Exhibit 10.8


 


EXECUTION VERSION


 




 





REVOLVING CREDIT AND GUARANTEE AGREEMENT


 


Dated as of February 19, 2010


 


among


 


RDA HOLDING CO.,


 


THE READER’S DIGEST ASSOCIATION, INC.,


 


THE OTHER GUARANTORS NAMED HEREIN


 


The Lenders Party Hereto


 


and


 


JPMORGAN CHASE BANK, N.A.,

as Administrative Agent


 




 





J.P. MORGAN SECURITIES INC.,


BANC OF AMERICA SECURITIES LLC

CREDIT SUISSE SECURITIES (USA) LLC and


GOLDMAN SACHS CREDIT PARTNERS L.P.


as Joint Lead Arrangers and Joint Bookrunners


 

















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

  	
  1

  
	
   

  	
   

  
	
  Defined
  Terms

  	
  1

  
	
  Other
  Interpretive Provisions

  	
  43

  
	
  Accounting
  Terms

  	
  44

  
	
  Rounding

  	
  44

  
	
  References
  to Agreements, Laws, Etc.

  	
  44

  
	
  Times of
  Day

  	
  44

  
	
  Timing of
  Payment of Performance

  	
  44

  
	
  Currency
  Equivalents Generally

  	
  44

  
	
  Change of
  Currency

  	
  45

  
	
   

  	
   

  
	
  ARTICLE II
  THE LOANS

  	
  45

  
	
   

  	
   

  
	
  The
  Revolving Credit Loans

  	
  45

  
	
  Borrowings,
  Conversions and Continuations of Loans

  	
  45

  
	
  Letters
  of Credit

  	
  46

  
	
  Prepayments

  	
  53

  
	
  Termination
  or Reduction of Commitments

  	
  54

  
	
  Repayment
  of Loans

  	
  54

  
	
  Interest

  	
  54

  
	
  Fees

  	
  55

  
	
  Computation
  of Interest and Fees

  	
  55

  
	
  Evidence
  of Indebtedness

  	
  55

  
	
  Payments
  Generally

  	
  56

  
	
  Sharing
  of Payments

  	
  58

  
	
   

  	
   

  
	
  ARTICLE III
  TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY

  	
  58

  
	
   

  	
   

  
	
  Taxes

  	
  58

  
	
  Illegality

  	
  60

  
	
  Inability
  to Determine Rates

  	
  60

  
	
  Increased
  Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans

  	
  61

  
	
  Funding
  Losses

  	
  62

  
	
  Matters
  Applicable to All Requests for Compensation

  	
  62

  
	
  Replacement
  of Lenders under Certain Circumstances

  	
  63

  
	
  Survival

  	
  64

  
	
   

  	
   

  
	
  ARTICLE IV
  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

  	
  64

  
	
   

  	
   

  
	
  Conditions
  to Effectiveness

  	
  64

  
	
  Conditions
  to All Credit Extensions

  	
  66

  
	
   

  	
   

  
	
  ARTICLE V
  REPRESENTATIONS AND WARRANTIES

  	
  66

  
	
   

  	
   

  
	
  Existence,
  Qualification and Power; Compliance with Laws

  	
  67

  



 


i

















 


	
  Authorization;
  No Contravention

  	
  67

  
	
  Governmental
  Authorization; Other Consents

  	
  67

  
	
  Binding
  Effect

  	
  67

  
	
  Financial
  Statements; No Material Adverse Effect

  	
  67

  
	
  Litigation

  	
  68

  
	
  No
  Default

  	
  68

  
	
  Ownership
  of Property; Liens

  	
  68

  
	
  Environmental Compliance

  	
  68

  
	
  Taxes

  	
  69

  
	
  ERISA Compliance

  	
  69

  
	
  Subsidiaries;
  Equity Interests

  	
  70

  
	
  Margin
  Regulations; Investment Company Act

  	
  70

  
	
  Disclosure

  	
  70

  
	
  Intellectual
  Property; Licenses, Etc.

  	
  71

  
	
  Solvency

  	
  71

  
	
  Labor
  Matters

  	
  71

  
	
  Collateral

  	
  71

  
	
  Regulation
  H

  	
  72

  
	
  Certain
  Documents

  	
  72

  
	
  Priority
  Indebtedness

  	
  72

  
	
   

  	
   

  
	
  ARTICLE VI
  AFFIRMATIVE COVENANTS

  	
  72

  
	
   

  	
   

  
	
  Financial
  Statements

  	
  72

  
	
  Certificates;
  Other Information

  	
  74

  
	
  Update
  Calls

  	
  76

  
	
  Notices

  	
  76

  
	
  Payment
  of Obligations

  	
  76

  
	
  Preservation
  of Existence, Etc.

  	
  76

  
	
  Maintenance
  of Properties

  	
  76

  
	
  Maintenance
  of Insurance

  	
  76

  
	
  Compliance
  with Laws

  	
  77

  
	
  Inspection
  Rights; Books and Records; Discussions

  	
  77

  
	
  Covenant
  to Guarantee Obligations and Give Security

  	
  77

  
	
  Compliance
  with Environmental Laws

  	
  79

  
	
  Further
  Assurances

  	
  79

  
	
  Use of
  Proceeds

  	
  80

  
	
  Deposit
  Accounts

  	
  80

  
	
  Post-Closing
  Covenants

  	
  80

  
	
   

  	
   

  
	
  ARTICLE VII
  NEGATIVE COVENANTS

  	
  81

  
	
   

  	
   

  
	
  Limitation
  on Restricted Payments

  	
  81

  
	
  Limitation
  on incurrence of Indebtedness and issuance of Disqualified Stock and
  preferred stock

  	
  87

  
	
  Liens

  	
  92

  
	
  Merger,
  Consolidation or Sale of All or Substantially All Assets

  	
  92

  
	
  Limitations
  on Guarantors

  	
  94

  
	
  Transactions
  with Affiliates

  	
  95

  
	
  Dividend
  and Other Payment Restrictions Affecting Restricted Subsidiaries

  	
  97

  



 


ii

















 


	
  Asset
  Sales

  	
  99

  
	
  Prepayments, Etc.
  of Indebtedness

  	
  102

  
	
  Holding
  Company

  	
  103

  
	
  Payments
  for Consent

  	
  103

  
	
  Limitation
  on Lines of Business

  	
  103

  
	
  Limitation
  on Guarantees of Indebtedness by Restricted Subsidiaries

  	
  103

  
	
  Financial
  Condition Covenant

  	
  105

  
	
  Receivables

  	
  105

  
	
  Accounting
  Changes

  	
  105

  
	
   

  	
   

  
	
  ARTICLE VIII
  EVENTS OF DEFAULT AND REMEDIES

  	
  105

  
	
   

  	
   

  
	
  Events of
  Default

  	
  105

  
	
  Remedies
  Upon Event of Default

  	
  107

  
	
  Application
  of Funds

  	
  108

  
	
   

  	
   

  
	
  ARTICLE IX
  ADMINISTRATIVE AGENT AND OTHER AGENTS

  	
  109

  
	
   

  	
   

  
	
  Appointment
  and Authorization of Agents

  	
  109

  
	
  Delegation
  of Duties

  	
  110

  
	
  Liability
  of Agents

  	
  110

  
	
  Reliance
  by Agents

  	
  110

  
	
  Notice of
  Default

  	
  111

  
	
  Credit
  Decision; Disclosure of Information by Agents

  	
  111

  
	
  Indemnification
  of Agents

  	
  111

  
	
  Agents in
  their Individual Capacities

  	
  112

  
	
  Successor
  Agents

  	
  112

  
	
  Administrative
  Agent May File Proofs of Claim

  	
  113

  
	
  Collateral
  and Guarantee Matters

  	
  113

  
	
  Other
  Agents; Arrangers and Managers

  	
  114

  
	
  Appointment
  of Supplemental Administrative Agents

  	
  114

  
	
   

  	
   

  
	
  ARTICLE X
  GUARANTEE

  	
  115

  
	
   

  	
   

  
	
  Guarantee

  	
  115

  
	
  Right of
  Contribution

  	
  116

  
	
  No
  Subrogation

  	
  116

  
	
  Amendments, etc.
  with Respect to the Obligations

  	
  116

  
	
  Guarantee
  Absolute and Unconditional

  	
  116

  
	
  Reinstatement

  	
  117

  
	
  Payments

  	
  117

  
	
   

  	
   

  
	
  ARTICLE XI
  MISCELLANEOUS

  	
  118

  
	
   

  	
   

  
	
  Amendments,
  Etc.

  	
  118

  
	
  Notices
  and Other Communications; Facsimile Copies

  	
  119

  
	
  No
  Waiver; Cumulative Remedies

  	
  121

  
	
  Attorney
  Costs, Expenses and Taxes

  	
  121

  
	
  Indemnification
  by the Borrower

  	
  121

  
	
  Payments
  Set Aside

  	
  122

  
	
  Successors
  and Assigns

  	
  123

  



 


iii

















 


	
  Confidentiality

  	
  126

  
	
  Setoff

  	
  127

  
	
  Interest
  Rate Limitation

  	
  127

  
	
  Counterparts

  	
  128

  
	
  Integration

  	
  128

  
	
  Survival
  of Representations and Warranties

  	
  128

  
	
  Severability

  	
  128

  
	
  Tax Forms

  	
  128

  
	
  GOVERNING
  LAW

  	
  130

  
	
  Submission
  To Jurisdiction; Waivers

  	
  130

  
	
  WAIVER OF
  RIGHT TO TRIAL BY JURY

  	
  130

  
	
  Binding
  Effect

  	
  131

  
	
  Lender
  Action

  	
  131

  
	
  USA PATRIOT Act

  	
  131

  
	
  Acknowledgements

  	
  131

  
	
  Releases
  of Guarantee and Lien

  	
  131

  



 


iv

















 


	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  1.01A

  	
  Certain
  Collateral Documents

  
	
  1.01B

  	
  Mortgaged
  Properties

  
	
  1.01C

  	
  Designated
  Non-Debtors

  
	
  2.01

  	
  Loans

  
	
  5.11(c)

  	
  Foreign
  Benefits Matters

  
	
  5.12

  	
  Subsidiaries
  and Other Equity Investments

  
	
  5.18

  	
  Collateral
  Matters

  
	
  6.16

  	
  Post-Closing
  Matters

  
	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Form of

  	
   

  
	
   

  	
   

  
	
  A

  	
  Committed
  Loan Notice

  
	
  B

  	
  Note

  
	
  C

  	
  Compliance
  Certificate

  
	
  D

  	
  Assignment
  and Assumption

  
	
  E

  	
  Security
  Agreement

  
	
  F

  	
  Opinion
  of Kirkland & Ellis LLP

  
	
  G

  	
  Mortgage

  
	
  H

  	
  U.S.
  Tax Compliance Certificate

  
	
  I

  	
  Letter
  of Credit Application (commercial)

  
	
  J

  	
  Letter
  of Credit Application (standby)

  
	
  K

  	
  Junior
  Lien Intercreditor Agreement

  



 


v

















 


CREDIT AGREEMENT


 


This
REVOLVING CREDIT AGREEMENT (“Agreement”) is
entered into as of February 19, 2010, among RDA HOLDING CO., a Delaware
corporation (“Holdings”), THE READER’S DIGEST
ASSOCIATION, INC., a Delaware corporation (the “Borrower”),
the subsidiary guarantors from time to time party hereto, JPMORGAN CHASE BANK,
N.A., as Administrative Agent, and the several banks and other financial
institutions or entities from time to time parties to this Agreement (collectively,
the “Lenders” and each a “Lender”).


 


The
parties hereto hereby agree as follows:


 


ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS


 


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


 


“Acquired Indebtedness” means, with respect to any specified
Person,


 


(1) Indebtedness
or Disqualified Stock of any other Person existing at the time such other
Person is merged with or into or became a Restricted Subsidiary of such
specified Person, including, without limitation, Indebtedness or
Disqualified Stock incurred in connection with, or in contemplation of, such
other Person merging with or into or becoming a Restricted Subsidiary of such
specified Person; and


 


(2) Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person.


 


“Additional Interest” means all additional interest then
owing pursuant to the Registration Rights Agreement.


 


“Additional Notes” means additional notes issued from time to
time under the Senior Secured Note Indenture after the initial offering.


 


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


 


“Administrative Agent’s Office” means the Administrative
Agent’s address and, as appropriate, account as set forth in Section 11.02
or such other address or account as the Administrative Agent may from time to
time notify the Borrower and the Lenders in writing (including by electronic
mail or by posting to Intralinks or other similar information transmission
systems).


 


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


 


“Affiliate” of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling,” “controlled by”
and “under common control with”), as used with respect to any Person, shall
mean the 


 

















 


possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise.


 


“Affiliate Transaction” has the meaning set forth in Section 7.06


 


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


 


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


 


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


 


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


 


“Applicable Rate” means, with respect to Revolving Credit
Loans, unused Revolving Credit Commitments and Letter of Credit fees, a rate
per annum equal to (i) for Eurodollar Rate Loans, 4.00%, (ii) for Base
Rate Loans, 3.00%, (iii) for Letter of Credit fees, 4.00% and (iv) for
commitment fees, 1.00%.


 


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


 


“Arrangers” means J.P. Morgan Securities Inc., Banc of
America Securities LLC, Goldman Sachs Credit Partners L.P. and Credit Suisse
Securities (USA) LLC in their capacity as Joint Lead Arrangers and Joint
Bookrunners under this Agreement.


 


“Asset Sale” means:


 


(1) the
sale, conveyance, transfer or other disposition, whether in a single
transaction or a series of related transactions, of property or assets
(including by way of a sale and leaseback) of the Borrower, a Guarantor or any
Restricted Subsidiary (each referred to in this definition as a “disposition”);
or


 


(2) the
issuance or sale of Equity Interests of any Restricted Subsidiary (other than
directors’ qualifying shares or shares required by applicable law to be held by
a Person other than the Borrower or a Restricted Subsidiary), whether in a
single transaction or a series of related transactions (other than preferred
stock of Restricted Subsidiaries issued in compliance with Section 7.02)
in each case, other than:


 


(a) a
disposition of Cash Equivalents or obsolete, damaged or worn out equipment in
the ordinary course of business or the sale or lease of equipment, inventory or
accounts receivable in the ordinary course of business and dispositions of
property in the ordinary course of business that is no longer used or useful in
the conduct of the business of the Borrower and its Restricted Subsidiaries;


 


(b) the
disposition of all or substantially all of the assets of the Borrower and the
Restricted Subsidiaries in a manner permitted pursuant to Section 7.04;


 


(c) the
making of any Restricted Payment or Permitted Investment that is permitted to
be made, and is made, under Section 7.01 or the granting of a Lien
permitted by Section 7.03;


 


2

















 


(d) any
disposition of assets or issuance or sale of Equity Interests of any Restricted
Subsidiary in any transaction or series of transactions with an aggregate fair
market value of less than $5.0 million;


 


(e) any
disposition of property or assets or issuance of securities by (i) a
Restricted Subsidiary to the Borrower, (ii) the Borrower or a Restricted
Subsidiary to another Subsidiary Guarantor or (iii) a Restricted
Subsidiary that is not a Subsidiary Guarantor to another Restricted Subsidiary
that is not a Subsidiary Guarantor;


 


(f) to
the extent allowable under Section 1031 of the Internal Revenue Code of
1986, any exchange of like property (excluding any boot thereon) for use in a
Similar Business;


 


(g) the
lease, assignment or sublease of any real or personal property in the ordinary
course of business;


 


(h) licenses
or sub-licenses of intellectual property in the ordinary course of business
(other than any perpetual licensing or exclusive licenses or sub-licenses or
assignments of intellectual property that have a material adverse effect on the
value of the Collateral or the ability of the Collateral Agent or the Secured
Parties to realize the benefits of, and intended to be afforded by, the
Collateral);


 


(i) solely
with respect to Section 7.09(a)(i)(A) and (B) and Section 7.09(b)(i)(A) and
(B), foreclosures on assets, involuntary asset transfers or transfers by reason
of eminent domain;


 


(j) sales
of accounts receivable, or participations therein, in connection with any
Receivables Facility;


 


(k) any
financing transaction with respect to property built or acquired by the
Borrower or any Restricted Subsidiary after the Closing Date, including,
without limitation, sale leasebacks and asset securitizations permitted by this
Agreement;


 


(l) any
issuance or sale of Equity Interests in, or Indebtedness or other securities
of, an Unrestricted Subsidiary, including in connection with any merger or
consolidation;


 


(m) dispositions
of accounts receivable in connection with the compromise, settlement or
collection thereof in the ordinary course of business or in bankruptcy or
similar proceedings and not in connection with a Receivables Facility;


 


(n) the
factoring by Foreign Subsidiaries at maturity or collection of any accounts
receivable pursuant to factoring programs entered into in the ordinary course
of business on customary market terms and with respect to receivables of, and
generated by, Foreign Subsidiaries;


 


(o) the
sale, lease, assignment, transfer or disposal of any property or assets in
connection with any office move or relocation in the ordinary course of
business;


 


(p) solely
for purposes of satisfying Section 7.09(a)(i)(A) or Section 7.09(b)(i)(A),
the sale, lease, assignment, transfer or disposal of Investments in joint
ventures to the extent required by, or made pursuant to customary sell
arrangements between, the joint venture parties set forth in joint venture
arrangements and similar binding arrangements;


 


(q) the
sale, lease, assignment, transfer or disposal of any and all of the art
collections owned by the Borrower or its Restricted Subsidiaries on the Closing
Date.


 


3

















 


“Asset Sale Offer” has the meaning set forth in Section 7.08(b)(iv).


 


“Assignees” has the meaning specified in Section 11.07(b).


 


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


 


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


 


“Audited Financial Statements” means the audited consolidated
balance sheets of the Borrower and its consolidated Subsidiaries as of each of June 30,
2007, June 30, 2008 and June 30, 2009, and the related audited
consolidated statements of income, stockholders’ equity and cash flows for the
Borrower and its consolidated Subsidiaries for the periods ended on such dates.


 


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


 


“Bank Priority Obligations” has the meaning specified in the
Security Agreement.


 


“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as
heretofore and hereafter amended, and codified as 11 U.S.C. §§101 et seq.


 


“Bankruptcy Court” means the United States Bankruptcy Court
for the Southern District of New York presiding over the Chapter 11 cases of
The Reader’s Digest Association, Inc. and its affiliates, Case No. 09-23529
(RDD).


 


“Base Rate” means for any day a fluctuating rate per annum
equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the
rate of interest in effect for such day as publicly announced from time to time
by JPMorgan Chase Bank as its “prime rate” and (c) the Eurodollar Rate for
a Eurodollar Rate Loan with a one month Interest Period plus 1%.  The “prime rate” is a rate set by JPMorgan
Chase Bank based upon various factors including JPMorgan Chase Bank costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate.  Any change in such
rate announced by JPMorgan Chase Bank shall take effect at the opening of
business on the day specified in the public announcement of such change.


 


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


 


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


 


“Board
of Directors” means:


 


(1) with
respect to a corporation, the board of directors of the corporation or any committee
thereof duly authorized to act on behalf of such board;


 


(2) with
respect to a partnership, the Board of Directors of the general partner of the
partnership;


 


(3) with
respect to a limited liability company, the managing member or members or any
controlling committee of managing members thereof; and


 


4














 


(4) with
respect to any other Person, the board or committee of such Person serving a
similar function.


 


“Borrower” has the meaning specified in the introductory
paragraph to this Agreement.


 


“Business Day” means any day other than a Saturday, Sunday or
other day on which commercial banks are authorized to close under the Laws of,
or are in fact closed in, the state where the Administrative Agent’s Office is
located or in The City of New York; provided, that
when used in connection with a Eurodollar Rate Loan, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in deposits
in Dollars in the London interbank market.


 


“Capital Expenditures” means, for any period, the sum,
without duplication, of the additions to property, plant or equipment and other
capital expenditures, including replacements, capitalized repairs and
improvements during such period, of the Borrower and its Restricted
Subsidiaries for such period, determined in accordance with GAAP.


 


“Capital Stock” means:


 


(1) in
the case of a corporation, corporate stock,


 


(2) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock;


 


(3) in
the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and


 


(4) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.


 


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


 


“Cases” means the jointly administered chapter 11 cases of
the captioned In re The Reader’s Digest Association, Inc., Case No. 09-23529
(RDD), arising upon the filing of voluntary petitions for relief with the
Bankruptcy Court on August 24, 2009.


 


“Cash Collateral” has the meaning specified in Section 2.03(g).


 


“Cash Collateralize” has the meaning specified in Section 2.03(g).


 


“Cash Equivalents”
means:


 


(1) U.S. dollars and any other foreign currency held by the
Borrower and the Restricted Subsidiaries in the ordinary course of business;


 


(2) securities issued or directly and fully guaranteed or insured
by the United States government or any agency or instrumentality thereof (provided
that the full faith and credit of the United States is pledged in support
thereof), maturing, unless such securities are deposited to defease any
Indebtedness, not more than two years from the date of acquisition;


 


5

















 


(3) securities issued by U.S. government-sponsored entities (“GSE”)
and federally related institutions, maturing and not more than two years from
the date of acquisition;


 


(4) repurchase agreements with primary dealers of eligible banks,
and


 


(a) with a maturity of not more than one year from the date of
acquisition; and


 


(b) supported by underlying collateral that is U.S. Treasury of
U.S. government-sponsored entities;


 


(5) certificates of deposit, time deposits, Eurodollar time deposits,
and bankers’ acceptances


 


(a) with a rated bank that has received a short-term rating from a
nationally recognized statistical rating organization (“NRSRO”)
in the highest short-term rating category for debt obligations (within which
there may be subcategories or gradations indicating relative standing).
Long-term ratings may be used if short-term ratings are not available; and


 


(b) with a maturity of not more than two years from the date of
acquisition;


 


(6) securities issued or fully guaranteed or insured by any state,
commonwealth or territory of the United States, or by any political subdivision
or taxing authority thereof; and


 


(a) such security is a rated security that has received a
short-term rating from a NRSRO in the highest short-term rating category for
debt obligations (within which there may be subcategories or gradations
indicating relative standing). Long-term ratings may be used if short-term
ratings are not available; and


 


(b) such security has a maturity of not more than two years from the
date of acquisition;


 


(7) money market funds assets of which are consistent with the
quality standards of Cash Equivalents described herein (but excluding for
purposes of this clause (7) money market funds that invest primarily in
auction rate securities);


 


(8) commercial paper and corporate obligations of corporations,
provided that such security:


 


(a) is a rated security that has received a short-term rating from
a NRSRO in the highest short-term rating category for debt obligations (within
which there may be sub-categories or gradations indicating relative standing);
and


 


(b) has a stated final maturity of not more than one year from the
date of acquisition; and


 


(9) instruments equivalent to those referred to in clauses (1) to
(8) above denominated in euro or pounds sterling or any other foreign
currency comparable in credit quality and tenor to those referred to above and
customarily used by corporations for cash management purposes in any
jurisdiction outside the United States to the extent reasonably required in
connection with any business conducted by any Restricted Subsidiary organized
in such jurisdiction and not for speculative purposes.


 


6

















 


“Cash Management Obligations” means obligations owed by any
Loan Party to any Lender or Affiliate of a Lender hereunder in respect of any
overdraft and related liabilities arising from treasury, depository and cash
management services or any automated clearing house transfers of funds.


 


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


 


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


 


“Change of Control” means the earliest to occur of:


 


(a)           after giving effect to the
Reorganization Plan, the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the
Exchange Act and the rules of the SEC thereunder as in effect on the date
hereof), of Equity Interests representing 50% or more of the aggregate ordinary
voting power represented by the issued and outstanding Equity Interests of
Holdings;


 


(b)           after giving effect to the
Reorganization Plan, the board of directors of Holdings ceasing to consist of a
majority of the Continuing Directors;


 


(c)           Holdings ceasing to own, directly,
all of the outstanding Equity Interests in the Borrower;


 


(d)           a Specified Change of Control; or


 


(e)           the Disposition of all or
substantially all of the assets of the Loan Parties other than in a manner
permitted pursuant to Section 7.04.


 


“Charges” has the meaning specified in Section 11.10.


 


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


 


“Code” means the U.S. Internal Revenue Code of 1986.


 


“Collateral” means all property of the Loan Parties, now or
hereafter acquired, upon which a Lien in favor of the Collateral Agent for the
benefit of the Secured Parties is purported to be created by any Collateral
Document, provided that in no event shall any Excluded Property constitute
Collateral.


 


“Collateral Account” means one or more segregated accounts
pledged under the Collateral Documents that is under the sole control of the
Collateral Agent and is free from all other Liens (other than Liens permitted
to be incurred under clauses (30) and (31) under the definition of “Permitted
Liens,” Liens securing Secured Obligations, Pari Passu Payment Lien Obligations
and Junior Lien Indebtedness), and includes cash and Cash Equivalents received
by the Administrative Agent or the Collateral Agent from Asset Sales of
Collateral, Recovery Events, foreclosures on or sales of Collateral or any
other awards or proceeds pursuant to the Collateral Documents, including
earnings, revenues, rents, issues, profits and income from the Collateral
received pursuant to the Collateral Documents and interest earned thereon.


 


7

















 


“Collateral Agent” means Wilmington Trust FSB and its
successors and assigns.


 


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


 


(a)           the Administrative
Agent shall have received each Collateral Document required to be delivered on
the Closing Date pursuant to Section 4.01(a)(iii) or pursuant to Section 6.11
at such time, duly executed by each Loan Party thereto;


 


(b)           all Obligations
shall have been unconditionally guaranteed (the “Guaranty”)
by Holdings and each Domestic Subsidiary (other than Direct Holdings IP LLC),
or, in the case of Domestic Subsidiaries formed or acquired after the Closing
Date, each wholly-owned Domestic Subsidiary with assets with either a book
value or fair market value equal to or greater than $250,000 (each, a “Guarantor”);


 


(c)           except as set forth
in Section 6.16, the Obligations and the Guaranty shall have been secured
by a security interest in (i) all the Equity Interests of the Borrower and
(ii) all Equity Interests of each Subsidiary (other than Direct Holdings
IP LLC) of the Borrower directly owned by the Borrower or any Guarantor, in
each case having the priority required by the Collateral Documents; provided that pledges of Equity Interests of each Foreign
Subsidiary, and of each Domestic Subsidiary substantially all of whose assets
consist of Equity Interests of one or more Foreign Subsidiaries, shall be
limited to 65% of the issued and outstanding Equity Interests of such
Subsidiary at any time;


 


(d)           except to the extent
otherwise permitted hereunder or under any Collateral Document, (i) to the
extent governed by the Uniform Commercial Code, the execution of the Collateral
Documents shall be effective to create a security interest in all Collateral
described therein and proceeds thereof, in each case, to the extent
constituting Collateral and with the priority required by the Collateral
Documents and (ii) except as set forth in Section 6.16, all documents
and instruments, including Uniform Commercial Code financing statements and
filings made in respect of Intellectual Property constituting Collateral in the
United States Patent and Trademark Office and the United States Copyright
Office, reasonably requested by the Administrative Agent to be filed,
registered or recorded to create the Liens intended to be created by the
Collateral Documents and to perfect such Liens to the extent required by, and
with the priority required by, the Collateral Documents, shall have been filed,
registered or recorded or delivered to the Administrative Agent for filing,
registration or recording;


 


(e)           none of the
Collateral shall be subject to any Liens other than Liens permitted by Section 7.03;
and


 


(f)            except as set forth
in Section 6.11, the Administrative Agent shall have received
(i) counterparts of a Mortgage with respect to any Material Real Property
described on Schedule 1.01B hereto or required to be delivered pursuant to Section 6.11
(the “Mortgaged Properties”) duly executed
and delivered by the record owner of such property, (ii) a policy or
policies of title insurance issued by a nationally recognized title insurance
company insuring the Lien of each such Mortgage as a valid Lien on the property
described therein, free of any other Liens except as expressly permitted by Section 7.03,
together with such endorsements, coinsurance and reinsurance as the
Administrative Agent may reasonably request and (iii) such surveys,
abstracts, appraisals, legal opinions and other documents as the Administrative
Agent may reasonably request with respect to any such Mortgaged Property.


 


8

















 


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


 


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


 


“Collateral Disposition Offer” has the meaning specified in Section 7.08(a)(v).


 


“Collateral Documents” means the security agreements, pledge
agreements, Mortgages, collateral assignments, agency agreements and related
agreements, instruments and documents executed and delivered pursuant to this
Agreement or any of the foregoing (including, without limitation, finance
statements under the Uniform Commercial Code of the relevant states), as
amended, supplemented, restated, renewed, refunded, replaced, restructured,
repaid, refinanced or otherwise modified from time to time, and pursuant to
which Collateral is pledged, assigned or granted to or on behalf of the
Collateral Agent for the ratable benefit of the Secured Parties and the
Administrative Agent or notice of such pledge, assignment or grant is given.


 


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


 


“Committee” means the statutory unsecured creditors committee
appointed in the Cases on August 31, 2009.


 


“Compensation Period” has the meaning specified in Section 2.11(c)(ii).


 


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


 


“Confirmation Order” means the order of the United States
Bankruptcy Court for the Southern District of New York, dated January 19,
2010, confirming the Reorganization Plan.


 


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


 


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


 


9

















 


(a) consolidated
interest expense of such Person and its Restricted Subsidiaries for such
period, to the extent such expense was deducted (and not added back) in
computing Consolidated Net Income (including (a) amortization of original
issue discount resulting from the issuance of Indebtedness at less than par, (b) all
commission, discounts and other fees and charges owed with respect to letters
of credit or bankers’ acceptances, (c) non-cash interest payments (but
excluding any non-cash interest expense attributable to the movement in the
mark to market valuation of obligations under Swap Contracts or other
derivative instruments pursuant to ASC No. 815—“Derivatives and Hedging
Overview”), (d) the interest component of Capitalized Lease Obligations (e) and
net payments, if any, without duplication, pursuant to interest rate
obligations under Swap Contracts with respect to Indebtedness, and excluding (1) any
Additional Interest, (2) amortization of deferred financing fees and (3) any
expensing of bridge or other financing fees); plus


 


(b) consolidated
capitalized interest of such Person and its Restricted Subsidiaries for such
period, whether paid or accrued; less


 


(c) interest
income for such period.


 


“Consolidated Leverage Ratio” means, with respect to any
Person for any period, the ratio of:


 


(1) the
Consolidated Total Indebtedness of such Person and its Restricted Subsidiaries
at the time of determination (the “Calculation Date”),
to


 


(2) the
EBITDA of such Person for the four most recent full fiscal quarters (for
purposes of this definition, the period from January 1, 2010 to March 31,
2010 shall be deemed to be a full fiscal quarter of the Borrower without giving
effect to the Emergence Date) ending immediately prior to the date for which internal
financial statements are available.


 


If
the Borrower or any Restricted Subsidiary has incurred, assumed, guaranteed,
redeemed, retired or extinguished any Indebtedness (other than Indebtedness
incurred under any revolving credit facility unless such Indebtedness has been
permanently repaid and has not been replaced) or issues or redeems Disqualified
Stock or preferred stock subsequent to the commencement of the period for which
the Consolidated Leverage Ratio is being calculated but prior to or substantially
concurrently with the event for which the calculation of the Consolidated
Leverage Ratio is made, then the Consolidated Leverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption, guarantee,
redemption, retirement or extinguishment of Indebtedness, or such issuance or
redemption of Disqualified Stock or preferred stock, as if the same had
occurred at the beginning of the applicable four-quarter period.


 


For
purposes of making the computation referred to above, Investments,
acquisitions, dispositions, mergers, consolidations and disposed operations (as
determined in accordance with GAAP) that have been made by the Borrower or any
of its Restricted Subsidiaries during the four-quarter reference period or
subsequent to such reference period and on or prior to or simultaneously with
the Calculation Date shall be calculated on a pro forma basis assuming that all
such Investments, acquisitions, dispositions, mergers, consolidations and
disposed operations (and the change in any associated fixed charge obligations
and the change in EBITDA resulting therefrom) had occurred on the first day of
the four-quarter reference period. If since the beginning of such period any
Person that subsequently became a Restricted Subsidiary or was merged with or
into the Borrower or any of its Restricted Subsidiaries since the beginning of
such period shall have made any Investment, acquisition, disposition, merger,
consolidation or disposed operation that would have required adjustment pursuant
to this definition, then the Consolidated Leverage Ratio shall be calculated
giving pro forma effect thereto for such period as if 


 


10

















 


such
Investment, acquisition, disposition, merger, consolidation or disposed
operation had occurred at the beginning of the applicable four-quarter period.


 


For
purposes of this definition, whenever pro forma effect is to be given to a
transaction, the pro forma calculations shall be (x) made in good faith by
a responsible financial or accounting officer of the Borrower (and may include,
for the avoidance of doubt, cost savings and operating expense reductions
resulting from such Investments acquisition, disposition, merger or
consolidation or disposition which is being given pro forma effect that have
been or are reasonably expected to be realized within twelve (12) months after
the date of such Investment, acquisition, disposition, merger, consolidation or
disposed operation as the result of specified actions taken or to be taken
within six (6) months after such date) and which are reasonably
identifiable and factually supportable, except as otherwise provided herein or (y) determined
in accordance with Regulation S-X. If any Indebtedness bears a floating rate of
interest and is being given pro forma effect, the interest on such Indebtedness
shall be calculated as if the rate in effect on the Calculation Date had been
the applicable rate for the entire period (taking into account any obligations
under Swap Contracts applicable to such Indebtedness). Interest on a
Capitalized Lease Obligations shall be deemed to accrue at an interest rate
reasonably determined by a responsible financial or accounting officer of the
Borrower to be the rate of interest implicit in such Capitalized Lease
Obligation in accordance with GAAP. For purposes of making the computation
referred to above, interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based upon the average
daily balance of such Indebtedness during the applicable period except as set
forth in the first paragraph of this definition. Interest on Indebtedness that
may optionally be determined at an interest rate based upon a factor of a prime
or similar rate, a eurocurrency interbank offered rate, or other rate, shall be
deemed to have been based upon the rate actually chosen, or, if none, then
based upon such optional rate chosen as the Borrower may designate.


 


For
the purposes of this definition, any amount in a currency other than U.S.
dollars will be converted to U.S. dollars based on the average exchange rate
for such currency for the most recent twelve month period immediately prior to
the date of determination determined in a manner consistent with that used in
calculating EBITDA for the applicable period.


 


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


 


(1) any
net after-tax effect of extraordinary, non-recurring or unusual gains or
losses, costs, charges or expenses (less all fees and expenses relating
thereto) shall be excluded (including, without limitation, severance,
relocation, transition and other restructuring costs and curtailments or
modifications to pension and post-retirement employee benefit plans),


 


(2) the
Net Income for such period shall not include the cumulative effect of a change
in accounting principles during such period,


 


(3) any
net after-tax effect of income (loss) from disposed, abandoned or discontinued
operations and any net after-tax gains or losses on disposal, abandoned of
disposed or discontinued operations shall be excluded,


 


(4) any
net after-tax gains or losses (less all fees and expenses relating thereto)
attributable to asset dispositions other than in the ordinary course of
business, as determined in good faith by the Board of Directors of the
Borrower, shall be excluded,


 


11

















 


(5) the
Net Income for such period of any Person that is not a Subsidiary, or is an
Unrestricted Subsidiary, or that is accounted for by the equity method of
accounting, shall be excluded; provided that Consolidated Net Income of the
Borrower shall be increased by the amount of dividends or distributions or
other payments that are actually paid in cash (or to the extent converted into
cash) to the referent Person or a Restricted Subsidiary thereof in respect of
such period (without duplication of any amounts included under Section 7.01(a)(vii)(D)(1));


 


(6) solely
for the purpose of determining the amount available for Restricted Payments
under Section 7.01(a)(vii)(A), the Net Income for such period of any
Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded
if the declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of its Net Income is not at the date of determination
wholly permitted without any prior governmental approval (which has not been
obtained) or, directly or indirectly, by the operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule,
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, unless such restriction with respect to the payment of dividends
or in similar distributions has been legally waived; provided that Consolidated
Net Income of the Borrower will be increased by the amount of dividends or
other distributions or other payments actually paid in cash (or to the extent
converted into cash) to the Borrower or a Restricted Subsidiary thereof in
respect of such period, to the extent not already included therein;


 


(7) the
effects of adjustments (including the effects of such adjustments pushed down
to the Borrower and the Restricted Subsidiaries) in any line item of such
Person’s consolidated financial statements pursuant to GAAP resulting from the
application of purchase accounting in relation to any consummated acquisition,
net of taxes, shall be excluded;


 


(8) any
net after-tax income (loss) from the early extinguishment or cancellation of
Indebtedness or obligations under Swap Contracts or other derivative
instruments shall be excluded;


 


(9) any
impairment charge or asset write-off pursuant to ASC No. 350—“Intangible
Assets” and No. 360—“Impairments” and the amortization of intangibles
arising pursuant to ASC No. 805 (excluding any such impairment charge to
the extent that it represents an accrual of or reserve for cash expenditures in
any future period) shall be excluded;


 


(10) the
amount of any expense will be excluded to the extent a corresponding amount is
received in cash by the Borrower and the Restricted Subsidiaries from a Person
other than the Borrower or any Restricted Subsidiaries under any agreement
providing for reimbursement of any such expense, provided such reimbursement
payment has not been included in determining Consolidated Net Income (it being
understood that if the amounts received in cash under any such agreement in any
period exceed the amount of expense in respect of such period, such excess
amounts received may be carried forward and applied against expense in future
periods);


 


(11)
any non-cash compensation charge or expense recorded from grants of stock
appreciation or similar rights, stock options or other rights to officers,
directors or employees shall be excluded; and


 


(12)
any increase in amortization or depreciation or other non-cash charges or the
impact of write-off of deferred revenues resulting from the application of SOP
90-7 in relation to the Emergence Transactions shall be excluded.


 


Notwithstanding
the foregoing, for the purpose of Section 7.01 only (other than Section 7.01(a)(vii)(D)),
there shall be excluded from Consolidated Net Income any income arising from
any sale 


 


12

















 


or
other disposition of Restricted Investments made by the Borrower and the
Restricted Subsidiaries, any repurchases and redemptions of Restricted
Investments from the Borrower and the Restricted Subsidiaries, any repayments
of loans and advances which constitute Restricted Investments by the Borrower
or any Restricted Subsidiary, any sale of the stock of an Unrestricted Subsidiary
or any distribution or dividend from an Unrestricted Subsidiary, in each case
only to the extent such amounts increase the amount of Restricted Payments
permitted under Section 7.01(a)(vii)(D).


 


“Consolidated Secured Debt Ratio” means, with respect to any
specified Person, as of any date of determination, the ratio of (1) the
sum, without duplication, of (a) the aggregate principal amount of the
Specified Notes, plus (b) the aggregate amount outstanding under any
Receivables Facility, plus (c) the aggregate principal amount (or accreted
value) outstanding under any Pari Passu Payment Lien Obligations, plus (d) the
aggregate principal amount (or accreted value) outstanding under this Agreement
and Credit Facilities which constitute Priority Payment Lien Obligations
(including letters of credit) and any other Priority Payment Lien Obligations,
and plus (e) the aggregate amount of any incremental Indebtedness and
other obligations permitted to be incurred under Section 7.02(b)(i) after
giving effect to any amounts of Indebtedness and other obligations incurred
under such Section 7.02(b)(i), as of the last day of the most recent fiscal
quarter for which internal financial statements are available immediately
preceding the date on which such event for which such calculation is being made
shall occur (for the purposes of this definition, the period from January 1,
2010 to March 31, 2010 shall be deemed to be a full fiscal quarter of the
Borrower without giving effect to the Emergence Date) to (2) the EBITDA of
the specified Person and its Restricted Subsidiaries (on a consolidated basis)
for the most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
event for which such calculation is being made shall occur (for the purposes of
this definition, the period from January 1, 2010 to March 31, 2010
shall be deemed to be a full fiscal quarter of the Borrower without giving
effect to the Emergence Date), in each case with such pro forma adjustments as
are appropriate and consistent with the pro forma adjustment provisions set
forth in the definition of Consolidated Leverage Ratio.


 


“Consolidated Total Indebtedness” means, as at any date of
determination, an amount equal to the sum of (1) the aggregate amount of
all outstanding Indebtedness of the Borrower and its Restricted Subsidiaries on
a consolidated basis consisting of Indebtedness for borrowed money, Obligations
in respect of Capitalized Lease Obligations and debt obligations evidenced by
promissory notes and similar instruments, (2) the aggregate amount of all
outstanding Disqualified Stock of the Borrower and all preferred stock of its
Restricted Subsidiaries on a consolidated basis, with the amount of such
Disqualified Stock and preferred stock equal to the greater of their respective
voluntary or involuntary liquidation preferences and maximum fixed repurchase
prices, in each case determined on a consolidated basis in accordance with
GAAP, and (3) all obligations relating to Receivables Facilities.


 


For
purposes hereof, the “maximum fixed repurchase price” of any Disqualified Stock
or preferred stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Stock or preferred
stock as if such Disqualified Stock or preferred stock were repurchased on any
date on which Consolidated Total Indebtedness shall be required to be
determined pursuant to this Agreement, and if such price is based upon, or
measured by, the fair market value of such Disqualified Stock or preferred
stock, such fair market value shall be determined reasonably and in good faith
by the Borrower.


 


“Contingent Obligations” means, with respect to any Person,
any obligation of such Person guaranteeing any leases, dividends or other
obligations that do not constitute Indebtedness (“primary obligations”) of any
other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person, whether
or not contingent,


 


13

















 


(1) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor,


 


(2) to
advance or supply funds


 


(a) for
the purchase or payment of any such primary obligation, or


 


(b) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, or


 


(c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation against loss in respect thereof.


 


“Continuing Directors” means, as of any date of
determination, any member of the Board of Directors of the Borrower who:


 


(1) was
a member of such Board of Directors on the Emergence Date; or


 


(2) was
nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election.


 


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


 


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


 


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


 


“Credit Facilities” means, with respect to the Borrower or
any of its Restricted Subsidiaries, one or more debt facilities, other than the
Revolving Credit Facility, or other financing arrangements (including, without
limitation, commercial paper facilities or indentures) providing for revolving
credit loans, term loans, letters of credit or other long-term Indebtedness,
including any notes, mortgages, guarantees, security documents, instruments and
agreements executed in connection therewith, and any amendments, supplements,
modifications, extensions, renewals, restatements or refundings thereof and any
indentures or credit facilities or commercial paper facilities that replace,
refund or refinance any part of the loans, notes, other credit facilities or
commitments thereunder, including any such replacement, refunding or
refinancing facility or indenture that increases the amount permitted to be
borrowed thereunder or alters the maturity thereof (provided that such increase
in borrowings is permitted under Section 7.02) or adds Restricted
Subsidiaries as additional borrowers or guarantors thereunder and whether by
the same or any other agent, lender or investor or group of lenders or
investors.


 


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


 


14

















 


(including,
in the case of Loan Parties incorporated or organized in England or Wales,
administration, administrative receivership, voluntary arrangement and schemes
of arrangement).


 


“Default” means any event that is, or with the passage of
time or the giving of notice or both would be, an Event of Default provided
that any Default that results solely from the taking of any action that would
have been permitted but for the continuation of a previous Default will be
deemed to be cured if such previous Default is cured prior to becoming an Event
of Default.


 


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


 


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


 


“Designated Noncash Consideration” means the fair market
value of noncash consideration received by the Borrower or a Restricted
Subsidiary in connection with an Asset Sale that is so designated as Designated
Noncash Consideration pursuant to an Officers’ Certificate, setting forth the
basis of such valuation, less the amount of cash or Cash Equivalents received
in connection with a subsequent sale of such Designated Noncash Consideration.


