Document:

Exhibit 10.2

     

    SENIOR
SUBORDINATED SELLER NOTE

     

    
    

     

    
      	$100,000,000	
                September 30, 2009

            

    

     

     

    1.           FOR
VALUE RECEIVED, the undersigned, BARNES &
NOBLE,
INC., a Delaware
corporation (the
“Company”), hereby
promises to pay to the order of Leonard Riggio and Louise Riggio (each a “Payee”) the principal amount
of One Hundred Million Dollars ($100,000,000) or, if less, the aggregate unpaid
principal amount of this Note, on the Maturity Date (or, if such day is not a
Business Day, on the immediately preceding Business Day), subject to the
provisions herein. The Issuer further promises to pay interest on the unpaid
principal amount of this Note from time to time at a rate per annum equal to
8.0%.  Interest on this Note shall be due and payable in arrears in
cash on each December 29 and June 30 of each calendar year, provided that if any
such day is not a Business Day, payment shall be made on the immediately
preceding Business Day. Payments of principal hereof and interest hereon shall
be made in Dollars in immediately available funds to such account of the
Noteholder located in New York, New York, as the Noteholder may designate in
writing to the Issuer.

     

     2.           Prepayments.

     

    (a)           Optional Prepayment. Subject
to the provisions herein (including, without limitation, the restrictions on
payment contained in Section 3 and the subordination provisions contained in
Section 4), the Issuer may, at any time prior to the Maturity Date and so long
as such prepayment is not prohibited under the Senior Debt Documents, prepay the
principal amount of this Note, in whole or in part, without penalty or premium,
on any Business Day.  Prepayments of this Note must be accompanied by
payment of accrued and unpaid interest on the principal amount prepaid to and
including the date of payment.

     

     (b)           Change of Control Payment.
Subject to the provisions herein (including, without limitation, the
restrictions on payment contained in Section 3 and the subordination provisions
contained in Section 4):

     

    
      	
               
      

            	
              (i)

            	
              upon
      a Change of Control, the Noteholder shall have the right to require the
      Issuer to repurchase this Note at a repurchase price in cash equal to 100%
      of the principal amount thereof plus accrued and unpaid interest if any,
      to the date of repurchase, in accordance with the terms contemplated in
      clause (ii) below;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              within
      10 Business Days following any Change of Control, the Issuer shall notify
      the Noteholder that a Change of Control has occurred. Such notice shall
      provide that the Noteholder has the right to require the Issuer to
      repurchase this Note at a repurchase price in cash equal to 100% of the
      principal amount thereof plus accrued and unpaid interest, if any, to the
      date of repurchase and 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    set
forth the proposed date of repurchase (which shall be a Business Day and shall
in no event be earlier than 10 Business Days from the date of such notice (such
date, the “Repurchase
Date”));

     

    
      	
               
      

            	
              (iii)

            	
              the
      Noteholder shall notify the Issuer of its election to tender the Note for
      purchase by the Issuer on the terms set forth in the notice by no later
      than 10 Business Days after receipt of such notice, which election shall
      be irrevocable and shall be in respect of not less than the entire Note.
      If the Noteholder shall not have informed the Issuer of its election at
      the expiration of such 10 Business Day period, the Noteholder shall be
      deemed conclusively not to have elected to tender the Note for purchase by
      the Issuer; and

            

    

    

    
      	
               
      

            	
              (iv)

            	
              on
      the Repurchase Date, the Noteholder shall tender the Note to the Issuer
      against the deposit by the Issuer in the Noteholder’s account (which
      account shall be the same account as set forth in Section 1 above) of
      funds sufficient to pay the purchase price of the Note so
      tendered.  Upon repurchase of the Note by the Issuer pursuant to
      this Section 2(b), the Note shall be cancelled and all obligations of the
      Issuer thereunder shall be
terminated.

