral, without the prior written
consent of each Lender, (iv) modify the protections afforded to an
SPC pursuant to the provisions of Section 9.04(i) without the written
consent of such SPC or (v) reduce the percentage contained in the
definition of the term “Required Lenders” without the prior written consent of
each Lender (it being understood that with the consent of the Required Lenders,
additional extensions of credit pursuant to this Agreement may be included
in the determination of the Required Lenders on substantially the same basis as
the Commitments on the date hereof); provided  further that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent or the
Collateral Agent hereunder or under any other Loan Document without the prior
written consent of the Administrative Agent or the Collateral Agent.


 


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


 


SECTION 9.10. Entire
Agreement. This Agreement, the Fee Letter and the other Loan
Documents constitute the entire contract between the parties relative to the
subject matter hereof. Any other previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement and the
other Loan Documents. Except as otherwise provided in Section 9.18, nothing
in this Agreement or in the other Loan Documents, expressed or implied, is
intended to confer upon any person (other than the parties hereto and thereto,
their respective successors and assigns permitted hereunder and, to the extent
expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Collateral Agent and the Lenders) any rights,
remedies, obligations or liabilities under or by reason of this Agreement or
the other Loan Documents.


 


SECTION 9.11. WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN


 


65





















 


CONNECTION
WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.


 


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


 


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


 


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


 


SECTION 9.15. Jurisdiction;
Consent to Service of Process. (a)  Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding shall be heard and determined only in such
New York State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Administrative Agent, the Collateral
Agent or any Lender may otherwise have to bring any action or proceeding


 


66





















 


relating to
this Agreement or the other Loan Documents against the Borrower or its properties
in the courts of any jurisdiction.


 


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


 


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


 


SECTION 9.16. Confidentiality.
Each of the Administrative Agent, the Collateral Agent and the Lenders agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its and its Affiliates’
officers, directors, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to
the extent requested by any regulatory authority or quasi-regulatory authority
(such as the National Association of Insurance Commissioners), (c) to the
extent required by applicable laws or regulations or by any subpoena or similar
legal process, (d) in connection with the exercise of any remedies
hereunder or under the other Loan Documents or any suit, action or proceeding
relating to the enforcement of its rights hereunder or thereunder, (e) subject
to an agreement containing provisions substantially the same as those of this Section 9.16,
to (i) any actual or prospective assignee of or participant in any of its
rights or obligations under this Agreement and the other Loan Documents or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower or any Subsidiary or any of their
respective obligations, (f) with the consent of the Borrower or (g) to
the extent such Information becomes publicly available other than as a result
of a breach of this Section 9.16. For the purposes of this Section, “Information” shall mean all information
received from the Borrower and related to the Borrower or Parent or their
business, other than any such information that was available to the
Administrative Agent, the Collateral Agent or any Lender on a nonconfidential
basis prior to its disclosure by the Borrower. Any person required to maintain
the confidentiality of Information as provided in this Section 9.16 shall
be considered to have complied with its obligation to do so if such person has
exercised the same degree of care to maintain the confidentiality of such
Information as such person would accord its own confidential information.


 


SECTION 9.17. USA
PATRIOT Act Notice. Each Lender and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the USA PATRIOT Act, it is required to obtain,
verify and record information that identifies the Borrower, which information


 


67





















 


includes the
name and address of the Borrower and other information that will allow such
Lender or the Administrative Agent, as applicable, to identify the Borrower in
accordance with the USA PATRIOT Act.


 


SECTION 9.18. INTERCREDITOR
AGREEMENT. REFERENCE IS MADE TO THE INTERCREDITOR AGREEMENT. EACH
LENDER HEREUNDER (A) ACKNOWLEDGES THAT IT HAS RECEIVED A COPY OF THE
INTERCREDITOR AGREEMENT, (B) CONSENTS TO THE SUBORDINATION OF LIENS
PROVIDED FOR IN THE INTERCREDITOR AGREEMENT, (C) AGREES THAT IT WILL BE
BOUND BY AND WILL TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT AND (D) AUTHORIZES AND INSTRUCTS THE COLLATERAL
AGENT TO ENTER INTO THE INTERCREDITOR AGREEMENT AS COLLATERAL AGENT AND ON
BEHALF OF SUCH LENDER. THE FOREGOING PROVISIONS ARE INTENDED AS AN INDUCEMENT
TO THE LENDERS UNDER THE FIRST LIEN CREDIT AGREEMENT TO EXTEND CREDIT TO THE
BORROWER AND SUCH LENDERS ARE INTENDED THIRD PARTY BENEFICIARIES OF SUCH
PROVISIONS.


 


[Remainder of page intentionally
left blank]


 


68

















 


IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective authorized officers as of the day and year first above
written.


 


	
   

  	
  WEIGHTWATCHERS.COM, INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ DAVID P. KIRCHHOFF

  	
   

  
	
   

  	
   

  	
  Name: David P. Kirchhoff

  	
   

  
	
   

  	
   

  	
  Title:   CEO & President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CREDIT SUISSE, CAYMAN ISLANDS

  BRANCH, individually and as

  Administrative Agent and Collateral Agent,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ ROBERT HETU

  	
   

  
	
   

  	
   

  	
  Name: Robert Hetu

  	
   

  
	
   

  	
   

  	
  Title:   Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ CASSANDRA DROOGAN

  	
   

  
	
   

  	
   

  	
  Name: Cassandra Droogan

  	
   

  
	
   

  	
   

  	
  Title:   Associate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


 


69

















 


	
   

  	
  BAYERISHE
  HYPO-UND VEREINSBANK AG,

  
	
   

  	
  NEW YORK
  BRANCH

  
	
   

  	
   

  	
  As Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
  /s/ MARTHA
  G. MARTINEZ

  
	
   

  	
   

  	
   

  	
  Name: Martha
  G. Martinez

  
	
   

  	
   

  	
   

  	
  Title:
    Associate Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
  /s/ JENNIFER
  LARROW

  
	
   

  	
   

  	
   

  	
  Name:
  Jennifer Larrow

  
	
   

  	
   

  	
   

  	
  Title:
    Associate Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						



 


 


70

















 


	
   

  	
  MIZUHO
  CORPORATE BANK, LTD.

  
	
   

  	
   

  	
  As Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ JAMES
  FAYEN

  
	
   

  	
   

  	
   

  	
  Name: James
  Fayen

  
	
   

  	
   

  	
   

  	
  Title:
    Deputy General Manager

  
					



 


 


71