 


“Designated Non-Debtors” means the Subsidiaries set forth on
Schedule 1.01C.


 


“Designated Preferred Stock” means preferred stock of the
Borrower or any direct or indirect parent thereof (in each case other than
Disqualified Stock) that is issued for cash (other than to a Restricted
Subsidiary or an employee stock ownership plan or trust established by the
Borrower or any of its Subsidiaries) and is so designated as Designated
Preferred Stock, pursuant to an Officers’ Certificate, as the case may be, on
the issuance date thereof, the cash proceeds of which are excluded from the
calculation set forth in Section 7.01(a)(iii).


 


“DIP Credit Agreement” means the Credit and Guarantee
Agreement, dated as of August 26, 2009, among Holdings, the Borrower and
certain of the Borrower’s Subsidiaries, the lenders from time to time party
thereto, the JPMorgan Chase Bank, N.A., as administrative agent, and the other
parties thereto, as amended, supplemented or otherwise modified prior to the
date hereof.


 


“Disposition” or “Dispose” means
the sale, transfer, license, lease or other disposition (including any sale and
leaseback transaction and any sale of Equity Interests held in another Person)
of any property by any Person, including any sale, assignment, transfer or
other disposal, with or without recourse, of any notes or accounts receivable
or any rights and claims associated therewith; and, shall include any issuance
by a Person of any of its Equity Interests to another Person.


 


“Disqualified Stock” means, with respect to any Person, any
Capital Stock of such Person which, by its terms, or by the terms of any
security into which it is convertible or for which it is putable or
exchangeable, or upon the happening of any event, matures or is mandatorily
redeemable, other than as a result of a change of control or asset sale,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the
option of the holder thereof, other than as a result of a change of control or
asset sale, in whole or in part, in each case prior to the date 91 days after
the Maturity Date; provided, however, that 


 


15

















 


only
the portion of Capital Stock that so matures or is mandatorily redeemable, is
so convertible or exchangeable or is so redeemable at the option of the holder
thereof prior to such date will be deemed to be Disqualified Stock; and,
provided further, that if such Capital Stock is issued to any plan for the
benefit of employees of the Borrower or its Subsidiaries or by any such plan to
such employees, such Capital Stock shall not constitute Disqualified Stock
solely because it may be required to be repurchased by the Borrower or any of its
Subsidiaries in order to satisfy applicable statutory or regulatory
obligations.


 


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


 


“Domestic Subsidiary” means, with respect to any Person, any
Restricted Subsidiary of such Person other than a Foreign Subsidiary.


 


“EBITDA” means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (without
duplication):


 


(a) provision
for taxes based on income or profits, plus franchise or similar taxes, of such
Person for such period deducted (and not added back) in computing Consolidated
Net Income, plus


 


(b) Consolidated
Interest Expense of such Person for such period to the extent the same was
deducted (and not added back) in calculating such Consolidated Net Income, plus


 


(c) Consolidated
Depreciation and Amortization Expense of such Person for such period to the
extent such depreciation and amortization were deducted (and not added back) in
computing Consolidated Net Income, plus


 


(d) any
fees, expenses or charges related to any Equity Offering, Permitted Investment,
acquisition, disposition, recapitalization or Indebtedness permitted to be
incurred by this Agreement (whether or not successful), including such fees,
expenses or charges related to the offering of the Senior Secured Notes, and,
in each case, deducted (and not added back) in computing Consolidated Net
Income, plus


 


(e) the
amount of any restructuring charges deducted (and not added back) in such
period in computing Consolidated Net Income, including any one-time costs
incurred in connection with acquisitions after the Closing Date, plus


 


(f) any
other non-cash charges, expenses or losses reducing Consolidated Net Income for
such period (including any impairment charges or the impact of purchase accounting
and the effects of fresh start accounting under SOP 90-7), excluding any such
charge that represents an accrual or reserve for a cash expenditure for a
future period, plus


 


(g) the
amount of any minority interest expense or non-controlling interest in income
of consolidated subsidiaries deducted (and not added back) in such period in
calculating Consolidated Net Income (less the amount of any cash dividends paid
to the holders of such minority interests), plus


 


(h) all
non-recurring costs and expenses of the Borrower and its Restricted
Subsidiaries incurred in connection with the Emergence Transactions; plus


 


(i) any
net loss resulting from obligations under Swap Contracts (including pursuant to
the application of SFAS No. 133), plus


 


16














 


(j) foreign
exchange losses resulting from the impact of foreign currency changes on the
valuation of assets or liabilities on the balance sheet of the Borrower and its
consolidated Subsidiaries, plus


 


(k) any
deductions consisting of subsidiary income attributable to minority interests
in Reader’s Digest Association Limited, except to the extent actually paid to a
holder of Equity Interests in such Subsidiary (or any designee of such Person)
other than the Borrower and its Subsidiaries (with such payments to be deducted
in the period made), less


 


(l) any
net gain resulting from obligations under Swap Contracts (including pursuant to
the application of SFAS No. 133), less


 


(m) foreign
exchange gains resulting from the impact of foreign currency changes on the
valuation of assets or liabilities on the balance sheet of the Borrower and its
consolidated Subsidiaries, less


 


(n) any
additions resulting from subsidiary losses attributable to minority interests
in Reader’s Digest Association Limited, less


 


(o) non-cash
items increasing Consolidated Net Income of such Person for such period
(including the effects of fresh start accounting under SOP 90-7), excluding any
non-cash gains which represent the reversal of any accrual of, or cash reserve
for, anticipated cash charges that reduced EBITDA in any prior period.


 


It
is understood that if the EBITDA for any fiscal quarter is less than zero, then
such EBITDA shall be deemed to be equal to zero.


 


“Effective Date” means the effective date of the
Reorganization Plan.


 


“Eligible Assignee” means any Assignee permitted by and
consented to in accordance with Section 11.07(b).


 


“Emergence Date” means the day (a) that is the Business
Day selected by the Debtors (as defined under the Reorganization Plan) after
the date of the Confirmation Order on which all conditions specified in Article IX.A
of the Reorganization Plan have been satisfied or waived pursuant to Article IX.B
of the Reorganization Plan; (b) the Emergence Transactions shall have
occurred; and (c) the Reorganization Plan shall have been substantially
consummated.


 


“Emergence Transactions” mean the various transactions set
forth in the Reorganization Plan entered into by the Borrower and certain of
its affiliates in connection with the Emergence Date and substantial consummation
of the Reorganization Plan.


 


“Environmental Laws” means any and all Laws (including common
law) relating to pollution, the protection of the environment, the protection
of natural resources, or, to the extent relating to exposure to hazardous substances,
the protection of human health or to the release of any pollutants into the
environment, including those related to air emissions and discharges to public
water or waste treatment systems.


 


“Environmental Liability” means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower, any other Loan
Party or any of their respective Subsidiaries directly or indirectly resulting
from 


 


17

















 


or
based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of
any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the environment
or (e) any contract, agreement or other consensual arrangement pursuant to
which liability is assumed or imposed with respect to any of the foregoing.


 


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


 


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


 


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


 


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


 


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


 


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


 


“Eurodollar Rate” means, for any Interest Period with respect
to any Eurodollar Rate Loan:


 


18

















 


(a)           the rate per annum
equal to the rate determined by the Administrative Agent to be the offered rate
that appears on the page of the Reuters Screen LIBOR01 Page (or any
successor thereto) that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Interest Period, or, if different, the date
on which quotations would customarily be provided by leading banks in the
London Interbank Market for deposits of amounts in the relevant currency for
delivery on the first day of such Interest Period, or


 


(b)           if the rate
referenced in the preceding clause (a) does not appear on such page or
service or such page or service shall not be available, the rate per annum
equal to the rate determined by the Administrative Agent to be the offered rate
on such other page or other service that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m. (London
time) two (2) Business Days prior to the first day of such Interest
Period, or, if different, the date on which quotations would customarily be
provided by leading banks in the London Interbank Market for deposits of
amounts in the relevant currency for delivery on the first day of such Interest
Period, or


 


(c)           if the rates
referenced in the preceding clauses (a) and (b) are not available,
the rate per annum determined by the Administrative Agent as the rate of
interest at which deposits in Dollars for delivery on the first day of such
Interest Period in Same Day Funds in the approximate amount of the Eurodollar
Rate Loan being made, continued or converted by JPMorgan Chase Bank and with a
term equivalent to such Interest Period would be offered by JPMorgan Chase Bank’s
London Branch to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Interest Period or, if different, the date
on which quotations would customarily be provided by leading banks in the
London Interbank Market for deposits of amounts in the relevant currency for
delivery on the first day of such Interest Period;


 


provided, that in no
event shall the Eurodollar Rate be less than 2.00%.


 


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


 


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


 


“Excess Collateral Proceeds” has the meaning specified in Section 7.08(a)(v).


 


“Excess Proceeds” has the meaning set forth in Section 7.08(b)(iv).


 


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


 


“Exchange Notes” means any notes issued in exchange for notes
pursuant to the Registration Rights Agreement or similar agreement.


 


“Exchange Rate” means on any day with respect to any currency
other than Dollars, the rate at which such currency may be exchanged into
Dollars, as set forth at approximately 11:00 a.m. (London time) on such
day on the Reuters World Currency Page for such currency; in the event
that such 


 


19

















 


rate
does not appear on any Reuters World Currency Page, the Exchange Rate shall be
determined by reference to such other publicly available service for displaying
exchange rates as may be agreed upon by the Administrative Agent and the
Borrower, or, in the absence of such agreement, such Exchange Rate shall
instead be the arithmetic average of the spot rates of exchange of the
Administrative Agent in the market where its foreign currency exchange
operations in respect of such currency are then being conducted, at or about
10:00 a.m. (New York City time) on such date for the purchase of Dollars
for delivery two Business Days later.


 


“Excluded Contribution” means net cash proceeds, marketable
securities or Qualified Proceeds received by the Borrower and its Restricted
Subsidiaries from


 


(a) contributions
to its common equity capital, and


 


(b) the
sale (other than to a Subsidiary of the Borrower or to any management equity
plan or stock option plan or any other management or employee benefit plan or
agreement of the Borrower or a Subsidiary) of Capital Stock (other than
Disqualified Stock and Designated Preferred Stock) of the Borrower or any
direct or indirect parent of the Borrower,


 


in
each case designated as Excluded Contributions pursuant to an Officers’
Certificate on the date such capital contributions are made or the date such
Equity Interests are sold, as the case may be, which are excluded from the
calculation set forth in Section 7.01(a)(vii).


 


“Excluded Property” has the meaning specified in the Security
Agreement.


 


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


 


“Existing Indebtedness” means Indebtedness of the Borrower
and its Restricted Subsidiaries existing on the Emergence Date.


 


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


 


“First Lien Credit Agreement” means the Credit Agreement,
dated as of  February 19, 2010,
among the Borrower, Holdings, the German Borrower party thereto, the lenders
party thereto and JPMorgan Chase Bank, N.A., as administrative agent, as
amended, supplemented, waived or otherwise modified prior to the effectiveness of
this Agreement.


 


“Foreign Benefit Arrangement” means any employee benefit
arrangement mandated by non-U.S. law that is maintained or contributed to by
any Loan Party or any ERISA Affiliate.


 


“Foreign Jurisdiction Deposit” means a deposit or Guarantee
incurred in the ordinary course of business and required by any Governmental
Authority in a foreign jurisdiction as a condition of doing business in such
jurisdiction.


 


20

















 


“Foreign Lender” has the meaning specified in Section 11.15.


 


“Foreign Plan” means each employee benefit plan (within the
meaning of Section 3(3) of ERISA, whether or not subject to ERISA)
that is not subject to U.S. law and is maintained or contributed to by any Loan
Party or any ERISA Affiliate.


 


“Foreign Subsidiary” means, with respect to any Person, any
Restricted Subsidiary of such Person that is not organized or existing under
the laws of the United States, any state thereof or the District of Columbia,
and any Restricted Subsidiary of such Restricted Subsidiary.


 


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


 


“GAAP” means generally accepted accounting principles in the
United States which are in effect on the Closing Date.


 


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


 


“Government Securities” means securities that are:


 


(a) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged, or


 


(b) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America,


 


which,
in either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act), as custodian with
respect to any such Government Securities or a specific payment of principal of
or interest on any such Government Securities held by such custodian for the
account of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the Government Securities or the
specific payment of principal of or interest on the Government Securities
evidenced by such depository receipt.


 


“Granting Lender” has the meaning specified in Section 11.07(h).


 


“Group Member” means Holdings, the Borrower and the
Subsidiaries.


 


“guarantee” means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness or other obligations.


 


“Guarantee” means the guarantee by any Guarantor of the
Borrower’s Obligations under this Agreement.


 


21

















 


“Guarantors” has the meaning specified in the definition of “Collateral
and Guarantee Requirement”.


 


“Guarantor Obligations”: 
with respect to any Guarantor, all obligations and liabilities of such
Guarantor which may arise under or in connection with this Agreement
(including, without limitation, Article X), any other Loan Document or any
Secured Hedge Agreement to which such Guarantor is a party and any monetary
Cash Management Obligations owed by such Guarantor, in each case whether on
account of guarantee obligations, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all Attorney Costs
that are required to be paid by such Guarantor pursuant to the terms of this
Agreement or any other Loan Document).


 


“Guaranty” has the meaning specified in the definition of “Collateral
and Guarantee Requirement”.


 


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


 


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


 


“Holdings” has the meaning specified in the preamble of this
Agreement.


 


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


 


“Indebtedness” means, with respect to any Person,


 


(a) any
Indebtedness (including principal and premium) of such Person, whether or not
contingent:


 


(1) in
respect of borrowed money,


 


(2) evidenced
by bonds, notes, debentures or similar instruments or letters of credit or
bankers’ acceptances (or, without double counting, reimbursement agreements in
respect thereof),


 


(3) representing
the deferred and unpaid balance of the purchase price of any property
(including Capitalized Lease Obligations), except any such balance that
constitutes a trade payable or similar obligation to a trade creditor, in each
case accrued in the ordinary course of business, or


 


(4) representing
any obligations under Swap Contracts,


 


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


 


(b) to
the extent not otherwise included, any obligation by such Person to be liable
for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of
another Person (whether or not such items would appear upon the balance sheet
of such obligor or guarantor), other than by endorsement of negotiable
instruments for collection in the ordinary course of business, and


 


22

















 


(c) to
the extent not otherwise included, Indebtedness of another Person secured
by a Lien on any asset owned by such Person, whether or not such Indebtedness
is assumed by such Person (with the amount of such Indebtedness deemed to be
the lower of (i) the principal amount of the Indebtedness of such other
person and (ii) the fair market value of the assets securing such
Indebtedness at the date of determination);


 


provided, however, that (x) Contingent
Obligations incurred in the ordinary course of business, (y) and
obligations under or in respect of Receivables Facilities, and (z) in the
case of the Borrower and its Restricted Subsidiaries, statutory or other legal
requirements to make deposits in connection with sweepstakes or similar
contests, or surety bonds or letters of credit posted pursuant to such
requirements in the ordinary course of business shall be deemed not to
constitute Indebtedness.


 


“Indemnified Liabilities” has the meaning specified in Section 11.05.


 


“Indemnitees” has the meaning specified in Section 11.05.


 


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


 


“Information” has the meaning specified in Section 11.08.


 


“Initial Purchasers” means J.P. Morgan Securities Inc., Banc
of America Securities LLC, Credit Suisse Securities (USA) LLC, Goldman, Sachs &
Co. and Moelis & Company LLC.


 


“Intellectual Property” has the meaning set forth in the
Security Agreement.


 


“Interest Payment Date” means, (a) as to any Eurodollar
Rate Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date applicable to such Loan, provided that
if any Interest Period for a Eurocurrency Rate Loan exceeds three months, the
respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates, (b) as to any Base
Rate Loan, the last Business Day of each March, June, September and December and
the Maturity Date applicable to such Loan and (c) as to any Loan, the date
of any repayment or prepayment made in respect thereof.


 


“Interest Period” means, as to each Eurodollar Rate Loan, the
period commencing on the date such Eurodollar Rate Loan is disbursed or
converted to or continued as a Eurodollar Rate Loan and ending on the date one,
two or three months thereafter, as selected by the Borrower in its Committed
Loan Notice; provided that:


 


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


 


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


 


23

















 


(iii)          no
Interest Period shall extend beyond the Maturity Date applicable to such
Eurodollar Rate Loan; and


 


“Investments” means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the form
of loans (including guarantees), advances or capital contributions (excluding
accounts receivable, trade credit, advances to customers, commission, travel and
similar advances to officers and employees, in each case made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities issued by any other Person
and investments that are required by GAAP to be classified on the balance sheet
(excluding the footnotes) of such Person in the same manner as the other
investments included in this definition to the extent such transactions involve
the transfer of cash or other property. For purposes of the definition of “Unrestricted
Subsidiary” and Section 7.01,


 


(1) “Investments”
shall include the portion (proportionate to the Borrower’s direct or indirect
equity interest in such Subsidiary) of the fair market value of the net assets
of a Subsidiary of the Borrower at the time that such Subsidiary is designated
an Unrestricted Subsidiary; provided, however, that upon a redesignation of
such Subsidiary as a Restricted Subsidiary, the Borrower or applicable
Restricted Subsidiary shall be deemed to continue to have a permanent “Investment”
in an Unrestricted Subsidiary in an amount (if positive) equal to


 


(x) the
Borrower’s direct or indirect “Investment” in such Subsidiary at the time of
such redesignation; less


 


(y) the
portion (proportionate to the Borrower’s direct or indirect equity interest in
such Subsidiary) of the fair market value of the net assets of such Subsidiary
at the time of such redesignation; and


 


(2) any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer, in each case as determined
in good faith by the Borrower.


 


“Issue Date” means the date on which the Senior Secured Notes
are initially issued.


 


“J.H. Cohn” means J.H. Cohn, LLP, and any successor thereto.


 


“JPMorgan Chase Bank” means JPMorgan Chase
Bank, N.A., and any successor thereto.


 


“Junior Financing” has the meaning specified in Section 7.09.


 


“Junior Financing Documentation” means any documentation
governing any Junior Financing.


 


“Junior Lien Indebtedness” means any Indebtedness incurred by
the Borrower or any Restricted Subsidiary which is permitted to be secured by
the Collateral on a junior basis to the security interest in favor of the
Secured Obligations and Pari Passu Payment Lien Obligations.


 


“Junior Lien Intercreditor Agreement” means the junior lien
intercreditor agreement entered into by the representative of the holders of
the Junior Lien Indebtedness, in substantially the form attached as Exhibit K.


 


24

















 


“Laws” means, collectively, all international, foreign,
Federal, state and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities.


 


“L/C Advance” means, with respect to each Lender, such Lender’s
funding of its participation in any L/C Borrowing in accordance with its Pro
Rata Share.


 


“L/C Borrowing” means an extension of credit resulting from a
drawing under any Letter of Credit which has not been reimbursed or refinanced
as a Refunding Loan in accordance with Section 2.03(c).


 


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


 


“L/C Issuer” means JPMorgan Chase Bank and any other Lender
that becomes an L/C Issuer in accordance with Section 2.03(k) or Section 11.07(j),
in each case, in its capacity as an issuer of Letters of Credit hereunder, or
any successor issuer of Letters of Credit permitted hereunder.


 


“L/C Obligations” means, as at any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit plus the
aggregate of all Unreimbursed Amounts, including all L/C Borrowings.


 


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


 


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


 


“Letter of Credit” means any letter of credit issued
hereunder.  A Letter of Credit may be a
commercial letter of credit or a standby letter of credit.


 


“Letter of Credit Application” means an application and
agreement for the issuance or amendment of a Letter of Credit in the form from
time to time in use by the relevant L/C Issuer, provided that any such
application or agreement shall not be inconsistent with the terms hereof or
impose any additional obligations or liabilities on any Loan Party.  Any Letter of Credit Application delivered to
JPMorgan Chase Bank as L/C Issuer for a commercial letter of credit shall be
substantially in the form of Exhibit I or such other form as may be
reasonably acceptable to JPMorgan Chase Bank. 
Any Letter of Credit Application delivered to JPMorgan Chase Bank as L/C
Issuer for a standby letter of credit shall be substantially in the form of Exhibit J
or such other form as may be reasonably acceptable to JPMorgan Chase Bank.


 


“Letter of Credit Expiration Date” means the day that is five
(5) Business Days prior to the scheduled Maturity Date then in effect for
the Revolving Credit Facility (or, if such day is not a Business Day, the next
preceding Business Day).


 


“Letter of Credit Sublimit” means an amount equal to the
lesser of (a) $25,000,000 and (b) the aggregate amount of the
Revolving Credit Commitments.  The Letter
of Credit Sublimit is part of, and not in addition to, the Revolving Credit
Facility.


 


25

















 


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


 


“Liquidity” means, as of the most recent date for which
internal financial statements are available, the sum of (i) cash, (ii) Cash
Equivalents and (iii) unutilized commitments available to be borrowed
under revolving credit arrangements of the Borrower and its Restricted
Subsidiaries, after giving effect to outstanding letters of credit thereunder.


 


“Loan” means an extension of credit by a Lender to the
Borrower under Article II in the form of a Revolving Credit Loan.


 


“Loan Documents” means, collectively, (i) this
Agreement, (ii) the Notes, (iii) the Collateral Documents and (iv) each
Letter of Credit Application.


 


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


 


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


 


“Material Adverse Effect” means any event, development or
circumstance that, individually or in the aggregate, has had or could reasonably
be expected to have a material adverse effect on (a) the business,
property, operations or financial condition of Holdings and its Subsidiaries,
taken as a whole, in each case, other than such effects attributable to the
commencement of the Cases or the existence of prepetition claims and of
defaults under claims to the extent stayed by virtue of the commencement of the
Cases, (b) the business, property, operations or financial condition of
Holdings, the Borrower and the Restricted Subsidiaries, taken as a whole, in
each case, other than such effects attributable to the commencement of the
Cases or the existence of prepetition claims and of defaults under claims to
the extent stayed by virtue of the commencement of the Cases, or (c) the
validity or enforceability of this Agreement or any of the other Loan Documents
or the rights and remedies of the Administrative Agent and the Lenders
hereunder or thereunder.


 


“Material Real Property” means, on any date, any real
property owned (but excluding leases) by any Loan Party with a fair market
value as of such date in excess of $2,500,000.


 


“Maturity Date” means the date that is three (3) years
from the Closing Date.


 


“Maximum Rate” has the meaning specified in Section 11.10.


 


“Moelis” means Moelis & Company LLC, and any
successor thereto.


 


“Mortgage” means, collectively, the deeds of trust, trust
deeds, hypothecs and mortgages made by the Loan Parties in favor or for the
benefit of the Administrative Agent on behalf of the Lenders substantially in
the form of Exhibit G (with such changes as may be customary to account
for local Law matters or as otherwise may be reasonably satisfactory to the
Administrative Agent), and any other mortgages executed and delivered pursuant
to Section 6.11.


 


26














 


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


 


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


 


“Net Award” means any awards or proceeds in respect of any
condemnation or other eminent domain proceeding relating to any Collateral
deposited in the Collateral Account pursuant to the Collateral Documents.


 


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


 


“Net Insurance Proceeds” means any
awards or proceeds in respect of any casualty insurance or title insurance
claim relating to any Collateral deposited in the Collateral Account pursuant
to the Collateral Documents.


 


“Net Proceeds” from an Asset Sale means
the aggregate cash proceeds received by the Borrower or any Restricted
Subsidiary (including any cash received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise and net proceeds from
the sale of other disposition of any Designated Noncash Consideration and
securities or other assets received as consideration, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations
relating to the properties or assets that are the subject of such Asset Sale or
received in any other non-cash form) therefrom, in each case net of:


 


(1) all brokerage, legal, accounting, investment banking, title
and recording tax expenses, commissions and other fees and expenses incurred,
and all federal, state, provincial, foreign and local taxes required to be paid
or accrued as a liability under GAAP or distributed or distributable to its members
as a tax distribution (after taking into account any available tax credits or
deductions and any tax sharing agreements), as a direct cost relating to such
Asset Sale;


 


(2) all payments made on any Indebtedness that is secured with a
higher priority than the Secured Obligations by any assets subject to such
Asset Sale, in accordance with the terms of any Lien upon such assets, or that
must by its terms, or in order to obtain a necessary consent to such Asset
Sale, or by applicable law, be repaid out of the proceeds from such Asset Sale;


 


(3) all distributions and other payments required to be made to
minority interest holders (other than the Borrower or Restricted Subsidiaries)
in Subsidiaries or joint ventures as a result of such Asset Sale;


 


(4) the deduction of appropriate amounts to be provided by the
seller as a reserve, in accordance with GAAP, against any liabilities
associated with the property or other assets disposed of in such Asset Sale and
retained by the Borrower or any Restricted Subsidiary after such Asset Sale;
and


 


27

















 


(5) any portion of the purchase price from an Asset Sale placed in
escrow in accordance with GAAP (whether as a reserve for adjustment of the
purchase price, or for satisfaction of indemnities in respect of such Asset
Sale);


 


provided, however, that,
in the cases of clauses (4) and (5), upon reversal of any such reserve or
the termination of any such escrow, Net Proceeds shall be increased by the
amount of such reversal or any portion of funds released from escrow to the
Borrower or any Restricted Subsidiary.


 


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


 


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


 


“Note” means a promissory note of the Borrower payable to any
Lender, in substantially the form of Exhibit B hereto, evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from the Loans
of such Lender.


 


“NPL” means the National Priorities List under CERCLA.


 


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


 


“Officer” means the Chairman of the Board of Directors, the
Chief Executive Officer, the Chief Financial Officer, the President, any
Executive Vice President, Senior Vice President or Vice President, the
Treasurer or the Secretary of the Borrower. “Officer” of any Guarantor has a
correlative meaning.


 


“Officers’ Certificate” means a certificate signed on behalf
of the Borrower by two Officers of the Borrower, one of whom must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of the Borrower that meets the requirements
set forth in this Agreement.


 


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


 


28

















 


connection
with its formation or organization with the applicable Governmental Authority
in the jurisdiction of its formation or organization and, if applicable, any
certificate or articles of formation or organization of such entity.


 


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


 


“Outstanding Amount” means (a) with respect to the
Revolving Credit Loans on any date, the amount thereof after giving effect to
any borrowings and prepayments or repayments of Revolving Credit Loans
(including any refinancing of outstanding unpaid drawings under Letters of
Credit or L/C Credit Extensions as a Revolving Credit Borrowing) occurring on
such date; and (b) with respect to any L/C Obligations on any date, the
amount thereof on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes thereto as of such date, including
as a result of any reimbursements of outstanding unpaid drawings under any
Letters of Credit (including any refinancing of outstanding unpaid drawings
under Letters of Credit or L/C Credit Extensions as a Revolving Credit Borrowing)
or any reductions in the maximum amount available for drawing under Letters of
Credit taking effect on such date.


 


“Pari Passu Payment Lien Obligations” means any Additional
Notes and any other Indebtedness that has a stated maturity date that is longer
than the Senior Secured Notes and that is permitted to have Pari Passu Payment
Lien Priority relative to the Senior Secured Notes with respect to the
Collateral and is not secured by any other assets; provided that an authorized
representative of the holders of such Indebtedness (other than any Additional
Notes) shall have executed a joinder to the Collateral Documents in the form
provided therein.


 


“Pari Passu Payment Lien Priority” means, relative to
specified Indebtedness and other obligations, having equal Lien priority to the
Senior Secured Notes and the Guarantees, as the case may be, on the Collateral.


 


“Participant” has the meaning specified in Section 11.07(e).


 


“Patriot Act” means the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)).


 


“PBGC” means the Pension Benefit Guaranty Corporation.


 


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


 


“Permitted Investments” means


 


(a) any
Investment in the Borrower or any Domestic Subsidiary or any Investment by a
Restricted Subsidiary that is not a Subsidiary Guarantor in a Restricted
Subsidiary that is not a Subsidiary Guarantor;


 


(b) any
Investment in cash and Cash Equivalents;


 


29

















 


(c) any
Investment by the Borrower or any Domestic Subsidiary in a Person that is
engaged in a Similar Business if as a result of such Investment:


 


(1) such
Person becomes a Domestic Subsidiary; or


 


(2) such
Person, in one transaction or a series of related transactions, is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Borrower or a Domestic
Subsidiary,


 


(d) any
Investment by a Restricted Subsidiary that is not a Subsidiary Guarantor in a
Person that is engaged in a Similar Business if as a result of such Investment:


 


(1) such
Person becomes a Restricted Subsidiary; or


 


(2) such
Person, in one transaction or a series of related transactions, is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Borrower or a Restricted
Subsidiary,


 


(e) any
Investment in securities or other assets not constituting cash or Cash
Equivalents and received in connection with an Asset Sale made pursuant to Section 7.09
or any other disposition of assets not constituting an Asset Sale;


 


(f) any
Investment existing or pursuant to agreements or arrangements in effect on the
Closing Date and any modification, replacement, renewal or extension thereof;
provided that the amount of any such Investment may not be increased except (x) as
required by the terms of such Investment as in existence on the Closing Date or
(y) as otherwise permitted under this Agreement;


 


(g) any
Investment acquired by the Borrower or any Restricted Subsidiary:


 


(1) in
exchange for any other Investment or accounts receivable held by the Borrower
or any such Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuers of such
other Investment or accounts receivable; or


 


(2) as
a result of a foreclosure by the Borrower or any Restricted Subsidiary with
respect to any secured Investment or other transfer of title with respect to
any secured Investment in default;


 


(i) obligations
under Swap Contracts permitted under Section 7.02(b)(i) and Section 7.02(b)(xii);


 


(j) loans
and advances to officers, directors and employees for business-related travel
expenses, moving expenses and other expenses, in each case incurred in the
ordinary course of business and in compliance with applicable law or to finance
the purchase of Equity Interests of the Borrower or any of its direct or
indirect parents and in an amount not to exceed $5.0 million at any one time outstanding;


 


(k) Investments
the payment for which consists of Equity Interests of the Borrower or any of
its direct or indirect parents (exclusive of Disqualified Stock of the
Borrower); provided, however, that such Equity Interests will not increase the
amount available for Restricted Payments under Section 7.01(a)(vii);


 


30

















 


(l) guarantees
of Indebtedness permitted under Section 7.02; provided that if such
Indebtedness can only be incurred by the Borrower or Subsidiary Guarantors,
then such guarantees are only permitted by this clause to the extent made by
the Borrower or a Subsidiary Guarantor, and (ii) performance guarantees
with respect to obligations incurred by the Borrower or any of its Restricted
Subsidiaries that are permitted by this Agreement;


 


(m) any
transaction to the extent it constitutes an Investment that is permitted and
made in accordance with Section 7.06(b) (except transactions
described in clauses (ii), (iv), (v), (vi), (viii) and (ix) of such Section 7.06(b));


 


(n) Investments
consisting of purchases and acquisitions of inventory, supplies, material or
equipment in the ordinary course of business or the non-exclusive licensing of
intellectual property pursuant to joint marketing arrangements with other
Persons;


 


(o) additional
Investments having an aggregate fair market value, taken together with all
other Investments made pursuant to this clause (o) that are at that time
outstanding, not to exceed the greater of (x) $50.0 million and (y) 2.0%
of Total Assets (with the fair market value of each Investment being measured
at the time made and without giving effect to subsequent changes in value) plus
the amount of any distributions, dividends, payments or other returns in
respect of such Investments (without duplication for purposes of Section 7.01(a)(vii));
provided that if such Investment is in Capital Stock of a Person that
subsequently becomes a Restricted Subsidiary, such Investment shall thereafter
be deemed permitted under clause (a) or (d) above and shall not be
included as having been made pursuant to this clause (o);


 


(p) Investments
of a Restricted Subsidiary acquired after the Closing Date or of an entity
merged into the Borrower or merged into or consolidated with a Restricted
Subsidiary in accordance with Section 7.04 after the Closing Date to the
extent that such Investments were not made in contemplation of or in connection
with such acquisition, merger or consolidation and were in existence on the
date of such acquisition, merger or consolidation;


 


(q) the
creation of Liens on the assets of the Borrower or any of its Restricted
Subsidiaries in compliance with Section 7.03;


 


(r) Investments
relating to any special-purpose wholly owned subsidiary of the Borrower
organized in connection with a Receivables Facility that, in the good faith
determination of the Board of Directors of the Borrower, are necessary or
advisable to effect such Receivables Facility;


 


(s) Investments
consisting of earnest money deposits required in connection with a purchase
agreement or letter of intent permitted by this Agreement;


 


(t) Investments
in Reader’s Digest Association Limited in an amount not to exceed £10.9 million
to settle under-funded pension liabilities; and


 


(u) Investments
in the form of contributions of the Capital Stock or intercompany notes of
first-tier Foreign Subsidiaries to other first-tier Foreign Subsidiaries to
effectuate a tax reorganization of the Borrower and its Foreign Subsidiaries.


 


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


 


(1) Liens,
pledges, prepayments or deposits by such Person in connection with workmen’s
compensation laws, unemployment insurance laws and other social security
legislation or 


 


31

















 


similar
legislation, Liens, pledges, prepayments or deposits (including deposits made
to satisfy statutory or other legal obligations in connection with sweepstakes
or similar contests and Liens in favor of postal authorities) in connection
with, or to secure the performance of, bids, tenders, contracts (other than for
the payment of Indebtedness) or leases to which such Person is a party, or
Liens, pledges, prepayments or deposits to secure public or statutory
obligations of such Person or Liens or deposits of cash or U.S. government
bonds to secure surety or appeal bonds to which such Person is a party, or
Liens or deposits as security for contested taxes or import duties or for the
payment of rent, in each case incurred in the ordinary course of business;


 


(2) Liens
imposed by law, such as carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s, workmen’s, suppliers’ or construction contractor’s Liens, in each
case which secure amounts which are not overdue for a period of more than
forty-five (45) days or if more than forty-five (45) days overdue, are unfiled
and no other action has been taken to enforce such Lien or being contested in
good faith by appropriate proceedings or other Liens arising out of judgments
or awards against such Person with respect to which such Person shall then be
proceeding with an appeal or other proceedings for review;


 


(3) Liens
for taxes, assessments or other governmental charges not yet due or payable or
which are being contested in good faith by appropriate proceedings;


 


(4) Liens
(including rights of set-off), deposits, prepayments or cash pledges in
connection with or to secure the performance of statutory bonds, stay, customs
and appeal bonds, performance bonds and surety bonds or bid bonds and other
obligations of a like nature (including those to secure health, safety and
environmental obligations) or with respect to other regulatory requirements or
letters of credit issued pursuant to the request of and for the account of such
Person in the ordinary course of its business;


 


(5) easements,
rights-of-way, restrictions (including zoning restrictions), covenants,
licenses, encroachments, protrusions and other similar minor encumbrances and
minor title defects affecting real property and zoning or other restrictions as
to the use of real properties or Liens incidental which are imposed by any
governmental authority having jurisdiction over such real property which do not
in the aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of such Person;


 


(6) Liens
securing Indebtedness permitted to be incurred pursuant to Section 7.02(b)(iv);
provided that Liens securing Indebtedness incurred pursuant to Section 7.02(b)(iv) are
solely on acquired property or the assets of the acquired entity; provided,
further, however, that individual financings of equipment provided by one
lender may be cross collateralized to other financings of equipment provided by
such lender;


 


(7) Liens
existing on the Closing Date (other than Liens securing the Secured Obligations
and Liens securing the Senior Secured Notes);


 


(8) Liens
on property or shares of stock of or held by a Person at the time such Person
becomes a Restricted Subsidiary; provided, however, such Liens are not created
or incurred in connection with, or in contemplation of, such other Person
becoming such a subsidiary; provided, further, however, that such Liens may not
extend to any other property owned by the Borrower or any Restricted
Subsidiary;


 


(9) Liens
on property at the time the Borrower or a Restricted Subsidiary acquired the
property, including any acquisition by means of a merger or consolidation with
or into the Borrower or 


 


32

















 


any
Restricted Subsidiary; provided, however, that such Liens are not created or
incurred in connection with, or in contemplation of, such acquisition;
provided, further, however, that the Liens may not extend to any other property
owned by the Borrower or any Restricted Subsidiary;


 


(10) Liens
securing Indebtedness or other obligations of a Restricted Subsidiary that is
not a Subsidiary Guarantor to another Restricted Subsidiary that is not a
Subsidiary Guarantor, in each case permitted to be incurred in accordance with Section 7.02;
provided that the Liens extend only to assets of Restricted Subsidiaries that
are not Subsidiary Guarantors;


 


(11)
Liens securing obligations under Swap Contracts so long as the related
Indebtedness is, and is permitted to be under this Agreement, secured by a Lien
on the same property securing such obligations under Swap Contracts;


 


(12)
Liens on specific items of inventory of other goods and proceeds of any Person
securing such Person’s obligations in respect of bankers’ acceptances issued or
created for the account of such Person to facilitate the purchase, shipment or
storage of such inventory or other goods;


 


(13)
Leases, licenses, sublicenses and subleases of real property granted to others
in the ordinary course of business which do not materially interfere with the
ordinary conduct of the business of the Borrower or any of the Restricted
Subsidiaries;


 


(14)
Liens arising from Uniform Commercial Code financing statement filings
regarding operating leases entered into by the Borrower and its Restricted
Subsidiaries in the ordinary course of business;


 


(15)
Liens in favor of the Borrower or any Domestic Subsidiary;


 


(16)
Liens on equipment of the Borrower or any Restricted Subsidiary granted in the
ordinary course of business to the Borrower’s or any Restricted Subsidiary’s
clients at which such equipment is located;


 


(17)
Liens to secure any refinancing, refunding, extension, renewal, modification or
replacement (or successive refinancing, refunding, extensions, renewals,
modifications or replacements) as a whole, or in part, of any Indebtedness
secured by any Lien referred to in clauses (6), (7), (8), (9), (10), (15), (19)
and (22); provided, however, that (x) such new Lien shall be limited to
all or part of the same property that secured the original Lien (plus improvements
on such property and after acquired-property that is affixed or incorporated
into the property covered by such Lien), (y) the Indebtedness secured by
such Lien at such time is not increased to any amount greater than the sum of (A) the
outstanding principal amount or, if greater, committed amount of the
Indebtedness secured by a Lien described under clauses (6), (7), (8), (9),
(10), (15), (19) and (22) at the time the original Lien became a Permitted Lien
under this Agreement, and (B) an amount necessary to pay any fees and
expenses, including premiums and defeasance costs, related to such refinancing,
refunding, extension, renewal or replacement and (z) the new Lien has no
greater priority relative to the Liens securing the Secured Obligations and the
holders of the Indebtedness secured by such Lien have no greater intercreditor
rights relative to the Secured Parties than the original Liens and the related
Indebtedness;


 


(18)
Liens to secure Indebtedness of any Foreign Subsidiary permitted by Section 7.02(b)(xxi) covering
only the assets of such Foreign Subsidiary;


 


(19)
Liens securing the Senior Secured Notes outstanding on the Closing Date and the
Exchange Notes in respect thereof, the guarantees relating to such Senior
Secured Notes and Exchange 


 


33

















 


Notes
and any obligations with respect to such Senior Secured Notes and Exchange
Notes and guarantees relating thereto;


 


(20)
Liens on the Collateral in favor of any collateral agent (including for the
benefit of the Secured Parties) relating to such collateral agent’s
administrative expenses with respect to the Collateral;


 


(21)
Liens securing judgments, attachments or awards not giving rise to an Event of
Default and notices of lis pendens and associated rights related to litigation
being contested in good faith by appropriate proceedings and for which adequate
reserves have been made;


 


(22)
Liens on Collateral securing Pari Passu Payment Lien Obligations or Junior Lien
Indebtedness that has a stated maturity date that is longer than the
Indebtedness permitted to be incurred pursuant to Section 7.01(a);
provided that any such Indebtedness has Pari Passu Payment Lien Priority or
junior Lien priority (pursuant to the Junior Lien Intercreditor Agreement) relative
to the Secured Obligations and after giving pro forma effect thereto, the
Consolidated Secured Debt Ratio would be no greater than 2.25 to 1.0;


 


(23)
Any interest or title of a lessor, sublessor, licensor or sublicensor in the
property subject to any lease, sublease, license or sublicense (other than any
property that is the subject of a sale and leaseback transaction);


 


(24)
Liens on assets or securities deemed to arise in connection with and solely as
a result of the execution, delivery or performance of contracts to sell such
assets or securities if such sale is otherwise permitted by this Agreement;


 


(25)
Liens on Capital Stock of Unrestricted Subsidiaries securing Indebtedness of
such Unrestricted Subsidiaries (except to the extent such Capital Stock is
pledged as Collateral);


 


(26)
Liens on (x) Collateral securing Indebtedness incurred pursuant to, and
obligations described in, Section 7.02(b)(i); provided that any such
Indebtedness (other than Indebtedness that constitutes Secured Obligations) may
be Bank Priority Obligations, Pari Passu Payment Lien Obligations or have
junior Lien priority pursuant to the Junior Lien Intercreditor Agreement
relative to the Secured Obligations and (y) Liens on property and assets
of Foreign Subsidiaries securing Indebtedness of Foreign Subsidiaries incurred
pursuant to Section 7.01(a)(v).


 


(27)
Liens on Collateral securing Junior Lien Indebtedness that has a stated
maturity date that is longer than the Revolving Credit Loans and that is
permitted to be incurred pursuant to Section 7.01(a); provided that any
such Liens are subject to the Junior Lien Intercreditor Agreement;


 


(28)
Liens in favor of customs and revenue authorities arising as a matter of law to
secure payment of customs duties in connection with importation of goods;


 


(29)
Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by the Borrower or any of its
Restricted Subsidiaries in the ordinary course of business;


 


(30)
Liens that are contractual rights of set-off or, in the case of clause (i) or
(ii) below, other bankers’ Liens (i) relating to treasury, depository
and cash management services or any automated clearing house transfers of funds
in the ordinary course of business and not given in connection with the
issuance of Indebtedness, (ii) relating to pooled deposit or sweep
accounts to permit satisfaction of 


 


34

















 


overdraft
or similar obligations incurred in the ordinary course of business of the
Borrower or any Subsidiary or (iii) relating to purchase orders and other
agreements entered into with customers of the Borrower or any Restricted
Subsidiary in the ordinary course of business;


 


(31)
Liens (i) of a collection bank arising under Section 4-210 of the
Uniform Commercial Code on items in the course of collection, (ii) in
favor of a banking institution arising as a matter of law encumbering deposits
(including the right of set-off) arising in the ordinary course of business in connection
with the maintenance of such accounts and (iii) arising under customary
general terms of the account bank in relation to any bank account maintained
with such bank and attaching only to such account and the products and proceeds
thereof;


 


(32)
Liens arising by operation of law or contract on insurance policies and the
proceeds thereof to secure premiums thereunder, and Liens, pledges and deposits
in the ordinary course of business securing liability for premiums or
reimbursement or indemnification obligations of (including obligations in
respect of letters of credit or bank guarantees for the benefit of) insurance
carriers;


 


(33)
Liens attaching solely to cash earnest money deposits in connection with fully
collateralized repurchase agreements that are permitted by Section 7.02
that constitute temporary cash investments and that do not extend to any assets
other than those that are the subject of such repurchase agreement;


 


(34)
Liens solely on any cash earnest money deposits made in connection with any
letter of intent or purchase agreement permitted hereunder;


 


(35)
Liens on accounts receivable and related assets incurred in connection with a
Receivables Facility;


 


(36)
Liens on deposits in the ordinary course of business securing credit card programs
maintained in the ordinary course of business in an amount not to exceed $15.0
million (plus the amount, up to an additional $20.0 million, of such deposits
sought by JPMorgan Chase Bank, N.A. or its subsidiaries (including Paymentech))
in the aggregate at any one time outstanding;


 


(37)
ground leases in respect of real property on which facilities owned or leased
by the Borrower or any of its Subsidiaries are located and other Liens
affecting the interest of any landlord (and any underlying landlord) of any
real property leased by the Borrower or any Subsidiary;


 


(38)
Liens on equipment (including printing presses and data-processing equipment)
owned by the Borrower or any Restricted Subsidiary and located on the premises
of any supplier, in the ordinary course of business;


 


(39)
Utility and other similar deposits made in the ordinary course of business;


 


(40)
Liens encumbering reasonable customary initial deposits and margin deposits and
similar Liens attaching to commodity trading accounts or other brokerage
accounts incurred in the ordinary course of business, consistent with past
practice and not for speculative purposes;


 


(41)
Liens (i) on cash advances in favor of the seller of any property to be
acquired in an Investment permitted pursuant to Permitted Investments to be
applied against the purchase price for such Investment, and (ii) consisting
of an agreement to sell any property in an Asset Sale permitted under Section 7.09,
in each case, solely to the extent such Investment or Asset Sale, as the case
may be, would have been permitted on the date of the creation of such Lien;


 


35

















 


(42)
Liens on cash collateral securing letters of credit existing on the Emergence
Date; and


 


(43)
Liens securing Indebtedness and other obligations in an aggregate principal
amount not to exceed $5.0 million at any one time outstanding.