            

    

    

    3.           Other Payment
Provisions. Notwithstanding anything to the contrary herein, no
payment or prepayment of principal of or interest on this Note (including,
without limitation, under Section 2 or Section 8 hereof) may be made, directly
or indirectly to the Noteholder (and shall instead be paid over to the Senior
Debt Agent under Section 4(b) to the extent permitted by applicable law),
if:

     

     (i)           the
Issuer or its properties is subject to any Insolvency Proceeding;

     

    
      	
               
      

            	
              (ii)

            	
              a
      payment default shall have occurred and be continuing with respect to any
      Senior Obligations; or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              a
      Payment Blockage Period shall have occurred and be
    continuing.

            

    

     

    
      	
              4.

            	
              Subordination
      Provisions.

            

    

     

    (a)           Subordination. Payment of this
Note (including, without limitation, under Section 2 or Section 8 hereof) is and
shall be expressly subordinate and junior in right of payment to the prior
payment in full in cash of the Senior Obligations to the extent and in the
manner set forth herein, and this Note is hereby so subordinated as a claim
against the Issuer or any of the assets of the Issuer, whether such claim be
made (i) in the event of any Insolvency Proceeding, or (ii) other than in
connection with an Insolvency Proceeding, prior to the Senior Obligations being
Paid in Full.

     

     

    
      
        
        

      

      
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    (b)           Payment Over. If the
Noteholder shall receive any payment (including, without limitation, under
Section 2 or Section 8 hereto)  in violation of the terms hereof, it
shall hold such payment in trust for the benefit of the Senior Creditors and
forthwith pay it over to the Senior Debt Agent, for application in accordance
with the Senior Debt Documents.  In the event that any payment
hereunder shall be due and, at such time, the Issuer shall be prohibited by the
terms of this Note from making such payment to the Noteholder, the Issuer shall
instead, to the extent permitted by applicable law, make such payment to the
Senior Debt Agent to the extent the Senior Debt Obligations have not been Paid
In Full.

     

    (c)           Insolvency Proceedings; Acceleration
of Senior Obligations. (i)  In the event of any Insolvency
Proceeding relative to the Issuer or any Guarantor or its properties or any
acceleration of any Senior Obligations, then all of the Senior Obligations shall
first be Paid in Full before the Noteholder may receive and retain any payment
upon this Note, and in any such proceedings any payment or distribution of any
kind or character, whether in cash or property or securities, which may be
payable or deliverable in respect of this Note shall be paid or delivered
directly to the Senior Debt Agent to the extent of any unpaid Senior
Obligations, unless and until all such Senior Obligations are Paid in Full, and
the Noteholder hereby irrevocably authorizes the Senior Debt Agent, as
attorney-in-fact for such Noteholder, to prove any claim in such proceedings on
this Note, and to demand, sue for, collect and receive any such payment or
distribution, and to apply such payment or distribution to the payment of the
then unpaid Senior Obligations, and to take such other action (including
acceptance or rejection of any plan of reorganization in any Insolvency
Proceeding) in the name of such Noteholder or of the relevant Senior Creditors
as the Senior Debt Agent may deem necessary or advisable for the enforcement of
the provisions hereof.  The Noteholder shall execute and deliver such
other and further powers of attorney, assignments, proofs of claim or other
instruments as may be requested by the Senior Debt Agent in order to accomplish
the foregoing, but only with respect to such Noteholder’s capacity as a
Noteholder hereunder and not in respect of any other relationship between such
Noteholder and the Issuer.

     

    (ii)           In
the event that, notwithstanding the foregoing, upon any such Insolvency
Proceeding, any payment or distribution of the assets of the Issuer of any kind
or character, whether in cash, property or securities, shall be received by the
Noteholder in respect of this Note before all Senior Obligations are Paid in
Full, such payment or distribution shall be held in trust for the Senior
Creditors and shall forthwith be paid over to the Senior Debt Agent to the
extent any Senior Obligations have not been Paid in Full after giving effect to
any concurrent payment or distribution to the Senior Debt Agent.

     

    (iii)           In
the event of any Insolvency Proceeding against the Issuer or any Guarantor or
any of their assets, the Noteholder hereby agrees not to contest and hereby
waives any right to object to and expressly consents to (A) any post-petition
financing of or use of cash collateral by Issuer or any Guarantor, to the extent
approved or provided by the Senior Debt Agent, and the granting by Issuer or any
Guarantor to Senior Debt Agent of senior liens and priorities in connection
therewith and (B) any sale or other disposition of any property securing all of
any part of the Senior Obligations free and clear of security interests, liens
or other claims of Noteholder under Section 363 of the 

     

     

    
      
        
        

      

      
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    Bankruptcy
Code or any other provision of the Bankruptcy Code if the Senior Debt Agent has
approved or consented to such sale or disposition.

     

     (d)           Standstill; Certain Other
Agreements. (i)  The
Noteholder agrees that, until the earlier to occur of the Maturity Date or the
date the Senior Obligations are Paid in Full (A) if a payment default shall have
occurred and be continuing with respect to any Senior Obligations or a Payment
Blockage Period shall have occurred and be continuing or if an Insolvency
Proceeding shall have commenced, it will not take, demand or receive, or take
any action to accelerate or collect, any payment of all or any part of this Note
and (B) it will not file, join in or facilitate any petition or proceeding
seeking the involuntary bankruptcy of the Issuer or any Guarantor.

     

    (ii)           The
Noteholder further agrees (A) that it shall not request, seek, obtain or
maintain any lien on or security interest in any property, tangible or
intangible, of the Issuer or any Guarantor as security for payment of the
obligation under this Note and that it shall not attach or levy or take any
action against any property, tangible or intangible, of the Issuer or any
Guarantor under any circumstances and (B) that it shall not take, nor consent to
or acquiesce in the taking of, any action to set aside, challenge or otherwise
dispute the existence, validity or priority of the Senior Obligations or the
creation, attachment, validity, perfection, priority or continuation of any lien
or security interest of the Senior Debt Agent or the Senior Creditors in any
property, tangible or intangible, of the Issuer, any Guarantor or any of their
Subsidiaries.

     

    (iii)           The
Senior Creditors, or any of them, may, at any time and from time to time,
without the consent of or notice to the Noteholder, without incurring any
responsibility to the Noteholder, and without impairing or releasing any of the
rights of any of the Senior Creditors, or any of the obligations of the
Noteholder:

     

    
      	
               
      

            	
              (A)

            	
              change
      the amount (subject to Section 6(b)) or terms of or renew or extend any
      Senior Obligations or amend any Senior Debt Document, as the case may be,
      in any manner or enter into or amend in any manner any other agreement
      relating to any Senior Obligations;

            

    

     

    
      	
               
      

            	
              (B)

            	
              sell,
      exchange, release or otherwise deal with any property at any time pledged
      or mortgaged or subject to any lien to secure any Senior
      Obligations;

            

    

     

    
      	
               
      

            	
              (C)

            	
              release
      anyone liable in any manner for the payment or collection of any Senior
      Obligations; and

            

    

     

    
      	
               
      

            	
              (D)

            	
              exercise
      or refrain from exercising any rights against the Issuer, any Guarantor or
      any other Person (including the
Noteholder).

            

    

     

    (e)           Certain
Waivers.         (i)  The
Noteholder hereby waives notice of or proof of reliance by any Senior Creditor
upon the provisions hereof, and the Senior Obligations shall 

     

     

    
      
        
        

      

      
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    conclusively
be deemed to have been created, contracted, incurred and maintained in reliance
upon the provisions hereof.

     

    (ii)           The
Issuer hereby waives diligence, presentment, demand, protest and notice of any
kind whatsoever.  The non-exercise by the Noteholder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.

     

    (f)           Acknowledgement of Subordination and
Payment Restrictions. The subordination provisions contained herein and
the provisions contained in Section 3 hereof are for the benefit of the Senior
Debt Agent, Senior Creditors and their respective successors and assigns and may
not be rescinded or cancelled or modified in any way without the prior written
consent of the Senior Debt Agent. The Noteholder hereby expressly acknowledges and
agrees to the subordination provisions and payment restrictions contained herein.