 


For
purposes of determining compliance with this definition, (A) Permitted
Liens need not be incurred solely by reference to one category of Permitted
Liens described above but are permitted to be incurred in part under any
combination thereof and (B) in the event that a Lien (or any portion
thereof) meets the criteria of one or more of the categories of Permitted Liens
described above, the Borrower shall, in its sole discretion, classify (or
reclassify) such item of Permitted Liens (or any portion thereof) in any manner
that complies with this definition and will only be required to include the
amount and type of such item of Permitted Liens in one of the above clauses and
such Lien will be treated as having been incurred pursuant to only one of such
clauses.


 


“Person” means any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.


 


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


 


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


 


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


 


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


 


“Prepetition Credit Agreement” means the Credit Agreement,
dated as of March 2, 2007, among Doctor Acquisition Co., RDA Holding Co.,
the Borrower, the overseas borrowers party thereto, the lenders party thereto
and JPMorgan Chase Bank, N.A., as administrative agent, as amended, supplemented,
waived or otherwise modified from time to time prior to the effectiveness of
the First Lien Credit Agreement.


 


“Prepetition Euro Term Loans” means the Euro Term Loans (as
defined in the Prepetition Credit Agreement as in effect immediately prior to
the effectiveness of the First Lien Credit Agreement).


 


“Priority Payment Lien Obligations” means the Indebtedness
and other obligations incurred or described in Section 7.02(b)(i).


 


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


 


“Pro Rata Share” means, with respect to each Lender at any
time a fraction (expressed as a percentage, carried out to the ninth decimal
place), the numerator of which is the amount of the Commitments of such Lender
and the denominator of which is the amount of the Aggregate Commitments; provided that (if applicable) if such Commitments have been
terminated, then the Pro Rata Share of each Lender shall be determined based on
the Pro Rata Share of such Lender immediately prior 


 


36

















 


to
such termination and after giving effect to any subsequent assignments made
pursuant to the terms hereof.


 


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


 


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


 


“Receivable” has the meaning set forth in the Security
Agreement.


 


“Receivables Facility” means one or more receivables
financing facilities, as amended from time to time, the Indebtedness and
obligations of which are non-recourse (except for standard representations, warranties,
covenants and indemnities made in connection with such facilities) to the
Borrower and the Restricted Subsidiaries pursuant to which any Restricted
Subsidiaries that are Foreign Subsidiaries sell their accounts receivable to a
Person that is not a Restricted Subsidiary.


 


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


 


“Recovery Event” means any event, occurrence, claim or
proceeding that results in any Net Award or Net Insurance Proceeds being
deposited into the Collateral Account pursuant to the Collateral Documents.


 


“Refinancing Indebtedness” has the meaning specified in Section 7.02(b)(xv).


 


“Refunding Loans” has the meaning set forth in Section 2.03(c).


 


“Register” has the meaning specified in Section 11.07(d).


 


“Registration Rights Agreement” means the Registration Rights
Agreement with respect to the Senior Secured Notes dated as of the Issue Date,
among the Borrower, the Guarantors and the Initial Purchasers and, with respect
to any Additional Notes, one or more registration rights agreements among the
Borrower, the Guarantors and the other parties thereto, relating to the rights
given by the Borrower and the Guarantors to the purchasers of Additional Notes
to register such Additional Notes under the Securities Act.


 


“Reorganization Plan” means the Third Amended Joint Chapter
11 Plan of Reorganization for The Reader’s Digest Association, Inc. and
its Debtor Affiliates, dated as of November 30, 2009, Case No. 09-23529
(RDD) filed in the United States Bankruptcy Court for the Southern District of
New York, as amended, supplemented or otherwise modified from time to time.


 


“Replacement Assets” means (1) non-current assets and
property (including any such assets acquired by capital expenditures but
excluding Indebtedness and Capital Stock) that shall be used or useful in a
Similar Business by the Borrower or a Restricted Subsidiary or (2) substantially
all the assets of a Similar Business or a majority of the Voting Stock of any
Person engaged in a Similar Business that shall become on the date of
acquisition thereof a Domestic Subsidiary (or a Restricted Subsidiary solely to
the extent the assets being replaced were sold by a Foreign Subsidiary).


 


37

















 


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


 


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


 


“Required Lenders” means, as of any date of determination,
Lenders having more than 50% of the sum of the aggregate Outstanding Amount of
all Loans.


 


“Requirement of Law” means, as to any Person, any law,
treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.


 


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


 


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


 


“Restricted Payment” has the meaning specified in Section 7.01(a).


 


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


 


“Refunding Capital Stock” has the meaning set forth in Section 7.01(b)(ii).


 


“Retired Capital Stock” has the meaning set forth in Section 7.01(b)(ii).


 


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


 


“Revolving Credit Commitments” means, as to each Lender, its
obligation to (a) make Revolving Credit Loans to the Borrower pursuant to Section 2.01,
(b) purchase participations in L/C Obligations,in an aggregate principal
amount at any one time outstanding not to exceed the amount set forth, opposite
such Lender’s name on Schedule 2.01 under the caption “Revolving Credit
Commitment” or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable, as such amount may be adjusted from time
to time in accordance with this Agreement. 
The aggregate Revolving Credit Commitments of all Lenders shall be
$50,000,000 on the Closing Date, as such amount may be adjusted from time to
time in accordance with this Agreement.


 


“Revolving Credit Exposure” means, as to each Lender, the sum
of the outstanding principal amount of such Lender’s Revolving Credit Loans and
its Pro Rata Share of the L/C Obligations at such time.


 


38














 


“Revolving Credit Facility” means, at any time, the aggregate
amount of the Lenders’ Revolving Credit Commitments at such time.


 


“Revolving Credit Loans” has the meaning specified in Section 2.01.


 


“Same Day Funds” means immediately available funds.


 


“SEC” means the United States Securities and Exchange
Commission.


 


“Second Lien Credit Agreement” means the Second Lien Credit
Agreement, dated as of February 19, 2010, among the Borrower, Holdings,
the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative
agent, as amended, supplemented, waived or otherwise modified prior to the
effectiveness of this Agreement.


 


“Secured Hedge Agreement” means any Swap Contract permitted
under Article VII that is entered into by and between any Loan Party and any
Hedge Bank hereunder, in each case at the time such Secured Hedge Agreement is
entered into.


 


“Secured Obligations” means (i) in the case of the
Borrower, the Obligations, and (ii) in the case of each Guarantor, its
Guarantor Obligations.


 


“Secured Parties” means, collectively, the Administrative
Agent, the other Agents, the Lenders including the L/C Issuers, the Hedge
Banks, each holder of Cash Management Obligations, any Affiliate of a Lender to
which Obligations are owed, the Supplemental Administrative Agent and each
co-agent or sub-agent appointed by the Administrative Agent from time to time
pursuant to Section 9.01(c).


 


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


 


“Security Agreement” means, collectively, the Security
Agreement executed by Holdings, the Borrower, each Guarantor, the Collateral
Agent, the Administrative Agent and the Senior Secured Notes Trustee
substantially in the form of Exhibit E, together with each other security
agreement supplement executed and delivered pursuant to Section 6.11.


 


“Security Agreement Supplement” has the meaning specified in
the Security Agreement.


 


“Senior Secured Indebtedness” means, as at any date, the
aggregate principal amount of all Consolidated Total Indebtedness that is
secured by a Lien on any assets of the Loan Parties.


 


“Senior Secured Leverage Ratio” means, as at any date, the
ratio of (a) Senior Secured Indebtedness as at such date to (b) EBITDA
for the Test Period most recently ended prior to such date.


 


“Senior Secured Note Indenture” means the Indenture entered
into by the Borrower and certain of its Subsidiaries in connection with the
issuance of the Senior Secured Notes, together with all instruments and other
agreements entered into by the Borrower or such Subsidiaries in connection
therewith.


 


“Senior Secured Note Trustee” means Wells Fargo Bank, N.A.,
in its capacity as indenture trustee under the Senior Secured Note Indenture,
together with any of its successors.


 


39

















 


“Senior Secured Notes” means the $525,000,000 aggregate
principal amount of senior secured notes of the Borrower issued on the Closing
Date pursuant to the Senior Secured Note Indenture.


 


“Similar Business” means any business conducted or proposed
to be conducted by the Borrower and its Restricted Subsidiaries on the Closing
Date or any business that is similar, reasonably related, incidental or
ancillary thereto or any business that is a reasonable extension thereof.


 


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


 


“Specified Change of Control” means a “Change of Control” (or
other defined term having a similar purpose) as defined in the Senior Secured Note
Indenture or any document governing any refinancing of any of the Senior
Secured Notes.


 


“Specified Notes” means, collectively, the Senior Secured
Notes, the Additional Notes and the Exchange Notes.


 


“SPC” has the meaning specified in Section 11.07(h).


 


“Statutory Reserve Rate” means 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 to which the relevant Lender is subject
for eurocurrency funding (currently referred to as “Eurocurrency Liabilities”
in Regulation D of the Board).  Such
reserve percentages shall include those imposed pursuant to such
Regulation D.  Eurodollar Rate Loans
shall be deemed to constitute eurocurrency funding 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 or any comparable regulation. 
The Statutory Reserve Rate shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.


 


“Successor Borrower” has the meaning specified in Section 7.04(a)(i).


 


“Successor Person” has the meaning specified in Section 7.05(a)(i).


 


“Subsidiary” means, with respect to any Person,


 


(1) any
corporation, association, or other business entity (other than a partnership,
joint venture, limited liability company or similar entity) of which more than
50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time of determination owned
or controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of that Person or a combination thereof; and


 


40

















 


(2) any
partnership, joint venture, limited liability company or similar entity of
which


 


(x) more than 50% of the capital accounts,
distribution rights, total equity and voting interests or general or limited
partnership interests, as applicable, are owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person or a combination thereof whether in the form of membership, general,
special or limited partnership or otherwise, and


 


(y) such Person or any Restricted Subsidiary of
such Person is a controlling general partner or managing member of such entity.


 


“Subsidiary Guarantor” means each wholly owned Domestic
Subsidiary of the Borrower on the Closing Date (other than Direct Holdings IP
L.L.C.) and any other Restricted Subsidiaries that become Guarantors under this
Agreement in accordance with the terms hereof until such time as such Person’s
Guarantee may be released in accordance with this Agreement.


 


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


 


“Suspension Period” means any day on which no Loans, L/C
Borrowings, Unreimbursed Amounts or Letters of Credit are outstanding, other
than Letters of Credit that have been Cash Collateralized in an amount equal to
105% of the Outstanding Amount thereof.


 


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


 


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


 


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


 


“Test Period” means, for any determination under this
Agreement, the period of four consecutive fiscal quarters of the Borrower then
last ended.


 


41

















 


“Threshold Amount” means $18,000,000.


 


“Total Assets” means, with respect to any Person, the total
consolidated assets of such Person and its Restricted Subsidiaries as shown on
the most recent balance sheet of such Person.


 


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


 


“Unaudited Financial Statements” means the unaudited
consolidated balance sheets and related statements of income, stockholders’
equity and cash flows of the Borrower and its consolidated Subsidiaries for
each subsequent fiscal quarter ended after the fiscal year ended June 30,
2009, in each case for which and to the extent such financial statements are
available prior to the Closing Date.


 


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


 


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


 


“Unreimbursed Amount” has the meaning set forth in Section 2.03(c).


 


“Unrestricted Subsidiary” means:


 


(1) any
Subsidiary of the Borrower, which at the time of determination is an
Unrestricted Subsidiary (as designated by the Board of Directors of the
Borrower, as provided below), and


 


(2) any
Subsidiary of an Unrestricted Subsidiary.


 


The
Board of Directors of the Borrower may designate any Subsidiary of the Borrower
(including any existing Subsidiary and any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of
its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds
any Lien on, any property of, the Borrower or any Subsidiary of the Borrower
(other than any Subsidiary of the Subsidiary to be so designated); provided
that


 


(a) any
Unrestricted Subsidiary must be an entity of which shares of the Capital Stock
or other Equity Interests (including partnership interests) entitled to cast at
least a majority of the votes that may be cast by all shares or Equity
Interests having ordinary voting power for the election of directors or other
governing body are owned, directly or indirectly, by the Borrower,


 


(b) such
designation complies with Section 7.01, and


 


(c) each
of:


 


(1) the
Subsidiary to be so designated, and


 


(2) its
Subsidiaries


 


has
not at the time of designation, and does not thereafter, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable with
respect to any Indebtedness pursuant to which the lender has recourse to any of
the assets of the Borrower or any Restricted Subsidiary.


 


42

















 


The Board of Directors of the Borrower may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that, immediately after
giving effect to such designation no Default or Event of Default shall have
occurred and be continuing and, on a pro forma basis taking into account such
designation, the Borrower would be permitted to incur such Indebtedness
pursuant to Section 7.02.


 


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


 


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


 


“Weighted Average Life to Maturity” means, when applied to
any Indebtedness, Disqualified Stock or preferred stock, as the case may be, at
any date, the quotient obtained by dividing


 


(1) the
sum of the products of the number of years from the date of determination to
the date of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Disqualified Stock or
preferred stock multiplied by the amount of such payment, by


 


(2) the
sum of all such payments.


 


“Wholly Owned Subsidiary” of any Person means a Subsidiary of
such Person, 100% of the outstanding Capital Stock or other ownership interests
of which (other than directors’ qualifying shares) shall at the time be owned
by such Person or by one or more Wholly Owned Subsidiaries of such Person.


 


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


 


(a)   The meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms.


 


(b)   (i)  The words “herein,” “hereto,” “hereof”
and “hereunder” and words of similar import when used in any Loan Document
shall refer to such Loan Document as a whole and not to any particular
provision thereof.


 


(ii)           Article,
Section, Exhibit and Schedule references are to the Loan Document in which
such reference appears.


 


(iii)          The
term “including” is by way of example and not limitation.


 


(iv)          The
term “documents” includes any and all instruments, documents, agreements,
certificates, notices, reports, financial statements and other writings,
however evidenced, whether in physical or electronic form.


 


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


 


43

















 


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


 


Section 1.03           Accounting
Terms.  (a)  All accounting terms not
specifically or completely defined herein shall be construed in conformity
with, and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP, applied in a manner consistent with that
used in preparing the Audited Financial Statements, except as otherwise
specifically prescribed herein.


 


(b)   Notwithstanding any other provision contained
herein, all terms of an accounting or financial nature used herein shall be
construed, and all computations of amounts and ratios referred to herein shall
be made, without giving effect to any election under Statement of Financial
Accounting Standards 159 (or any other Financial Accounting Standard having a
similar result or effect) to value any Indebtedness or other liabilities of
Holdings, the Borrower or any of their respective Subsidiaries at “fair value”,
as defined therein.


 


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


 


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


 


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


 


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


 


Section 1.08           Currency
Equivalents Generally.  Any
amount specified in this Agreement (other than in Articles II, IX, and XI)
or any of the other Loan Documents to be in Dollars shall also include the
equivalent of such amount in any currency other than Dollars, such equivalent
amount to be determined at the rate of exchange quoted by the Reuters World
Currency Page for the applicable currency at 11:00 a.m. (London time)
on such day (or, in the event such rate does not appear on any Reuters World
Currency Page, by reference to such other publicly available service for
displaying exchange rates as may be agreed upon by the Administrative Agent and
the Borrower, or, in the absence of such agreement, such rate shall instead be
the arithmetic average of the spot rates of exchange of the Administrative
Agent in the market where its foreign currency exchange operations in respect
of such currency are then being conducted, at or about 10:00 a.m. (New
York City time) on such date for the purchase of Dollars for delivery
two Business Days later). 
Notwithstanding the foregoing, for purposes 


 


44

















 


of determining compliance with Sections 7.01, 7.02
or 7.03 with respect to any amount of Indebtedness or Investment in a currency
other than Dollars, no Default shall be deemed to have occurred solely as a
result of changes in rates of exchange occurring after the time such
Indebtedness or Investment is incurred; provided that,
for the avoidance of doubt, the foregoing provisions of this Section 1.08
shall otherwise apply to such Sections, including with respect to determining
whether any Indebtedness or Investment may be incurred at any time under such
Sections.


 


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


 


ARTICLE II

THE LOANS


 


Section 2.01           The
Revolving Credit Loans. 
Subject to the terms and conditions set forth herein, each Lender
severally agrees to make loans denominated in Dollars to the Borrower as
elected by the Borrower pursuant to Section 2.02 (each such loan, a “Revolving Credit Loan”) from time to time, on any Business
Day until the Maturity Date, in an aggregate principal amount not to exceed at
any time outstanding the amount of such Lender’s Revolving Credit Commitment; provided that (i) after giving effect to any Revolving
Credit Borrowing, the amount of the Revolving Credit Exposure of any Lender
shall not exceed such Lender’s Revolving Credit Commitment, and (ii) no
Revolving Credit Loans shall be made on the Closing Date.  Within the limits of each Lender’s Revolving
Credit Commitment, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.01, prepay under Section 2.04,
and reborrow under this Section 2.01. 
Revolving Credit Loans may be Base Rate Loans or Eurodollar Rate Loans,
as further provided herein.


 


Section 2.02           Borrowings,
Conversions and Continuations of Loans.  (a)  Each Revolving Credit
Borrowing, each conversion of Revolving Credit Loans from one Type to the
other, and each continuation of Eurodollar Rate Loans shall be made upon the
Borrower’s notice to the Administrative Agent, which may be given by
telephone.  Each such notice must be
received by the Administrative Agent not later than (i) 12:30 p.m.
(New York time) three (3) Business Days prior to the requested date of any
Revolving Credit Borrowing or continuation of Eurodollar Rate Loans or any
conversion of Base Rate Loans to Eurodollar Rate Loans, and (ii) 12:00 p.m.
(New York time) on the proposed date of (x) any Revolving Credit Borrowing
of Base Rate Loans or (y) any conversion of Eurodollar Rate Loans to Base
Rate Loans.  Each telephonic notice by
the Borrower pursuant to this Section 2.02(a) must be confirmed
promptly by delivery to the Administrative Agent of a written Committed Loan
Notice, appropriately completed and signed by a Responsible Officer of the
Borrower.  Each Revolving Credit
Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be
in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess
thereof.  Except as provided in Section 2.03(c),
each conversion to Base Rate Loans shall be in a principal amount of $1,000,000
or a whole multiple of $500,000 in excess thereof.  Each Committed Loan Notice (whether
telephonic or written) shall specify (i) whether the Borrower is
requesting a Revolving Credit Borrowing, a conversion of Revolving Credit Loans
from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Revolving Credit Borrowing, conversion or continuation,
as the case may be (which shall be a Business Day), (iii) the principal
amount of Revolving Credit Loans to be borrowed, converted or continued, (iv) the
Type of Loans to which existing Revolving Credit Loans are to be converted, and
(v) if applicable, the duration of the Interest Period with respect
thereto.  If the Borrower fails to give a
timely notice requesting a conversion or continuation, then the Loans shall be
continued as, or converted 


 


45

















 


to, Base Rate Loans.  Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans.  If the Borrower requests a Revolving Credit
Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any
such Committed Loan Notice, but fails to specify an Interest Period, it will be
deemed to have specified an Interest Period of one (1) month.


 


(b)   Following receipt of a Committed Loan Notice,
the Administrative Agent shall promptly notify each Lender of the amount of its
Pro Rata Share of the Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans or
continuation described in Section 2.02(a). In the case of each Revolving
Credit Borrowing, each Lender shall make the amount of its Loan available to
the Administrative Agent in Same Day Funds at the Administrative Agent’s Office
not later than 1:00 p.m. (New York time) on the Business Day specified in
the applicable Committed Loan Notice. 
Upon satisfaction of the applicable conditions set forth in Section 4.02,
the Administrative Agent shall make all funds so received available to the
Borrower in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the books of JPMorgan Chase Bank with the amount
of such funds or (ii) wire transfer of such funds, in each case in
accordance with instructions provided to (and reasonably acceptable to) the
Administrative Agent by the Borrower; provided that
if, on the date the Committed Loan Notice with respect to such Revolving Credit
Borrowing is given by the Borrower, there are L/C Borrowings outstanding, then
the proceeds of such Revolving Credit Borrowing shall be applied, first, to the
payment in full of any such L/C Borrowings and third, to the Borrower as
provided above.


 


(c)   Except as otherwise provided herein, a Eurodollar
Rate Loan may be continued or converted only on the last day of an Interest
Period for such Eurodollar Rate Loan unless the Borrower pays the amount due,
if any, under Section 3.05 in connection therewith.


 


(d)   The Administrative Agent shall promptly
notify the Borrower and the Lenders of the interest rate applicable to any
Interest Period for Eurodollar Rate Loans upon determination of such interest
rate.  The determination of the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error.  At any time that Base
Rate Loans are outstanding, the Administrative Agent shall notify the Borrower
and the Lenders of any change in JPMorgan Chase Bank prime rate used in
determining the Base Rate promptly following the public announcement of such
change.


 


(e)   After giving effect to all Revolving Credit
Borrowings, all conversions of Loans from one Type to the other, and all
continuations of Loans as the same Type, there shall not be more than ten (10) Interest
Periods in effect.


 


(f)    The failure of any Lender to make the Loan
to be made by it as part of any Revolving Credit Borrowing shall not relieve
any other Lender of its obligation, if any, hereunder to make its Loan on the
date of such Revolving Credit Borrowing, but no Lender shall be responsible for
the failure of any other Lender to make the Loan to be made by such other
Lender on the date of any Revolving Credit Borrowing.


 


Section 2.03           Letters
of Credit.  (a)  The Letter of Credit Commitment.  (i) Subject to the terms and conditions
set forth herein, (A) each L/C Issuer agrees, in reliance upon the
agreements of the other Lenders set forth in this Section 2.03, (1) from
time to time on any Business Day during the period from the Closing Date until
the Letter of Credit Expiration Date, to issue Letters of Credit denominated in
Dollars for the account of the Borrower (provided that any Letter of Credit may
be for the benefit of Holdings or any Subsidiary of the Borrower) and to amend
or renew Letters of Credit previously issued by it, in accordance with Section 2.03(b),
and (2) to honor drafts under the Letters of 


 


46

















 


Credit and (B) the Lenders severally
agree to participate in Letters of Credit issued pursuant to this Section 2.03;
provided that no L/C Issuer shall be
obligated to make any L/C Credit Extension with respect to any Letter of
Credit, and no Lender shall be obligated to participate in any Letter of Credit
to the extent that, as of the date of such L/C Credit Extension, (x) the
amount of the Revolving Credit Exposure of any Lender would exceed such Lender’s
Revolving Credit Commitment or (y) the Outstanding Amount of the L/C
Obligations would exceed the Letter of Credit Sublimit.  Within the foregoing limits, and subject to
the terms and conditions hereof, the Borrower’s ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrower may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed.


 


(ii)           An L/C Issuer shall be under no
obligation to issue any Letter of Credit if:


 


(A) 
any order, judgment or decree of any Governmental Authority or arbitrator shall
by its terms purport to enjoin or restrain such L/C Issuer from issuing such
Letter of Credit, or any Law applicable to such L/C Issuer or any directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over such L/C Issuer shall prohibit, or direct that such L/C
Issuer refrain from, the issuance of letters of credit generally or such Letter
of Credit in particular; or


 


(B) 
the issuance of such Letter of Credit would violate any Laws binding upon such
L/C Issuer.


 


(iii)          Each Letter of Credit shall, unless
otherwise agreed by the applicable L/C Issuer and subject to Section 2.03(b)(iii),
expire no later than the earlier of (x) twelve months after the date of
issuance or last renewal and (y) unless Cash Collateralized prior to the
Letter of Credit Expiration Date, the Letter of Credit Expiration Date.  An L/C Issuer shall be under no obligation to
amend any Letter of Credit if (A) such L/C Issuer would have no obligation
at such time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept
the proposed amendment to such Letter of Credit.


 


(b)   Procedures for Issuance
and Amendment of Letters of Credit; Auto-Renewal Letters of Credit.  (i) Each Letter of Credit shall be
issued or amended, as the case may be, upon the request of the Borrower
delivered to an L/C Issuer (with a copy to the Administrative Agent) in the
form of a Letter of Credit Application, appropriately completed and signed by a
Responsible Officer of the Borrower.  Such
Letter of Credit Application must be received by the relevant L/C Issuer and
the Administrative Agent not later than 12:30 p.m. (New York time) at
least three (3) Business Days prior to the proposed issuance date or date
of amendment, as the case may be; or, in each case, such later date and time as
the relevant L/C Issuer may agree in a particular instance in its sole
discretion.  In the case of a request for
an initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail reasonably satisfactory to the relevant L/C
Issuer:  (a) the proposed issuance
date of the requested Letter of Credit (which shall be a Business Day); (b) the
amount thereof; (c) the expiry date thereof; (d) the name and address
of the beneficiary thereof; (e) the documents to be presented by such
beneficiary in case of any drawing thereunder; (f) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (g) such other matters as the relevant L/C Issuer may
reasonably request.  In the case of a
request for an amendment of any outstanding Letter of Credit, such Letter of
Credit Application shall specify in form and detail reasonably satisfactory to
the relevant L/C Issuer (1) the Letter of Credit to be amended; (2) the
proposed date of amendment thereof (which shall be a Business Day); (3) the
nature of the proposed amendment; and (4) such other matters as the
relevant L/C Issuer may reasonably request.


 


47

















 


(ii)           Promptly after receipt of any Letter
of Credit Application, the relevant L/C Issuer will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has received a copy of such Letter of Credit Application from the Borrower and,
if not, such L/C Issuer will provide the Administrative Agent with a copy
thereof.  Upon receipt by the relevant
L/C Issuer of confirmation from the Administrative Agent that the requested issuance
or amendment is permitted in accordance with the terms hereof, then, subject to
the terms and conditions hereof, such L/C Issuer shall, on the requested date,
issue a Letter of Credit for the account of the Borrower or enter into the
applicable amendment, as the case may be. 
Immediately upon the issuance of each Letter of Credit, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the relevant L/C Issuer a risk participation in such Letter of
Credit in an amount equal to the product of such Lender’s Pro Rata Share times
the amount of such Letter of Credit.


 


(iii)          If the Borrower so requests in any
applicable Letter of Credit Application, the relevant L/C Issuer may in its
sole discretion agree to issue a Letter of Credit that has automatic renewal
provisions (each, an “Auto-Renewal Letter of
Credit”); provided that
any such Auto-Renewal Letter of Credit must permit the relevant L/C Issuer to
prevent any such renewal at least once in each twelve month period (commencing
with the date of issuance of such Letter of Credit) by giving prior notice to
the beneficiary thereof not later than a day (the “Nonrenewal Notice Date”) in each such twelve month period to
be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the relevant L/C
Issuer, the Borrower shall not be required to make a specific request to the
relevant L/C Issuer for any such renewal. 
Once an Auto-Renewal Letter of Credit has been issued, the Lenders shall
be deemed to have authorized (but may not require) the relevant L/C Issuer to
permit the renewal of such Letter of Credit at any time to an expiry date not
later than the Letter of Credit Expiration Date; provided
that the relevant L/C Issuer shall not permit any such renewal if (A) the
relevant L/C Issuer has determined that it would have no obligation at such
time to issue such Letter of Credit in its renewed form under the terms hereof
(by reason of the provisions of Section 2.03(a)(ii) or Section 2.03(a)(iii) or
otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is five (5) Business Days before the
Nonrenewal Notice Date from the Administrative Agent, any Lender or the
Borrower that one or more of the applicable conditions specified in Section 4.02
is not then satisfied.


 


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


 


(c)   Drawings and
Reimbursements; Funding of Participations.  (i) Upon receipt from the beneficiary of
any Letter of Credit of any notice of a drawing under such Letter of Credit,
the relevant L/C Issuer shall notify promptly the Borrower and the
Administrative Agent thereof.  Not later
than 1:00 p.m. (New York time) on (x) if notice that a payment is
made on any date by an L/C Issuer under a Letter of Credit is received by the
Borrower on or before 11:00 a.m. (New York time), the Business Day
immediately following such date or (y) if notice that a payment is made on
any date by an L/C Issuer under a Letter of Credit is received by the Borrower
later than 11:00 a.m. (New York time), the second Business Day immediately
following such date (each such date, an “Honor
Date”), the Borrower shall reimburse such L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing.  In order to reimburse any such drawing, the
Borrower shall have the option to request in accordance with Section 2.02
a Revolving Credit Borrowing of Base Rate Loans (“Refunding Loans”), without regard to the minimum and multiples
specified in Section 2.02 for the principal amount of Base Rate Loans but
subject to the amount of the unutilized portion of the Revolving Credit
Commitments of the Lenders and the conditions set forth in Section 4.02.  If the Borrower fails to so reimburse such
L/C Issuer by such time, the Administrative Agent shall promptly notify each
Lender of the Honor Date, the 


 


48

















 


amount of the unreimbursed
drawing (the “Unreimbursed Amount”),
and the amount of such Lender’s Pro Rata Share thereof.  Any notice given by an L/C Issuer or the
Administrative Agent pursuant to this Section 2.03(c) may be given by
telephone if immediately confirmed in writing; provided
that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.


 


(ii)           Each Lender (including any Lender
acting as an L/C Issuer) shall, upon any notice pursuant to Section 2.03(c) to
make a Refunding Loan to the Borrower, make such funds available to the
Administrative Agent for the account of the relevant L/C Issuer, in Dollars, at
the Administrative Agent’s Office for payments not later than 1:00 p.m.
(New York time) on the Business Day specified in such notice by the
Borrower.  The Administrative Agent shall
remit the funds so received to the relevant L/C Issuer.


 


(iii)          With respect to any Unreimbursed
Amount, the Borrower shall be deemed to have incurred from the relevant L/C
Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand (together
with interest) and shall bear interest at the Default Rate.  In such event, upon demand by the relevant
L/C Issuer (through the Administrative Agent), each Lender shall make funds available
to the Administrative Agent for the account of the relevant L/C Issuer, in
Dollars, at the Administrative Agent’s Office for payments in an amount equal
to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m.
(New York time) on the Business Day following the date of such demand, and such
payment to the Administrative Agent for the account of the relevant L/C Issuer
shall be deemed payment in respect of its participation in such L/C Borrowing
and shall constitute an L/C Advance from such Lender in satisfaction of its participation
obligation under this Section 2.03.


 


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


 


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


 


(vi)          If any Lender fails to make available
to the Administrative Agent for the account of the relevant L/C Issuer any
amount required to be paid by such Lender pursuant to the foregoing provisions
of this Section 2.03(c) by the time specified in Section 2.03(c)(iii),
such L/C Issuer shall be entitled to recover from such Lender (acting through
the Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to such L/C Issuer at a rate per annum equal to the
Federal Funds Rate from time to time in effect. 
A certificate of the relevant L/C Issuer submitted to any Lender
(through the Administrative Agent) with respect to any amounts owing under this
Section 2.03(c)(vi) shall be conclusive absent manifest error.


 


49

















 


(d)   Repayment of
Participations.  (i) If
at any time after an L/C Issuer has made a payment under any Letter of Credit
and has received from any Lender such Lender’s L/C Advance in respect of such
payment in accordance with Section 2.03(c), the Administrative Agent
receives for the account of such L/C Issuer any payment in respect of the
related Unreimbursed Amount or interest thereon (whether directly from the
Borrower or otherwise, including proceeds of Cash Collateral applied thereto by
the Administrative Agent), the Administrative Agent will distribute to such
Lender its Pro Rata Share thereof (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s L/C
Advance was outstanding) in the same funds as those received by the
Administrative Agent.


 


(ii)           If any payment received by the
Administrative Agent for the account of an L/C Issuer pursuant to Section 2.03(c) is
required to be returned under any of the circumstances described in Section 11.06
(including pursuant to any settlement entered into by such L/C Issuer in its
discretion), each Lender shall pay to the Administrative Agent for the account
of such L/C Issuer its Pro Rata Share thereof on demand of the Administrative
Agent, plus interest thereon from the date of such demand to the date such amount
is returned by such Lender, at a rate per annum equal to the Federal Funds Rate
from time to time in effect.


 


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


 


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


 


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


 


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


 


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


 


(v)           any exchange, release or
nonperfection of any Collateral, or any release or amendment or waiver of or
consent to departure from the Guarantee under this Agreement or any other
guarantee, for all or any of the Obligations any Loan Party in respect of such
Letter of Credit; or


 


(vi)          any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any Loan Party;


 


50














 


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


 


(f)            Role of L/C Issuers.  Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the relevant L/C Issuer shall not
have any responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document.  None of the L/C Issuers, any Agent-Related
Person nor any of the respective correspondents, participants or assignees of
any L/C Issuer shall be liable to any Lender for (i) any action taken or
omitted in connection herewith at the request or with the approval of the
Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit
Application.  The Borrower hereby assumes
all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; provided that
this assumption is not intended to, and shall not, preclude the Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. 
None of the L/C Issuers, any Agent-Related Person, nor any of the
respective correspondents, participants or assignees of any L/C Issuer, shall
be liable or responsible for any of the matters described in clauses (i) through
(iv) of Section 2.03(e); provided that
anything in such clauses to the contrary notwithstanding, the Borrower may have
a claim against an L/C Issuer, and such L/C Issuer may be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by such L/C Issuer’s willful misconduct or gross negligence
or such L/C Issuer’s willful or grossly negligent failure to pay under any
Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions
of a Letter of Credit.  In furtherance
and not in limitation of the foregoing, each L/C Issuer may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary, and no
L/C Issuer shall be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.


 


(g)         Cash Collateral.  (i)  If as of the Letter of Credit
Expiration Date, any Letter of Credit may for any reason remain outstanding and
partially or wholly undrawn, (ii) if any Event of Default occurs and is
continuing and the Administrative Agent or the Required Lenders, as applicable,
require the Borrower to Cash Collateralize the L/C Obligations pursuant to Section
8.02(c), (iii) an Event of Default set forth under Section 8.01(f) occurs
and is continuing or (iv) if the Borrower delivers written notice to the
Administrative Agent that it desires to Cash Collateralize any Letter of
Credit, then the Borrower shall Cash Collateralize the then Outstanding Amount
of such Letter of Credit (in the case of clauses (i) and (iv) above)
or of all L/C Obligations (in the case of clauses (ii) and (iii) above)
(in each case, in an amount equal to 105% of such Outstanding Amount), and
shall do so not later than 2:00 p.m., New York City time, on (x) in the
case of the immediately preceding clauses (i) and (ii), (1) the
Business Day that the Borrower receives notice thereof, if such notice is
received on such day prior to 12:00 Noon, New York City time (which notice, in
the case of clause (i) above, shall not be given prior to the Letter of
Credit Expiration Date), or (2) if clause (1) above does not apply,
the Business Day immediately following the day that the Borrower receives such
notice, (y) in the case of the immediately preceding clause (iii), the
Business Day on which an Event of Default set forth under Section 8.01(f) occurs
or, if such day is not a Business Day, the Business Day immediately succeeding
such day and (z) in the case of 


 


51

















 


the immediately preceding
clause (iv), the Business Day immediately following the day that the
Administrative Agent receives the notice referenced in such clause (iv) .  For purposes hereof, “Cash Collateralize”
means to pledge and deposit with or deliver to the Administrative Agent, for
the benefit of the relevant L/C Issuer and the Lenders, as collateral for the
L/C Obligations, cash or deposit account balances (“Cash Collateral”) pursuant to documentation in form and
substance reasonably satisfactory to the Administrative Agent and the relevant
L/C Issuer (which documents are hereby consented to by the Lenders).  Derivatives of such term have corresponding
meanings.  The Borrower hereby grants to
the Administrative Agent, for the benefit of the L/C Issuers and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing.  Cash
Collateral shall be maintained in blocked accounts at JPMorgan Chase Bank and
may be invested in readily available Cash Equivalents.  If at any time the Administrative Agent
determines that any funds held as Cash Collateral are subject to any right or
claim of any Person other than the Administrative Agent (on behalf of the
Secured Parties) or that the total amount of such funds is less than 105% of
the aggregate Outstanding Amount of all L/C Obligations, the Borrower will,
forthwith upon demand by the Administrative Agent, pay to the Administrative
Agent, as additional funds to be deposited and held in the deposit accounts at
JPMorgan Chase Bank as aforesaid, an amount equal to the excess of (a) 105%
of such aggregate Outstanding Amount over (b) the total amount of funds,
if any, then held as Cash Collateral that the Administrative Agent reasonably
determines to be free and clear of any such right and claim.  Upon the drawing of any Letter of Credit for which
funds are on deposit as Cash Collateral, such funds shall be applied, to the
extent permitted under applicable Law, to reimburse the relevant L/C
Issuer.  To the extent the amount of any
Cash Collateral exceeds 105% of the then Outstanding Amount of such L/C
Obligations and so long as no Event of Default has occurred and is continuing,
the excess shall be refunded to the Borrower. 
If the Borrower is required to provide an amount of Cash Collateral
hereunder as a result of the occurrence of an Event of Default, such amount
plus any accrued interest or realized profits with respect to such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
two Business Days after all Events of Default have been cured or waived.  Notwithstanding the occurrence of the Letter
of Credit Expiration Date, any full or partial failure by the Borrower to Cash
Collateralize the Outstanding Amount of any Letter of Credit in the case of
clause (i) above shall operate to continue the several obligations of the
Lenders to participate in such Letter of Credit (x) to the extent so not
Cash Collateralized and (y) to the extent any such Cash Collateral is
required to be returned to the Borrower under any of the circumstances
described in Section 11.06 (including pursuant to any settlement entered
into by such L/C Issuer in its discretion), and upon any drawing under such
Letter of Credit, such participations by the Lenders in any Unreimbursed Amount
shall be deemed to be L/C Borrowings and L/C Advances pursuant to this Section 2.03.


 


(h)         Letter of Credit Fees.  The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its Pro
Rata Share a Letter of Credit fee for each Letter of Credit issued pursuant to
this Agreement equal to the Applicable Rate times the daily maximum amount then
available to be drawn under such Letter of Credit (whether or not such maximum
amount is then in effect under such Letter of Credit if such maximum amount
increases periodically pursuant to the terms of such Letter of Credit).  Such letter of credit fees shall be computed
on a quarterly basis in arrears.  Such
letter of credit fees shall be due and payable in Dollars on the first Business
Day after the end of each March, June, September and December, commencing
with the first such date to occur after the issuance of such Letter of Credit,
on the Letter of Credit Expiration Date and thereafter on demand.  If there is any change in the Applicable Rate
during any quarter, the daily maximum amount of each Letter of Credit shall be
computed and multiplied by the Applicable Rate separately for each period
during such quarter that such Applicable Rate was in effect.


 


(i)             Fronting Fee and Documentary and Processing Charges
Payable to L/C Issuers.  The Borrower shall pay directly to each L/C
Issuer for its own account a fronting fee with respect to each Letter of Credit
issued by it equal to 0.25% per annum of the daily maximum amount then
available to be 


 


52

















 


drawn under such Letter of
Credit (whether or not such maximum amount is then in effect under such Letter
of Credit if such maximum amount increases periodically pursuant to the terms
of such Letter of Credit).  Such fronting
fees shall be computed on a quarterly basis in arrears.  Such fronting fees shall be due and payable
on the first Business Day after the end of each March, June, September and
December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter
on demand.  In addition, the Borrower
shall pay directly to each L/C Issuer for its own account the customary
issuance, presentation, amendment and other processing fees, and other standard
costs and charges, of such L/C Issuer relating to letters of credit as from
time to time in effect.  Such customary
fees and standard costs and charges are due and payable within ten (10) Business
Days of demand and are nonrefundable.


 


(j)             Conflict with Letter of Credit Application.  Notwithstanding anything else to
the contrary in this Agreement, in the event of any conflict between the terms
hereof and the terms of any Letter of Credit Application, the terms hereof
shall control.


 


(k)          Addition of an L/C Issuer.  A Lender may become an
additional L/C Issuer hereunder pursuant to a written agreement among the
Borrower, the Administrative Agent and such Lender.  The Administrative Agent shall notify the
Lenders of any such additional L/C Issuer.


 


Section 2.04                                Prepayments.  (a)  Optional.  (i)  The Borrower may, upon notice to
the Administrative Agent, at any time or from time to time voluntarily prepay
Revolving Credit Loans in whole or in part without premium or penalty; provided that (1) such notice must be received by the
Administrative Agent not later than 2:30 p.m. (New York time) (A) three
(3) Business Days prior to any date of prepayment of Eurodollar Rate Loans
and (B) on the date of prepayment of Base Rate Loans; (2) any
prepayment of Eurodollar Rate Loans shall be in a principal amount of
$1,000,000 or a whole multiple of $500,000 in excess thereof; and (3) any
prepayment of Base Rate Loans shall be in a principal amount of $1,000,000 or a
whole multiple of $500,000 in excess thereof or, in each case, if less, the
entire principal amount thereof then outstanding.  Each such notice shall specify the date and
amount of such prepayment and the Type(s) of Loans to be prepaid.  The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender’s Pro Rata Share of such prepayment. 
If such notice is given by the Borrower, the Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. 
Any prepayment of a Eurodollar Rate Loan shall be accompanied by all
accrued interest thereon, together with any additional amounts required
pursuant to Section 3.05.  Each
prepayment of the Loans pursuant to this Section 2.04(a) shall be
paid to the Lenders in accordance with their respective Pro Rata Shares.


 


(b)         Mandatory. (i) If
for any reason the aggregate Revolving Credit Exposures at any time exceeds the
aggregate Revolving Credit Commitments then in effect, the Borrower shall
promptly prepay or cause to be promptly prepaid Revolving Credit Loans and/or
Cash Collateralize the L/C Obligations in an aggregate amount equal to such
excess; provided that the Borrower shall not be
required to Cash Collateralize the L/C Obligations pursuant to this Section 2.04(b) unless
after the prepayment in full of the Revolving Credit Loans such aggregate
Outstanding Amount exceeds the aggregate Revolving Credit Commitments then in
effect.  If the Borrower is required to
provide an amount of Cash Collateral in respect of L/C Obligations pursuant to
this clause (i), such amount plus any accrued interest or realized profits with
respect to such amount shall be returned to the Borrower as and to the extent
that, after giving effect to such return, the Borrower would remain in
compliance with this clause (i) and no Event of Default shall have
occurred and be continuing.


 


(ii)                                  The Borrower shall notify the Administrative Agent in writing of any
mandatory prepayment of Loans required to be made pursuant to this Section 2.04(b) at
least three (3) Business Days prior to the date of such prepayment.  Each such notice shall specify the date of
such prepayment and 


 


53

















 


provide a reasonably
detailed calculation of the amount of such prepayment.  The Administrative Agent will promptly notify
each Lender of the contents of the Borrower’s prepayment notice and of such
Lender’s Pro Rata Share of the prepayment.


 


(c)          Each prepayment of Loans pursuant to this Section 2.04 shall be paid
to the Lenders in accordance with their respective Pro Rata Shares.


 


(d)         All
prepayments under this Section 2.04 shall be made together with, in the
case of any such prepayment of a Eurodollar Rate Loan on a date other than the
last day of an Interest Period therefor, any amounts owing in respect of such
Eurodollar Rate Loan pursuant to Section 3.05.


 


Section 2.05                                Termination or Reduction of Commitments.  (a) The Borrower may, upon written
notice to the Administrative Agent, terminate the unused Commitments, or from
time to time permanently reduce the unused Commitments; provided
that (i) any such notice shall be received by the Administrative Agent
three (3) Business Days prior to the date of termination or reduction, (ii) any
such partial reduction shall be in an aggregate amount of $1,000,000 or any
whole multiple of $500,000 in excess thereof (or, if less, the remaining amount
of such Commitments) and (iii) if, after giving effect to any reduction of
the Commitments, the Letter of Credit Sublimit exceeds the amount of the
Revolving Credit Facility, such sublimit shall be automatically reduced by the
amount of such excess.  The amount of any
such Commitment reduction shall not be applied to the Letter of Credit Sublimit
unless otherwise specified by the Borrower. 
Notwithstanding the foregoing, the Borrower may rescind or postpone any
notice of termination or reduction of the Commitments if such termination or
reduction would have resulted from a refinancing of all or any portion of the
Revolving Credit Facility, which refinancing shall not be consummated or
otherwise shall be delayed.


 


(b)         Application of Commitment Reductions; Payment of
Fees.  The
Administrative Agent will promptly notify the Lenders of any termination or
reduction of unused portions of the Letter of Credit Sublimit or the unused
Commitments under this Section 2.05. 
Upon any reduction of unused Commitments, the Commitment of each Lender
shall be reduced by such Lender’s Pro Rata Share of the amount by which such
Commitments are reduced (other than the termination of the Commitment of any
Lender as provided in Section 3.07). 
All commitment fees accrued until the effective date of any termination
of the Aggregate Commitments shall be paid on the effective date of such
termination.


 


Section 2.06                                Repayment of Loans.  (a) Revolving Credit Loans.  The Borrower shall repay to the
Administrative Agent for the ratable account of the Lenders on the Maturity
Date for the Revolving Credit Facility the aggregate principal amount of all of
its Revolving Credit Loans outstanding on such date.


 


Section 2.07                                Interest.  (a)  Subject to the provisions of Section 2.07(b),
(i) each Eurodollar Rate Loan shall bear interest on the outstanding
principal amount thereof for each Interest Period at a rate per annum equal to
the Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii) each
Base Rate Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate.


 


(b)         If
any Event of Default shall have occurred and be continuing, all outstanding
Loans and other Obligations under the Loan Documents (whether or not overdue at
such time) shall bear interest at a fluctuating interest rate per annum at all
times equal to the Default Rate to the fullest extent permitted by applicable
Laws.


 


(c)          Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein.  Notwithstanding the 


 


54

















 


foregoing, interest
accruing pursuant to Section 2.07(b) shall be payable from time to
time on demand.  Interest hereunder shall
be due and payable in accordance with the terms hereof before and after
judgment, and before and after the commencement of any proceeding under any
Debtor Relief Law.


 


Section 2.08                                Fees.  In addition to certain fees described in
Sections 2.03(h) and (i):


 


(a)          Commitment Fee.  The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Pro Rata Share, a
commitment fee equal to the Applicable Rate with respect to commitment fees
times the average daily amount by which the aggregate Revolving Credit
Commitment exceeds the sum of (A) the Outstanding Amount of Revolving
Credit Loans and (B) the Outstanding Amount of L/C Obligations; provided that any commitment fee accrued with respect to any
of the Commitments of a Defaulting Lender during the period prior to the time
such Lender became a Defaulting Lender and unpaid at such time shall not be
payable by the Borrower so long as such Lender shall be a Defaulting Lender
except to the extent that such commitment fee shall otherwise have been due and
payable by the Borrower prior to such time; and provided
further that no commitment fee shall accrue on any of the
Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting
Lender.  The commitment fee shall accrue
at all times from the Closing Date until the Maturity Date for the Revolving
Credit Facility or such earlier date as the Revolving Credit Commitments shall
be terminated hereunder, including at any time during which one or more of the
conditions in Article IV is not met, and shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December, commencing with the first such date to occur after the Closing Date,
and on the Maturity Date for the Revolving Credit Facility.  The commitment fee shall be calculated quarterly
in arrears, and if there is any change in the Applicable Rate during any
quarter, the average daily amount shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect.


 


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


 


Section 2.09                                Computation of Interest and Fees.  All computations of interest for Base Rate
Loans when the Base Rate is determined by JPMorgan Chase Bank’s “prime rate”
shall be made on the basis of a year of three hundred and sixty-five (365) or
three hundred and sixty-six (366) days, as the case may be, and actual days
elapsed.  All other computations of fees
and interest shall be made on the basis of a three hundred and sixty (360) day
year and actual days elapsed.  Interest
shall accrue on each Loan for the day on which the Loan is made, and shall not
accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid; provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.11(a),
bear interest for one (1) day.  Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.  The Administrative Agent shall, upon the
reasonable request of the Borrower, deliver to the Borrower a statement showing
the quotations used by the Administrative Agent in determining any interest
rate pursuant to Section 2.07(a).


 


Section 2.10                                Evidence of Indebtedness.  (a)  The Credit Extensions made by
each Lender shall be evidenced by one or more accounts or records maintained by
such Lender and evidenced by one or more entries in the Register maintained by
the Administrative Agent, acting solely for purposes of Treasury Regulation
Section 5f.103-1(c), as agent for the Borrower, in each case in the
ordinary course of business.  The
accounts or records maintained by the Administrative Agent and each Lender
shall be prima facie evidence absent manifest error of the amount of the Credit
Extensions made by the Lenders to the Borrower and the interest and payments
thereon.  Any failure to so record or any
error in doing so 


 


55

















 


shall not, however, limit or otherwise affect the
obligation of the Borrower hereunder to pay any amount owing with respect to
the Obligations.  In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error.  Upon the
request of any Lender made through the Administrative Agent, the Borrower shall
execute and deliver to such Lender (through the Administrative Agent) a Note
payable to such Lender, which shall evidence such Lender’s Loans in addition to
such accounts or records.  Each Lender
may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect
thereto.


 


(b)         In
addition to the accounts and records referred to in Section 2.10(a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records and, in the case of the Administrative Agent,
entries in the Register, evidencing the purchases and sales by such Lender of
participations in Letters of Credit.  In
the event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall
control in the absence of manifest error.


 


(c)          Entries made in good faith by the Administrative Agent in the Register
pursuant to Section 2.10(a), and by each Lender in its account or accounts
pursuant to Section 2.10(a), shall be prima facie
evidence of the amount of principal and interest due and payable or to become
due and payable from the Borrower to, in the case of the Register, each Lender
and, in the case of such account or accounts, such Lender, under this Agreement
and the other Loan Documents, absent manifest error; provided
that the failure of the Administrative Agent or such Lender to make an entry,
or any finding that an entry is incorrect, in the Register or such account or
accounts shall not limit or otherwise affect the obligations of the Borrower
under this Agreement and the other Loan Documents.


 


Section 2.11                                Payments Generally.  (a)  All payments to be made by the
Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff.  Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent’s Office in
Dollars and in Same Day Funds not later than 2:00 p.m. on the date
specified herein.  The Administrative
Agent will promptly distribute to each Lender its Pro Rata Share (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative
Agent after 2:00 p.m. (New York time) shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue.


 


(b)         If
any payment to be made by the Borrower shall come due on a day other than a
Business Day, payment shall be made on the next following Business Day, and
such extension of time shall be reflected in computing interest or fees, as the
case may be; provided that, if such extension
would cause payment of interest on or principal of Eurodollar Rate Loans to be
made in the next succeeding calendar month, such payment shall be made on the
immediately preceding Business Day.


 


(c)          Unless the Borrower or any Lender has notified the Administrative Agent,
prior to the time any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that
the Borrower or such Lender, as the case may be, has timely made such payment
and may (but shall not be so required to), in reliance thereon, make available
a corresponding amount to the Person entitled thereto.  If and to the extent that such payment was
not in fact made to the Administrative Agent in Same Day Funds, then:


 


56

















 


(i)                                     if the Borrower failed to make such payment, each Lender shall forthwith
on demand repay to the Administrative Agent the portion of such assumed payment
that was made available to such Lender in Same Day Funds, together with
interest thereon in respect of each day from and including the date such amount
was made available by the Administrative Agent to such Lender to the date such
amount is repaid to the Administrative Agent in Same Day Funds at the Federal
Funds Rate from time to time in effect; and


 


(ii)                                  if any Lender failed to make such payment, such Lender shall forthwith on
demand pay to the Administrative Agent the amount thereof in Same Day Funds,
together with interest thereon for the period from the date such amount was
made available by the Administrative Agent to the Borrower to the date such
amount is recovered by the Administrative Agent (the “Compensation Period”) at a rate per annum
equal to the Federal Funds Rate from time to time in effect.  When such Lender makes payment to the
Administrative Agent (together with all accrued interest thereon), then such
payment amount (excluding the amount of any interest which may have accrued and
been paid in respect of such late payment) shall constitute such Lender’s Loan
included in the applicable Revolving Credit Borrowing.  If such Lender does not pay such amount
forthwith upon the Administrative Agent’s demand therefor, the Administrative
Agent may make a demand therefor upon the Borrower, and the Borrower shall pay
such amount to the Administrative Agent, together with interest thereon for the
Compensation Period at a rate per annum equal to the rate of interest
applicable to the applicable Revolving Credit Borrowing.  Nothing herein shall be deemed to relieve any
Lender from its obligation to fulfill its commitments hereunder or to prejudice
any rights which the Administrative Agent or the Borrower may have against any
Lender as a result of any default by such Lender hereunder.


 


A
notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this Section 2.11(c) shall be conclusive, absent
manifest error.


 


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


 


(e)          The obligations of the Lenders hereunder to make Loans and to fund
participations in Letters of Credit are several and not joint.  The failure of any Lender to make any Loan or
to fund any such participation on any date required hereunder shall not relieve
any other Lender of its corresponding obligation to do so on such date, and no
Lender shall be responsible for the failure of any other Lender to so make its
Loan or purchase its participation.


 


(f)            Nothing herein shall be deemed to obligate any Lender to obtain the funds
for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.


 


(g)         Whenever
any payment received by the Administrative Agent under this Agreement or any of
the other Loan Documents is insufficient to pay in full all amounts due and
payable to the Administrative Agent and the Lenders under or in respect of this
Agreement and the other Loan Documents on any date, such payment shall be
distributed by the Administrative Agent and applied by the Administrative Agent
and the Lenders in the order of priority set forth in Section 8.03.  If the Administrative Agent receives funds
for application to the Obligations of the Loan Parties under or in respect of
the Loan Documents under circumstances for which the Loan Documents do not
specify the manner in which such funds are to be applied, the Administrative
Agent may, but at the direction of 


 


57

















 


Required Lenders shall,
elect to distribute such funds to each of the Lenders in accordance with such
Lender’s Pro Rata Share of the sum of (a) the Outstanding Amount of all
Loans outstanding at such time and (b) the Outstanding Amount of all L/C
Obligations outstanding at such time, in repayment or prepayment of such of the
outstanding Loans or other Obligations then owing to such Lender.


 


Section 2.12                                Sharing of Payments.  If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it,
or the participations in L/C Obligations, any payment (whether voluntary,
involuntary, through the exercise of any right of setoff, or otherwise) in
excess of its ratable share (or other share contemplated hereunder) thereof,
such Lender shall immediately (a) notify the Administrative Agent of such
fact, and (b) purchase from the other Lenders such participations in the
Loans made by them and/or such subparticipations in the participations in L/C
Obligations held by them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment in respect of such Loans or
such participations, as the case may be, pro rata with each of them; provided that if all or any portion of such excess payment
is thereafter recovered from the purchasing Lender under any of the
circumstances described in Section 11.06 (including pursuant to any
settlement entered into by the purchasing Lender in its discretion), such
purchase shall to that extent be rescinded and each other Lender shall repay to
the purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender’s ratable share (according to the proportion of
(i) the amount of such paying Lender’s required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered, without further interest thereon. 
The Borrower agrees that any Lender so purchasing a participation from
another Lender may, to the fullest extent permitted by applicable Law, exercise
all its rights of payment (including the right of setoff, but subject to Section 11.09)
with respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.  The Administrative Agent will keep records (which
shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section 2.12 and will in each case
notify the Lenders following any such purchases or repayments.  Each Lender that purchases a participation
pursuant to this Section 2.12 shall from and after such purchase have the
right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.


 


ARTICLE III


 


TAXES, INCREASED
COSTS PROTECTION AND ILLEGALITY


 


Section 3.01                                Taxes.  (a)  Except as provided in this Section 3.01,
any and all payments by the Borrower to or for the account of any Agent or any
Lender under any Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and all
liabilities (including additions to tax, penalties and interest) with respect
thereto, excluding in the case of each Agent and each Lender, taxes imposed on
or measured by its net income or overall gross income (including branch
profits), and franchise (and similar) taxes imposed on it in lieu of net income
taxes, by the jurisdiction (or any political subdivision thereof) under the
Laws of which such Agent or such Lender, as the case may be, is organized,
managed or controlled or maintains a Lending Office or conducts business in
(except to the extent the business is considered to be conducted in such
jurisdiction solely as a result of such Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or enforced,
any Loan Document) and all liabilities (including additions to tax, penalties
and interest) with respect thereto.  All
non-excluded taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and liabilities described in the immediately
preceding sentence are hereinafter referred to as “Taxes”.  If the Borrower shall be required by any Laws
to deduct any Taxes or 


 


58

















 


Other Taxes from or in respect of any sum payable
under any Loan Document to any Agent or any Lender, (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section 3.01),
each of such Agent and such Lender receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable Laws, and (iv) within thirty (30) days after the date of
such payment (or, if receipts or evidence are not available within thirty (30)
days, as soon as possible thereafter), the Borrower shall furnish to such Agent
or Lender (as the case may be) the original or a certified copy of a receipt
evidencing payment thereof to the extent such a receipt is issued
therefor.  If the Borrower fails to pay
any Taxes or Other Taxes when due to the appropriate taxing authority or fails
to remit to any Agent or any Lender the required receipts or other required
documentary evidence, the Borrower shall indemnify such Agent and such Lender
for any incremental taxes, interest or penalties that may become payable by
such Agent or such Lender arising out of such failure.  Notwithstanding anything to the contrary in
this Section 3.01(a), the Borrower shall not be required to increase the
sum payable under any Loan Document, or to indemnify any Lender or Agent, with
respect to Taxes that (i) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower), are United States withholding
taxes imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party hereto (or designates a new lending office),
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 taxes or (ii) are withholding taxes that are excluded pursuant
to Section 11.15(c).


 


(b)         In
addition, the Borrower agrees to pay any and all present or future stamp, court
or documentary taxes and any other excise, property, intangible or mortgage
recording taxes or charges or similar levies which arise from any payment made
under any Loan Document or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect to, any Loan Document
(hereinafter referred to as “Other Taxes”).


 


(c)          The Borrower agrees to indemnify each Agent and each Lender for
(i) the full amount of Taxes and Other Taxes (including any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this Section 3.01)
paid by such Agent and such Lender and (ii) any liability (including
additions to tax, penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority; provided such Agent or Lender, as the case may be, provides the
Borrower with a written statement thereof setting forth in reasonable detail
the basis and calculation of such amounts, which statement shall be conclusive
absent manifest error.  Payment under
this Section 3.01(c) shall be made within thirty (30) days after the
date such Lender or such Agent makes a demand therefor.


 


(d)         If
any Lender or Agent determines, in its reasonable discretion, that it has
received a refund in respect of any Taxes or Other Taxes as to which
indemnification or additional amounts have been paid to it by the Borrower
pursuant to this Section 3.01, it shall promptly remit such refund (but only to
the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section 3.01 with respect to the Taxes or Other Taxes
giving rise to such refund plus any interest included in such refund by the
relevant taxing authority attributable thereto) to the Borrower, net of all
reasonable out-of-pocket expenses of the Lender or Agent, as the case may be
and without interest (other than any interest paid by the relevant taxing
authority with respect to such refund); provided that
the Borrower, upon the request of the Lender or Agent, as the case may be,
agrees promptly to return such refund (plus any penalties, interest or other
charges imposed by the relevant taxing authority) to such party in the event
such party is required to repay such refund to the relevant taxing authority.  Such Lender or Agent, as the 


 


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case may be, shall, at the
Borrower’s request, provide the Borrower with a copy of any notice of
assessment or other evidence of the requirement to repay such refund received
from the relevant taxing authority (provided that
such Lender or Agent may delete any information therein that such Lender or
Agent deems confidential).  Nothing
herein contained shall interfere with the right of a Lender or Agent to arrange
its tax affairs in whatever manner it thinks fit or to make available its tax
returns or disclose any information relating to its tax affairs or any
computations in respect thereof or require any Lender or Agent to do anything
that would prejudice its ability to benefit from any other refunds, credits,
reliefs, remissions or repayments to which it may be entitled.


 


(e)          Each Lender agrees that, upon the occurrence of any event giving rise to
the operation of Section 3.01(a) or (c) with respect to such Lender
it will, if requested by the Borrower, use commercially reasonable efforts to
designate another Lending Office for any Loan or Letter of Credit affected by
such event; provided that such efforts are made on
terms that, in the sole judgment exercised in good faith of such Lender, cause
such Lender and its Lending Office(s) to suffer no economic, legal or
regulatory disadvantage, and provided further
that nothing in this Section 3.01(e) shall affect or postpone any of
the Obligations of the Borrower or the rights of such Lender pursuant to Section 3.01(a) or
(c).


 


(f)            Each Lender shall indemnify the Administrative Agent, within 10 days
after demand therefor, for the full amount of any taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges with
respect to which the Borrower is not required to pay additional amounts
pursuant to Section 3.01(a) (“Excluded
Taxes”) attributable to such Lender that are payable or paid by the
Administrative Agent, and interest, penalties and reasonable expenses arising
therefrom or with respect thereto, whether or not such Excluded Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the
amount of such payment or liability delivered to any Lender by the Administrative
Agent shall be conclusive absent manifest error.


 


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


 


Section 3.03                                Inability to Determine Rates.  If the Required Lenders determine that for
any reason adequate and reasonable means do not exist for determining the
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or that the Eurodollar Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, or that Dollar
deposits are not being offered to banks in the London interbank eurodollar
market for the applicable amount and the Interest Period of such Eurodollar
Rate Loan, the Administrative Agent will promptly so notify the Borrower and
each Lender.  Thereafter, the obligation
of the Lenders to make or maintain Eurodollar Rate Loans shall be 


 


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suspended until the Administrative Agent (upon the
instruction of the Required Lenders, which instruction shall be given promptly
upon such condition’s ceasing to exist) revokes such notice.  Upon receipt of such notice, the Borrower may
revoke any pending request for a Revolving Credit Borrowing of, conversion to
or continuation of Eurodollar Rate Loans or, failing that, will be deemed to
have converted such request into a request for a Revolving Credit Borrowing of
Base Rate Loans in the amount specified therein.


 


Section 3.04                                Increased Cost and Reduced Return; Capital
Adequacy; Reserves on Eurodollar Rate Loans.  (a)  If
any Lender determines (in good faith) that as a result of the introduction of
or any change in or in the interpretation of any Law, in each case after the
date hereof, or such Lender’s compliance therewith, there shall be any increase
in the cost to such Lender of agreeing to make or making, funding or
maintaining Eurodollar Rate Loans or (as the case may be) issuing or
participating in Letters of Credit, or a reduction in the amount received or
receivable by such Lender in connection with any of the foregoing (excluding
for purposes of this Section 3.04(a) any such increased costs or
reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section 3.01
shall govern), (ii) changes in the basis of taxation of overall net income
or overall gross income (including branch profits), and franchise (and similar)
taxes imposed in lieu of net income taxes, by the United States or any foreign
jurisdiction or any political subdivision of either thereof under the Laws of
which such Lender is organized or maintains a Lending Office and (iii) reserve
requirements contemplated by Section 3.04(c)), then from time to time
within ten (10) days after demand by such Lender setting forth in
reasonable detail such increased costs (with a copy of such demand to the
Administrative Agent given in accordance with Section 3.06), the Borrower shall
pay to such Lender such additional amounts as will compensate such Lender for
such increased cost or reduction.


 


(b)         If
any Lender determines (in good faith) that the introduction of any Law
regarding capital adequacy or any change therein or in the interpretation
thereof, in each case after the date hereof, or compliance by such Lender or
such Lender’s holding company therewith, has the effect of reducing the rate of
return on the capital of such Lender or such Lender’s holding company (or its
Lending Office) as a consequence of its obligations hereunder to a level below
that which such Lender or such Lender’s holding company could have achieved but
for such introduction, change or compliance (taking into consideration its
policies with respect to capital adequacy, by an amount deemed by such Lender
to be material, then from time to time upon demand of such Lender setting forth
in reasonable detail the charge and the calculation of such reduced rate of
return (with a copy of such demand to the Administrative Agent given in
accordance with Section 3.06), the Borrower shall pay to such Lender such
additional amounts as will compensate such Lender or such Lender’s holding
company for such reduction within ten (10) days after receipt of such
demand.


 


(c)          The Borrower shall pay to each Lender, (i) as long as such Lender
shall be required to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits, additional interest
on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual
costs of such reserves allocated to such Loan by such Lender (as determined by
such Lender in good faith, which determination shall be conclusive in the
absence of manifest error), and (ii) as long as such Lender shall be
required to comply with any reserve ratio requirement or analogous requirement
of any other central banking or financial regulatory authority imposed in
respect of the maintenance of the Commitments or the funding of the Eurodollar
Rate Loans, such additional costs (expressed as a percentage per annum and
rounded upwards, if necessary, to the nearest five decimal places) equal to the
actual costs allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive absent manifest
error) which in each case shall be due and payable on each date on which
interest is payable on such Loan, provided the Borrower shall have received at
least ten (10) days’ prior notice (with a copy to the Administrative
Agent, and which notice shall specify the Statutory Reserve Rate, if any,
applicable to such Lender) of such additional interest or cost from such 


 


61

















 


Lender.  If a Lender fails to give notice ten (10) days
prior to the relevant Interest Payment Date, such additional interest or cost
shall be due and payable ten (10) days from receipt of such notice.


 


(d)         Failure
or delay on the part of any Lender to demand compensation pursuant to this Section 3.04
shall not constitute a waiver of such Lender’s right to demand such
compensation, provided that the Borrower shall
not be required to compensate a Lender pursuant to Section 3.04(a), (b) or
(c) for any such increased cost or reduction incurred more than 180 days
prior to the date that such Lender demands, or notifies the Borrower of its
intention to demand, compensation therefor, provided
further that, if the circumstance giving rise to such increased cost or
reduction is retroactive, then such 180-day period referred to above shall be
extended to include the period of retroactive effect thereof.


 


(e)          If any Lender requests compensation under this Section 3.04, then
such Lender will, if requested by the Borrower, use commercially reasonable
efforts to designate another Lending Office for any Loan or Letter of Credit
affected by such event; provided that
such efforts are made on terms that, in the reasonable judgment of such Lender,
cause such Lender and its Lending Office(s) to suffer no material
economic, legal or regulatory disadvantage, and provided
further that nothing in this Section 3.04(e) shall affect or
postpone any of the Obligations of the Borrower or the rights of such Lender
pursuant to Section 3.04(a), (b), (c) or (d) or any rights of the
Borrower pursuant to Section 3.07.


 


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


 


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


 


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


 


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


 


Section 3.06                                Matters Applicable to All Requests for
Compensation. 
(a)  Any Agent or any Lender claiming compensation under this Article III
shall deliver a certificate to the Borrower setting forth the additional amount
or amounts to be paid to it hereunder which shall be conclusive in the absence
of manifest error.


 


(b)         With
respect to any Lender’s claim for compensation under Section 3.01, 3.02,
3.03 or 3.04, the Borrower shall not be required to compensate such Lender for
any amount incurred more than 180 days prior to the date that such Lender
notifies the Borrower of the event that gives rise to such claim; provided that, if the circumstance giving rise to such claim
is retroactive, then such 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.  If any Lender requests compensation by the
Borrower under Section 3.04, the Borrower may, by notice to such Lender
(with a copy to the Administrative Agent), suspend the obligation of such
Lender to make or continue from one Interest Period to another Eurodollar Rate
Loans, or to convert Base Rate Loans into Eurodollar Rate Loans, until the
event or condition giving rise to such request ceases to be in effect (in which
case the provisions of Section 3.06(c) shall be applicable); provided that such suspension shall not affect the right of
such Lender to receive the compensation so requested.


 


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(c)          If the obligation of any Lender to make or continue from one Interest
Period to another any Eurodollar Rate Loan, or to convert Base Rate Loans into
Eurodollar Rate Loans shall be suspended pursuant to Section 3.06(b) hereof,
such Lender’s Eurodollar Rate Loans shall be automatically converted into Base
Rate Loans on the last day(s) of the then current Interest Period(s) for
such Eurodollar Rate Loans (or, in the case of an immediate conversion required
by Section 3.02, on such earlier date as required by Law) and, unless and
until such Lender gives notice as provided below that the circumstances
specified in Section 3.01, 3.02, 3.03 or 3.04 hereof that gave rise to
such conversion no longer exist:


 


(i)                                     to the extent that such Lender’s Eurodollar Rate Loans have been so
converted, all payments and prepayments of principal that would otherwise be
applied to such Lender’s Eurodollar Rate Loans shall be applied instead to its
Base Rate Loans; and


 


(ii)                                  all Loans that would otherwise be made or continued from one Interest
Period to another by such Lender as Eurodollar Rate Loans shall be made or
continued instead as Base Rate Loans, and all Base Rate Loans of such Lender
that would otherwise be converted into Eurodollar Rate Loans shall remain as
Base Rate Loans.


 


(d)         If
any Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.01, 3.02, 3.03 or 3.04 hereof that gave
rise to the conversion of such Lender’s Eurodollar Rate Loans pursuant to this Section
3.06 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Rate Loans made by
other Lenders are outstanding, such Lender’s Base Rate Loans shall be
automatically converted, on the first day(s) of the next succeeding
Interest Period(s) for such outstanding Eurodollar Rate Loans, to the
extent necessary so that, after giving effect thereto, all Loans held by the
Lenders holding Eurodollar Rate Loans and by such Lender are held pro rata (as
to principal amounts, interest rate basis, and Interest Periods) in accordance
with their respective Commitments.


 


Section 3.07                                Replacement of Lenders under Certain
Circumstances. 
(a)  If at any time (i) the Borrower becomes obligated to
pay additional amounts or indemnity payments described in Section 3.01 or
3.04 as a result of any condition described in such Sections or any Lender
ceases to make Eurodollar Rate Loans as a result of any condition described in Section 3.02
or Section 3.04, (ii) any Lender becomes a Defaulting Lender or (iii) any
Lender becomes a Non-Consenting Lender, then the Borrower may, upon prior
written notice to the Administrative Agent and such Lender, replace such Lender
by causing such Lender to (and such Lender shall be obligated to) assign
pursuant to Section 11.07(b) (with the assignment fee to be paid by
the Borrower in such instance), at par, all of its rights and obligations under
this Agreement to one or more Eligible Assignees; provided
that neither the Administrative Agent nor any Lender shall have any obligation
to the Borrower to find a replacement Lender or other such Person.


 


(b)         Any
Lender being replaced pursuant to Section 3.07(a) above shall (i) execute
and deliver an Assignment and Assumption with respect to such Lender’s
Commitment and outstanding Loans and participations in L/C Obligations, and (ii) deliver
any Notes evidencing such Loans to the Borrower or Administrative Agent.  Pursuant to such Assignment and Assumption,
(A) the assignee Lender shall acquire all or a portion, as the case may
be, of the assigning Lender’s Commitment and outstanding Loans and
participations in L/C Obligations, (B) all obligations of the Borrower
owing to the assigning Lender relating to the Loans and participations so
assigned shall be paid in full by the assignee Lender to such assigning Lender
concurrently with such assignment and assumption and (C) upon such payment
and, if so requested by the assignee Lender, delivery to the assignee Lender of
the appropriate Note or Notes executed by the Borrower, the assignee Lender
shall become a Lender hereunder and the assigning Lender shall cease to
constitute a Lender hereunder with respect to such assigned Loans, 


 


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Commitments and participations,
except with respect to indemnification provisions under this Agreement, which
shall survive as to such assigning Lender.


 


(c)          Notwithstanding anything to the contrary contained above, any Lender that
acts as an L/C Issuer may not be replaced hereunder at any time that it has any
Letter of Credit outstanding hereunder unless arrangements reasonably
satisfactory to such L/C Issuer (including the furnishing of a back-up standby
letter of credit in form and substance, and issued by an issuer reasonably
satisfactory to such L/C Issuer or the depositing of cash collateral into a
cash collateral account in amounts and pursuant to arrangements reasonably
satisfactory to such L/C Issuer) have been made with respect to each such
outstanding Letter of Credit and the Lender that acts as the Administrative
Agent may not be replaced hereunder except in accordance with the terms of Section 9.09.


 


(d)         In
the event that (i) the Borrower or the Administrative Agent has requested
that the Lenders consent to a departure or waiver of any provisions of the Loan
Documents or agree to any amendment thereto, (ii) the consent, waiver or
amendment in question requires the agreement of all affected Lenders in
accordance with the terms of Section 11.01 and (iii) the Required Lenders
have agreed to such consent, waiver or amendment, then any Lender who does not
agree to such consent, waiver or amendment shall be deemed a “Non-Consenting Lender.”


 


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


 


ARTICLE IV


 


CONDITIONS
PRECEDENT TO CREDIT EXTENSIONS


 


Section 4.01                                Conditions to Effectiveness.  The effectiveness of this Agreement is
subject to the satisfaction or waiver of the following conditions precedent:


 


(a)          The Administrative Agent’s receipt of the following, each of which shall
be originals or facsimiles (followed promptly by originals) or electronic
copies (following promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party, if any,
each in form and substance reasonably satisfactory to the Administrative Agent:


 


(i)                                     counterparts of this Agreement, duly executed by Holdings, the Borrower,
the Guarantors and the Administrative Agent;


 


(ii)                                  a Note executed by the Borrower in favor of each Lender that has
requested a Note at least two Business Days in advance of the Closing Date;


 


(iii)                               each Collateral Document set forth on Schedule 1.01A, duly executed by
each Loan Party party thereto;


 


(iv)                              such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may reasonably require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party or is to be a party on the Closing
Date and with appropriate insertions and attachments, including the certificate
of incorporation (or equivalent thereof) of each Loan Party that is a
corporation certified by the relevant authority of the jurisdiction of
organization of such Loan Party and a 


 


64

















 


long form good standing
certificate (or equivalent thereof) for each Loan Party from its jurisdiction
of organization;


 


(v)                                 opinion from (i) Kirkland & Ellis LLP, special New York
counsel to Holdings substantially in the form of Exhibit F and (ii) except
as set forth in Section 6.16, local counsel in Washington as may be
reasonably requested by the Administrative Agent;


 


(vi)                              except as set forth in Section 6.16, evidence that all insurance
(including title insurance) required to be maintained pursuant to the Loan
Documents has been obtained and is in effect and that the Administrative Agent
has been named as loss payee or additional insured, as appropriate, under each
insurance policy with respect to such liability and property insurance as to
which the Administrative Agent shall have reasonably requested to be so named;
and


 


(vii)                           a Committed Loan Notice or Letter of Credit Application, as applicable,
relating to the initial Credit Extension, if any; and


 


(viii)                        a certificate signed by a Responsible Officer of the Borrower certifying
compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.02.


 


(b)         [Reserved.]


 


(c)          The Lenders and the Administrative Agent shall have received payment in
full in cash of all costs, fees and expenses due and payable (including those
required to be paid to such Lenders hereunder) and invoiced before the Closing
Date.


 


(d)         The
Borrower (directly or indirectly from RD Escrow Corporation) shall have received
at least $525,000,000 in gross cash proceeds from the issuance of the Senior
Secured Notes.


 


(e)          The Administrative Agent shall have received evidence reasonably
satisfactory to it that all loans outstanding under the First Lien Credit
Agreement and Second Lien Credit Agreement and all accrued and unpaid interest,
fees and other amounts owing thereunder shall have been paid in full, and all
Liens securing obligations thereunder shall have been released.


 


(f)            The Lenders shall have received (i) the Audited Financial Statements
and Unaudited Financial Statements (ii) the Pro Forma Balance Sheets and (iii) projections
through June 30, 2014, in form reasonably satisfactory to the
Administrative Agent, accompanied by a certificate of a Responsible Officer of
the Borrower stating that such projections are based on estimates, information
and assumptions believed by management of the Borrower to be reasonable on the
Closing Date and that to his or her best knowledge, such Responsible Officer
(not in his or her individual capacity, but solely as a Responsible Officer)
has no reason to believe that such projections are incorrect or misleading in
any material respect (it being understood and agreed that the projections are
subject to significant uncertainties and contingencies, many of which are
beyond the control of the Responsible Officer and that no assurance can be
given that any of the projections will be realized, and that such projections
are not a guarantee of financial performance and actual results may differ from
the projected results and such differences may be material).


 


(g)         The
Collateral Agent, as bailee for the Secured Parties, shall have received
certificates, if any, representing the Pledged Equity referred to therein, to
the extent required therein, accompanied by undated stock powers executed in
blank and instruments evidencing the Pledged Debt indorsed in blank; and


 


65

















 


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


 


(i)             The Administrative Agent shall have received at least three 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 Patriot Act, requested by such Person.


 


Section 4.02                                Conditions to All Credit Extensions.  The obligation of each Lender to honor any
Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion or a continuation of Loans) is subject to the following
conditions precedent:


 


(a)          The representations and warranties of the Borrower and each other Loan
Party contained in Article V or any other Loan Document shall be true and
correct in all material respects as of the date of such Credit Extension; provided that, to the extent that such
representations and warranties specifically refer to an earlier date, they
shall be true and correct in all material respects as of such earlier date; provided, further that, any representation
and warranty that is qualified as to “materiality,” “Material Adverse Effect”
or similar language shall be true and correct in all respects on such
respective dates.


 


(b)         No
Default or Event of Default shall have occurred and be continuing at the time
of or immediately after giving effect to such proposed Credit Extension.


 


(c)          The Borrower and its Subsidiaries shall be in compliance with the
financial covenant set forth in Section 7.14 on a pro forma basis after
giving effect to the extensions of credit requested to be made on such date and
the application of the proceeds thereof (and the Borrower shall have delivered
to the Administrative Agent evidence reasonably satisfactory to the
Administrative Agent demonstrating compliance with the foregoing).


 


(d)         All
obligations described in clause (a) of the definition of “Obligations”
shall constitute (i) “Priority Payment Lien Obligations” under and as
defined in the Senior Secured Note Indenture and (ii) Bank Priority
Obligations at the time of and immediately after giving effect to such proposed
Credit Extension.


 


(e)          The Administrative Agent and, if applicable, the relevant L/C Issuer
shall have received a Request for Credit Extension in accordance with the
requirements hereof.


 


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


 


ARTICLE V


 


REPRESENTATIONS
AND WARRANTIES


 


Each
Loan Party hereby jointly and severally represents and warrants to the Agents
and the Lenders that:


 


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


 


Section 5.02                                Authorization; No Contravention.  After giving effect to the Reorganization
Plan, the execution, delivery and performance by each Loan Party of each Loan
Document to which such Person is a party, and the consummation of the
transactions contemplated thereby, are within such Loan Party’s corporate or
other powers, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) violate the terms of
any of such Person’s Organization Documents, (b) violate or result in any
breach of, or the creation of any Lien under (other than Liens created by the
Loan Documents and other Liens permitted by Section 7.03), or require any
payment to be made under (i) any Contractual Obligation to which such
Person is a party or which is binding upon such Person or the properties of
such Person or any of its Subsidiaries or (ii) any order, injunction, writ
or decree of any Governmental Authority or any arbitral award to which such Person
or its property is subject; or (c) violate any Law; except with respect to any
violation or breach (but not creation of Liens or payments) referred to in each
case of clauses (b) and (c) above, to the extent that such violation
or breach could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.


 


Section 5.03                                Governmental Authorization; Other Consents.  No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with (a) the
execution, delivery or performance by any Loan Party of this Agreement or any
other Loan Document, (b) the grant by any Loan Party of the Liens granted
by it pursuant to the Collateral Documents or (c) the perfection or
maintenance of the Liens created under the Collateral Documents (including the
priority thereof, other than filings referred to in Section 5.18) or (d) the
exercise by the Administrative Agent or any Lender of its rights under the Loan
Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, in each case of the foregoing, except for the approvals,
consents, exemptions, authorizations, actions, notices and filings which have
been duly obtained, taken, given or made and are in full force and effect.


 


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


 


Section 5.05                                Financial Statements; No Material Adverse
Effect.  (a)  (i)  The
Audited Financial Statements and the Unaudited Financial Statements fairly
present in all material respects the consolidated financial condition of the
Borrower and its consolidated Subsidiaries as of the dates thereof and their
consolidated results of operations for the period covered thereby in accordance
with GAAP 


 


67

















 


consistently applied throughout the periods covered
thereby, except as otherwise expressly noted therein and, in the case of the
Unaudited Financial Statements, subject to normal year-end audit adjustments
and the absence of footnotes.


 


(ii)                                  The unaudited pro  forma consolidated balance sheet of the
Borrower and its Restricted Subsidiaries as of September 30, 2009
(including the notes thereto) and the unaudited pro  forma
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
of September 30, 2009 (including the notes thereto) (collectively, the “Pro Forma Balance Sheets”) have been
prepared giving effect (as if such events had occurred on such date) to (i) the
occurrence of the Effective Date, (ii) the Loans made on the Closing Date,
(iii) the issuance of the Senior Secured Notes and all other transactions
that would be required to be given pro forma effect by Regulation S-X
promulgated under the Exchange Act and (iv) the payment of fees and
expenses in connection with the foregoing. 
The Pro Forma Balance Sheets have been prepared in good faith, based on
assumptions believed by the Borrower to be reasonable as of the date of
delivery thereof, and present fairly in all material respects in accordance
with GAAP the pro  forma consolidated financial position of the
Borrower and its Restricted Subsidiaries as of September 30, 2009 and the pro
forma consolidated financial position of the Borrower and its
consolidated Subsidiaries as of September 30, 2009 and their pro  forma
consolidated results of operations for the periods covered thereby, assuming
that the events specified in the preceding sentence had actually occurred at
such date.


 


(b)         Since
June 30, 2009, after giving effect to the Reorganization Plan, there has
been no event or circumstance, either individually or in the aggregate, that
has had or could reasonably be expected to have a Material Adverse Effect.


 


(c)          The forecasts of consolidated balance sheets, income statements and cash
flow statements of the Borrower and its consolidated Subsidiaries which have
been furnished to the Administrative Agent prior to the Closing Date have been
prepared in good faith on the basis of assumptions believed by the Borrower to
be reasonable at the time made, it being understood that forecasts are, by
their nature, inherently uncertain and actual results may vary from such
forecasts and that such variations may be material.


 


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


 


Section 5.07                                No Default.  Neither the Borrower nor any Subsidiary is in
default under or with respect to any Contractual Obligation that, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.  No Default or
Event of Default has occurred and is continuing.


 


Section 5.08                                Ownership of Property; Liens.  Each Loan Party and each of its Subsidiaries
has good title to, or valid leasehold interests in, or (in the case of
Intellectual Property) a license or other right to use, or easements or other
limited property interests in, all its properties and assets material to the
ordinary conduct of its business (including all Material Real Property), free
and clear of all Liens except for minor defects in title that do not materially
interfere with its ability to conduct its business or to utilize such assets
for their intended purposes and Liens permitted by Section 7.03.


 


Section 5.09                                Environmental Compliance.  (a)  There are no claims, actions,
suits, or proceedings alleging potential liability or responsibility for
violation of, or otherwise relating to, any 


 


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Environmental Law or to Hazardous Materials that
could, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.


 


(b)         Except
as could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, (i) none of the properties currently or, to the
knowledge of the Borrower, formerly owned, leased or operated by any Loan Party
or any of its Subsidiaries is listed or proposed for listing on the NPL or on
the CERCLIS or any analogous foreign, state or local list or, to the knowledge
of the Borrower, is adjacent to any such property; and (ii) Hazardous
Materials have not been released, discharged or disposed of by any Person on
any property currently or, to the knowledge of the Borrower, formerly owned,
leased or operated by any Loan Party or any of its Subsidiaries and Hazardous
Materials have not otherwise been released, discharged or disposed of by any of
the Loan Parties and their Subsidiaries at any other location, in each case in
a manner that could reasonably be expected to result in Environmental
Liability.


 


(c)          The properties owned, leased or operated by the Borrower and the
Subsidiaries do not contain any Hazardous Materials in amounts or
concentrations which (i) constitute a violation of, (ii) require
remedial action under, or (iii) could give rise to liability under,
Environmental Laws, which violations, remedial actions and liabilities,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.


 


(d)         Neither
the Borrower nor any of its Subsidiaries is undertaking, either individually or
together with other potentially responsible parties, any investigation or
assessment or remedial or response action relating to any actual or threatened
release, discharge or disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any Governmental
Authority or the requirements of any Environmental Law, except for such
investigation or assessment or remedial or response action that, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.


 


(e)          All Hazardous Materials generated, used, treated, handled or stored at,
or transported to or from, by any Loan Party or any of its Subsidiaries, any
property currently or formerly owned or operated by any Loan Party or any of
its Subsidiaries have been disposed of in a manner not reasonably expected to
result, individually or in the aggregate, in a Material Adverse Effect.


 


(f)            Except as would not reasonably be expected to result, individually or in
the aggregate, in a Material Adverse Effect, none of the Loan Parties and their
Subsidiaries has contractually assumed any liability or obligation of any other
Person under or relating to any Environmental Law.


 


Section 5.10                                Taxes.  The Borrower and its applicable Subsidiaries
have filed all U.S. Federal income and material state and other material tax
returns and reports required to be filed, and have paid all U.S. Federal income
and material state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings diligently conducted and for which
reserves have been provided to the extent required by GAAP.