     

    5.           Affirmative
Covenants.  So long as any principal of and interest on this
Note or any other amount payable hereunder remains unpaid or
unsatisfied:

     

    
      	
               
      

            	
              (a)

            	
              Information.  The
      Issuer shall deliver to the
Noteholder:

            

    

     

    
      	
               
      

            	
              (i)

            	
              as
      soon as available, but in any event within 90 days after the end of each
      fiscal year of the Issuer, a consolidated balance sheet of the Issuer and
      its Subsidiaries as at the end of such fiscal year, and related
      consolidated statements of income, operations, shareholders’ equity and
      cash flows for such fiscal year, all in reasonable detail and prepared in
      accordance with GAAP, setting forth in each case in comparative form the
      figures for the previous fiscal year and audited and accompanied by a
      report and opinion of a firm of independent public accountants of
      recognized national standing (without a “going concern” or  like
      qualification or exception and without any qualification or exception as
      to the scope of audit) as presenting fairly in all material respects, the
      financial position, results of operations and cash flows of the Issuer and
      its Subsidiaries on a consolidated basis in accordance with
      GAAP;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              as
      soon as available, but in any event within 45 days after the end of each
      of the first three fiscal quarters of each fiscal year of the Issuer, a
      consolidated balance sheet of the Issuer and its Subsidiaries as at the
      end of such fiscal quarter and the related statements of operations,
      stockholders’ equity and cash flows for such fiscal quarter and for the
      then elapsed portion of such fiscal year, setting forth in each case in
      comparative form the figures for the corresponding period or periods of
      (or, in the case of the balance sheet, as of the end of) the previous
      fiscal year, all certified by a Responsible Officer as presenting fairly
      in all material respects the financial position, results of operations and
      cash flows of the Issuer and its Subsidiaries on a consolidated basis in
      

            

    

     

     

    
      
        
        

      

      
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    accordance with GAAP, subject to normal year-end adjustments and
the absence of footnotes;

     

    
      	
               
      

            	
              (iii)

            	
              within
      5 Business Days after the occurrence of any Default of which a Responsible
      Officer has obtained knowledge, a notice setting forth such Default and
      stating what action the Issuer has taken or proposes to take with respect
      thereto; and

            

    

     

    
      	
               
      

            	
              (iv)

            	
              within
      5 Business Days of the occurrence of any matter that has resulted or could
      reasonably be expected to result in a Material Adverse Effect, including
      the commencement of any material litigation or proceeding affecting the
      Issuer or any Material Subsidiary, a notice setting forth such event and
      actions taken (if any) with respect
thereto.

            

    

     

    (b)           Preservation of Existence,
Etc. The Issuer shall (i) preserve, renew and maintain in full force and
effect its legal existence under the laws of the jurisdiction of its
organization except in a transaction permitted hereunder and (ii) take all
reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in any material respect in the normal conduct
of its business, except to the extent that failure to do so could not be
reasonably be expected to have a Material Adverse Effect.

     

    (c)           Maintenance of Properties. The
Issuer shall, and shall cause each of its Subsidiaries, to maintain, preserve
and protect all of its material properties and equipment necessary in the
operation of its business in good working order and condition, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

     

    (d)           Compliance with Law. The
Issuer shall, and shall cause each of its Subsidiaries to, comply in all
material respects with the requirements of all laws and all orders, writs,
injunctions and decrees applicable to it or to its business or property, except
in such instances in which (x) such requirement of law or order, injunction or
decree is being contested in good faith by appropriate proceedings diligently
conducted or (y) the failure to comply therewith could not be reasonable be
expected to have a Material Adverse Effect.

     

    (e)           Maintenance of Books and
Records. The Issuer shall, and shall cause each of its Subsidiaries to,
maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of the
Issuer or such Subsidiary, as the case may be.