 


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


 


(b)         (i) 
Other than the commencement of the Cases, which is a Reportable Event, no ERISA
Event has occurred during the five year period prior to the date on which this
representation is made or deemed made with respect to any Pension Plan; (ii) neither
any Loan Party nor any ERISA 


 


69

















 


Affiliate has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA with
respect to any Pension Plan (other than premiums due and not delinquent under
Section 4007 of ERISA); (iii) neither any Loan Party nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and no
event has occurred which, with the giving of notice under Section 4219 of
ERISA, would reasonably be expected to result in such liability) under
Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan;
(iv) neither any Loan Party nor any ERISA Affiliate has engaged in a
transaction that could reasonably be expected to be subject to
Sections 4069 or 4212(c) of ERISA; and (v) the present value of
all benefit liabilities under each Pension Plan does not exceed the aggregate
current value of the assets of such Pension Plan (based on those assumptions
used to fund the Pension Plans); except, with respect to each of the foregoing
clauses (i) through (v) of this Section 5.11(b), as could not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.


 


(c)          Except as specifically disclosed in Schedule 5.11(c), (i) all
employer and employee contributions required by applicable law or by the terms
of any Foreign Benefit Arrangement or Foreign Plan have been made, or, if
applicable, accrued in accordance with normal accounting practices; (ii) the
accrued benefit obligations of each Foreign Plan (based on those assumptions
used to fund such Foreign Plan) with respect to all current and former
participants do not exceed the assets of such Foreign Plan; (iii) each Foreign
Plan that is required to be registered has been registered and has been
maintained in good standing with applicable regulatory authorities; and (iv) each
such Foreign Benefit Arrangement and Foreign Plan is in compliance (A) with
all material provisions of applicable law and all material applicable
regulations and published interpretations thereunder with respect to such
Foreign Benefit Arrangement or Foreign Plan and (B) with the terms of such
plan or arrangement; except, with respect to each of the foregoing clauses (i) through
(iv) of this Section 5.11(c), as could not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.


 


Section 5.12                                Subsidiaries; Equity Interests.  As of the Closing Date, neither Holdings nor
any other Loan Party has any Subsidiaries other than those specifically
disclosed in Schedule 5.12, and all of the outstanding Equity Interests owned
by the Loan Parties in such Subsidiaries have been validly issued, are fully
paid and nonassessable and all Equity Interests owned by Holdings or a Loan
Party are owned free and clear of all Liens except (i) those created under
the Collateral Documents and (ii) any Lien that is permitted under Section 7.03.  As of the Closing Date, Schedule 5.12
(a) sets forth the name and jurisdiction of each Subsidiary, (b) sets
forth the ownership interest of Holdings, the Borrower and any other Subsidiary
in each Subsidiary, including the percentage of such ownership and
(c) identifies each Subsidiary that is a Subsidiary the Equity Interests
of which are required to be pledged on the Closing Date pursuant to the
Collateral and Guarantee Requirement.


 


Section 5.13                                Margin Regulations; Investment Company Act.  (a)  The Borrower is not engaged
nor will it engage, principally or as one of its important activities, in the
business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board), or extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Revolving Credit
Borrowings or drawings under any Letter of Credit will be used for any purpose
that violates Regulation U.


 


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


 


Section 5.14                                Disclosure.  No report, financial statement, certificate
or other written information furnished by or on behalf of any Loan Party to any
Agent or any Lender or the Bankruptcy Court in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered
hereunder or any other Loan Document (as modified or supplemented by other
information so furnished) when taken as a whole contains any material
misstatement of fact or omits to state any material 


 


70

















 


fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not materially
misleading; provided that, with respect to projected
financial information and pro forma financial information, the Loan Parties
represent only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time made; it being understood
that projections are, by their nature, inherently uncertain and such
projections may vary from actual results and that such variances may be
material.


 


Section 5.15                                Intellectual Property; Licenses, Etc.  Each of the Loan Parties and their
Subsidiaries owns, or licenses or possesses the valid right to use, all
Intellectual Property that is material to the operation of the business of the
Borrower and its Subsidiaries, taken as a whole, as currently conducted, and,
without known conflict with the rights of any Person, except to the extent such
conflicts, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. 
To the best knowledge of the Borrower, the conduct of the business of
the Borrower and its Subsidiaries, taken as a whole, as currently conducted,
does not infringe upon, misappropriate or otherwise violate any Intellectual
Property of any Person and, to the knowledge of the Borrower, no Person infringes
upon, misappropriates or otherwise violates any Intellectual Property owned or
exclusively licensed by the Borrower and its Subsidiaries, except in each case
of the foregoing as could not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. 
No written or, to the knowledge of the Borrower, oral claim or
litigation regarding any Intellectual Property owned or exclusively licensed by
any Loan Party or its Subsidiaries is pending or, to the knowledge of the Loan
Parties, threatened against any Loan Party or Subsidiary, which, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.


 


Section 5.16                                Solvency.  On the Closing Date, after giving effect to
the Effective Date and the incurrence of all Indebtedness and Obligations being
incurred in connection herewith and therewith, the Borrower and its
Subsidiaries, on a consolidated basis, are Solvent.


 


Section 5.17                                Labor Matters.  Except as, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect: (a) there are no strikes or
other labor disputes against any Loan Party pending or, to the knowledge of the
Borrower, threatened; (b) hours worked by and payment made to employees of
each Loan Party have not been in violation of the Fair Labor Standards Act or
any other applicable Laws dealing with such matters; and (c) all payments
due from any Loan Party on account of employee health and welfare insurance
have been paid or accrued as a liability on the books of the relevant party.


 


Section 5.18                                Collateral.  (a)  The Security Agreement is effective
to create in favor of the Collateral Agent, for the benefit of the Secured
Parties, legal, valid and enforceable (subject to the effect of Debtor Relief
Laws and subject to general principles of equity) security interests in the
Collateral described therein and proceeds thereof to the extent governed by the
Uniform Commercial Code.  In the case of
the Pledged Equity or Pledged Debt described in any of the Collateral
Documents, when stock certificates representing such Pledged Equity or
promissory notes representing such Pledged Debt are delivered to the Collateral
Agent, as bailee, together with the necessary endorsements, and in the case of
the other Collateral described in any of the Collateral Documents, when
financing statements and other filings specified on Schedule 5.18 in
appropriate form are filed in the offices specified on Schedule 5.18, the
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for their respective
Obligations, in each case to the extent a Lien on such Collateral can be
perfected by the filing of a financing statement, by filings to be made in
respect of Intellectual Property in the United States Patent and Trademark
Office and the United States Copyright Office or, in the case of the Pledged
Equity and Pledged Debt, by possession or control, in each case prior and
superior in right to any other Person (except (x) in the case of
Collateral constituting Pledged Equity and Pledged Debt, nonconsensual Liens 


 


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permitted by Section 7.03 and the Liens in favor
of the Secured Parties (as such term is defined in the Security Agreement),
subject to Section 5.5 of the Security Agreement, and (y) in the case
of Collateral other than Pledged Equity and Pledged Debt, Liens permitted by Section 7.03
and the Liens in favor of the Secured Parties (as such term is defined in the
Security Agreement), subject to Section 5.5 of the Security Agreement); provided, however, that
additional filings may be required in the United States Patent and Trademark
Office and the United States Copyright Office to perfect the security interest
in Intellectual Property acquired after the date hereof.


 


(b)         Each
of the Mortgages, when duly executed and delivered, is effective to create in
favor of the Collateral Agent, for the benefit of the Secured Parties, a legal,
valid and enforceable (subject to the effect of Debtor Relief Laws and subject
to general principles of equity) Lien on the Mortgaged Properties described
therein and proceeds thereof, and when the Mortgages are filed in the appropriate
recording offices, each such Mortgage shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the Loan Parties
in the Mortgaged Properties and the proceeds thereof, as security for the
Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person (except that the security interest
created in such real property and the Mortgaged Property may be subject to the
Liens permitted by Section 7.03.


 


Section 5.19                                Regulation H.  No Mortgage encumbers improved real property
that is located in an area that has been identified by the Secretary of Housing
and Urban Development as an area having special flood hazards and in which
flood insurance has been made available under the National Flood Insurance Act
of 1968, as amended.


 


Section 5.20                                Certain Documents.  The Borrower has delivered to the
Administrative Agent a complete and correct copy of the Senior Secured Notes
Indenture and any other documentation relating to the Senior Secured Notes
reasonably requested by the Administrative Agent, including any amendments,
supplements or modifications with respect to any of the foregoing.


 


Section 5.21                                Priority Indebtedness.  The obligations described in clause (a) of
the definition of “Obligations” constitute (a) “Priority Payment Lien
Obligations” under and as defined in the Senior Secured Note Indenture and (b) Bank
Priority Obligations.


 


ARTICLE VI


 


AFFIRMATIVE
COVENANTS


 


So
long as any Lender shall have any Revolving Credit Commitment hereunder, any
Letter of Credit shall remain outstanding and not Cash Collateralized, or any
other Secured Obligation shall remain outstanding (other than contingent
indemnification and contingent expense reimbursement obligations and Secured
Obligations in respect of Secured Hedge Agreements and Cash Management
Obligations), each Loan Party shall, and shall cause each of its Subsidiaries
to:


 


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


 


(a)          as soon as available, but in any event within ninety (90) days after the
end of each fiscal year of the Borrower (or by May 31, 2010 for the fiscal
year ending on December 31, 2009) beginning with the fiscal year ending on
December 31, 2009, a consolidated and consolidating (by region) balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of such
fiscal year and a consolidated and consolidating (by region) balance sheet of
the Borrower and its Restricted Subsidiaries as at the end of such fiscal year,
and the related consolidated and consolidating (by region) statements of 


 


72

















 


income or operations,
stockholders’ equity and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all prepared
in accordance with GAAP (other than the consolidating financial statements,
which shall be substantially in the form delivered to the Administrative Agent
prior to the Closing Date), audited (in the case of the consolidated financial
statements) and accompanied by a report and opinion of an independent
registered public accounting firm of nationally recognized standing, which
report and opinion shall be prepared in accordance with generally accepted
auditing standards and shall not be subject to any “going concern” or like
qualification, exception or explanatory paragraph or any qualification or
exception arising out of the scope of the audit;


 


(b)         as
soon as available, but in any event within forty-five (45) days after the end
of each of the first three (3) fiscal quarters of each fiscal year of the
Borrower (or by May 31, 2010 for the fiscal quarter ending on March 31,
2010) beginning with the fiscal quarter ending on March 31, 2010, an
unaudited consolidated and consolidating (by region) balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such fiscal quarter
and an unaudited consolidated and consolidating (by region) balance sheet of
the Borrower and its Restricted Subsidiaries as at the end of such fiscal
quarter, and the related unaudited (i) consolidated and consolidating (by
region) statements of income or operations for such fiscal quarter and for the
portion of the fiscal year then ended and (ii) consolidated and
consolidating (by region) statements of cash flows for such fiscal quarter and
for the portion of the fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year for the applicable entities and the corresponding portion
of the previous fiscal year for the applicable entities, all certified by a
Responsible Officer of the Borrower as fairly presenting in all material
respects the consolidated financial condition, results of operations,
stockholders’ equity and cash flows of the Borrower and its consolidated
Subsidiaries and its Restricted Subsidiaries in accordance with GAAP (other
than the consolidating financial statements, which shall be substantially in
the form delivered to the Administrative Agent prior to the Closing Date),
subject only to normal year-end audit adjustments and the absence
of footnotes;


 


(c)          [Reserved]


 


(d)         as
soon as available, and in any event no later than ninety (90) days after the
end of each fiscal year of the Borrower (or by May 31, 2010 for the fiscal
year ending on December 31, 2009) beginning with the fiscal year ending on
December 31, 2009, a reasonably detailed consolidated budget for the
following fiscal year (including a projected consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as of the end of the following
fiscal year and a projected consolidated balance sheet of the Borrower and its
Restricted Subsidiaries as of the end of the following fiscal year, the related
consolidated statements of projected cash flow and projected income and a
summary of the material underlying assumptions applicable thereto)
(collectively, the “Projections”),
which Projections shall be certified by a Responsible Officer of the Borrower
as being prepared based upon good faith estimates and assumptions that are
believed by such Responsible Officer to be reasonable at the time made and that
such Responsible Officer is not aware of (x) any information contained in
such Projections which is false or misleading in any material respect or (y) any
omission of information which causes such Projections to be false or misleading
in any material respect (it being understood and agreed that the Projections
are subject to significant uncertainties and contingencies, many of which are
beyond the control of the Responsible Officer and that no assurance can be
given that any of the Projections will be realized, and that the Projections
are not a guarantee of financial performance and actual results may differ from
the projected results and such differences may be material).


 


Notwithstanding
the foregoing, the obligations in paragraphs (a) and (b) of this Section 6.01
may be satisfied with respect to financial information of the Borrower and its
consolidated Subsidiaries or of the Borrower and its Restricted Subsidiaries by
furnishing (A) the applicable financial 


 


73

















 


statements
of Holdings (or any direct or indirect parent of Holdings) or (B) the
Borrower’s or Holdings’ (or any direct or indirect parent thereof), as
applicable, Form 10-K or 10-Q, as applicable, filed with the SEC; provided that, with respect to each of clauses (A) and
(B), (i) to the extent such information relates to Holdings (or a parent
thereof), such information is accompanied by consolidating information that
explains in reasonable detail the differences between the information relating
to Holdings (or such parent), on the one hand, and the information relating to
the Borrower and its consolidated Restricted Subsidiaries on a standalone
basis, on the other hand and (ii) to the extent such information is in
lieu of information required to be provided under Section 6.01(a), such
materials are accompanied by a report and opinion of an independent registered
public accounting firm of nationally recognized standing, which report and
opinion shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any “going concern” or like
qualification, exception or explanatory paragraph or any qualification or
exception arising out of the scope of the audit.


 


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


 


(a)          simultaneously with the delivery of the financial statements referred to
in Section 6.01(a), a certificate of its independent certified public
accounting firm certifying such financial statements and stating that in making
the examination necessary therefor no knowledge was obtained of any Default or
Event of Default under Section 7.14 or, if any such Default or Event of
Default shall exist, stating the nature and status of such event (which
certificate may be limited to the extent required by such firm’s general
accounting and auditing rules, policies or guidelines);


 


(b)         simultaneously
with the delivery of the financial statements referred to in Section 6.01(a) and
(b), a duly completed Compliance Certificate signed by a Responsible Officer of
the Borrower;


 


(c)          simultaneously with the delivery of the financial statements referred to
in Section 6.01(a) and (b), a narrative discussion and analysis of
the financial condition and results of operations of the Borrower and its
Subsidiaries (including, without limitation, with respect to Dispositions, cost
savings, facility closures, litigation, contingent liabilities and other
matters as the Administrative Agent or any Lender through the Administrative
Agent may from time to time reasonably request) for the applicable period, and
for the period from the beginning of the then current fiscal year to the end of
such period, in each case, as compared to the portion of the Projections
covering such periods;


 


(d)         [Reserved]


 


(e)          promptly after the same are publicly available, copies of all annual,
quarterly and current reports and registration statements which the Borrower or
any Subsidiary files with the SEC or with any Governmental Authority that may
be substituted therefor (other than amendments to any registration statement
(to the extent such registration statement, in the form it became effective, is
delivered), exhibits to any registration statement and, if applicable, any
registration statement on Form S-8) and in any case not otherwise required
to be delivered to the Administrative Agent pursuant hereto;


 


(f)            promptly after the furnishing thereof, copies of any material requests or
material notices received by any Loan Party (other than in the ordinary course
of business) or material statements or material reports furnished to any holder
of debt securities of any Loan Party or of any of its Subsidiaries in a
principal amount greater than the Threshold Amount or to any holder of public
or preferred equity securities of any Loan Party and not otherwise required to
be furnished to the Lenders pursuant to any other clause of this Section 6.02;


 


74






 










 


(g)         no
later than two (2) Business Days prior to the effectiveness thereof,
copies of substantially final drafts of any proposed amendment, supplement,
waiver or other modification, and any replacement, with respect to the Senior
Secured Notes Indenture, documentation governing Pari Passu Payment Lien
Obligations or any Junior Financing Documentation;


 


(h)         together
with the delivery of each Compliance Certificate pursuant to Section 6.02(b),
to the extent not previously disclosed to the Administrative Agent, (i) a
description of any change in the name or the jurisdiction of organization of
any Loan Party, (ii) a certificate of a Responsible Officer of the
Borrower (A) setting forth any updates to Schedule 6 of the Security
Agreement or confirming there has been no change in the information required to
be reflected in such Schedule since the date of the Security Agreement or the
date of the most recent certificate delivered pursuant to this clause (ii), (B) identifying,
based on Collateral owned, and Laws in effect, as of the date of such
certificate, all Uniform Commercial Code financing statements (including
fixture filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations, containing
a description of the Collateral that will be required to be filed of record
within the 18 months following the date of such certificate, to the extent
necessary and required under the Collateral Documents to protect and perfect
the security interests under the Collateral Documents for a period of not less
than 18 months after the date of such certificate (except as noted therein with
respect to any continuation statements to be filed within such period); provided, that the delivery of such certificate is only
required at the time of the delivery of each Compliance Certificate required to
be delivered in connection with Section 6.01(a) or (b), (iii) a
description of any Person that has become a Group Member, in each case, since
the date of the most recent list delivered pursuant to this Section 6.02(h) (or,
in the case of the first such list so delivered, since the Closing Date) and (iv) a
reconciliation of operating income of the Borrower and its Restricted
Subsidiaries to EBITDA (which reconciliation may be provided as part of the
calculations included in the applicable Compliance Certificate);


 


(i)             promptly, subject to applicable confidentiality requirements of Group
Members, such additional financial or other information as the Administrative
Agent or any Lender through the Administrative Agent may from time to time
reasonably request; and


 


(j)             simultaneously with the delivery of the financial statements referred to
in Section 6.01(a) and (b), a calculation of (i) the outstanding
aggregate amount of “Priority Payment
Lien Obligations” under and as defined in the Senior Secured Note
Indenture and (ii) the aggregate principal amount of Indebtedness
outstanding under Section 7.02(b)(i), in each case, certified by a
Responsible Officer of the Borrower.


 


Documents
required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) or
(f) may be delivered electronically and if so delivered, shall be deemed
to have been delivered on the date (i) on which the Borrower posts such
documents, or provides a link thereto on the Borrower’s website on the Internet
at the website address listed in Section 11.02; (ii) on which such
documents are posted on the Borrower’s behalf on IntraLinks/IntraAgency or
another relevant website, if any, to which each Lender and the Administrative
Agent have access (whether a commercial, third-party website or whether
sponsored by the Administrative Agent); or (iii) such documents are
publicly available on the SEC’s website pursuant to the SEC’s EDGAR system;
provided that:  (i) upon written request
by the Administrative Agent, the Borrower shall deliver paper copies of such
documents to the Administrative Agent for further distribution to each Lender
until a written request to cease delivering paper copies is given by the Administrative
Agent and (ii) the Borrower shall notify (which may be by facsimile or
electronic mail) the Administrative Agent of the posting of any such documents
and provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents. 
Notwithstanding anything contained herein, in every instance the
Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(b) to the Administrative
Agent.  


 


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Each
Lender shall be solely responsible for timely accessing posted documents or
requesting delivery of paper copies of such documents from the Administrative
Agent and maintaining its copies of such documents.


 


Section 6.03                                Update Calls.  At least once per fiscal quarter, at such
times as the Borrower and the Administrative Agent shall agree, the Borrower
shall host a conference call (with a question and answer period) with the chief
executive officer and chief financial officer of the Borrower and such other
members of senior management of the Borrower as the Borrower deems appropriate
and the Administrative Agent and the Lenders and their respective
representatives and advisors to discuss the performance of the business, strategic
alternatives and other issues as the Administrative Agent may reasonably
request.


 


Section 6.04                                Notices.  Promptly after any Responsible Officer of a
Loan Party obtains knowledge thereof, notify the Administrative Agent (for
prompt notification to each Lender):


 


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


 


(b)         of
any development or event that has had or could reasonably be expected to have a
Material Adverse Effect.


 


Each
notice pursuant to this Section shall be accompanied by a written
statement of a Responsible Officer of the Borrower (x) that such notice is
being delivered pursuant to Section 6.04(a) or (b) (as
applicable) and (y) setting forth details of the occurrence referred to
therein and stating what action the Borrower has taken and proposes to take
with respect thereto.


 


Section 6.05                                Payment of Obligations.  Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature (including, but not limited to, all
material taxes, fees, assessments, and other governmental charges), except
where the amount or validity thereof is currently being contested in good faith
by appropriate proceedings and any required reserves in conformity with GAAP
with respect thereto have been provided on the books of the relevant Group
Member.


 


Section 6.06                                Preservation of Existence, Etc.  (a)  Preserve, renew and maintain
in full force and effect its legal existence under the Laws of the jurisdiction
of its organization except (i) in the case of any Subsidiary of the
Borrower, where the failure to perform such obligations, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
or (ii) in a transaction permitted by Section 7.04 or Section 7.08
and (b) take all reasonable action to maintain all privileges (including
its good standing), material rights, material permits, material licenses and
material franchises necessary or desirable in the normal conduct of its business,
except (i) to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect or (ii) pursuant to a
transaction permitted by Section 7.04 or Section 7.08.


 


Section 6.07                                Maintenance of Properties.  Except if the failure to do so could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (a) maintain, preserve and protect all of its properties
and equipment material to the operation of its business in good working order,
repair and condition, ordinary wear and tear excepted and casualty or
condemnation excepted, and (b) make all necessary renewals, replacements,
modifications, improvements, upgrades, extensions and additions thereof or
thereto in accordance with prudent industry practice.


 


Section 6.08                                Maintenance of Insurance.  Maintain with financially sound and reputable
insurance companies, insurance with respect to its properties and business
against loss or 


 


76

















 


damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts (after giving effect to any self-insurance reasonable and customary for
similarly situated Persons engaged in the same or similar businesses as the
Borrower and its Subsidiaries) and with deductible levels as are customarily
carried under similar circumstances by such other Persons and ensure that the
Administrative Agent is an additional insured and/or loss payee under such
liability and property insurance as reasonably requested by the Administrative
Agent.


 


Section 6.09                                Compliance with Laws.  Comply with the requirements of all Laws and
all orders, writs, injunctions and decrees applicable to it or to its business
or property, except if the failure to comply therewith could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


Section 6.10                                Inspection Rights; Books and Records;
Discussions.  (a) 
Keep proper books of record and account in which full, true and correct entries
in all material respects are made of all dealings and transactions in relation
to its business and activities and (b) permit representatives of the
Administrative Agent or any Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books of record at any
reasonable time upon reasonable notice and to discuss the business, operations,
properties and financial and other condition of the Loan Parties with officers
and senior managerial employees of the Loan Parties and with their independent
certified public accountants, in all cases subject to applicable Law and the
terms of any applicable confidentiality agreements not entered into for
purposes of obstructing the operation of this Section 6.10; provided, that an officer of the Borrower shall be provided
reasonable opportunity to participate in any such discussion with the
accountants; provided, further,
that such inspections and discussions shall be coordinated through the
Administrative Agent and that in the absence of a continuation of an Event of
Default, the Administrative Agent and the Lenders shall not exercise such
rights more often than once (1) during any calendar quarter.  The Administrative Agent and each Lender
agrees to use reasonable efforts to coordinate and manage the exercise its
rights under this Section 6.10 so as to minimize the disruption to the
business of the Borrower and its Subsidiaries resulting therefrom.


 


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


 


(a)          upon the formation or acquisition of any new direct or indirect
Subsidiary by any Loan Party:


 


(i)                                     within (x) thirty (30) days after the formation or acquisition of
any such Domestic Subsidiary or such longer period as may be reasonably
acceptable to the Administrative Agent if the Loan Parties are diligently
pursuing compliance herewith, and (y) forty-five (45) days after the
formation or acquisition of any such Foreign Subsidiary or, in the case of this
clause (y), such longer period as may be reasonably acceptable to the
Administrative Agent:


 


(A)                              cause each such Subsidiary that is required to
become a Guarantor under the Collateral and Guarantee Requirement or becomes a
Guarantor to furnish to the Administrative Agent a description of the Material
Real Property owned by such Subsidiary, in detail reasonably satisfactory to
the Administrative Agent;


 


(B)                                cause (x) each such Subsidiary that is
required to become a Guarantor pursuant to the Collateral and Guarantee
Requirement or becomes a 


 


77

















 


Guarantor
to duly execute and deliver to the Collateral Agent Mortgages, Security
Agreement Supplements and other security agreements and documents and to
execute, deliver, file and record any such other documents, statements,
assignments, instruments, agreements or other papers and take all other actions
reasonably requested by the Administrative Agent in order to create a perfected
security interest with the priority required by the Collateral Documents in all
of its assets required to constitute Collateral under the Loan Documents
(including, with respect to Mortgages, the documents listed in Section 6.11(b)),
as reasonably requested by and in form and substance reasonably satisfactory to
the Administrative Agent (consistent with the Mortgages, Security Agreement and
other security agreements in effect on the Closing Date), and (y) each
direct parent of each such Subsidiary (if such parent is the Borrower or is
required to be a Guarantor pursuant to the Collateral and Guarantee Requirement
or becomes a Guarantor) to duly execute and deliver to the Collateral Agent
such Security Agreement Supplements and other security agreements and to
execute, deliver, file and record any such other documents, statements,
assignments, instruments, agreements or other papers and take all other actions
reasonably requested by the Administrative Agent in order to create a perfected
security interest with the priority required by the Collateral Documents in any
uncertificated Equity Interests of such Subsidiary that are required to
constitute Collateral under the Loan Documents, as reasonably requested by the
Administrative Agent and in form and substance reasonably satisfactory to the
Administrative Agent (consistent with the Security Agreement in effect on the
Closing Date);


 


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


 


(D)                               take and cause such Subsidiary and each direct
or indirect parent of such Subsidiary to take whatever action (including the
recording of Mortgages, the filing of Uniform Commercial Code financing
statements, delivery of stock and membership interest certificates, delivery of
promissory notes duly endorsed in favor of the Collateral Agent, and the
execution, delivery, filing and recording of any such other documents,
statements, assignments, instruments, agreements or other papers) may be
reasonably requested by the Administrative Agent to vest in the Collateral
Agent (or in any representative of 


 


78

















 


the
Collateral Agent designated by it) valid Liens required by the Collateral and Guarantee
Requirement, enforceable against all third parties in accordance with their
terms, except as such enforceability may be limited by Debtor Relief Laws and
by general principles of equity;


 


(E)                                 cause each such Subsidiary that is required to
become a Guarantor under the Collateral and Guarantee Requirement to guarantee
the Obligations; and


 


(F)                                 cause each such Subsidiary to deliver to the
Administrative Agent copies of its Organization Documents,


 


(ii)                                  within thirty (30) days (with respect to any Domestic Subsidiary) or
forty-five (45) days (with respect to any Foreign Subsidiary) after the request
therefor by the Administrative Agent (or such longer period as may be
reasonably acceptable to the Administrative Agent if the Loan Parties are
diligently pursuing compliance herewith), deliver to the Administrative Agent a
signed copy of an opinion, addressed to the Collateral Agent, the
Administrative Agent, the other Agents and the Lenders, of counsel for the Loan
Parties reasonably acceptable to the Administrative Agent as to such matters
set forth in this Section 6.11(a) as the Administrative Agent may
reasonably request, and


 


(iii)                               as promptly as practicable after the request therefor by the
Administrative Agent, deliver to the Administrative Agent, with respect to each
parcel of Material Real Property that is owned by such Subsidiary, any existing
title reports, existing surveys or existing environmental assessment reports;
and


 


(b)         after
the Closing Date, concurrently with the acquisition of any Material Real
Property by any Loan Party and such Material Real Property shall not already be
subject to a perfected Lien pursuant to the Collateral and Guarantee
Requirement, the Borrower shall give notice thereof to the Administrative Agent
and promptly thereafter shall cause such assets to be subjected to a Lien to
the extent and at such times as shall be required by the Collateral and
Guarantee Requirement and the Collateral Documents, as the case may be, and
will take, or cause the relevant Loan Party to take, such actions and at such
times as shall be reasonably requested by the Administrative Agent to grant and
perfect or record such Lien, including, as applicable, the actions referred to
in Section 6.13(b).


 


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


 


Section 6.13                                Further Assurances.  (a)  Promptly upon request by the
Administrative Agent (i) correct any material defect or error that may be
discovered in the execution, acknowledgment, filing or recordation of any
Collateral Document or other document or instrument relating to any Collateral,
and (ii) do, execute, acknowledge, deliver, record, re-record, file,
re-file, register and re-register any and all such further acts, deeds,
certificates, assurances and other instruments as the 


 


79

















 


Administrative Agent may reasonably request from
time to time in order to carry out more effectively the purposes of the
Collateral Documents.


 


(b)         In
the case of any Material Real Property referred to in Section 6.11(b),
provide the Administrative Agent with Mortgages with respect to such Material
Real Property within sixty (60) days of the acquisition of such real property
(or such longer period as may be reasonably acceptable to the Administrative Agent
if the Loan Parties are diligently pursuing compliance herewith) together with:


 


(i)                                     evidence that counterparts of any such Mortgage has been duly executed,
acknowledged and delivered and is in form suitable for filing or recording in
all filing or recording offices that the Administrative Agent may deem
reasonably necessary or desirable in order to create a valid and subsisting
perfected Lien on the property and/or rights described therein in favor of the
Collateral Agent for the benefit of the Secured Parties and that all filing and
recording taxes and fees that are due and payable have been paid or otherwise
provided for in a manner reasonably satisfactory to the Administrative Agent;


 


(ii)                                  fully paid title insurance policies (or the equivalent or other forms
available in each applicable jurisdiction) (the “Mortgage Policies”) in form and substance, with endorsements
and in amount, reasonably acceptable to the Administrative Agent (not to exceed
the value of the real properties covered thereby), issued, coinsured and
reinsured by title insurers reasonably acceptable to the Administrative Agent,
insuring the Mortgages to be valid subsisting Liens on the property described
therein, free and clear of all defects and encumbrances except for minor
defects in title that do not materially interfere with the Loan Party’s ability
to conduct business and subject to Liens permitted by Section 7.03, and
providing for such other affirmative insurance (including endorsements for
future advances under the Loan Documents) and such coinsurance and direct
access reinsurance as the Administrative Agent may reasonably request;


 


(iii)                               if so requested by the Administrative Agent in its reasonable discretion,
opinions of local counsel for the Loan Parties in states in which the real
properties are located, with respect to the enforceability and perfection of
any such Mortgage and any related fixture filings in form and substance
reasonably satisfactory to the Administrative Agent; and


 


(iv)                              such other evidence that all other actions that the Administrative Agent
may reasonably deem necessary or desirable in order to create valid and
subsisting Liens on the property described in each such Mortgage has been
taken.


 


Section 6.14                                Use of Proceeds.  Apply the proceeds of the Revolving Credit
Loans and the Letters of Credit solely for working capital and other general
corporate purposes of Holdings and its Subsidiaries.


 


Section 6.15                                Deposit Accounts.  Except as set
forth on Schedule 6.16, maintain at all
times all of the cash and Cash Equivalents of Holdings and its Domestic
Subsidiaries (other than cash and Cash Equivalents not exceeding $5,000,000 in
the aggregate) at an account or accounts (i) with any financial
institution that has entered into a control agreement with respect to such
acount(s) in form and substance reasonably satisfactory to the
Administrative Agent or (ii) at an account the entire balance of which is
swept at least once every three (3) Business Days to an account described
in clause (i) above.


 


Section 6.16                                Post-Closing Covenants.  (a)  Cause each post-closing matter
identified on Schedule 6.16 to be completed on or before the date set forth on
Schedule 6.16 for such post-closing matter.


 


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ARTICLE VII


 


NEGATIVE
COVENANTS


 


So
long as any Lender shall have any Revolving Credit Commitment hereunder, any
Letter of Credit shall remain outstanding and not Cash Collateralized, or any
other Secured Obligation shall remain outstanding (other than contingent
indemnification and contingent expense reimbursement obligations and Secured
Obligations in respect of Secured Hedge Agreements and Cash Management
Obligations), each Loan Party covenants and agrees with the Lenders that:


 


Section 7.01                                Limitation on Restricted Payments.  (a)  The
Borrower will not, and will not permit any Restricted Subsidiary to, directly
or indirectly:


 


(i)                                     declare or pay any dividend or make any distribution on account of the
Borrower’s or any Restricted Subsidiary’s Equity Interests, including any
dividend or distribution payable in connection with any merger or consolidation
other than:


 


(A)      dividends or distributions by the Borrower
payable in Equity Interests (other than Disqualified Stock) of the Borrower or
in options, warrants or other rights to purchase such Equity Interests; or


 


(B)        dividends or distributions by a Restricted
Subsidiary so long as, in the case of any dividend or distribution payable on
or in respect of any class or series of securities issued by a Restricted
Subsidiary other than a Wholly Owned Subsidiary, the Borrower or a Restricted
Subsidiary receives at least its pro rata share of such dividend or
distribution in accordance with its Equity Interests in such class or series of
securities;


 


(ii)                                  purchase, redeem, defease or otherwise acquire or retire for value any
Equity Interests of the Borrower or any direct or indirect parent of the
Borrower, including in connection with any merger or consolidation, held by
Persons other than the Borrower or any Subsidiary Guarantor;


 


(iii)                               make any principal payment on, or redeem, repurchase, defease, otherwise
acquire or retire for value or give any irrevocable notice of redemption with
respect thereto in each case, prior to any scheduled repayment, sinking fund
payment or maturity, any Indebtedness, other than:


 


(A)      Pari Passu Payment Lien
Obligations;


 


(B)        Priority Payment Lien Obligations;


 


(C)        Indebtedness permitted under clauses (iv),
(vii), (viii), (ix), and (x) of Section 7.02(b);


 


(D)       the purchase, repurchase or other acquisition
of Indebtedness purchased in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due within
one year of the date of purchase, repurchase or acquisition;


 


(E)         Indebtedness incurred under revolving credit
facilities (other than payments, redemptions, repurchases, defeasances or other
acquisitions or retirements for value that are accompanied by termination or
reduction of commitments under such revolving credit facilities); or


 


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(F)         the giving of an irrevocable notice of
redemption with respect to the transactions described in clauses (ii) and (iii)
above; or


 


(iv)                              make any Restricted Investment


 


(all
such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as “Restricted Payments”),
unless at the time of such Restricted Payment:


 


(v)                                 no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof;


 


(vi)                              immediately after giving effect to such transaction on a pro forma basis,
the Borrower could incur $1.00 of additional Indebtedness under Section 7.02(a);
and


 


(vii)                           such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by the Borrower and the Restricted Subsidiaries after
the Closing Date (including Restricted Payments permitted by clauses (i),
(viii), (xii), (xiv) and (xvi) of paragraph (c) below, but
excluding all other Restricted Payments permitted by paragraph (c)), is less
than the sum of:


 


(A)      the EBITDA of the Borrower for the period
(taken as one accounting period) from April 1, 2010, to the end of the
Borrower’s most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment, less the
product of 1.4 times Consolidated Interest Expense of the Borrower for the same
period; provided that if the amount under this clause (1) for any fiscal
quarter is less than zero, then the amount “built” under this clause (1) for
such fiscal quarter shall be deemed to be equal to zero, plus


 


(B)        100% of the aggregate net cash proceeds and
the fair market value, as determined in good faith by the Board of Directors,
of marketable securities or other property received by the Borrower since
immediately after the Closing Date from the issue or sale of:


 


(1)          Equity Interests of the Borrower, including Retired Capital Stock (as
defined below), but excluding cash proceeds and the fair market value, as
determined in good faith by the Board of Directors, of marketable securities or
other property received from the sale of:


 


I                                            Equity
Interests to members of management, directors or consultants of the Borrower,
any direct or indirect parent of the Borrower and the Borrower’s Subsidiaries
after the Closing Date to the extent such amounts have been applied to
Restricted Payments made in accordance with clause (iv) of paragraph (c) below;
and


 


II                                        Designated
Preferred Stock; or


 


(2)          debt securities of the Borrower that have been converted into such Equity
Interests of the Borrower or its direct or indirect parents;


 


provided, however, that this clause (B) shall not include the
proceeds from (w) Refunding Capital Stock (as defined below), (x) Equity
Interests or converted debt securities of the Borrower sold to a Restricted
Subsidiary, or to an employee stock ownership plan or other trust established
by the Borrower or a 


 


82

















 


Restricted
Subsidiary, (y) Disqualified Stock or debt securities that have been
converted into Disqualified Stock or (z) Excluded Contributions or
Designated Preferred Stock, plus


 


(C)        100% of the aggregate amount of cash and the
fair market value, as determined in good faith by the Board of Directors, of
marketable securities or other property contributed to the capital of the
Borrower following the Closing Date other than (i) net cash proceeds
contributed to the Borrower from the sale of Disqualified Stock or Designated
Preferred Stock, (ii) net cash proceeds received from Equity Offerings to
the extent used to redeem Senior Secured Notes, (iii) by any Excluded
Contributions and (iv) by contributions to the Borrower and the Restricted
Subsidiaries in connection with the Reorganization Plan, plus


 


(D)       100% of the aggregate amount received in cash
and the fair market value, as determined in good faith by the Board of
Directors, of marketable securities or other property received by the Borrower
or a Restricted Subsidiary by means of:


 


(1)          the sale or other disposition (other than to the Borrower or a Restricted
Subsidiary or to an employee stock ownership plan or any trust established by
the Borrower or any of its Subsidiaries) of Restricted Investments made after
the Closing Date by the Borrower and its Restricted Subsidiaries and
repurchases and redemptions of such Restricted Investments from the Borrower
and its Restricted Subsidiaries and repayments of loans or advances which
constitute Restricted Investments made after the Closing Date by the Borrower
and the Restricted Subsidiaries and (without duplication of amounts included in
EBITDA) any dividends or distributions received by the Borrower or a Restricted
Subsidiary on account of Restricted Investments made after the Closing Date
(other than in each case to the extent the Investment in such Restricted
Investment was made by the Borrower or a Restricted Subsidiary pursuant to
clause (xiv) of paragraph (c) below); or


 


(2)          the sale (other than to the Borrower or a Restricted Subsidiary or to an
employee stock ownership plan or any trust established by the Borrower or any
of its Subsidiaries) of the stock of an Unrestricted Subsidiary (other than in
each case to the extent the Investment in such Unrestricted Subsidiary was made
by the Borrower or a Restricted Subsidiary pursuant to clause (x) of
paragraph (c) below or to the extent such Investment constituted a
Permitted Investment) or a dividend or distribution from an Unrestricted
Subsidiary in each case after the Closing Date; plus


 


(E)         in the case of the redesignation of an Unrestricted
Subsidiary as a Restricted Subsidiary after the Closing Date, the fair market
value of the Investment in such Unrestricted Subsidiary, as determined by the
Board of Directors in good faith or if, in the case of an Unrestricted
Subsidiary, such fair market value may exceed $25.0 million, in writing by an
Independent Financial Advisor, at the time of the redesignation of such
Unrestricted Subsidiary as a Restricted Subsidiary, other than an Unrestricted
Subsidiary to the extent the Investment in such Unrestricted Subsidiary was
made by the Borrower or a Restricted Subsidiary pursuant to clause (xiv) of
paragraph (c) below or to the extent such Investment constituted a
Permitted Investment.


 


(b)         The
foregoing provisions of Section 7.01(a) will not prohibit:


 


(i)                                     the payment of any dividend or distribution within 60 days after the date
of declaration thereof, if at the date of declaration such payment would have
complied with the provisions of this Agreement or the redemption, repurchase or
retirement of Indebtedness if, at the date of any irrevocable redemption notice
such payment would have complied with the provisions of this Agreement;


 


83

















 


(ii)                                  the redemption, repurchase, retirement or other acquisition of any Equity
Interests of the Borrower (“Retired Capital
Stock”) or Indebtedness of the Borrower or a Subsidiary Guarantor,
or any Equity Interests of any direct or indirect parent of the Borrower, in
exchange for, or out of the proceeds of the substantially concurrent sale
(other than to the Borrower or a Restricted Subsidiary or to an employee stock
ownership plan or other trust established by the Borrower or a Restricted
Subsidiary) of, Equity Interests of the Borrower or any direct or indirect parent
of the Borrower to the extent contributed to the Borrower (in each case, other
than any Disqualified Stock) (“Refunding
Capital Stock”);


 


(iii)                               the redemption, repurchase or other acquisition or retirement of
Indebtedness of the Borrower or a Subsidiary Guarantor made by exchange for, or
out of the proceeds of the substantially concurrent sale of, new Indebtedness
of the Borrower or a Subsidiary Guarantor, as the case may be, which is
incurred in compliance with Section 7.02 so long as:


 


(A)      such new Indebtedness has a final scheduled
maturity date equal to or later than the final scheduled maturity date of the
Indebtedness being so redeemed, repurchased, acquired or retired;


 


(B)        such new Indebtedness has a Weighted Average
Life to Maturity equal to or greater than the remaining Weighted Average Life
to Maturity of the Indebtedness being so redeemed, repurchased, acquired or
retired;


 


(C)        in the case of unsecured Indebtedness, such
new Indebtedness is unsecured, and in the case of secured Indebtedness, such
new Indebtedness is either unsecured or is Junior Lien Indebtedness pursuant to
the Junior Lien Intercreditor Agreement; and


 


(D)       the principal amount of such new Indebtedness
does not exceed the principal amount of (or accreted value, if applicable), plus
any accrued and unpaid interest on, the Indebtedness being so redeemed,
repurchased, acquired or retired, plus the amount of any premium (including
tender premiums) and any fees and expenses incurred in connection with such
issuance of new Indebtedness;


 


(iv)                              a Restricted Payment to pay for the repurchase, retirement or other
acquisition or retirement for value of common Equity Interests of the Borrower
or any of its direct or indirect parents held by any future, present or former
employee, director or consultant of the Borrower, any of its Subsidiaries or
any of its direct or indirect parents (or permitted transferees, assigns,
estates, or heirs of such employee, director or consultant) pursuant to any
management equity plan or stock option plan or any other management or employee
benefit plan or agreement; provided, however, that the aggregate Restricted
Payments made under this clause (iv) do not exceed $5.0 million in any
calendar year (with unused amounts in any calendar year being carried over to
the immediately succeeding calendar year; provided further that such amount in
any calendar year may be increased by an amount not to exceed:


 


(A)      the cash proceeds from the sale of Equity
Interests (other than Disqualified Stock) of the Borrower and, to the extent
contributed to the Borrower, Equity Interests of any of the Borrower’s direct
or indirect parents, in each case to members of management, directors or
consultants of the Borrower, any of its Subsidiaries or any of its direct or
indirect parents that occurred after the Closing Date, to the extent the cash
proceeds from the sale of such Equity Interests have not otherwise been applied
to the payment of Restricted Payments by virtue of Section 7.01(a)(vii);
plus


 


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(B)        the cash proceeds of key man life insurance
policies received by the Borrower and its Restricted Subsidiaries after the
Closing Date; less


 


(C)        the amount of any Restricted Payments
previously made pursuant to clauses (A) and (B) of this clause (iv);


 


(v)                                 the declaration and payment of dividends to holders of any class or
series of Disqualified Stock of the Borrower or any Restricted Subsidiary
issued in accordance with Section 7.02;


 


(vi)                              the declaration and payment of dividends to holders of any class or
series of Designated Preferred Stock (other than Disqualified Stock) issued by
the Borrower after the Closing Date;


 


(A)      provided that the aggregate amount of
dividends paid pursuant to this clause (A) shall not exceed the aggregate
amount of cash actually received by the Borrower from the sale of such
Designated Preferred Stock;


 


(B)        the declaration and payment of dividends to a
direct or indirect parent of the Borrower, the proceeds of which will be used
to fund the payment of dividends to holders of any class or series of
Designated Preferred Stock (other than Disqualified Stock) of such parent
issued after the Closing Date; provided, that the amount of dividends paid
pursuant to this clause (B) shall not exceed the aggregate amount of cash
actually contributed to the Borrower from the sale of such Designated Preferred
Stock;


 


(vii)                           repurchases of Equity Interests (i) constituting fractional shares
or (ii) deemed to occur upon exercise of stock options or warrants or
other securities convertible or exchangeable into Equity Interests if such
Equity Interests represent all or a portion of the exercise price of such
options or warrants;


 


(viii)                        the payment of dividends on the Borrower’s common equity or the dividend
or distribution to any direct or indirect parent company to fund the payment by
such parent company of dividends on its common stock, following the
consummation of the first public offering of the Borrower’s common stock or the
common stock of any of its direct or indirect parents after the Closing Date,
of up to 6% per annum of the net cash proceeds received by or contributed to
the Borrower in any public offering, other than public offerings with respect
to the Borrower’s or such direct or indirect parent company’s common stock
registered on Form S-8 and other than any public sale constituting an
Excluded Contribution;


 


(ix)                                Restricted Payments that are made with Excluded Contributions;


 


(x)                                   other Restricted Payments in an aggregate amount taken together with all
other Restricted Payments made pursuant to this clause (x) not to exceed
$20.0 million;


 


(xi)                                the declaration and payment of dividends by the Borrower to, or the
making of loans to, any direct or indirect parent company of the Borrower in
aggregate amounts not to exceed the aggregate amount required for any direct or
indirect parent company to pay, in each case without duplication;


 


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


 


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(B)        foreign, federal, state and local income
taxes, to the extent such income taxes are attributable to the income of the
Borrower and the Restricted Subsidiaries and, to the extent of the amount
actually received from its Unrestricted Subsidiaries, in amounts required to
pay such taxes to the extent attributable to the income of such Unrestricted
Subsidiaries; provided that in each case the amount of such payments in any
fiscal year does not exceed the amount that the Borrower and its Restricted
Subsidiaries would be required to pay in respect of foreign, federal, state and
local taxes for such fiscal year were the Borrower, its Restricted Subsidiaries
and its Unrestricted Subsidiaries (to the extent described above) to pay such
taxes separately from any such parent entity;


 


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


 


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


 


(E)         fees and expenses incurred by any direct or
indirect parent company of the Borrower in connection with any unsuccessful
equity issuances or incurrence of Indebtedness to the extent the net proceeds
thereof were intended to be contributed to the Borrower; and


 


(F)         taxes with respect to income of any direct or
indirect parent company of the Borrower derived from funding made available to the
Borrower and its Restricted Subsidiaries by such direct or indirect parent
company;


 


(xii)                             the repurchase, redemption or other acquisition or retirement for value
of any Indebtedness or the making of a dividend or distribution to any direct
or indirect parent of the Borrower to fund a similar purchase, redemption or
other acquisition or retirement for value required pursuant to provisions
similar to those described in Section 3.10 of the Senior Secured Note
Indenture (in which case a repurchase, redemption or other acquisition or
retirement price of not greater than 101% of the principal amount of such
Indebtedness) and under Section 3.5 of the Senior Secured Note Indenture;


 


(xiii)                          the distribution, as a dividend or otherwise, of (A) Equity
Interests of, or Indebtedness owed to the Borrower or a Restricted Subsidiary
by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries the primary
assets of which are cash and/or Cash Equivalents) and (B) any proceeds
received from an Unrestricted Subsidiary on account of such Equity Interests or
Indebtedness, provided, that, in the case of clause (B), such proceeds will be
excluded from EBITDA for purposes of Section 7.01(a)(vii)(A) and will
be excluded from Section 7.01(a)(vii)(E);


 


(xiv)                         Investments in joint ventures and Unrestricted Subsidiaries; provided
that the aggregate Restricted Payments made pursuant to this clause (xiv) do
not exceed the greater of (x) $20.0 million and (y) 1.0% of Total
Assets; provided that such amount shall be increased by an amount not to exceed
(A) the cash proceeds received as a dividend, distribution or otherwise
from such joint ventures and Unrestricted Subsidiaries (it being understood
that the forgiveness of any debt by such joint venture and Unrestricted
Subsidiary will not be a Restricted Payment hereunder) less (B) the amount
of any Restricted Payments previously made pursuant to subclause (A) of
this clause (xiv); provided, further, that such increased amount shall be
excluded from EBITDA for purposes of Section 7.01(a)(vii)(A) and
shall also be excluded from clauses Section 7.01(a)(vii)(D) and Section 7.01(a)(vii)(E);


 


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(xv)                            distributions or payments of Receivables Fees;


 


(xvi)                         the repurchase, redemption, acquisition or retirement of Indebtedness
with Unutilized Excess Collateral Proceeds or Unutilized Excess Proceeds; and


 


(xvii)                      Restricted Payments made in connection with the Emergence Transactions;


 


provided
however, that at the time of, and after giving effect to, any Restricted
Payment permitted under clauses (v), (vi), (x) and (xiii), no Default or
Event of Default shall have occurred and be continuing or would occur as a
consequence thereof.


 


(c)          Notwithstanding anything to the contrary in the foregoing, (i) Restricted
Investments of assets and property constituting Collateral (other than cash and
Cash Equivalents) made pursuant to Section 7.01(a) may only be made
in Subsidiary Guarantors and (ii) the Borrower will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, declare or pay any
dividend or make any distribution (whether cash or noncash) on account of the
Borrower’s Equity Interests or purchase or redeem, defease or otherwise acquire
or retire for value any Equity Interests of the Borrower or any direct or
indirect parent of the Borrower, in each case to or for the benefit of any
holder of common Equity Interests of the Borrower or any direct or indirect
parent of the Borrower, by means of (A) Section 7.01(a)(vii), (B) Section 7.01(b)(x),
Section 7.01(b)(xiii) or Section 7.01(b)(xiv) or (C) clause
(o) of the definition of “Permitted Investments,” unless in each case such
Restricted Payment is otherwise in compliance with this Agreement and at the
time of such Restricted Payment (x) the Consolidated Secured Debt Ratio
(calculated without giving effect to clause (1)(e) of the definition of
Consolidated Secured Debt Ratio) of the Borrower would have been no greater
than 3.25 to 1.00 on a pro forma basis (it being understood that the amount
calculated pursuant to clause (1) of the definition of Consolidated
Secured Debt Ratio will be reduced by the Liquidity of the Borrower and its
Restricted Subsidiaries in excess of $150.0 million for purposes of such
calculation) and (y) the Borrower and its Restricted Subsidiaries would
have Liquidity of no less than $100.0 million on a pro forma basis.


 


(d)         The
amount of all Restricted Payments (other than cash) will be the fair market
value (as determined in good faith by the Borrower) on the date of such
Restricted Payment of the assets or securities proposed to be paid, transferred
or issued by the Borrower or such Restricted Subsidiary, as the case may be,
pursuant to such Restricted Payment.


 


(e)          As of the Closing Date, all of the Borrower’s Subsidiaries will be
Restricted Subsidiaries. The Borrower will not permit any Unrestricted
Subsidiary to become a Restricted Subsidiary except pursuant to the last
sentence of the definition of “Unrestricted Subsidiary.” For purposes of
designating any Restricted Subsidiary as an Unrestricted Subsidiary, all
outstanding Investments by the Borrower and the Restricted Subsidiaries (except
to the extent repaid) in the Subsidiary so designated will be deemed to be
Restricted Payments in an amount determined as set forth in the last sentence
of the definition of “Investment.” Such designation will be permitted only if a
Restricted Payment in such amount would be permitted at such time, whether
pursuant to Section 7.01(a), Section 7.01(b)(ix) or Section 7.01(b)(x),
or pursuant to the definition of “Permitted Investments,” and if such
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.


 


Section 7.02                                Limitation on incurrence of Indebtedness and
issuance of Disqualified Stock and preferred stock.


 


(a)  The Borrower will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, create,
incur, issue, assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, (collectively, “incur” and collectively, an “incurrence”)
with respect to any


 


87

















 


Indebtedness
(including Acquired Indebtedness) and the Borrower will not issue any shares of
Disqualified Stock and will not permit any Restricted Subsidiary to issue any
shares of Disqualified Stock or preferred stock; provided, however, that the
Borrower may incur Indebtedness (including Acquired Indebtedness) or issue
shares of Disqualified Stock, and any Subsidiary Guarantor may incur
Indebtedness (including Acquired Indebtedness), issue shares of Disqualified
Stock and issue shares of preferred stock, if the Consolidated Leverage Ratio
of the Borrower and the Restricted Subsidiaries at the time such additional
Indebtedness is incurred or such Disqualified Stock or preferred stock is
issued would have been no greater than 5.00 to 1.00, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred, or the Disqualified Stock or preferred
stock had been issued, as the case may be, and the application of proceeds
therefrom had occurred at the beginning of the most recently ended four full
fiscal quarters for which internal financial statements are available.


 


(b)         The
foregoing limitations in paragraph (a) will not apply to:


 


(i)                                     the incurrence of (A) Indebtedness of any Loan Party pursuant to any
Loan Document, (B) Indebtedness under Credit Facilities by the Borrower or
any of the Subsidiary Guarantors and the issuance and creation of letters of
credit and bankers’ acceptances thereunder (with letters of credit and bankers’
acceptances being deemed to have a principal amount equal to the face amount
thereof), (C) Indebtedness under Credit Facilities of Foreign
Subsidiaries, (D) obligations under Secured Hedge Agreements or (E) Cash
Management Obligations; provided that the aggregate principal amount of
Indebtedness incurred under clauses (B), (C), (D) and (E) outstanding at
any one time shall not exceed $50.0 million less the aggregate amount of all
Net Proceeds of Asset Sales applied by the Borrower or any Restricted
Subsidiary since the Closing Date to permanently repay any Indebtedness under
Credit Facilities (and, in the case of revolving credit Indebtedness, to effect
a corresponding permanent reduction thereunder);


 


(ii)                                  the incurrence by the Borrower and any Subsidiary Guarantor of
Indebtedness represented by (i) the Senior Secured Notes issued on the
Issue Date (other than any Additional Notes), including any guarantee thereof,
and (ii) any Exchange Notes (including any guarantee thereof);


 


(iii)                               Existing Indebtedness (other than Indebtedness described in clauses (i) and
(ii));


 


(iv)                              Indebtedness (including Capitalized Lease Obligations), Disqualified
Stock and preferred stock incurred by the Borrower or any of the Subsidiary
Guarantors to finance the purchase, lease or improvement of property (real or
personal) or equipment that is used or useful in a Similar Business, whether
through the direct purchase of assets or the Capital Stock of any Person owning
such assets, in an aggregate principal amount which, when aggregated with the
principal amount of all other Indebtedness, Disqualified Stock and preferred
stock then outstanding and incurred pursuant to this clause (iv) and
including all Refinancing Indebtedness incurred to refund, refinance or replace
any other Indebtedness, Disqualified Stock and preferred stock incurred
pursuant to this clause (iv), does not exceed the greater of $20.0 million and
1.0% of Total Assets;


 


(v)                                 Indebtedness incurred by the Borrower or any Restricted Subsidiary
constituting reimbursement obligations with respect to letters of credit issued
in the ordinary course of business, including without limitation letters of
credit in respect of workers’ compensation claims, or other Indebtedness with
respect to reimbursement type obligations regarding workers’ compensation
claims, health, disability or other employee benefits, or property, casualty or
liability insurance or self insurance obligations in the ordinary course of
business; provided, however, that upon the drawing of such letters of credit or
the incurrence of such Indebtedness, such obligations are reimbursed within 30
days following such drawing or incurrence;


 


88

















 


(vi)                              Indebtedness arising from agreements of the Borrower or a Restricted
Subsidiary providing for and to the extent of indemnification, adjustment of
purchase price or similar obligations, in each case, incurred or assumed in
connection with the disposition or acquisition of any business, assets or a
Subsidiary, other than guarantees of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or a Subsidiary for the
purpose of financing such acquisition; provided that the maximum assumable
liability in respect of all such Indebtedness shall at no time exceed the gross
proceeds including noncash proceeds (the fair market value of such noncash
proceeds being measured at the time received and without giving effect to any
subsequent changes in value) actually received by the Borrower and the
Restricted Subsidiaries in connection with such disposition;


 


(vii)                           Indebtedness of the Borrower to a Subsidiary Guarantor; provided that any
subsequent issuance or transfer of any Capital Stock or any other event which
results in any such Subsidiary Guarantor ceasing to be a Subsidiary Guarantor
or any other subsequent transfer of any such Indebtedness (except to the
Borrower or another Guarantor) shall be deemed, in each case to be an
incurrence of such Indebtedness not permitted by this clause (vii);


 


(viii)                        Indebtedness of the Borrower or a Subsidiary Guarantor to a Restricted
Subsidiary that is not a Subsidiary Guarantor; provided that any such
Indebtedness is subordinated in right of payment to the Secured Obligations, as
applicable, provided further that any subsequent issuance or transfer of any
Capital Stock or any other event which results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent
transfer of any such Indebtedness (except to the Borrower or another Restricted
Subsidiary) shall be deemed, in each case, to be an incurrence of such
Indebtedness not permitted by this clause (viii);


 


(ix)                                Indebtedness of a Subsidiary Guarantor to the Borrower or another
Subsidiary Guarantor;


 


(x)                                   Indebtedness of a Restricted Subsidiary that is not a Subsidiary
Guarantor to the Borrower or a Restricted Subsidiary;


 


(xi)                                shares of preferred stock of a Restricted Subsidiary issued to the
Borrower or another Restricted Subsidiary; provided that any subsequent
issuance or transfer of any Capital Stock or any other event which results in
any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
other subsequent transfer of any such shares of preferred stock (except to the
Borrower or another Restricted Subsidiary) shall be deemed in each case to be
an issuance of such shares of preferred stock not permitted by this clause
(xi);


 


(xii)                             obligations under Swap Contracts (excluding obligations under Swap
Contracts entered into for speculative purposes) for the purpose of limiting:


 


(A)      interest rate risk with respect to any
Indebtedness permitted to be incurred or outstanding under the Senior Secured
Note Indenture; or


 


(B)        exchange rate risk with respect to any
currency exchange; or


 


(C)        commodity risk;


 


(xiii)                          obligations in respect of performance, bid, appeal and surety bonds and
other similar types of performance and completion guarantees provided by the
Borrower or any Restricted Subsidiary in the ordinary course of business;


 


89

















 


(xiv)                         (A)      any guarantee by the Borrower or a Subsidiary Guarantor of Indebtedness
or other obligations of any Restricted Subsidiary so long as the incurrence of
such Indebtedness incurred by such Restricted Subsidiary is permitted under the
terms of this Agreement; provided that if the Indebtedness being guaranteed is
subordinated to or pari passu with a Subsidiary Guarantee, then the guarantee
shall be subordinated or pari passu to the Obligations or Guarantor
Obligations, as applicable, to the same extent as the Indebtedness guaranteed;
or


 


(B)        any guarantee by a Restricted Subsidiary of
Indebtedness of the Borrower or a Subsidiary Guarantor; provided that such guarantee
is incurred in accordance with Section 7.13; or


 


(C)        any guarantee by a Restricted Subsidiary that
is not a Subsidiary Guarantor of Indebtedness of another Restricted Subsidiary
that is not a Subsidiary Guarantor;


 


(xv)                            the incurrence by the Borrower or any Restricted Subsidiary of
Indebtedness, Disqualified Stock or preferred stock which serves to refund or
refinance any Indebtedness, Disqualified Stock or preferred stock of the
Borrower or any Restricted Subsidiary incurred as permitted under Section 7.02(a) and
Section 7.02(b)(ii) and (b)(iii) above, this clause (xv) and
clause (xvi) below, including additional Indebtedness, Disqualified Stock or
preferred stock incurred to pay premiums (including tender premiums),
defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its
respective maturity; provided, however, that such Refinancing Indebtedness:


 


(A)      (1) has a Weighted Average Life to
Maturity at the time such Refinancing Indebtedness is incurred which is not less
than the lesser of (x) the remaining Weighted Average Life to Maturity of
the Indebtedness, Disqualified Stock or preferred stock being refunded or
refinanced and (y) the remaining Weighted Average Life to Maturity of the
Revolving Credit Loans and (2) does not have a maturity date prior to the
Maturity Date;


 


(B)        to the extent such Refinancing Indebtedness
refinances (i) Indebtedness subordinated or pari passu in right of payment
to the Secured Obligations, such Refinancing Indebtedness is subordinated or
pari passu in right of payment to the Secured Obligations at least to the same
extent as the Indebtedness being refinanced or refunded or (ii) Disqualified
Stock or preferred stock, such Refinancing Indebtedness must be Disqualified
Stock or preferred stock, respectively;


 


(C)        shall not be in an amount in excess the
principal amount (or accreted value, if applicable) or liquidation preference
of, plus any accrued and unpaid interest on, the Indebtedness being so refunded
or refinanced, plus the amount of any premium (including tender premiums),
defeasance costs and any related fees and expenses;


 


(D)       shall not have a final maturity date prior to
the final maturity date of the Indebtedness, Disqualified Stock or preferred
stock being refunded or refinanced; and


 


(E)         shall not include:


 


(1)          Indebtedness, Disqualified Stock or preferred stock of a Restricted
Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness,
Disqualified Stock or preferred stock of the Borrower or a Subsidiary Guarantor;
or


 


(2)          Indebtedness, Disqualified Stock or preferred stock of the Borrower or a
Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or
preferred stock of an Unrestricted Subsidiary;


 


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(xvi)                         (A)      Indebtedness, Disqualified Stock or preferred stock of Persons incurred
and outstanding on or prior to the date such Person was acquired by the
Borrower or any Restricted Subsidiary or merged into the Borrower or a
Restricted Subsidiary in accordance with the terms of this Agreement and (ii) Indebtedness
of the Borrower or any Restricted Subsidiary incurred in connection with or in
contemplation of, or to provide all or any portion of the funds or credit
support utilized to consummate, the acquisition by the Borrower or such
Restricted Subsidiary of property used or useful in a Similar Business (whether
through the direct purchase of assets or the purchase of Capital Stock of, or
merger or consolidation with, any Person owning such assets); provided that in
the case of both (i) and (ii), the Borrower would be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Consolidated Leverage
Ratio test set forth in paragraph (a) of this Section;


 


(xvii)                      Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business; provided that such Indebtedness is
extinguished within five business days of its incurrence;


 


(xviii)                   Indebtedness consisting of promissory notes issued by the Borrower or any
of its Restricted Subsidiaries to any current or former employee, director or
officer of the Borrower, any of its Restricted Subsidiaries or any of its
direct or indirect parents (or permitted transferees, assigns, estates, or
heirs of such employee, director or officer), to finance the purchase or
redemption of Equity Interests of the Borrower or any of its direct or indirect
parent companies permitted by Section 7.01; provided further, that such
indebtedness must be expressly subordinated in right of payment to the Secured
Obligations;


 


(xix)                           Indebtedness of the Borrower or any Restricted Subsidiary consisting of (i) the
financing of insurance premiums or (ii) take-or-pay obligations contained
in supply arrangements, in each case, in the ordinary course of business;


 


(xx)                              Indebtedness, Disqualified Stock and preferred stock of the Borrower and
the Restricted Subsidiaries not otherwise permitted hereunder in an aggregate
principal amount or liquidation preference, which when aggregated with the
principal amount and liquidation preference of all other Indebtedness,
Disqualified Stock and preferred stock then outstanding and incurred pursuant
to this clause (xx), does not at any one time outstanding exceed $35.0 million;
and


 


(xxi)                           Indebtedness of Foreign Subsidiaries in an aggregate amount not to exceed
$5.0 million at any time outstanding.


 


(c)          For purposes of determining compliance with this Section 7.03 in the
event that an item of Indebtedness, Disqualified Stock or preferred stock (or
any portion thereof) meets the criteria of more than one of the categories of
permitted Indebtedness, Disqualified Stock or preferred stock described in
clauses (b)(i) through (b)(xxi) above or is entitled to be incurred
pursuant to paragraph (a) of this Section, the Borrower shall, in its sole
discretion, classify or reclassify such item of Indebtedness, Disqualified
Stock or preferred stock (or any portion thereof) in any manner that complies with
this Section and such item of Indebtedness, Disqualified Stock or
preferred stock will be treated as having been incurred pursuant to only one of
such clauses or pursuant to paragraph (a) of this Section. Additionally,
all or any portion of any item of Indebtedness may later be reclassified as
having been incurred pursuant to any category of permitted Indebtedness
described in clauses (b)(i) through (b)(xxi) above or pursuant to
paragraph (a) of this Section so long as such Indebtedness is
permitted to be incurred pursuant to such provision at the time of
reclassifications, provided that all Indebtedness outstanding on the Closing
Date under this Agreement shall be deemed to have been incurred on such date in
reliance on the exception provided by clause (a) above and may not later
be reclassified. Accrual of interest, the accretion of accreted value, the
amortization of original issue discount and the payment of interest in the 


 


91

















 


form of additional Indebtedness,
Disqualified Stock or preferred stock will not be deemed to be an incurrence of
Indebtedness, Disqualified Stock or preferred stock for purposes of this
Section.


 


(d)         For
purposes of determining compliance with any U.S. dollar-denominated restriction
on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount
of Indebtedness denominated in a foreign currency shall be calculated based on
the relevant currency exchange rate in effect on the date such Indebtedness was
incurred, in the case of term debt, or first committed, in the case of
revolving credit debt; provided that if such Indebtedness is incurred to
refinance other Indebtedness denominated in a foreign currency, and such
refinancing would cause the applicable U.S. dollar-denominated restriction to
be exceeded if calculated at the relevant currency exchange rate in effect on
the date of such refinancing, such U.S. dollar-denominated restriction shall be
deemed not to have been exceeded so long as the principal amount of such refinancing
Indebtedness does not exceed the principal amount of such Indebtedness being
refinanced.


 


(e)          The principal amount of any Indebtedness incurred to refinance other
Indebtedness, if incurred in a different currency from the Indebtedness being
refinanced, shall be calculated based on the currency exchange rate applicable
to the currencies in which such respective Indebtedness is denominated that is
in effect on the date of such refinancing.


 


(f)            The Borrower will not, and will not permit any Subsidiary Guarantor to
directly or indirectly, incur any Indebtedness (including Acquired
Indebtedness) that is subordinated or junior in right of payment to any
Indebtedness of the Borrower or such Subsidiary Guarantor, as the case may be,
unless such Indebtedness is expressly subordinated in right of payment to the
Obligations or such Subsidiary Guarantor’s Guarantor Obligations to the extent
and in the same manner in all material respects and taken as a whole as such
Indebtedness is subordinated in right of payment to other Indebtedness of the
Borrower or such Subsidiary Guarantor as the case may be.


 


(g)         This
agreement will not treat (1) unsecured Indebtedness as subordinated or
junior to secured Indebtedness merely because it is unsecured or (2) senior
Indebtedness as subordinated or junior to any other senior Indebtedness merely
because it has a junior priority with respect to the same collateral or is
secured by different collateral.


 


Section 7.03                                Liens.  The Borrower will not, and will not permit
any of the Restricted Subsidiaries to, create, incur, assume or otherwise cause
or suffer to exist or become effective any Lien (other than Permitted Liens)
upon any of their property or assets, now owned or hereafter acquired, or upon
any income or profits therefrom.


 


Section 7.04                                Merger, Consolidation or Sale of All or
Substantially All Assets.


 


(a)          The Borrower may not consolidate or merge with or into or wind up into
(whether or not the Borrower is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of the
properties or assets of the Borrower and the Restricted Subsidiaries, taken as
a whole, in one or more related transactions, to any Person unless:


 


(i)                                     the Borrower is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than the Borrower) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
will have been made is a corporation, limited liability company or limited
partnership organized or existing under the laws of the United States, any
state thereof, the District of Columbia, or any territory thereof; provided
that if such Person is not a corporation, such Person shall be required to
cause a subsidiary of such Person that is a corporation to be a co-obligor of
the Obligations (such Person, as the case may be, being herein called the “Successor Borrower”);


 


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(ii)           the Successor Borrower, if other than
the Borrower, expressly assumes all the obligations of such Borrower under this
Agreement and the Collateral Documents pursuant to a supplement to this
Agreement or other documents, agreements or instruments in form reasonably
satisfactory to the Administrative Agent and shall cause such amendments,
supplements or other instruments to be executed, filed, and recorded in such
jurisdictions as may be required by applicable law to preserve and protect the
Lien on the Collateral owned by or transferred to the Successor Borrower,
together with such financing statements or comparable documents as may be
required to perfect any security interests in such Collateral which may be
perfected by the filing of a financing statement or a similar document under
the Uniform Commercial Code or other similar statute or regulation of the
relevant states or jurisdictions;


 


(iii)          immediately after such transaction no
Default or Event of Default exists;


 


(iv)          immediately after giving pro forma
effect to such transaction, as if such transaction had occurred at the
beginning of the applicable four-quarter period, the Successor Borrower would
be permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Consolidated Leverage Ratio test set forth in Section 7.02;


 


(v)           each Guarantor, unless it is a
Subsidiary Guarantor that is the other party to the transactions described
above, in which (a)(ii) above shall apply, shall have by supplement to
this Agreement confirmed that its Guarantee shall apply to such Person’s
obligations under this Agreement and its obligations under the Collateral
Documents shall continue to be in effect and shall cause such amendments,
supplements or other instruments to be executed, filed and recorded in such
jurisdictions as may be required by applicable law to preserve and protect the
Lien on the Collateral owned by such Guarantor, together with such financing
statements or comparable documents as may be required to perfect any security
interests in such Collateral which may be perfected by the filing of a
financing statement or a similar document under the Uniform Commercial Code or
other similar statute or regulation of the relevant states or jurisdictions;


 


(vi)          the Borrower shall have delivered to the
Administrative Agent an Officers’ Certificate and an Opinion of Counsel, each
stating that such consolidation, merger or transfer and such supplements, if
any, comply with this Agreement and, if a supplement to this Agreement or any
supplement to any Collateral Document is required in connection with such
transaction, such supplement shall comply with the applicable provisions of
this Agreement and the Collateral Documents;


 


(vii)         to the extent any assets of the Person
which is merged or consolidated with or into the Successor Borrower are assets
of the type which would constitute Collateral under the Collateral Documents,
the Successor Borrower will take such other actions as may be reasonably
necessary to cause such property and assets to be made subject to the Lien of
the Collateral Documents in the manner and to the extent required in this
Agreement or any of the Collateral Documents and shall take all reasonably
necessary action so that such Lien is perfected to the extent required by the
Collateral Documents; and


 


(viii)        the Collateral owned by or transferred
to the Successor Borrower shall:


 


(A)  continue
to constitute Collateral under this Agreement and the Collateral Documents,


 


(B)   be
subject to the Lien in favor of the Collateral Agent for the benefit of the
Collateral Agent, the Administrative Agent and the other Secured Parties; and


 


(C)   not be
subject to any Lien other than Permitted Liens.


 


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(b)   The Successor Borrower will succeed to, and be
substituted for such Borrower under this Agreement and the Obligations and the
Borrower (if not the Successor Borrower) will be fully released from its
obligations under this Agreement and the Collateral Documents but, in the case
of a lease of all or substantially all its assets, the Borrower will not be
released from the obligation to pay the principal of and interest on the
Obligations.


 


(c)   In addition, the Borrower will not, directly
or indirectly, lease all or substantially all of the properties and assets of
it and its Restricted Subsidiaries taken as a whole, in one or more related
transactions, to any other Person.


 


(d)   Notwithstanding the foregoing clauses (a)(iii) and
(a)(iv),


 


(i)            any Restricted Subsidiary that is
not a Subsidiary Guarantor may consolidate with, merge into or transfer all or
part of its properties and assets to the Borrower or any Restricted Subsidiary;


 


(ii)           any Subsidiary Guarantor may
consolidate with, merge into or transfer all or part of its properties and
assets to the Borrower or a Subsidiary Guarantor; and


 


(iii)          the Borrower may merge with an
Affiliate incorporated solely for the purpose of reincorporating the Borrower
in another State of the United States.


 


(e)   For purposes of this Section, the sale,
lease, conveyance, assignment, transfer, or other disposition of all or
substantially all of the properties and assets of one or more Subsidiaries of
the Borrower, which properties and assets, if held by the Borrower instead of
such Subsidiaries, would constitute all or substantially all of the properties
and assets of the Borrower on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Borrower.


 


(f)    Notwithstanding anything to the contrary
herein, any Subsidiary with a value of less than $250,000 may liquidate or
dissolve or change its legal form if the Borrower determines in good faith that
such action is in the best interests of the Borrower and its Subsidiaries and
is not materially disadvantageous to the interests of the Secured Parties.


 


Section 7.05           Limitations
on Guarantors.  (a) 
Subject to certain limitations described in this Agreement governing release of
a Guarantee upon the sale, disposition or transfer of a Subsidiary Guarantor,
each Guarantor will not, and the Borrower will not permit any Subsidiary
Guarantor to, consolidate or merge with or into or wind up into (whether or not
such Guarantor is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, any Person unless:


 


(i)            (A)such Guarantor is the surviving
corporation or the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) or to which such sale, assignment,
transfer, lease, conveyance or other disposition will have been made is a
corporation, partnership, trust or limited liability company organized or
existing under the laws of the United States, any state thereof, the District
of Columbia, or any territory thereof (such Guarantor or such Person, as the
case may be, being herein called the “Successor
Person”);


 


(B)   the
Successor Person, if other than such Guarantor, expressly assumes all the
obligations of such Guarantor under this Agreement, such Guarantor’s Guarantor
Obligations and the Collateral Documents pursuant to supplemental indentures or
other documents or instruments in form reasonably satisfactory to the
Administrative Agent and shall cause such amendments, supplements or other
instruments to be executed, filed, and recorded in such jurisdictions as may 


 


94

















 


be required by applicable law to preserve and
protect the Lien on the Collateral owned by or transferred to the Successor
Person, together with such financing statements or comparable documents as may
be required to perfect any security interests in such Collateral which may be
perfected by the filing of a financing statement or a similar document under
the Uniform Commercial Code or other similar statute or regulation of the
relevant states or jurisdictions;


 


(C)   immediately
after such transaction (and treating any Indebtedness which becomes an
obligation of the Successor Person or any Restricted Subsidiary as a result of
such transaction as having been incurred by the Successor Person or such
Restricted Subsidiary at the time of such transaction), no Default or Event of
Default exists;


 


(D)  the
Borrower shall have delivered to the Administrative Agent an Officers’
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indentures, amendments, supplements or
other instruments relating to the applicable Collateral Documents if any,
comply with this Agreement and the Collateral Documents, if a supplemental
indenture or any supplement to any Security Document is required in connection
with such transaction, such supplement shall comply with the applicable
provisions of this Agreement;


 


(E)   to the
extent any assets of the Person which is merged and consolidated with or into
the Successor Person are assets of the type which would constitute Collateral
under the applicable Collateral Documents, the Successor Person will take such
other actions as may be reasonably necessary to cause such property and assets
to be made subject to the Lien of the Collateral Documents in the manner and to
the extent required in this Agreement or any of the Collateral Documents and
shall take all reasonably necessary action so that such Lien is perfected to
the extent required by the Collateral Documents; and


 


(F)   the
Collateral owned by or transferred to the Successor Person shall:


 


(1)   continue to constitute Collateral under this
Agreement and the Collateral Documents;


 


(2)   be subject to the Lien in favor of the
Collateral Agent for the benefit of the Collateral Agent, the Administrative
Agent and the Secured Parties;


 


(3)   not be subject to any Lien other than
Permitted Liens; and


 


(ii)           the transaction is made in compliance
with Section 7.08.


 


(b)   Subject to certain limitations described in
this Agreement, the Successor Person will succeed to, and be substituted for,
such Guarantor under this Agreement and such Guarantor’s Guarantor Obligations
but, in the case of a lease of all or substantially all its assets, the
Guarantor will not be released from its obligations under its Guarantee.
Notwithstanding the foregoing any Subsidiary Guarantor may merge into or
transfer all or part of its properties and assets to another Subsidiary Guarantor
or the Borrower.


 


Section 7.06           Transactions
with Affiliates.  (a) 
The Borrower will not, and will not permit any Restricted Subsidiary to, make
any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate of the Borrower
(each of the foregoing, an “Affiliate Transaction”),
unless:


 


95

















 


(i)            such Affiliate Transaction is on
terms that are not materially less favorable to the Borrower or the relevant
Restricted Subsidiary than those that would have been obtained in a comparable transaction
by the Borrower or such Restricted Subsidiary with an unrelated Person on an
arm’s-length basis; and


 


(ii)           the Borrower delivers to the
Administrative Agent (A) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate payments or
consideration in excess of $15.0 million, a resolution adopted by the majority
of the Board of Directors of the Borrower approving such Affiliate Transaction
and set forth in an Officers’ Certificate that (x) such Affiliate
Transaction has been approved by a majority of the disinterested members of the
Board of Directors, if any, and (y) that such Affiliate Transaction
complies with clause (A) above; and (B) with respect to any Affiliate
Transactions or series of related Affiliate Transactions involving aggregate
payments or consideration in excess of $25.0 million, a letter from an
Independent Financial Advisor stating that such transaction is fair to the
Borrower or such Restricted Subsidiary from a financial point of view.


 


(b)   The foregoing provisions will not apply to
the following:


 


(i)            transactions between or among the
Borrower and/or any of the Restricted Subsidiaries;


 


(ii)           Restricted Payments permitted by Section 7.01
and the definition of “Permitted Investments” (other than pursuant to clauses
(c), (d) and (o) thereof);


 


(iii)          the payment of reasonable fees and
compensation paid to, and indemnities provided on behalf of, (and entering into
related agreements with) officers, directors, employees or consultants of the
Borrower, any of its direct or indirect parents or any Restricted Subsidiary;


 


(iv)          transactions in which the Borrower or
any Restricted Subsidiary, as the case may be, delivers to the Administrative
Agent a letter from an Independent Financial Advisor stating that such
transaction is fair to the Borrower or such Restricted Subsidiary from a
financial point of view;


 


(v)           payments or loans (or cancellation of
loans) to employees or consultants of the Borrower, any of its direct or
indirect parents or any Restricted Subsidiary which are approved by a majority
of the Board of Directors of the Borrower in good faith and in accordance with
applicable law;


 


(vi)          any agreement as in effect as of the
Closing Date, or any amendment thereto (so long as any such amendment is not
disadvantageous to the Secured Parties in any material respect) or payments
made thereunder or the performance thereof or any transaction contemplated
thereby;


 


(vii)         the existence of, or the performance by
the Borrower or any Restricted Subsidiaries of its obligations under the terms
of, any equityholders agreement (including any registration right agreement or
purchase agreements related thereto) to which it is party as of the Closing
Date and any similar agreement that it may enter into thereafter; provided,
however, that the existence of, or the performance by the Borrower or any
Restricted Subsidiary of its obligations under any future amendment to the
equityholders’ agreement or under any similar agreement entered into after the
Closing Date will only be permitted under this clause (vii) to the extent
that the terms of any such amendment or new agreement are not otherwise
disadvantageous to the Secured Parties in any material respects;


 


(viii)        transactions with customers, clients,
suppliers, or purchasers or sellers of goods or services, in each case in the
ordinary course of business and otherwise in compliance with the terms of this
Agreement which are fair to the Borrower and the Restricted Subsidiaries, in
the reasonable 


 


96

















 


determination of the Board
of Directors of the Borrower or the senior management thereof, or are on terms
at least as favorable as might reasonably have been obtained at such time in
arm’s length negotiations with an unaffiliated third party;


 


(ix)           transactions with a Person (other
than an Unrestricted Subsidiary of the Borrower) that is an Affiliate of the
Borrower solely because the Borrower or a Restricted Subsidiary of the Borrower
owns an equity interest in or otherwise controls such Person;


 


(x)            any purchases by the Borrower’s
Affiliates of Indebtedness of the Borrower or any of its Restricted
Subsidiaries the majority of which Indebtedness is offered to Persons who are
not Affiliates and the Affiliate of the Borrower purchases such Indebtedness on
similar terms;


 


(xi)           any issuance or sale of Equity
Interests (other than Disqualified Stock) to Affiliates of the Borrower and the
granting of registration and other customary rights in connection therewith or
any contribution to capital of direct or indirect parent companies, the
Borrower or any Restricted Subsidiary;


 


(xii)          any issuance of securities, or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment arrangements, stock options and stock ownership plans
approved by the Board of Directors of the Borrower in good faith;


 


(xiii)         sales of accounts receivable, or
participations therein, in connection with any Receivables Facility; and


 


(xiv)        transactions contemplated by the
Reorganization Plan and the related confirmation order.


 


Section 7.07           Dividend
and Other Payment Restrictions Affecting Restricted Subsidiaries.


 


(a)   The Borrower will not, and will not permit
any Restricted Subsidiary to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or consensual
restriction on the ability of any such Restricted Subsidiary to:


 


(i)            pay dividends or make any other
distributions to the Borrower or any Restricted Subsidiary on its Capital Stock
or with respect to any other interest or participation in, or measured by, its
profits, or pay any Indebtedness owed to the Borrower or any Restricted
Subsidiary;


 


(ii)           make loans or advances to the
Borrower or any Restricted Subsidiary; or


 


(iii)          sell, lease or transfer any of its
properties or assets to the Borrower or any Restricted Subsidiary.


 


(b)   The foregoing limitations in paragraph (a) will
not apply (in each case) to encumbrances or restrictions existing under or by
reason of:


 


(i)            contractual encumbrances or
restrictions in effect on the Closing Date, including pursuant to this
Agreement and the related documentation as in effect on the Closing Date and
any amendments, restatements, modifications, renewals, supplements, refundings,
replacements or refinancings of those agreements; provided that the amendments,
restatements, modifications, renewals, supplements, refundings, replacements or
refinancings are not materially more restrictive, taken as a 


 


97

















 


whole, with respect to
such dividend and other payment restrictions than those contained in those
agreements on the Closing Date;


 


(ii)           the Senior Secured Notes Indenture;


 


(iii)          purchase money obligations for
property acquired in the ordinary course of business that impose restrictions
of the nature discussed in clause (c) above on the property so acquired;


 


(iv)          applicable law or any applicable rule,
regulation or order;


 


(v)           any agreement or other instrument of
a Person acquired by the Borrower or any Restricted Subsidiary in existence at
the time of such acquisition (but not created in contemplation thereof), which
encumbrance or restriction is not applicable to any Person, or the properties
or assets of any Person, other than the Person, or the property or assets of
the Person, so acquired provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Agreement to be incurred;


 


(vi)          contracts for the sale of assets,
including, without limitation, customary restrictions with respect to a
Subsidiary pursuant to an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary that impose restrictions on the assets to be sold;


 


(vii)         secured Indebtedness otherwise
permitted to be incurred pursuant to Section 7.02 and Section 7.03
that limit the right of the debtor to dispose of the assets securing such
Indebtedness;


 


(viii)        restrictions on cash or other deposits
or net worth imposed by customers under contracts entered into in the ordinary
course of business;


 


(ix)           other Indebtedness, Disqualified
Stock or preferred stock of Foreign Subsidiaries permitted to be incurred
subsequent to the Closing Date pursuant to Section 7.02 that impose
restrictions solely on the Foreign Subsidiaries party thereto or their
Subsidiaries;


 


(x)            customary provisions in joint
venture agreements and other similar agreements relating solely to such joint
venture provided that with respect to any joint venture agreement relating to a
Restricted Subsidiary, such provisions will not materially affect the Borrower’s
ability to make anticipated payments on the Obligations (as determined in good
faith by the Board of Directors of the Borrower);


 


(xi)           customary provisions contained in
leases, licenses and other agreements entered into in the ordinary course of
business;


 


(xii)          any agreement or instrument (A) relating
to any Indebtedness or preferred stock of a Restricted Subsidiary permitted to be
incurred subsequent to the Closing Date pursuant to Section 7.02 if the
encumbrances and restrictions are not materially more disadvantageous to the
Secured Parties than is customary in comparable financings (as determined in
good faith by the Borrower) and (B) either (x) the Borrower
determines that such encumbrance or restriction will not adversely affect the
Borrower’s ability to make payments on the Obligations as and when they come
due or (y) such encumbrances and restrictions apply only during the continuance
of a default in respect of a payment or financial maintenance covenant relating
to such Indebtedness;


 


98

















 


(xiii)         restrictions created in connection with
any Receivables Facility that, in the good faith determination of the Board of
Directors of the Borrower, are necessary or advisable to effect such
Receivables Facility; and


 


(xiv)        any encumbrances or restrictions of the
type referred to in clauses (a)(i), a(ii) and (a)(iii) above imposed
by any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (i) through (xiii) above;
provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are, in the
good faith judgment of the Borrower’s Board of Directors, not materially more
restrictive taken as a whole with respect to such encumbrance and other restrictions
than those prior to such amendment, modification, restatement, renewal,
increase, supplement, refunding, replacement or refinancing.


 


Section 7.08           Asset
Sales.  (a)  (i)  The
Borrower will not, and will not permit any Restricted Subsidiary to, cause or
make an Asset Sale of Collateral, unless:


 


(A)  the
Borrower or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value (as determined in good faith by the Borrower on the date of contractually
agreeing to such Asset Sale) of the assets sold or otherwise disposed of;


 


(B)   85% of
the consideration therefor received by the Borrower or such Restricted
Subsidiary, as the case may be, is in the form of cash, Cash Equivalents or
Replacement Assets of a type which would constitute Collateral (which are
thereupon with their acquisition added to the Collateral securing the Secured
Obligations in the manner and to the extent required in this Agreement or any
of the Collateral Documents) or a combination of the foregoing;


 


(C)   to the
extent that any consideration received by the Borrower or a Restricted
Subsidiary in such Asset Sale constitutes securities or other assets that are
of a type or class that constitutes Collateral, such securities or other
assets, including the assets of any Person that becomes a Subsidiary Guarantor
as a result of such transaction, are concurrently with their acquisition added
to the Collateral securing the Secured Obligations in the manner and to the extent
required in this Agreement or any of the Collateral Documents; and


 


(D)  the Net
Proceeds from any such Asset Sale of Collateral is paid directly by the
purchaser thereof to the Collateral Agent to be held in trust in a Collateral
Account for application in accordance with this Section.


 


(ii)           Notwithstanding the foregoing
provisions of the above clause (i), the Borrower and the Restricted
Subsidiaries will not be required to cause any Net Proceeds to be held in an
Collateral Account in accordance with clause (a)(i)(C) above except to the
extent the aggregate Net Proceeds from all Asset Sales of Collateral which are
not held in a Collateral Account, or have not been previously applied in
accordance with the provisions of the following clauses relating to the
application of Net Proceeds from Asset Sales of Collateral, exceed $5.0
million.


 


(iii)          Any Net Proceeds deposited into the
Collateral Account from any Asset Sale of Collateral may be withdrawn to be
invested by the Borrower or a Guarantor in Replacement Assets constituting
Collateral within 365 days of the date of such Asset Sale, which Replacement
Assets are thereupon with their acquisition added to the Collateral securing
the Secured Obligations; provided that the Replacement Assets shall not include
the Capital Stock of Foreign Subsidiaries for purposes of this 


 


99

















 


requirement unless the
relevant Asset Sale consisted of the sale of the Capital Stock of a Foreign
Subsidiary.