     

    6.           Negative
Covenants.  So long as any principal of and interest on this
Note or any other amount payable hereunder remains unpaid or
unsatisfied:

     

    (a)           Mergers and
Consolidations. The Issuer shall not merge or consolidate with or
into any Person or sell all or substantially all of its assets, except that so
long as both prior to and subsequent to such merger or consolidation, no Event
of Default has occurred and is continuing, the Issuer may merge or consolidate
with any Person, provided that (x) the
Issuer 

     

     

    
      
        
        

      

      
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    shall be
the continuing or surviving Person or (y) if the Issuer shall not be the
surviving Person, such surviving Person shall have assumed the obligations of
the Issuer hereunder pursuant to documentation in form and substance reasonably
satisfactory to the Noteholder (each such merger or consolidation, a “Permitted
Merger”).

     

    (b)           Indebtedness.      (i)           The
Issuer shall not, and shall not permit any of its Subsidiaries to, Incur any
Indebtedness; provided, however, that the
Issuer or any Subsidiary may Incur Indebtedness, if the Interest Charge Coverage
Ratio for the Measurement Period immediately preceding the date on which such
additional Indebtedness is Incurred would have been at least 2 to 1, determined
on a pro forma basis
(including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been Incurred at the beginning of such Measurement Period.

     

    
      	
               
      

            	
              (ii)

            	
              Notwithstanding
      Section 6(b)(i) above, the Issuer and the Subsidiaries may Incur the
      following Indebtedness:

            

    

     

    (A)           Credit
Facility Indebtedness in an aggregate outstanding principal amount not to exceed
$2,000,000,000;

    

    (B)           Guarantees
by the Issuer and its Subsidiaries in respect of Indebtedness otherwise
permitted hereunder of the Issuer or any of its Subsidiaries;

    

    (C)           Indebtedness
of the Issuer or any Subsidiary owing to the Issuer or any other
Subsidiary;

    

    (D)           Indebtedness
in respect of Capitalized Leases and Indebtedness Incurred in financing the
acquisition, construction, repair, replacement or improvement of fixed or
capital assets by the Issuer or any Subsidiary;

    

    (E)           Indebtedness
of the Issuer or any Subsidiary (I) assumed in connection with or (II) Incurred
to finance, in each case, any acquisition of property and assets or businesses
of any Person or of assets constituting a business unit, a line of business or
division of such Person, or Equity Interests in a Person;

    

    (F)           Indebtedness
representing deferred compensation to employees of the Issuer and its
Subsidiaries incurred in the ordinary course of business;

    

    (G)           Indebtedness
to current or former officers, directors, managers, consultants and employees,
their respective estates, spouses or former spouses to finance the purchase or
redemption of Equity Interests of the Issuer (or any direct or indirect parent
thereof);

     

     

    
      
        
        

      

      
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    (H)           Indebtedness
Incurred by the Issuer or any Subsidiary in an acquisition, or any disposition
of assets, in each case to the extent constituting indemnification obligations
or obligations in respect of purchase price (including earn-outs) or other
similar adjustments;

    

    (I)           Indebtedness
consisting of obligations of the Issuer and any Subsidiary under deferred
compensation or other similar arrangements incurred by such Person in connection
with (I) the transactions contemplated by the Stock Purchase Agreement, or (II)
other acquisitions or dispositions of assets;

    

    (J)           Cash
Management Obligations and other Indebtedness in respect of netting services,
automatic clearinghouse arrangements, overdraft protections, employee credit
card programs and other cash management and similar arrangements in the ordinary
course of business and any guarantees thereof;

    

    (K)           Indebtedness
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;

    

    (L)           Indebtedness
incurred by the Issuer or any Subsidiary in respect of letters of credit, bank
guarantees, bankers’ acceptances, warehouse receipts or similar instruments
issued or created in the ordinary course of business or consistent with past
practice, including in respect of workers compensation claims, health,
disability or other employee benefits or property, casualty or liability
insurance or self-insurance or other Indebtedness with respect to
reimbursement-type obligations regarding workers compensation
claims;