 


(iv)          All of the Net Proceeds received from
any Recovery Event in respect of Collateral shall be deposited directly into
the Collateral Account and may be withdrawn to pay Priority Payment Lien
Obligations in accordance with the proviso of clause (v) below or be
invested by the Borrower or a Guarantor in Replacement Assets (which may
include performance of a restoration of the affected Collateral) within 365
days of the date of such Recovery Event, which Replacement Assets are thereupon
with their acquisition added to the Collateral securing the Secured
Obligations; provided, that (x) the Borrower shall not be required to
deposit in the Collateral Account the Net Proceeds in an aggregate amount of
$5.0 million or less and (y) Replacement Assets shall not include the
Capital Stock of Foreign Subsidiaries for purposes of this requirement.


 


(v)           Any Net Proceeds from Asset Sales of
Collateral or Recovery Events that are not applied or invested as provided in
this paragraph (a) or in accordance with the Collateral Documents will be
deemed to constitute “Excess Collateral
Proceeds.”  On or before the
366th day after an Asset Sale or Recovery Event pursuant to this paragraph (a),
if the aggregate amount of Excess Collateral Proceeds exceeds $20.0 million,
the Borrower may make an offer (“Collateral
Disposition Offer”) to all holders of the Specified Notes and all
holders of other Pari Passu Payment Lien Obligations containing provisions
similar to those set forth in the Senior Secured Note Indenture with respect to
offers to purchase or redeem with the proceeds of sales of Collateral to
purchase the maximum principal amount of the Specified Notes and such Pari
Passu Payment Lien Obligations (on a pro rata basis) to which the Collateral
Disposition Offer applies that may be purchased out of the Excess Collateral
Proceeds, at an offer price in cash in an amount equal to 100% of the principal
amount of the Specified Notes, plus accrued and unpaid interest to the date of
purchase, in accordance with the procedures set forth in the Senior Secured Note
Indenture; provided, that the Borrower may, prior
to making a Collateral Disposition Offer, repay, repurchase, redeem or acquire
the maximum principal amount of Indebtedness that is Priority Payment Lien Obligations (and to correspondingly reduce
the commitments with respect thereto) secured by such Collateral that may be
repaid, repurchased, redeemed or acquired out of such Net Proceeds, plus
accrued and unpaid interest, to the date of prepayment, with any Excess
Collateral Proceeds not used to repay, repurchase, redeem or acquire such
Indebtedness offered to holders of the Specified Notes in accordance with this
clause (after giving effect to the repayment, repurchase, redemption or
acquisition of Priority Payment Lien Obligations).  To the extent that the aggregate amount of
Specified Notes and other Pari Passu Payment Lien Obligations so validly
tendered and not properly withdrawn pursuant to a Collateral Disposition Offer
is less than the Excess Collateral Proceeds, the Borrower may use any remaining
Excess Collateral Proceeds (“Unutilized
Excess Collateral Proceeds”) in any manner not prohibited by this
Agreement.  Upon completion of such
Collateral Disposition Offer, the amount of Excess Collateral Proceeds shall be
reset at zero.


 


(b)   (i)  The Borrower will not, and will not
permit any Restricted Subsidiary to, directly or indirectly consummate an Asset
Sale (other than Asset Sales of Collateral which shall be treated in the manner
set forth in paragraph (a) above), unless:


 


(A)  the
Borrower or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value (as determined in good faith by the Borrower on the date of contractually
agreeing to such Asset Sale) of the assets sold or otherwise disposed of;


 


(B)   at least
75% of the consideration therefor received by the Borrower or such Restricted
Subsidiary, as the case may be, is in the form of cash, Cash Equivalents or
Replacement Assets or a combination of the foregoing; and


 


100

















 


(C)   to the
extent that any consideration received by the Borrower or a Restricted
Subsidiary in such Asset Sale constitutes securities or other assets that are
of a type or class that constitutes Collateral, such securities or other
assets, including the assets of any Person that becomes a Subsidiary Guarantor
as a result of such transaction, are concurrently with their acquisition added
to the Collateral securing the Secured Obligations in the manner and to the
extent required in this Agreement or any of the Collateral Documents.


 


(ii)           Within 365 days after the Borrower’s
or a Restricted Subsidiary’s receipt of Net Proceeds from an Asset Sale subject
to this clause (b), the Borrower or such Restricted Subsidiary, at its option,
may apply such Net Proceeds from such Asset Sale:


 


(A)  to repay
Priority Payment Lien Obligations (and to correspondingly reduce commitments
with respect thereto) and Indebtedness of the applicable Restricted Subsidiary
(if such Restricted Subsidiary is not a Guarantor);


 


(B)   to make
an investment in (1) any one or more businesses; provided that such
investment in any business is in the form of the acquisition of Capital Stock
of such business such that it constitutes a Restricted Subsidiary, (2) capital
expenditures or (3) acquisitions of other assets (other than current
assets), in each of (1), (2) and (3), used or useful in a Similar
Business; provided, further, that, to the extent such investment is of the type
which would constitute Collateral under the applicable Collateral Documents,
such investment is concurrently added to the Collateral securing the Revolving
Credit Loans in the manner and to the extent required in this Agreement or any
of the Collateral Documents; and/or


 


(C)   to make
an investment in (a) any one or more businesses; provided that such
investment in any business is in the form of the acquisition of Capital Stock
of such business such that it constitutes a Restricted Subsidiary, (b) properties
or (c) other assets that, in each of (a), (b) and (c), replace the
businesses, properties and assets that are the subject of such Asset Sale;
provided, further, that, to the extent such investment is of the type which
would constitute Collateral under the applicable Collateral Documents, such
investment is concurrently added to the Collateral securing the Secured
Obligations in the manner and to the extent required in this Agreement or any
of the Collateral Documents.


 


(iii)          Pending the final application of any
Net Proceeds from Asset Sales in accordance with clauses (1) through (3) above,
the Borrower and the Restricted Subsidiaries may temporarily reduce
Indebtedness or otherwise apply such Net Proceeds in any manner not prohibited
by this Agreement. Any binding commitment to apply Net Proceeds to invest in
accordance with clauses (ii)(B) or (ii)(C) above shall be treated as
a permitted final application of Net Proceeds from the date of such commitment
so long as the Borrower or such Restricted Subsidiary enters into such commitment
with the good faith expectation that such Net Proceeds will be applied to
satisfy such commitment within 180 days of such commitment; provided that if
such commitment is later canceled, terminated or otherwise not consummated
during such period for any reason, then such Net Proceeds shall constitute “Excess
Proceeds” (as defined in clause (iv) below).


 


(iv)          Any Net Proceeds from Asset Sales
covered by this clause (b) that are not invested or applied as provided
and within the time period set forth above will be deemed to constitute “Excess Proceeds.”  When the aggregate amount of Excess Proceeds
exceeds $20.0 million, the Borrower may make an offer to all holders of the
Specified Notes, and, at the Borrower’s option, to the holders of any Pari
Passu Payment Lien Obligations (an “Asset
Sale Offer”) containing provisions similar to those set forth in the
Senior Secured Note Indenture with respect to offers to purchase or redeem with
the proceeds of sales of assets, to purchase the maximum principal amount of
Specified Notes and Pari Passu Payment 


 


101

















 


Lien Obligations that may
be purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date fixed for the closing of such offer, in
accordance with the procedures set forth in the Senior Secured Note
Indenture.  To the extent that the
aggregate amount of Specified Notes and such Pari Passu Payment Lien
Obligations tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Borrower may use any remaining Excess Proceeds (which shall also
constitute “Unutilized Excess Proceeds”)
for any purpose not prohibited by the terms of this Agreement.  Upon completion of any such Asset Sale Offer,
the amount of Excess Proceeds shall be reset at zero.  After the Borrower or any Restricted
Subsidiary has applied the Net Proceeds from any Asset Sale as provided in, and
within the time periods required by, this paragraph (b), any Unutilized Excess
Proceeds may be released by the Collateral Agent to the Borrower or such
Restricted Subsidiary for use by the Borrower or such Restricted Subsidiary for
any purpose not prohibited by this Agreement.


 


(c)   For purposes of clauses (a) and (b) of
this Section, (i) any liabilities (other than Pari Passu Payment Lien
Obligations, Disqualified Stock and Indebtedness the repayment of which would
constitute a Restricted Payment) (as shown on the Borrower’s, or such Restricted
Subsidiary’s, most recent balance sheet or in the notes thereto) of the
Borrower or any Restricted Subsidiary that are assumed by the transferee of any
such assets and for which the Borrower and all Restricted Subsidiaries have
been validly released by all creditors in writing; and (ii) any securities
or other obligations received by the Borrower or such Restricted Subsidiary
from such transferee that are converted by the Borrower or such Restricted
Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash
Equivalents received) within 180 days following the closing of such Asset Sale
shall be deemed to be cash or Cash Equivalents.


 


(d)   In addition for purposes of clause (b) of
this Section only, any Designated Noncash Consideration received by the
Borrower or any Restricted Subsidiary in such Asset Sale having an aggregate
fair market value, taken together with all other Designated Noncash
Consideration received pursuant to this clause (c) that is at that time
outstanding, not to exceed 1.0% of Total Assets with the fair market value of
each item of Designated Noncash Consideration being measured at the time
received and without giving effect to subsequent changes in value, shall be
deemed to be cash or Cash Equivalents.


 


Section 7.09           Prepayments, Etc.
of Indebtedness.  The
Borrower will not, and will not permit any Restricted Subsidiary to, directly
or indirectly:


 


(a) prepay,
redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity
thereof in any manner (it being understood that payments of regularly scheduled
interest shall be permitted) any unsecured Indebtedness, any Junior Lien
Indebtedness or any Indebtedness that is required to be subordinated to the
Obligations pursuant to the terms of the Loan Documents (collectively, “Junior Financing”) or make any payment in violation of any
subordination terms of any Junior Financing Documentation, except the
refinancing thereof with Refinancing Indebtedness otherwise permitted under Section 7.02(b)(xv);


 


(b)   amend, modify or change in any manner
materially adverse to the interests of the Lenders (i) any term or
condition of the Senior Secured Notes, the Senior Secured Note Indenture,
documentation governing Pari Passu Payment Lien Obligations or any Junior
Financing Documentation or (ii) any Organization Document of any Group
Member, in any case without the consent of the Administrative Agent; or


 


(c)   amend, modify or otherwise change Section 3.2(b)(1) of
the Senior Secured Note Indenture or clause (26) of the definition of “Permitted
Liens” in the Senior Secured Note Indenture.


 


102






 










 


Section 7.10           Holding
Company.  Holdings shall not conduct,
transact or otherwise engage in any business or operations other than (i) its
ownership of all of the Equity Interests in, and its management of, the
Borrower, (ii) action required by law to maintain its existence, (ii)
performance of its obligations under this Agreement, the Senior Secured Note
Indenture, the Collateral Documents and the other agreements contemplated
thereby, (v) any public offering of its common stock, (vi) activities incidental
to its maintenance and continuance and to any of the foregoing activities and
(vii) other activities to the extent permitted by, and in compliance with, this
Agreement.


 


Section 7.11           Payments
for Consent.  The
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, pay or cause to be paid any consideration to or for the benefit of
any Lender for or as an inducement to any consent, waiver or amendment of any
of the terms or provisions of this Agreement unless such consideration is
offered to be paid and is paid to all Lenders that consent, waive or agree to
amend in the time frame set forth in the solicitation documents relating to
such consent, waiver or amendment.


 


Section 7.12           Limitation
on Lines of Business.  The Borrower
will not, and will not permit any Restricted Subsidiary to, engage in any
business other than a Similar Business.


 


Section 7.13           Limitation
on Guarantees of Indebtedness by Restricted Subsidiaries.


 


(a)   The Borrower will not permit any Restricted
Subsidiary that is not a Subsidiary Guarantor or a special-purpose Restricted
Subsidiary formed in connection with Receivables Facilities, to guarantee the
payment of any Indebtedness of the Borrower or any other Guarantor unless:


 


(i)            such Restricted Subsidiary executes
and delivers within 10 Business Days joinders or supplements to this Agreement
and the Collateral Documents providing for a first-priority secured guarantee
of payment of the Obligations by such Restricted Subsidiary, except if such
Indebtedness is by its express terms subordinated in right of payment to the
Obligations or such Subsidiary Guarantor’s Guarantor Obligations, any such
guarantee of such Restricted Subsidiary with respect to such Indebtedness shall
be subordinated in right of payment to such Restricted Subsidiary’s Guarantor
Obligations substantially to the same extent as such Indebtedness is
subordinated in right of payment to the Obligations or such Subsidiary
Guarantor’s Guarantor Obligations;


 


(ii)           such Restricted Subsidiary waives and
will not in any manner whatsoever claim or take the benefit or advantage of,
any rights of subrogation in relation to the Secured Parties in respect of any
payment by such Restricted Subsidiary under its guarantee until payment in full
of the Secured Obligations (other than contingent indemnification and
contingent expense reimbursement obligations and Secured Obligations in respect
of Secured Hedge Agreements and Cash Management Obligations that are not due
and payable);


 


(iii)          such Restricted Subsidiary shall take
such action as may be reasonably necessary to cause its property and assets
that are of the type which would constitute Collateral under the Collateral
Documents to be made subject to the Lien of the Collateral Documents in the
manner and to the extent required in this Agreement or any of the Collateral
Documents and shall take all reasonably necessary action so that such Lien is
perfected to the extent required by this Agreement and the Collateral
Documents; and


 


(iv)          such Restricted Subsidiary shall
deliver to the Administrative Agent an Opinion of Counsel to the effect that:


 


(A)  such
Guarantee of the Obligations has been duly executed and authorized; and


 


103

















 


(B)   such
Guarantee of the Obligations constitutes a valid, binding and enforceable
obligation of such Restricted Subsidiary, except insofar as enforcement thereof
may be limited by bankruptcy, insolvency or similar laws (including, without
limitation, all laws relating to fraudulent transfers) and except insofar as
enforcement thereof is subject to general principles of equity;


 


provided that this
paragraph (a) shall not be applicable to any guarantee of any Restricted
Subsidiary that existed at the time such Person became a Restricted Subsidiary
and was not incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary to the extent it is not incurred pursuant to a
syndicated loan, registered offering of securities under the Securities Act or
a private placement of securities (including under Rule 144A) pursuant to an
exemption from the registration requirements of the Securities Act.


 


(b)   Notwithstanding the foregoing and the other
provisions of this Agreement, any Guarantee by a Restricted Subsidiary of the
Obligations shall provide by its terms that it shall be automatically and
unconditionally released and discharged upon:


 


(i)            any sale, exchange or transfer (by
merger or otherwise) of Capital Stock of such Subsidiary Guarantor following
which the applicable Subsidiary Guarantor is no longer a Restricted Subsidiary
or all or substantially all the assets of such Subsidiary Guarantor (other than
by lease), which sale, exchange or transfer is made in compliance with the
applicable provisions of this Agreement and all the obligations of such
Subsidiary Guarantor in respect of all Indebtedness of the Borrower or the
Subsidiary Guarantors terminate upon consummation of such transaction;


 


(ii)           the release or discharge of the
guarantee by such Restricted Subsidiary which resulted in the creation of such
Guarantee if such Subsidiary Guarantor would not then otherwise be required to
guarantee the Obligations pursuant to this Agreement provided, that if such
Restricted Subsidiary has incurred any Indebtedness or issued any preferred
stock or Disqualified Stock in reliance on its status as a Guarantor under
Section 7.02, such Restricted Subsidiary’s obligations under such Indebtedness,
Disqualified Stock or preferred stock, as the case may be, so incurred are
satisfied in full and discharged or are otherwise permitted to be incurred by a
Restricted Subsidiary (other than a Subsidiary Guarantor) under Section 7.02;
except a discharge or release by or as a result of payment under such
guarantee;


 


(iii)          if such Subsidiary Guarantor is
designated as an Unrestricted Subsidiary or otherwise ceases to be a Restricted
Subsidiary, in each case in accordance with the provisions of this Agreement,
upon effectiveness of such designation or when it first ceases to be a
Restricted Subsidiary, respectively; or


 


(iv)          if the Secured Obligations under this
Agreement are discharged in accordance with the terms of this Agreement (other
than contingent indemnification and contingent expense reimbursement
obligations and Secured Obligations in respect of Secured Hedge Agreements and
Cash Management Obligations).


 


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Section 7.14   Financial
Condition Covenant. Other than during a Suspension Period, the
Borrower will not permit the Senior Secured Leverage Ratio as of any day to be
greater than the ratio set forth below opposite the last day of the fiscal
quarter in which such day falls:


 


	
  Date

  	
   

  	
  Senior Secured

  Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2010

  	
   

  	
  4.50 : 1.00

  	
   

  
	
  June 30, 2010

  	
   

  	
  4.50 : 1.00

  	
   

  
	
  September 30, 2010

  	
   

  	
  4.50 : 1.00

  	
   

  
	
  December 31, 2010

  	
   

  	
  4.50 : 1.00

  	
   

  
	
  March 31, 2011

  	
   

  	
  4.25 : 1.00

  	
   

  
	
  June 30, 2011

  	
   

  	
  4.25 : 1.00

  	
   

  
	
  September 30, 2011

  	
   

  	
  4.00 : 1.00

  	
   

  
	
  December 31, 2011

  	
   

  	
  4.00 : 1.00

  	
   

  
	
  March 31, 2012

  	
   

  	
  3.75 : 1.00

  	
   

  
	
  June 30, 2012

  	
   

  	
  3.75 : 1.00

  	
   

  
	
  September 30, 2012

  	
   

  	
  3.75 : 1.00

  	
   

  
	
  December 31, 2012

  	
   

  	
  3.75 : 1.00

  	
   

  



 


Section 7.15           Receivables.  The Borrower will not, and will not permit
any Restricted Subsidiary that is a Domestic Subsidiary, to sell its accounts
receivable to a Person that is not a Restricted Subsidiary in connection with
any receivables financing facility.


 


Section 7.16           Accounting
Changes.  The Borrower will not make any
change in its fiscal year, (i) except as required by GAAP and (ii) except the
change to December 31 and any related changes.


 


ARTICLE
VIII


 


EVENTS OF
DEFAULT AND REMEDIES


 


Section 8.01           Events
of Default.  Any of the
following shall constitute an Event of Default:


 


(a)   Non-Payment.  The Borrower or any other Loan Party fails to
pay (i) when and as required to be paid herein, any amount of principal of
any Loan, or (ii) within three (3) Business Days after the same becomes
due, any interest or any other amount payable hereunder or with respect to any
other Loan Document; or


 


(b)   Specific Covenants.  Any Group Member fails to perform or observe
(or to cause the performance or observance of) any term, covenant or agreement
contained in any of Sections 6.04(a), 6.06 (solely with respect to Holdings and
the Borrower) or Section 6.16 or Article VII or Section 4.5 or 4.7(b) of the
Security Agreement; or


 


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(c)   Other Defaults.  Any Group Member fails to perform or observe
(or to cause the performance or observance of) any other covenant or agreement
(not specified in Section 8.01(a) or (b) above) contained in any Loan Document
on its part to be performed or observed and such failure continues for thirty
(30) days after written notice thereof by the Administrative Agent or the
Required Lenders to the Borrower; or


 


(d)   Representations and
Warranties.  Any
representation, warranty, certification or statement of fact made or deemed
made by or on behalf of the Borrower or any other Loan Party herein, in any
other Loan Document, or in any document required to be delivered in connection
herewith or therewith shall be incorrect or misleading in any material respect
when made or deemed made; or


 


(e)   Cross-Default.  Any Group Member (A) fails to make any
payment beyond the applicable grace period with respect thereto, if any
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise) in respect of any Indebtedness (other than Indebtedness hereunder)
having an aggregate principal amount of not less than the Threshold Amount, or
(B) fails to observe or perform any other agreement or condition contained in
any instrument or agreement evidencing, governing, securing or otherwise
relating to any such Indebtedness, or any other “default” (or like term)
occurs, the effect of which failure or other “default” is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause,
with the giving of notice if required, such Indebtedness to become due
(automatically or otherwise) prior to its stated maturity (or, in the case of
any such Indebtedness constituting a guarantee, to become payable); provided,
that this clause (e)(B) shall not apply to secured Indebtedness that becomes
due as a result of the voluntary sale or transfer of the property or assets
securing such Indebtedness, if such sale or transfer is permitted hereunder and
under the documents providing for such Indebtedness; provided,
further, that this clause (e) shall not
apply in respect of (x) any Indebtedness of any Designated Non-Debtor that
becomes due or payable, or is capable of becoming due or payable, prior to its
stated maturity, or (y) any non-payment in respect of any Indebtedness by any
Designated Non-Debtor, in each case to the extent caused by or directly
resulting from the institution of any proceeding under any Debtor Relief Law in
respect of such Designated Non-Debtor; or


 


(f)    Insolvency Proceedings,
Etc.  Any Group Member other
than a Designated Non-Debtor institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator, administrator,
administrative receiver or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator, administrator, administrative receiver or similar
officer is appointed without the application or consent of such Person and the
appointment continues undischarged or unstayed for sixty (60) calendar days; or
any proceeding under any Debtor Relief Law relating to any such Person or to
all or any material part of its property is instituted without the consent of
such Person and continues undismissed or unstayed for sixty (60) calendar days,
or an order for relief approving or ordering any of the foregoing is entered in
any such proceeding (to avoid any doubt, it being understood and agreed that
none of the foregoing shall be applicable to commencement of a process relating
to Mandataire ad Hoc or an
appointment of a Mandataire pursuant
to French laws); or


 


(g)   Inability to Pay Debts; Attachment. 
(i)  Any Group Member other than a Designated Non-Debtor
becomes generally unable or admits in writing its inability generally or fails
generally to pay its debts in excess of the Threshold Amount as they become
due, or (ii) any writ or warrant of attachment or execution or similar process
is issued or levied against all or any material part of the property of any
Group Member, and is not released, vacated or fully bonded within sixty (60)
days after its issue or levy; or


 


106

















 


(h)   Judgments.  (i) One or more judgments or decrees shall be
entered against any Group Member involving in the aggregate a liability (not
paid or fully covered by insurance as to which the relevant insurance company
has not disputed coverage) of an amount exceeding the Threshold Amount, and all
such judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within thirty (30) days from the entry thereof; or (ii)
there shall be rendered against any Group Member a nonmonetary judgment with
respect to any event which causes or could reasonably be expected to have a
Material Adverse Effect; or


 


(i)    ERISA.  (i)  An ERISA Event occurs with
respect to a Pension Plan or Multiemployer Plan which has resulted or could
reasonably be expected to result in liability of any Loan Party under Title IV
of ERISA in an aggregate amount which could reasonably be expected to result in
a Material Adverse Effect, (ii) any Loan Party or any ERISA Affiliate fails to
pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount
which could reasonably be expected to result in a Material Adverse Effect,
(iii) any Loan Party or any ERISA Affiliate engages in any “prohibited
transaction” (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Pension Plan which could reasonably be expected to
result in a Material Adverse Effect, or (iv) other than the matters disclosed
in Schedule 5.11(c), any other event or condition shall occur or exist with
respect to a Pension Plan, a Foreign Benefit Arrangement or Foreign Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect; or


 


(j)    Change of Control.  There occurs any Change of Control; or


 


(k)   Invalidity of Liens.  Any of the Collateral Documents shall cease,
for any reason, to be in full force and effect, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Liens created by any
Collateral Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby other than by reason of the release
thereof in accordance with the terms thereof; or


 


(l)    Invalidity of Guarantees.  The Guarantees contained in this Agreement
shall cease, for any reason, to be in full force and effect or any Loan Party
or Affiliate of any Loan Party shall so assert in writing (it being understood
and agreed that the discharge of a Guarantor from this Agreement in accordance
with the terms hereof shall not be construed as the Guarantee(s) in this
Agreement ceasing to be in full force and effect); or


 


(m)  Junior Financing
Documentation.  Any of the
Obligations of the Loan Parties under the Loan Documents for any reason shall
cease to be “Senior Indebtedness” (or any comparable term) or “Senior Secured
Financing” (or any comparable term) under, and as defined in any Junior
Financing Documentation.


 


Section 8.02           Remedies
Upon Event of Default.  If
any Event of Default occurs and is continuing, the Administrative Agent may
and, at the request of the Required Lenders, shall take any or all of the
following actions:


 


(a)   declare the Revolving Credit Commitment of
each Lender to make Loans and any obligation of the L/C Issuers to make L/C
Credit Extensions to be terminated, whereupon such commitments and obligation
shall be terminated;


 


(b)   declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to 


 


107

















 


be immediately due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by the Borrower; and


 


(c)   require that the Borrower Cash Collateralize
the L/C Obligations (in an amount equal to the then Outstanding Amount
thereof); and


 


(d)   exercise on behalf of itself and the Lenders
all rights and remedies available to it and the Lenders under the Loan
Documents or applicable Law;


 


provided that upon the
occurrence of an Event of Default specified in Section 8.01(f) with respect to
the Borrower, the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable, the Revolving Credit Commitments shall automatically terminate, any
obligation of the L/C Issuers to make L/C Credit Extensions shall automatically
terminate and the obligation of the Borrower to Cash Collateralize the L/C
Obligations as aforesaid shall automatically become effective without further
act of the Administrative Agent or any Lender.


 


Section 8.03           Application
of Funds.  After the
exercise of remedies provided for in Section 8.02 (or after the Loans have
automatically become immediately due and payable as set forth in the proviso to
Section 8.02), any amounts received on account of the Obligations shall be
applied by the Administrative Agent in the following order:


 


First, to payment of that portion of the Obligations
constituting fees, indemnities, expenses and other amounts (other than
principal and interest, but including Attorney Costs payable under Section
11.04 and amounts payable under Article III) payable to the Administrative
Agent in its capacity as such;


 


Second, to payment of that portion of the Obligations
constituting fees, indemnities and other amounts (other than principal and
interest) payable to the Lenders (including Attorney Costs payable under
Section 11.04 and amounts payable under Article III), ratably among them in
proportion to the amounts described in this clause Second payable to them;


 


Third, to payment of that portion of the Obligations
constituting accrued and unpaid interest on the Loans and L/C Borrowings,
ratably among the holders of such Obligations in proportion to the respective
amounts described in this clause Third
payable to them;


 


Fourth, to payment of that portion of the Obligations
constituting unpaid principal of the Loans and L/C Borrowings, the termination
value under Secured Hedge Obligations (including any interest with respect
thereto) and Cash Management Obligations and to Cash Collateralize the portion
of the L/C Obligations comprised of the aggregate undrawn amount of Letters of
Credit, ratably among the holders of such Obligations in proportion to the
respective amounts described in this clause Fourth
held by them;


 


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


 


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


 


108

















 


Subject
to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn
amount of Letters of Credit pursuant to clause Fourth
above shall be applied to satisfy drawings under such Letters of Credit as they
occur.  If any amount remains on deposit
as Cash Collateral after all Letters of Credit have either been fully drawn or
expired, such remaining amount shall be applied to the other Obligations, if
any, in the order set forth above and, if no Obligations remain outstanding, to
the Borrower.


 


Notwithstanding
anything to the contrary in this Agreement, amounts received from any Foreign
Subsidiary on account of the Obligations of any Foreign Subsidiary shall be applied
solely to the payment of Obligations of Foreign Subsidiaries.


 


ARTICLE IX


 


ADMINISTRATIVE
AGENT AND OTHER AGENTS


 


Section 9.01           Appointment
and Authorization of Agents.  (a)  Each Lender hereby irrevocably
appoints, designates and authorizes the Administrative Agent to take such
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall have no duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against the Administrative Agent. 
Without limiting the generality of the foregoing sentence, the use of
the term “agent” herein and in the other Loan Documents with reference to any
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable Law.  Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.


 


(b)   Each L/C Issuer shall act on behalf of the
Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith, and each such L/C Issuer shall have all of the benefits and
immunities (i) provided to the Agents in this Article IX with respect to any
acts taken or omissions suffered by such L/C Issuer in connection with Letters
of Credit issued by it or proposed to be issued by it and the applications and
agreements for letters of credit pertaining to such Letters of Credit as fully
as if the term “Agent” as used in this Article IX and in the definition of “Agent-Related
Person” included such L/C Issuer with respect to such acts or omissions, and
(ii) as additionally provided herein with respect to such L/C Issuer.


 


(c)   The Collateral Agent shall act as the “collateral
agent” under the Loan Documents, and each of the Lenders (in its capacities as
a Lender, L/C Issuer (if applicable) and a potential Hedge Bank) hereby
irrevocably appoints and authorizes the Collateral Agent to act as the agent of
(and to hold any security interest created by the Collateral Documents for and
on behalf of or on trust for) such Lender for purposes of acquiring, holding
and enforcing any and all Liens on Collateral granted by any of the Loan
Parties to secure any of the Obligations, together with such powers and
discretion as are reasonably incidental thereto.  In this connection, the Collateral Agent, as “collateral
agent” (and any co-agents, sub-agents and attorneys-in-fact appointed by the
Administrative Agent pursuant to Section 9.02 for purposes of holding or
enforcing any Lien on the Collateral (or any portion thereof) granted under the
Collateral Documents, or for exercising any rights and remedies thereunder at
the direction of the Administrative Agent), shall be entitled to the benefits
of all provisions of this Article IX (including, Section 9.07, as 


 


109

















 


though such co-agents,
sub-agents and attorneys-in-fact were the “collateral agent” under the Loan
Documents) as if set forth in full herein with respect thereto.


 


Section 9.02           Delegation
of Duties.  The
Administrative Agent may execute any of its duties under this Agreement or any
other Loan Document (including for purposes of holding or enforcing any Lien on
the Collateral (or any portion thereof) granted under the Collateral Documents
or of exercising any rights and remedies thereunder) by or through agents,
employees or attorneys-in-fact and such sub-agents as shall be deemed necessary
by the Administrative Agent and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such
duties.  The Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or sub-agent
or attorney-in-fact that it selects in the absence of gross negligence or
willful misconduct (as determined in the final non-appealable judgment of a
court of competent jurisdiction).


 


Section 9.03           Liability
of Agents.  No
Agent-Related Person shall (a) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct, as determined by the final judgment of a
court of competent jurisdiction, in connection with its duties expressly set
forth herein), or (b) be responsible in any manner to any Lender or participant
for any recital, statement, representation or warranty made by any Loan Party
or any officer thereof, contained herein or in any other Loan Document, or in
any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or the perfection or priority of any Lien or security interest
created or purported to be created under the Collateral Documents, or for any
failure of any Loan Party or any other party to any Loan Document to perform
its obligations hereunder or thereunder. 
No Agent-Related Person shall be under any obligation to any Lender or
participant to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any Loan
Party or any Affiliate thereof.


 


Section 9.04           Reliance
by Agents. 
(a)  Each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to any Loan Party),
independent accountants and other experts selected by such Agent.  Each Agent shall be fully justified in
failing or refusing to take any action under any Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such
action.  Each Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of the
Required Lenders (or such greater number of Lenders as may be expressly
required hereby in any instance) and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders.


 


(b)   For purposes of determining compliance with
the conditions specified in Article IV, each Lender that has signed this
Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless
the Administrative Agent shall have received notice from such Lender prior to
the proposed Closing Date specifying its objection thereto.


 


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Section 9.05           Notice
of Default.  The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default, except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Administrative Agent
for the account of the Lenders, unless the Administrative Agent shall have
received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default and stating that such notice is a “notice of
default.”  The Administrative Agent will
notify the Lenders of its receipt of any such notice.  The Administrative Agent shall take such
action with respect to any Event of Default as may be directed by the Required
Lenders in accordance with Article VIII; provided that unless and until the
Administrative Agent has received any such direction, the Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Event of Default as it shall deem advisable
or in the best interest of the Lenders.


 


Section 9.06           Credit
Decision; Disclosure of Information by Agents.  Each Lender expressly acknowledges that no
Agent-Related Person has made any representation or warranty to it, and that no
act by any Agent hereafter taken, including any consent to and acceptance of
any assignment or review of the affairs of any Loan Party or any Affiliate
thereof, shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Lender as to any matter, including whether
Agent-Related Persons have disclosed material information in their
possession.  Each Lender represents to
each Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower and the other Loan Parties hereunder.  Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to
make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Loan Parties.  Except for notices, reports and other
documents expressly required to be furnished to the Lenders by any Agent
herein, such Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of any
of the Loan Parties or any of their respective Affiliates which may come into
the possession of any Agent-Related Person.


 


Section 9.07           Indemnification
of Agents.  Whether or
not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand each Agent-Related Person (to the extent not reimbursed
by or on behalf of any Loan Party and without limiting the obligation of any
Loan Party to do so), pro rata, and hold harmless each Agent-Related Person
from and against any and all Indemnified Liabilities incurred by it; provided that no Lender shall be liable for the payment to
any Agent-Related Person of any portion of such Indemnified Liabilities
resulting from such Agent-Related Person’s own gross negligence or willful
misconduct, as determined by the final non-appealable judgment of a court of
competent jurisdiction; provided that no action taken in accordance with the
directions of the Required Lenders (or such other number or percentage of the
Lenders as shall be required by the Loan Documents) shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section
9.07.  In the case of any investigation, litigation
or proceeding giving rise to any Indemnified Liabilities, this Section 9.07
applies whether any such investigation, litigation or proceeding is brought by
any Lender or any other Person.  Without
limitation of the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether 


 


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through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrower.  The undertaking in this Section 9.07 shall
survive the termination of the Aggregate Commitments, the payment of all
Obligations and the resignation of the Administrative Agent.


 


Section 9.08           Agents
in their Individual Capacities.  JPMorgan Chase Bank and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits
from, acquire Equity Interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with each of the Loan
Parties and their respective Affiliates as though JPMorgan Chase Bank were not
the Administrative Agent or an L/C Issuer hereunder and without notice to or
consent of the Lenders.  The Lenders
acknowledge that, pursuant to such activities, JPMorgan Chase Bank or its
Affiliates may receive information regarding any Loan Party or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Loan Party or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information
to them.  With respect to its Loans, JPMorgan
Chase Bank shall have the same rights and powers under this Agreement as any
other Lender and may exercise such rights and powers as though it were not the
Administrative Agent or an L/C Issuer, and the terms “Lender” and “Lenders”
include JPMorgan Chase Bank in its individual capacity.


 


Section 9.09           Successor
Agents.  The Administrative Agent may
resign as the Administrative Agent upon thirty (30) days’ notice to the Lenders
and the Borrower.  If the Administrative
Agent resigns under this Agreement, the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders.  If no successor agent is appointed prior to
the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders, a
successor agent, which shall be a Lender or a bank with an office in New York,
New York or an Affiliate of such Lender or bank.  Upon the acceptance of its appointment as
successor agent hereunder, the Person acting as such successor agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and the term “Administrative Agent,” shall mean such successor
administrative agent and/or supplemental administrative agent, as the case may
be, and the retiring Administrative Agent’s appointment, powers and duties as
the Administrative Agent shall be terminated. 
After the retiring Administrative Agent’s resignation hereunder as the
Administrative Agent, the provisions of this Article IX and Sections 11.04 and
11.05 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was the Administrative Agent under this Agreement.  If no successor agent has accepted
appointment as the Administrative Agent by the date which is thirty (30) days
following the retiring Administrative Agent’s notice of resignation, the
retiring Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. 
Upon the acceptance of any appointment as the Administrative Agent
hereunder by a successor and upon the execution and filing or recording of such
financing statements, or amendments thereto, and such amendments or supplements
to the Mortgages, and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to (a) continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents or (b) otherwise ensure that the Collateral and Guarantee Requirement
is satisfied, the Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges, and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under the Loan Documents.  After the retiring Administrative Agent’s
resignation hereunder as the Administrative Agent, the provisions of this Article
IX shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent.


 


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Section 9.10                                Administrative Agent May File Proofs of
Claim.  In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to any Loan
Party, the Administrative Agent (irrespective of whether the principal of any
Loan or L/C Obligation shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise:


 


(a)          to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of the Lenders and
the Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative
Agent and their respective agents and counsel and all other amounts due the
Lenders and the Administrative Agent under Sections 2.08 and 11.04) allowed in
such judicial proceeding; and


 


(b)         to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;


 


and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to the Administrative Agent and, in the event that
the Administrative Agent shall consent to the making of such payments directly
to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the Agents and
their respective agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.08 and 11.04.


 


Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such proceeding.


 


Section 9.11                                Collateral and Guarantee Matters.  The Lenders irrevocably agree:


 


(a)          that any Lien on any property granted to or held by the Administrative
Agent under any Loan Document shall be automatically released (i) upon
termination of the Aggregate Commitments and payment in full of all Obligations
(other than (x) obligations under Secured Hedge Agreements, (y) Cash
Management Obligations and (z) contingent reimbursement and
indemnification obligations, in each case, not yet accrued and payable) and the
expiration or termination of all Letters of Credit, (ii) at the time the
property subject to such Lien is transferred or to be transferred as part of or
in connection with any transfer permitted hereunder or under any other Loan
Document to any Person other than a Loan Party, (iii) subject to Section 11.01,
if the release of such Lien is approved, authorized or ratified in writing by
the Required Lenders (or such greater number of Lenders as may be required
pursuant to Section 11.01), or (iv) if the property subject to such
Lien is owned by a Guarantor, upon release of such Guarantor from its
obligations under its Guaranty hereunder pursuant to clause (c) below;


 


(b)         (i) to
release or subordinate any Lien on any property granted to or held by the
Collateral Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 7.03 and (ii) that the
Collateral Agent is authorized (but not required) to release or subordinate any
Lien on any property granted to or held by the Collateral Agent under any Loan
Document to the holder of any other Lien on such property that is permitted by Section 7.03;
and


 


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(c)          that any Guarantor shall be automatically released from its obligations
hereunder and under the Security Agreement in accordance with Section 7.13(b).


 


Upon
request by the Administrative Agent at any time, the Required Lenders (or such
greater number of Lenders as may be required pursuant to Section 11.01)
will confirm in writing the Collateral Agent’s authority to release or
subordinate its interest in particular types or items of property, or to
release any Guarantor from its obligations hereunder and under the Security
Agreement pursuant to this Section 9.11. 
In each case as specified in this Section 9.11, the Collateral
Agent will (and each Lender irrevocably authorizes the Collateral Agent to), at
the Borrower’s expense, execute and deliver to the applicable Loan Party such
documents as such Loan Party may reasonably request to evidence the release or
subordination of such item of Collateral from the assignment and security
interest granted under the Collateral Documents, or to evidence the release of
such Guarantor from its obligations hereunder and under the Security Agreement,
in each case in accordance with the terms of the Loan Documents and this Section 9.11.


 


Section 9.12                                Other Agents; Arrangers and Managers.  None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as
a “syndication agent,” “bookrunner” or “lead arrangers” shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. 
Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender.  Each Lender acknowledges that it
has not relied, and will not rely, on any of the Lenders or other Persons so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.


 


Section 9.13                                Appointment of Supplemental Administrative
Agents.  (a)  It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any Law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction.  It is recognized that in
case of litigation under this Agreement or any of the other Loan Documents, and
in particular in case of the enforcement of any of the Loan Documents, or in
case the Administrative Agent deems that by reason of any present or future Law
of any jurisdiction it may not exercise any of the rights, powers or remedies
granted herein or in any of the other Loan Documents or take any other action
which may be desirable or necessary in connection therewith, the Administrative
Agent is hereby authorized to appoint an additional individual or institution
selected by the Administrative Agent in its sole discretion as a separate
trustee, co-trustee, administrative agent, collateral agent, administrative
sub-agent or administrative co-agent (any such additional individual or
institution being referred to herein individually as a “Supplemental
Administrative Agent” and collectively as “Supplemental
Administrative Agents”).


 


(b)         In
the event that the Administrative Agent appoints a Supplemental Administrative
Agent with respect to any Collateral, (i) each and every right, power,
privilege or duty expressed or intended by this Agreement or any of the other
Loan Documents to be exercised by or vested in or conveyed to the
Administrative Agent with respect to such Collateral shall be exercisable by
and vest in such Supplemental Administrative Agent to the extent, and only to
the extent, necessary to enable such Supplemental Administrative Agent to
exercise such rights, powers and privileges with respect to such Collateral and
to perform such duties with respect to such Collateral, and every covenant and
obligation contained in the Loan Documents and necessary to the exercise or
performance thereof by such Supplemental Administrative Agent shall run to and
be enforceable by either the Administrative Agent or such Supplemental
Administrative Agent, and (ii) the provisions of this Article IX and
of Sections 11.04 and 11.05 that refer to the Administrative Agent shall inure
to the benefit of such Supplemental Administrative Agent and all references
therein to the Administrative Agent shall be deemed to be 


 


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references to the
Administrative Agent and/or such Supplemental Administrative Agent, as the
context may require.


 


(c)          Should any instrument in writing from the Borrower, Holdings or any other
Loan Party be required by any Supplemental Administrative Agent so appointed by
the Administrative Agent for more fully and certainly vesting in and confirming
to him or it such rights, powers, privileges and duties, the Borrower or
Holdings, as applicable, shall, or shall cause such Loan Party to, execute,
acknowledge and deliver any and all such instruments promptly upon request by
the Administrative Agent.  In case any
Supplemental Administrative Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Administrative Agent, to the extent permitted
by Law, shall vest in and be exercised by the Administrative Agent until the appointment
of a new Supplemental Administrative Agent.


 


ARTICLE X


 


GUARANTEE


 


Section 10.01                          Guarantee.  (a)   Each
of the Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Administrative Agent, for the ratable benefit of
the Secured Parties and their respective successors and permitted indorsees,
transferees and assigns, the prompt and complete payment and performance by the
Borrower when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.


 


(b)         Anything
herein or in any other Loan Document to the contrary notwithstanding, the
maximum liability of each Guarantor hereunder and under the other Loan
Documents shall in no event exceed the amount which can be guaranteed by such
Guarantor under applicable federal and state laws relating to the insolvency of
debtors (after giving effect to the right of contribution established in Section 10.02.


 


(c)          Each Guarantor agrees that the Obligations may at any time and from time
to time exceed the amount of the liability of such Guarantor hereunder without
impairing the guarantee contained in this Article X or affecting the
rights and remedies of the Administrative Agent or any Lender hereunder.


 


(d)         The
guarantee contained in this Article X shall remain in full force and
effect until all the Obligations and the obligations of each Guarantor under
the guarantee contained in this Article X (other than contingent
indemnification and contingent expense reimbursement obligations and any
Obligations in respect of Secured Hedge Agreements and Cash Management
Obligations that are not due and payable) shall have been satisfied by payment
in full and the Commitments shall be terminated, notwithstanding that from time
to time during the term of this Agreement the Borrower may be free from any
Obligations.


 


(e)          No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Lender from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Guarantor hereunder
which shall, notwithstanding any such payment (other than any payment made by
such Guarantor in respect of the Obligations or any payment received or
collected from such Guarantor in respect of the Obligations), remain liable for
the Obligations up to the maximum liability of such Guarantor hereunder until
the Obligations are paid in full (other than contingent indemnification and 


 


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contingent expense
reimbursement obligations and any Obligations in respect of Secured Hedge
Agreements and Cash Management Obligations that are not due and payable) and
the Commitments are terminated.


 


Section 10.02                          Right of Contribution.  Each Subsidiary Guarantor hereby agrees that
to the extent that a Subsidiary Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder which has not paid its proportionate share of
such payment.  Each Subsidiary Guarantor’s
right of contribution shall be subject to the terms and conditions of Section 10.03.  The provisions of this Section 10.02
shall in no respect limit the obligations and liabilities of any Subsidiary
Guarantor to the Administrative Agent and the Lenders, and each Subsidiary
Guarantor shall remain liable to the Administrative Agent and the Lenders for
the full amount guaranteed by such Subsidiary Guarantor hereunder.


 


Section 10.03                          No Subrogation.  Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Obligations, nor shall any Guarantor seek or be entitled to
seek any contribution or reimbursement from the Borrower or any other Guarantor
in respect of payments made by such Guarantor hereunder, until all amounts
owing to the Administrative Agent and the Lenders by the Borrower on account of
the Obligations are paid in full and the Commitments are terminated.  If any amount shall be paid to any Guarantor
on account of such subrogation rights at any time when all of the Obligations
shall not have been paid in full, such amount shall be held by such Guarantor
in trust for the Administrative Agent and the Lenders, segregated from other
funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor,
be turned over to the Administrative Agent in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if
required), to be applied against the Obligations, whether matured or unmatured,
in such order as the Administrative Agent may determine.  For the avoidance of doubt, nothing in the
foregoing shall operate as a waiver of any subrogation rights.


 


Section 10.04                          Amendments, etc. with Respect to the
Obligations.  To the
fullest extent permitted by applicable law, each Guarantor shall remain
obligated hereunder notwithstanding that, without any reservation of rights
against any Guarantor and without notice to or further assent by any Guarantor,
any demand for payment of any of the Obligations made by the Administrative
Agent or any Lender may be rescinded by the Administrative Agent or such Lender
and any of the Obligations continued, and the Obligations, or the liability of
any other Person upon them or for any part thereof, or any collateral security
or guarantee therefor or right of offset with respect thereto, may, from time
to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Lender, and this Agreement and the other Loan Documents and any
other documents executed and delivered in connection herewith or therewith may
be amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Required Lenders or all Lenders, as the case may
be) may reasonably deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Administrative
Agent or any Lender for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released.  Neither
the Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Obligations or for the guarantee contained in this Article X or any
property subject thereto.


 


Section 10.05                          Guarantee Absolute and Unconditional.  To the fullest extent permitted by applicable
law, each Guarantor waives any and all notice of the creation, renewal,
extension or accrual 


 


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of any of the Obligations and notice of or proof of
reliance by the Administrative Agent or any Lender upon the guarantee contained
in this Article X or acceptance of the guarantee contained in this Article X;
the Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Article X; and all dealings
between the Borrower and any of the Guarantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Article X. 
To the fullest extent permitted by applicable law, each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or any of the Guarantors with respect to the
Obligations.  Each Guarantor understands
and agrees that the guarantee contained in this Article X, to the fullest
extent permitted by applicable law, shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of this Agreement or any other Loan Document, any of
the Obligations or any other collateral security therefor or guarantee or right
of offset with respect thereto at any time or from time to time held by the
Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
the Administrative Agent or any Lender, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrower or such
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrower for the Obligations, or of such Guarantor
under the guarantee contained in this Article X, in bankruptcy or in any
other instance.  When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent or any Lender may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Borrower, any other Guarantor, or any other
Person or against any collateral security or guarantee for the Obligations or
any right of offset with respect thereto, and any failure by the Administrative
Agent or any Lender to make any such demand, to pursue such other rights or
remedies or to collect any payments from the Borrower, any other Guarantor, or
any other Person or to realize upon any such collateral security or guarantee
or to exercise any such right of offset, or any release of the Borrower, any
other Guarantor, or any other Person or any such collateral security, guarantee
or right of offset, shall not relieve any Guarantor of any obligation or
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent or any Lender against any Guarantor. 
For the purposes hereof “demand” shall include the commencement and
continuance of legal proceedings.


 


Section 10.06                          Reinstatement.  The guarantee contained in this Article X
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any
Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Loan Party, or upon or as a result of the appointment of
a receiver, intervenor or conservator of, or trustee or similar officer for,
any Loan Party or any substantial part of its property, or otherwise, all as
though such payments had not been made.


 


Section 10.07                          Payments.  Each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the Administrative Agent’s Office.


 


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ARTICLE XI


 


MISCELLANEOUS


 


Section 11.01                          Amendments, Etc.  Except as
otherwise set forth in this Agreement, no amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent to any departure
by the Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Loan
Party, as the case may be, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given; provided that, no such amendment, waiver or consent shall:


 


(a)          postpone any date scheduled for, or reduce or forgive the amount of, any
payment of principal or interest under Section 2.07 or Section 2.08
without the written consent of each Lender directly affected thereby, it being
understood that the waiver of (or amendment to the terms of) any mandatory
prepayment of the Loans shall not constitute a postponement of any date scheduled
for the payment of principal or interest;


 


(b)         reduce
or forgive the principal of, or the rate of interest specified herein on, any
Loan or (subject to clause (i) of the second proviso to this Section 11.01)
any fees (including fees set forth in Section 2.08 or other amounts
payable hereunder or under any other Loan Document), or extend, postpone or
waive the date upon which any fees are to be paid, without the written consent
of each Lender directly affected thereby; provided that,
only the consent of the Required Lenders shall be necessary to amend the
definition of “Default Rate” or to waive any obligation of the Borrower to pay
interest at the Default Rate;


 


(c)          change any provision of this Section 11.01, the definition of “Required
Lenders” or “Pro Rata Share”, the third sentence of Section 2.11(a), Section 2.12,
Section 8.03 or Section 11.07(a)(x) without the written consent
of each Lender adversely affected thereby;


 


(d)         release
or subordinate all or substantially all of the Liens or Collateral granted to
the Secured Parties under any Loan Document in any transaction or series of
related transactions, without the written consent of each Lender; or


 


(e)          release all or substantially all of the aggregate value of the Guaranty,
without the written consent of each Lender;


 


and
provided further that (i) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of, or any fees or other amounts payable to, the
Administrative Agent under this Agreement or any other Loan Document and (ii) Section 11.07(h) may
not be amended, waived or otherwise modified without the consent of each
Granting Lender all or any part of whose Loans are being funded by an SPC at
the time of such amendment, waiver or other modification.  Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the principal of the Loans
of such Lender may not be reduced or forgiven, the Revolving Credit Commitments
of such Lender may not be increased and the Maturity Date of the Revolving
Credit Loans of such Lender may not be extended, in each case without the
consent of such Lender (it being understood that any Loans held or deemed held
by any Defaulting Lender shall be excluded for a vote of the Lenders hereunder
requiring any consent of the Lenders).


 


Notwithstanding
anything to the contrary contained in Section 11.01, guarantees,
collateral security documents and related documents executed by Foreign
Subsidiaries in connection with this 


 


118

















 


Agreement
may be in a form reasonably determined by the Administrative Agent and may be,
together with this Agreement, amended and waived with the consent of the
Administrative Agent at the request of the Borrower without the need to obtain
the consent of any other Lender if such amendment or waiver is delivered in
order (i) to comply with local Law or advice of local counsel, (ii) to
cure ambiguities or defects or (iii) to cause such guarantee, collateral
security document or other document to be consistent with this Agreement and
the other Loan Documents.


 


Section 11.02                          Notices and Other Communications; Facsimile
Copies.  (a)  General.  Unless
otherwise expressly provided herein, all notices and other communications
provided for hereunder or under any other Loan Document shall be in writing
(including by facsimile transmission). 
All such written notices shall be mailed, faxed or delivered to the
applicable address, facsimile number or electronic mail address, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:


 


(i)                                     if to the Borrower, any Guarantor, the Administrative Agent or an L/C
Issuer to the address, facsimile number, electronic mail address or telephone
number specified for such Person below or to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by such
party in a notice to the other parties:


 


	
  The
  Borrower and any Guarantor:

  	
  The
  Reader’s Digest Association, Inc.

  
	
   

  	
  Reader’s
  Digest Road

  
	
   

  	
  Pleasantville,
  NY 10570

  
	
   

  	
  Attention:
  Treasurer

  
	
   

  	
  Telephone
  number:  914-244-7683

  
	
   

  	
  Facsimile
  number:  914-244-5904

  
	
   

  	
  Electronic
  mail address:  william.magill@rd.com

  
	
   

  	
  Website
  address:  www.rd.com

  
	
   

  	
   

  
	
   

  	
  With
  copies to (which shall not constitute a notice hereunder):

  
	
   

  	
   

  
	
   

  	
  Kirkland &
  Ellis LLP

  
	
   

  	
  601
  Lexington Avenue

  
	
   

  	
  New
  York, NY 10022

  
	
   

  	
  Attention:  Leonard Klingbaum

  
	
   

  	
  Telephone
  number:  212-446-4792

  
	
   

  	
  Facsimile
  number:  212-446-6460

  
	
   

  	
  Electronic
  mail address: leonard.klingbaum@kirkland.com

  
	
   

  	
   

  
	
  The
  Administrative Agent:

  	
  JPMorgan
  Chase Bank, N.A.

  
	
   

  	
  277
  Park Avenue, 8th Floor

  
	
   

  	
  New
  York, NY 10172

  
	
   

  	
  Attention:  Tina Ruyter

  
	
   

  	
  Telephone
  number:   212-270-4676

  
	
   

  	
  Facsimile
  number:  212-270-5127

  
	
   

  	
  Electronic
  mail address: Tina.Ruyter@jpmorgan.com

  



 


119

















 


	
   

  	
  With
  a copy to:

  
	
   

  	
   

  
	
   

  	
  JPMorgan
  Chase Loan & Agency Services

  
	
   

  	
  1111
  Fannin, Floor 10

  
	
   

  	
  Houston,
  TX 77002

  
	
   

  	
  Attention:  Maryann T. Bui

  
	
   

  	
  Telephone
  number:   713-750-7932

  
	
   

  	
  Facsimile
  number:  713-750-2878

  
	
   

  	
  Electronic
  mail address: maryann.t.bui@jpmchase.com

  



 


(ii)                                  if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number specified in its Administrative Questionnaire or to
such other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the Borrower, the
Administrative Agent, the L/C Issuers.


 


All
such notices and other communications shall be deemed to be given or made, if
given or made during the recipient’s normal business hours (and if not, shall
be deemed to be given or made on the next succeeding Business Day), upon the
earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if
delivered by hand or by courier, when signed for by or on behalf of the
relevant party hereto; (B) if delivered by mail, four (4) Business
Days after deposit in the mails, postage prepaid; (C) if delivered by
facsimile, when sent and receipt has been confirmed by telephone; and (D) if
delivered by electronic mail (which form of delivery is subject to the provisions
of Section 11.02(d)), when delivered; provided that
notices and other communications to the Administrative Agent, the L/C Issuers
pursuant to Article II shall not be effective until actually received by
the Administrative Agent.  In no event
shall a voice mail message be effective as a notice, communication or
confirmation hereunder.


 


(b)         Effectiveness of Facsimile Documents and Signatures.  Loan Documents may be
transmitted and/or signed by facsimile or “PDF” (subject to Section 11.02(d)).  The effectiveness of any such documents and
signatures shall, subject to applicable Law, have the same force and effect as
manually signed originals and shall be binding on all Loan Parties, the Agents
and the Lenders.


 


(c)          Reliance by Agents and Lenders.  The Administrative Agent and the
Lenders shall be entitled to rely and act upon any notices (including
telephonic Committed Loan Notices) purportedly given by or on behalf of the
Borrower even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof.  The Borrower shall indemnify each
Agent-Related Person and each Lender from all losses, liabilities and related
reasonable out-of-pocket costs and expenses resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower in the
absence of gross negligence or willful misconduct.  All telephonic notices to the Administrative
Agent may be recorded by the Administrative Agent, and each of the parties
hereto hereby consents to such recording.


 


(d)         Electronic Communications.  Notices and other communications
to the Lenders hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided
that the foregoing shall not apply to notices to any Lender pursuant to Articles
II and III, if such Lender has notified the Administrative Agent that it is
incapable of receiving notices thereunder by electronic communication.  The Administrative Agent or the Borrower may,
in their discretion, agree to accept notices and other communications to them
hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to
particular notices or communications. 
Unless the Administrative Agent otherwise prescribes, (i) notices
and other 


 


120

















 


communications sent to an
e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgment from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgment), provided that if such notice or
other communication is not sent during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent at
the opening of business on the next Business Day for the recipient, and
(ii) notices or communications posted to an Internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient at
its e-mail address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying the
website address therefor.


 


Section 11.03                          No Waiver; Cumulative Remedies.  No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder or under any other
Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.  The rights,
remedies, powers and privileges herein provided, and provided under each other
Loan Document, are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by Law.


 


Section 11.04                          Attorney Costs, Expenses and Taxes.  The Borrower agrees (a) to pay or
reimburse the Administrative Agent, the Syndication Agent and the Arrangers for
all reasonable documented out-of-pocket costs and expenses incurred in
connection with the preparation, negotiation, syndication and execution of this
Agreement and the other Loan Documents, and any amendment, waiver, consent or
other modification of the provisions hereof and thereof (whether or not the
transactions contemplated thereby are consummated), and the consummation and
administration of the transactions contemplated hereby and thereby, including
all (i) Attorney Costs of one lead counsel in each relevant jurisdiction
and (ii) costs of Moelis, J.H. Cohn and other advisors to the
Administrative Agent, in the case of this clause (ii) accrued through the
completion of the transactions contemplated by the Reorganization Plan and (b) to
pay or reimburse the Administrative Agent, the Syndication Agent, the Arrangers
and each Lender for all reasonable documented out-of-pocket costs and expenses
incurred in connection with the enforcement of any rights or remedies under
this Agreement or the other Loan Documents (including all such costs and expenses
incurred during any negotiations, workouts, restructurings or legal
proceedings, including any proceeding under any Debtor Relief Law, and
including all Attorney Costs of one lead counsel in each relevant jurisdiction
and the fees and disbursements of any financial advisor or third party
consultants or appraisers to and of the Administrative Agent).  The foregoing costs and expenses shall
include all reasonable search, filing, recording and title insurance charges and
fees and taxes related thereto, and other reasonable and out-of-pocket expenses
incurred by any Agent.  The agreements in
this Section 11.04 shall survive the termination of the Aggregate
Commitments and the repayment of all Obligations.  All amounts due under this Section 11.04
shall be paid within ten (10) Business Days of receipt by the Borrower of
an invoice relating thereto setting forth such expenses in reasonable
detail.  If any Loan Party fails to pay
when due any costs, expenses or other amounts payable by it hereunder or under
any Loan Document, such amount may be paid on behalf of such Loan Party by the
Administrative Agent in its sole discretion.


 


Section 11.05                          Indemnification by the Borrower.  Whether or not the transactions contemplated
hereby are consummated, the Borrower shall indemnify and hold harmless each
Agent-Related Person, each Lender and their respective Affiliates, and
directors, officers, employees, counsel, agents, trustees, investment advisors
and attorneys-in-fact of each of the foregoing (collectively, the “Indemnitees”) from and against any and all liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments
and suits and related reasonable out-of-pocket expenses (including Attorney
Costs) of any kind or nature whatsoever which may at any time be imposed on,
incurred by or asserted against any such Indemnitee in any way relating to or
arising out of or in connection with (a) the 


 


121

















 


execution, delivery, enforcement, performance,
administration, amendment, modification or waiver of any Loan Document or any
other agreement, letter or instrument delivered in connection with the
transactions contemplated thereby or the consummation of the transactions
contemplated thereby, (b) any Revolving Credit Commitment, Loan or Letter
of Credit or the use or proposed use of the proceeds therefrom (including any
refusal by an L/C Issuer to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly
comply with the terms of such Letter of Credit, or (c) to the extent
relating to or arising from any of the foregoing, any actual or alleged
presence or release of Hazardous Materials on or from any property currently or
formerly owned, leased or operated by any Group Member, or any Environmental
Liability related in any way to any Group Member, or (d) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified Liabilities”), in all cases, whether or not
caused by or arising, in whole or in part, out of the negligence of the
Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits or expenses are found in
a final non-appealable judgment of a court of competent jurisdiction to have
resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee,
any Affiliate of such Indemnitee or any officer, director, employee, advisor,
representative or agent of such Indemnitee or any such Affiliate.  No Indemnitee shall be liable to any Group
Member for any damages arising from the use by others of any information or
other materials obtained through IntraLinks or other similar information
transmission systems in connection with this Agreement.  No Indemnitee shall be liable (whether direct
or indirect, in contract, tort or otherwise) to any Group Member except to the
extent such liability is found in a non-appealable judgment of a court of
competent jurisdiction to have resulted from the gross negligence, bad faith or
willful misconduct of such Indemnitee, any Affiliate of such Indemnitee or any
officer, director, employee, advisor, representative or agent of such
Indemnitee or any such Affiliate.  No
Indemnitee shall have any liability to any Group Member, nor any Group Member
to any Indemnitee, for any special, punitive, indirect or consequential damages
(including, without limitation, loss of profits, business or anticipated
savings) relating to this Agreement or any other Loan Document or arising out
of its activities in connection herewith or therewith (whether before or after
the Closing Date).  All amounts due under
this Section 11.05 shall be paid within ten (10) Business Days after
demand therefor; provided, however, that such Indemnitee shall promptly refund
any amount received under this Section 11.05 to the extent that there is a
final judicial or arbitral determination that such Indemnitee was not entitled
to indemnification or contribution rights with respect to such payment pursuant
to the express terms of this Section 11.05.  The agreements in this Section 11.05
shall survive the resignation of the Administrative Agent, the replacement of
any Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the Obligations.


 


Section 11.06                          Payments Set Aside.  To the extent that any payment by or on
behalf of the Borrower is made to any Agent or any Lender, or any Agent or any
Lender exercises its right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by such Agent or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each
Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or repaid by any Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time
in effect.


 


122














 


Section 11.07         Successors and Assigns.  (a)  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that (x) neither
Holdings nor the Borrower may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender and (y) no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee, (ii) by way of
participation in accordance with the provisions of Section 11.07(e), (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of Section 11.07(g) or Section 11.07(i) or (iv) to an
SPC in accordance with the provisions of Section 11.07(h) (and any
other attempted assignment or transfer by any party hereto shall be null and
void).  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in Section 11.07(e) and, to the
extent expressly contemplated hereby, the Indemnitees) any legal or equitable
right, remedy or claim under or by reason of this Agreement.


 


(b)   (i)  Subject
to the conditions set forth in clause (b)(ii) below, any Lender may assign
to one or more assignees (other than (A) a natural person or (B) Holdings
or any of its Subsidiaries or any of their respective Affiliates) (“Assignees”) all or a portion of its rights
and obligations under this Agreement (including all or a portion its Revolving
Credit Commitment and the Loans (including for purposes of this Section 11.07(b),
participations in L/C Obligations) at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld or delayed) of (x) the
Borrower, unless (i) the assignee is a Lender, an Affiliate of a Lender or
an Approved Fund or (ii) an Event of Default has occurred and is
continuing, (y) the Administrative Agent and (z) each L/C Issuer at
the time of such assignment.


 


(ii)           Assignments shall be subject to the following additional conditions:


 


(1)           except in the case of an assignment to a Lender, an Affiliate of a Lender
or an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Revolving Credit Commitment or Loans, the amount of the
Revolving Credit Commitment or Loans of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 and in increments of $1,000,000 in excess thereof
unless the Administrative Agent otherwise consents, provided
that such amounts shall be aggregated in respect of each Lender and its
Affiliates or Approved Funds, if any;


 


(2)           the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; provided that
only one such fee shall be payable in the event of simultaneous assignments to
or from two or more Approved Funds;


 


(3)           the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more Credit Contacts (as defined in the Administrative
Questionnaire) to whom all syndicate-level information (which may contain
material non-public information about Holdings, the Borrower, the other Loan
Parties and their Affiliates and related parties or their respective
securities) will be made available and who may receive such information in
accordance with the Assignee’s compliance procedures and applicable laws,
including Federal and state securities laws; and


 


123

















 


(4)           no assignment shall be effective unless and until such assignment is
recorded in the Register.


 


This
paragraph (b) shall not prohibit any Lender from assigning all or a
portion of its rights and obligations among separate Facilities on a non-pro
rata basis.


 


(c)   Subject
to acceptance and recording thereof by the Administrative Agent pursuant to Section 11.07(d),
from and after the effective date specified in each Assignment and Assumption,
the Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, 3.05, 11.04 and 11.05 with respect to facts
and circumstances occurring prior to the effective date of such assignment).  Upon request, and the surrender by the
assigning Lender of its Note, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. 
Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this clause (c) shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with Section 11.07(e).


 


(d)   The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Revolving Credit Commitments
of, and principal amounts (and related interest amounts) of the Loans, L/C
Obligations (specifying Unreimbursed Amounts), L/C Borrowings and amounts due
under Section 2.03, owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”).  The entries in the Register shall be
conclusive, absent manifest error, and the Borrower, the Agents and the Lenders
shall treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.  The Register
shall be available for inspection by the Borrower, the Administrative Agent
and, with respect to its own Loans, any Lender, at any reasonable time and from
time to time upon reasonable prior notice.


 


(e)   Any
Lender may at any time, without the consent of, or notice to, the Borrower or
the Administrative Agent, sell participations to any Person (other than (A) a
natural person or (B) Holdings or any of its Subsidiaries or any of their
respective Affiliates) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Revolving Credit Commitment and/or
the Loans (including such Lender’s participations in L/C Obligations) owing to
it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower, the Agents and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and the other Loan Documents and to
approve any amendment, modification or waiver of any provision of this
Agreement or the other Loan Documents; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other
modification described in the first proviso to Section 11.01 that directly
affects such Participant.  Subject to Section 11.07(f),
the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 11.07(c) but
shall not be entitled to recover greater amounts under such Sections than the
selling Lender would be entitled to 


 


124

















 


recover.  To the extent permitted by applicable Law,
each Participant also shall be entitled to the benefits of Section 11.09 as
though it were a Lender; provided that
such Participant agrees to be subject to Section 2.12 as though it were a
Lender.  Each Lender that sells a
participation with respect to a Loan shall, acting solely for this purpose as a
non-fiduciary agent of the Borrower, maintain a register on which it enters the
name and address of each Participant and the principal amounts (and related
interest amounts) of each Participant’s interest in the Loan (the “Participant Register”).  The entries in the Participant Register shall
be conclusive, absent manifest error, and such Lender shall treat each Person
whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to
the contrary.


 


(f)    A
Participant shall not be entitled to receive any greater payment under Section 3.01,
3.04 and 3.05 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower’s prior written
consent.  A Participant shall not be
entitled to the benefits of Section 3.01 unless the Borrower is notified
of the participation sold to such Participant and such Participant agrees, for
the benefit of the Borrower, to comply with Section 11.15 as though it
were a Lender.


 


(g)   Any
Lender may at any time, without the consent of the Borrower or the
Administrative Agent, pledge or assign a security interest in all or any
portion of its rights under this Agreement (including under its Note, if any)
to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.


 


(h)   Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special
purpose funding vehicle identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower (an “SPC”) the option to provide all or any part
of any Loan that such Granting Lender would otherwise be obligated to make
pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if
an SPC elects not to exercise such option or otherwise fails to make all or any
part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof.  Each party
hereto hereby agrees that (i) neither the grant to any SPC nor the
exercise by any SPC of such option shall increase the costs or expenses or
otherwise increase or change the obligations of the Borrower under this
Agreement (including its obligations under Section 3.01, 3.04 or 3.05), (ii) no
SPC shall be liable for any indemnity or similar payment obligation under this
Agreement for which a Lender would be liable, and (iii) the Granting
Lender shall for all purposes, including the approval of any amendment, waiver
or other modification of any provision of any Loan Document, remain the lender
of record hereunder.  The making of a
Loan by an SPC hereunder shall utilize the Revolving Credit Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender.  Notwithstanding
anything to the contrary contained herein, any SPC may (i) with notice to,
but without prior consent of the Borrower and the Administrative Agent and with
the payment of a processing fee of $3,500, assign all or any portion of its
right to receive payment with respect to any Loan to the Granting Lender and (ii) disclose
on a confidential basis any non-public information relating to its funding of
Loans to any rating agency, commercial paper dealer or provider of any surety
or guarantee or credit or liquidity enhancement to such SPC.


 


(i)    Notwithstanding
anything to the contrary contained herein, (1) any Lender may in
accordance with applicable Law create a security interest in all or any portion
of the Loans owing to it and the Note, if any, held by it and (2) any
Lender that is a Fund may, without the consent of the Borrower or the
Administrative Agent, create a security interest in all or any portion of the
Loans owing to it and the Note, if any, held by it to the trustee for holders
of obligations owed, or securities issued, by 


 


125

















 


such Fund as security for
such obligations or securities; provided that
unless and until such trustee actually becomes a Lender in compliance with the
other provisions of this Section 11.07, (i) no such pledge shall
release the pledging Lender from any of its obligations under the Loan
Documents and (ii) such trustee shall not be entitled to exercise any of
the rights of a Lender under the Loan Documents.


 


(j)    Notwithstanding
anything to the contrary contained herein, any L/C Issuer may, upon thirty (30)
days’ notice to the Borrower and the Lenders, resign as an L/C Issuer; provided that on or prior to the expiration of such 30-day
period with respect to such resignation, the relevant L/C Issuer shall have
identified a successor L/C Issuer reasonably acceptable to the Borrower willing
to accept its appointment as successor L/C Issuer.  In the event of any such resignation of an
L/C Issuer, the Borrower shall be entitled to appoint from among the Lenders
willing to accept such appointment a successor L/C Issuer hereunder; provided that
no failure by the Borrower to appoint any such successor shall affect the
resignation of the relevant L/C Issuer, except as expressly provided
above.  If an L/C Issuer resigns as an
L/C Issuer, it shall retain all the rights and obligations of an L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as an L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or
fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).


 


Section 11.08         Confidentiality.  Each of the Agents and the Lenders agrees to
maintain the confidentiality of the Information, except that Information may be
disclosed (a) on a need to know basis to its Affiliates and its and its Affiliates’
directors, officers, employees, trustees, investment advisors and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential pursuant to the terms hereof); (b) to the extent requested by
any Governmental Authority; (c) to the extent required by applicable Laws
or regulations or by any subpoena or similar legal process; (d) to any
other party to this Agreement; (e) subject to an agreement for the benefit
of the Borrower containing provisions substantially the same as those of this Section 11.08
(or as may otherwise be reasonably acceptable to the Borrower), to any pledgee
referred to in Section 11.07(g), counterparty to a Swap Contract, Eligible
Assignee of or Participant in, or any prospective Eligible Assignee of or
Participant in, any of its rights or obligations under this Agreement;
(f) with the written consent of the Borrower; (g) to the extent such
Information becomes publicly available other than as a result of a breach of
this Section 11.08; (h) to any Governmental Authority or examiner
(including the National Association of Insurance Commissioners or any other
similar organization) regulating any Lender; (i) to any rating agency when
required by it (it being understood that, prior to any such disclosure, such
rating agency shall undertake to preserve the confidentiality of any
Information relating to the Loan Parties received by it from such Lender); or (j) in
connection with the exercise of any remedies hereunder, under any other Loan
Document or any legal action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder.  In addition, the Agents and the Lenders may
disclose the existence of this Agreement and information about this Agreement
to market data collectors, similar service providers to the lending industry,
and service providers to the Agents and the Lenders in connection with the
administration and management of this Agreement, the other Loan Documents, the
Commitments and the Credit Extensions. 
For the purposes of this Section 11.08, “Information”
means all information received from any Loan Party relating to any Loan Party
or its business, other than any such information that is publicly available to
any Agent or any Lender prior to disclosure by any Loan Party other than as a
result of a breach of this Section 11.08; provided that, in the case of
information received from a Loan Party after the date hereof, such information (i) is
clearly identified at the time of delivery as confidential or (ii) is
delivered pursuant to Section 6.01, 6.02 or 6.04 hereof.


 


EACH LENDER ACKNOWLEDGES THAT INFORMATION FURNISHED TO IT PURSUANT TO
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY INCLUDE 


 


126

















 


MATERIAL
NON-PUBLIC INFORMATION CONCERNING HOLDINGS, THE BORROWER, THE OTHER LOAN
PARTIES AND THEIR AFFILIATES AND RELATED PARTIES OR THEIR RESPECTIVE
SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING
THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH
MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND
APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.


 


ALL INFORMATION, INCLUDING WAIVERS AND AMENDMENTS, FURNISHED BY
HOLDINGS, THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE
COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION,
WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT HOLDINGS, THE
BORROWER, THE OTHER LOAN PARTIES AND THEIR AFFILIATES AND RELATED PARTIES OR
THEIR RESPECTIVE SECURITIES. 
ACCORDINGLY, EACH LENDER REPRESENTS TO HOLDINGS, THE BORROWER AND THE
ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE
A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN
MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES
AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.


 


Section 11.09         Setoff.  In addition to any rights and remedies of the
Lenders provided by Law, but subject to Section 5.5 of the Security
Agreement, upon the occurrence and during the continuance of any Event of
Default, each Lender and its Affiliates is authorized at any time and from time
to time, without prior notice to the Borrower or any other Loan Party, any such
notice being waived by the Borrower (on its own behalf and on behalf of each Loan
Party and its Subsidiaries) to the fullest extent permitted by applicable Law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other Indebtedness at any time
owing by, such Lender and its Affiliates to or for the credit or the account of
the respective Loan Parties and their Subsidiaries against any and all
Obligations owing to such Lender and its Affiliates hereunder or under any
other Loan Document, now or hereafter existing, irrespective of whether or not
such Agent or such Lender or Affiliate shall have made demand under this
Agreement or any other Loan Document and although such Obligations may be
contingent or unmatured or denominated in a currency different from that of the
applicable deposit or Indebtedness.  Each
Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such set off and application made by such Lender; provided, that the failure to give such notice shall not
affect the validity of such setoff and application.  The rights of the Administrative Agent and
each Lender under this Section 11.09 are in addition to other rights and
remedies (including other rights of setoff) that the Administrative Agent and
such Lender may have.  Notwithstanding
anything herein or in any other Loan Document to the contrary, in no event
shall the assets of any Foreign Subsidiary that is not a Loan Party constitute
collateral security for payment of the Obligations of the Borrower or any
Domestic Subsidiary, it being understood that (a) the Equity Interests of
any Foreign Subsidiary that is not a Loan Party do not constitute such an asset
and (b) the provisions hereof shall not limit, reduce or otherwise
diminish in any respect the Borrower’s obligations to make any mandatory
prepayment pursuant to Section 2.04(b).


 


Section 11.10         Interest Rate Limitation.  Notwithstanding anything to the contrary
contained in any Loan Document, 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 


 


127

















 


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 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 Rate to
the date of repayment, shall have been received by such Lender.


 


Section 11.11         Counterparts.  This Agreement and each other Loan Document
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.  Delivery by telecopier of an
executed counterpart of a signature page to this Agreement and each other
Loan Document shall be effective as delivery of an original executed
counterpart of this Agreement and such other Loan Document.  The Agents may also require that any such
documents and signatures delivered by telecopier be confirmed by a manually
signed original thereof; provided that the failure to request or deliver the
same shall not limit the effectiveness of any document or signature delivered
by telecopier.


 


Section 11.12         Integration.  This Agreement and the other Loan Documents
comprise the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter.  In the event of
any conflict between the provisions of this Agreement and those of any other
Loan Document, the provisions of this Agreement shall control; provided that
the inclusion of supplemental rights or remedies in favor of the Agents or the
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement.  Each Loan Document was
drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.


 


Section 11.13         Survival of Representations and Warranties.  All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the
execution and delivery hereof and thereof. 
Such representations and warranties have been or will be relied upon by
each Agent and each Lender, regardless of any investigation made by any Agent
or any Lender or on their behalf and notwithstanding that any Agent or any
Lender may have had notice or knowledge of any Default at the time of any
Credit Extension, and shall continue in full force and effect as long as any
Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any
Letter of Credit shall remain outstanding.


 


Section 11.14         Severability.  If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable, the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired
thereby.  The invalidity of a provision
in a particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.


 


Section 11.15         Tax Forms.  (a)  Each Lender and Agent that is not a
“United States person” within the meaning of Section 7701(a)(30) of the
Code (each, a “Foreign Lender”) shall, to the
extent it is legally entitled to do so, deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a
Lender or Agent under this Agreement or changes its Lending Office or place of
organization (and from time to time thereafter upon the request of the Borrower
or the Administrative Agent), whichever of the following is applicable:


 


(i)            duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the United States
of America is a party,


 


128

















 


(ii)           duly completed copies of Internal Revenue Service Form W-8ECI,


 


(iii)          in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the Code, (x) a
certificate substantially in the form of Exhibit H to the effect that (A) such
Foreign Lender is not (i) a “bank” described in Section 881(c)(3)(A) of
the Code, (ii) a “10 percent shareholder” of the applicable Borrower
within the meaning of Section 881(c)(3)(B) of the Code or (iii) a
“controlled foreign corporation” described in Section 881(c)(3)(C) of
the Code and (B) the interest payments in question are not effectively
connected with the United States trade or business conducted by such Lender (a “U.S. Tax Compliance Certificate”) and (y) duly
completed copies of Internal Revenue Service Form W-8BEN,


 


(iv)          to the extent a Foreign Lender is not the beneficial owner (for example,
where the Foreign Lender is a partnership or participating Lender granting a
typical participation), an Internal Revenue Service Form W-8IMY,
accompanied by a Form W-8ECI, W-8BEN, U.S. Tax Compliance Certificate, Form W-9,
and/or other certification documents from each beneficial owner, as applicable;
provided that, if the Foreign Lender is a partnership (and not a participating
Lender) and one or more beneficial owners of such Foreign Lender are claiming
the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax
Compliance Certificate on behalf of each such beneficial owner, or


 


(v)           any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States federal withholding tax duly
completed together with such supplementary documentation as may be prescribed
by applicable law to permit the Borrower to determine the withholding or
deduction required to be made.


 


(b)   Each
Lender and Agent that is a “United States person” within the meaning of Section 7701(a)(30)
of the Code (each, a “United States Lender”)
shall deliver to the Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Lender or Agent becomes a Lender or Agent under this Agreement or changes
its Lending Office or place of organization (and from time to time thereafter
upon the request of the Borrower or the Administrative Agent) properly
completed copies of Internal Revenue Service Form W-9, certifying that
such Lender or Agent, as applicable, is entitled to an exemption from United
States backup withholding tax, or any successor form.


 


(c)   [
Reserved]


 


(d)   The
Borrower shall not be required to pay any additional amounts under Section 3.01(a) or
indemnity with respect to such Taxes under Section 3.01(c) to (A) any
Foreign Lender if such Foreign Lender shall have failed to satisfy the
provisions of Section 11.15(a) or (B) any United States Lender
if such United States Lender shall have failed to satisfy the provisions of Section 11.15(b);
provided, that (i) if such Lender
shall have satisfied the requirement of this Section 11.15, as applicable,
on the date such Lender became a Lender, or ceased to act for its own account
with respect to any payment under any of the Loan Documents, nothing in this Section 11.15
shall relieve the Borrower of its obligation to pay any amounts pursuant to Section 3.01
in the event that, as a result of any change in any applicable Law, treaty or
governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Loan Documents is not
subject to withholding or is subject to withholding at a reduced rate and (ii) nothing
in this Section 11.15(d) shall relieve the Borrower of its obligation
to pay any amounts pursuant to Section 3.01 in the event that the
requirements of Section 11.15 have not been satisfied if the Borrower is
entitled, under applicable Law, to rely on any applicable forms and statements
required to be provided under this Section


 


129

















 


11.15 by the Lender that
does not act or has ceased to act for its own account under any of the Loan
Documents, including in the case of a typical participation, and such Lender
has provided such required forms and statements.


 


(e)   Each
Lender agrees that if any form or certification previously delivered by it
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.  Notwithstanding anything to the contrary
herein, no Lender or Agent shall be required to deliver any form, certificate
or other document pursuant to this Section 11.15 that such Lender or Agent
is not legally able to deliver.


 


(f)    The
Administrative Agent may deduct and withhold any taxes required by any Laws to
be deducted and withheld from any payment under any of the Loan Documents.


 


SECTION 11.16     GOVERNING LAW.  THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.


 


Section 11.17         Submission To Jurisdiction; Waivers.  (a)  Each Loan Party hereby irrevocably
and unconditionally:


 


(i)            submits for itself and its property in any legal action or proceeding relating
to this Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of (i) any State or Federal court of
competent jurisdiction sitting in New York County, New York and (ii) appellate
courts from any thereof;


 


(ii)           consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;


 


(iii)          agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid at its address set forth
in Section 11.02 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;


 


(iv)          agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right of the
Administrative Agent or the Lenders to sue in any other jurisdiction; and


 


(v)           waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.


 


SECTION 11.18     WAIVER OF RIGHT TO TRIAL BY JURY.  EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT
TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR 


 


130

















 


HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION 11.18 WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.


 


Section 11.19         Binding Effect.  This Agreement shall become effective upon
the satisfaction or waiver of the conditions precedent set forth in Article IV
and thereafter shall be binding upon and inure to the benefit of the Borrower,
each Agent and each Lender and their respective permitted successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lenders.


 


Section 11.20         Lender Action.  Each Lender agrees that it shall not take or
institute any actions or proceedings, judicial or otherwise, for any right or
remedy against any Loan Party or any other obligor under any of the Loan Documents
or the Secured Hedge Agreements (including the exercise of any right of setoff,
rights on account of any banker’s lien or similar claim or other rights of
self-help), or institute any actions or proceedings, or otherwise commence any
remedial procedures, with respect to any Collateral or any other property of
any such Loan Party, without the prior written consent of the Administrative
Agent.  The provision of this Section 11.20
are for the sole benefit of the Lenders and shall not afford any right to, or
constitute a defense available to, any Loan Party.


 


Section 11.21         USA PATRIOT Act.  Each Lender hereby notifies the
Loan Parties that pursuant to the requirements of the Patriot Act, it is
required to obtain, verify and record information that identifies the Loan
Parties, which information includes the name, address and tax identification
numbers of the Loan Parties and other information that will allow such Lender
to identify the Loan Parties in accordance with the Act.


 


Section 11.22         Acknowledgements.  Each Loan Party hereby acknowledges that:


 


(a)   it
has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents;


 


(b)   neither
the Administrative Agent nor any Lender has any fiduciary relationship with or
duty to any Loan Party arising out of or in connection with this Agreement or
any of the other Loan Documents, and the relationship between Administrative
Agent and Lenders, on one hand, and the Loan Parties, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and


 


(c)   no
joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Lenders or
among the Loan Parties and the Lenders.


 


Section 11.23         Releases of Guarantee and Lien.


 


(a)   Notwithstanding anything to the
contrary contained herein or in any other Loan Document, the Administrative Agent is hereby irrevocably authorized by each
Lender (without requirement of notice to or consent of any Lender except as
expressly required by Section 11.01) to take any action reasonably
requested by the Borrower having the effect of releasing any Collateral or
Guarantee Obligations (i) to the extent necessary to permit any
Disposition of the applicable Collateral or Guarantor, in each case as
permitted by the Loan Documents or that has been consented to in accordance 


 


131

















 


with Section 11.01, (ii) in accordance
with Section 7.13(b) or (iii) under the circumstances described
in paragraph (b) below.


 


(b)   At such time as the Loans and the other Obligations
under the Loan Documents shall have been paid in full, the Collateral shall be
automatically released from the Liens created by the Collateral Documents, and
the Collateral Documents (other than with respect to the provisions thereof
expressly stated to survive termination) shall automatically terminate, all
without delivery of any instrument or performance of any act by any Person.


 


[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]


 


132

















 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.


 


 


	
   

  	
  RDA
  HOLDING CO.

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
  /s/
  Thomas A. Williams

  
	
   

  	
   

  	
  Name:
  

  	
  Thomas
  A. Williams

  
	
   

  	
   

  	
  Title:
  

  	
  Senior
  Vice President and Chief Financial Officer

  



 


 


	
   

  	
  THE
  READER’S DIGEST ASSOCIATION, INC.

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
  /s/
  Thomas A. Williams

  
	
   

  	
   

  	
  Name:
  

  	
  Thomas
  A. Williams

  
	
   

  	
   

  	
  Title:
  

  	
  Senior
  Vice President and Chief Financial Officer

  



 


 


	
   

  	
  EACH
  OF THE GUARANTORS LISTED ON ANNEX I HERETO

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
  /s/
  Thomas A. Williams

  
	
   

  	
   

  	
  Name:
  

  	
  Thomas
  A. Williams

  
	
   

  	
   

  	
  Title:
  

  	
  Authorized
  Signatory

  



 


[Revolving Credit and
Guarantee Agreement]


 

















 


	
   

  	
  JPMORGAN
  CHASE BANK, N.A., as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
  /s/
  Tina Ruyter

  
	
   

  	
   

  	
  Name:
  

  	
  Tina
  Ruyter

  
	
   

  	
   

  	
  Title:
  

  	
  Executive
  Director

  



 


 


	
   

  	
  BANK
  OF AMERICA, N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
  /s/
  Stephanie Vallillo

  
	
   

  	
   

  	
  Name:
  

  	
  Stephanie
  Vallillo

  
	
   

  	
   

  	
  Title:
  

  	
  Senior
  Vice President

  



 


 


	
   

  	
  CREDIT
  SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
  /s/
  Doreen Barr

  
	
   

  	
   

  	
  Name:
  

  	
  Doreen
  Barr

  
	
   

  	
   

  	
  Title:
  

  	
  Director

  



 


	
   

  	
  by

  
	
   

  	
   

  	
  /s/
  Lynne-Marie Paquette

  
	
   

  	
   

  	
  Name:
  

  	
  Lynne-Marie
  Paquette

  
	
   

  	
   

  	
  Title:
  

  	
  Associate

  



 


 


	
   

  	
  GOLDMAN
  SACHS CREDIT PARTNERS, L.P., as a Lender

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
  /s/
  Anna Ostrovsky

  
	
   

  	
   

  	
  Name:
  

  	
  Anna
  Ostrovsky

  
	
   

  	
   

  	
  Title:
  

  	
  Authorized
  Signatory

  



 


[Revolving Credit and
Guarantee Agreement]


 

















 


ANNEX I


 


Alex
Inc.


Allrecipes.com, Inc.


Ardee
Music Publishing, Inc.


Christmas
Angel Productions, Inc.


Direct
Entertainment Media Group, Inc.


Direct
Holdings Americas Inc.


Direct
Holdings Custom Publishing Inc.


Direct
Holdings Customer Service, Inc.


Direct
Holdings Education Inc.


Direct
Holdings Libraries Inc.


Direct
Holdings U.S. Corp.


Funk &
Wagnalls Yearbook Corp.


Gareth
Stevens, Inc.


Home
Service Publications, Inc.


Pegasus
Asia Investments, Inc.


Pegasus
Investment, Inc.


Pegasus
Sales, Inc.


Pleasantville
Music Publishing, Inc.


R.D.
Manufacturing Corporation


RD
Large Edition, Inc.


RD
Publications, Inc.


RD
Walking, Inc.


RDA
Sub Co.


RDCL, Inc.


Reader’s
Digest Children’s Publishing, Inc.


Reader’s
Digest Consumer Services, Inc.


Reader’s
Digest Entertainment, Inc.


Reader’s
Digest Financial Services, Inc.


Reader’s
Digest Latinoamerica S.A.


Reader’s
Digest Sales and Services, Inc.


Reader’s
Digest Sub Nine, Inc.


Reader’s
Digest Young Families, Inc.


Reiman
Manufacturing, LLC


Reiman
Media Group, Inc.


Retirement
Living Publishing Company, Inc.


Saguaro
Road Records, Inc.


Taste
of Home Media Group, Inc.


Taste
of Home Productions, Inc.


Travel Publications, Inc.


W.A. Publications, LLC


WAPLA,
LLC


Weekly
Reader Corporation


Weekly
Reader Custom Publishing, Inc.


World
Almanac Education Group, Inc.


World
Wide Country Tours, Inc.


WRC
Media Inc.


 


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