    

    (M)           obligations
in respect of performance, bid, appeal and surety bonds and performance and
completion guarantees and similar obligations provided by the Issuer or any
Subsidiary or obligations in respect of letters of credit, bank guarantees or
similar instruments related thereto, in each case in the ordinary course of
business or consistent with past practice;

    

    (N)           all
premiums (if any), interest (including post-petition interest), fees, expenses,
charges and additional or contingent interest on obligations described in
clauses (A) through (M) above and (O) through (R) below;

    

    (O)           Guarantees
Incurred in the ordinary course of business in respect of obligations to
suppliers, customers, franchisees, lessors and licensees;

    

    (P)           Indebtedness
Incurred in the ordinary course of business in respect of obligations of the
Issuer or any Subsidiary to pay the deferred purchase 

     

     

    
      
        
        

      

      
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    price of
goods or services or progress payments in connection with such goods and
services;

    

    (Q)           Indebtedness
resulting from the refinancing, refunding, replacement, renewal or extension of
Indebtedness described in clauses (A) through (P) above; and

    

    (R)           Indebtedness
resulting from the refinancing, refunding, replacement, renewal or extension of
Indebtedness described in Section 6(b)(i) above.

    

     (c)           Liens. The Issuer shall not,
and shall not permit any of its Subsidiaries to, create, incur, assume or suffer
to exist any Lien upon any of its property, assets or revenues, whether now
owned or hereafter acquired to secure Pari Passu/Junior Indebtedness, without
making, or causing such Subsidiary to make effective provision for securing this
Note equally and ratably with such Pari Passu/Junior Indebtedness or in the
event such Pari Passu/Junior Indebtedness is subordinate in right of payment to
this Note, prior to such Indebtedness, as to such property or assets for so long
as such Pari Passu/Junior Indebtedness shall be secured. The foregoing
restrictions shall not apply to the following Liens:

     

    
      	
               
      

            	
              (A)

            	
              Liens
      existing on the date hereof;

            

    

    

    
      	
               
      

            	
              (B)

            	
              Liens
      securing any Senior Obligations;

            

    

    

    
      	
               
      

            	
              (C)

            	
              Liens
      for taxes, assessments or governmental charges that are not overdue for a
      period of more than 120 days or that are being contested in good faith and
      by appropriate proceedings for which appropriate reserves have been
      established in accordance with
GAAP;

            

    

    

    
      	
               
      

            	
              (D)

            	
              statutory
      or common law Liens of landlords, carriers, warehousemen, mechanics,
      materialmen, repairmen, construction contractors or other like Liens
      arising in the ordinary course of business, so long as, in each case, such
      Liens arise in the ordinary course of
business;

            

    

    

    
      	
               
      

            	
              (E)

            	
              (I)
      pledges or deposits in the ordinary course of business in connection with
      workers’ compensation, unemployment insurance and other social security
      legislation and (II) pledges and deposits in the ordinary course of
      business securing liability for reimbursement or indemnification
      obligations of (including obligations in respect of letters of credit or
      bank guarantees for the benefit of) insurance carriers providing property,
      casualty or liability insurance to the Issuer or any
      Subsidiary;

            

    

    
 

    
      
        
        

      

      
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              (F)

            	
              deposits
      to secure the performance of bids, trade contracts, governmental contracts
      and leases (other than Indebtedness for borrowed money), statutory
      obligations, surety, stay, customs and appeal bonds, performance bonds and
      other obligations of a like nature (including those to secure health,
      safety and environmental obligations) incurred in the ordinary course of
      business;

            

    

    

    
      	
               
      

            	
              (G)

            	
              Liens
      securing Cash Management Obligations, Hedging Agreements and other
      Indebtedness in respect of netting services, automatic clearinghouse
      arrangements, overdraft protections, employee credit card programs and
      other cash management and similar arrangements in the ordinary course of
      business and any guarantees
thereof;

            

    

    

    
      	
               
      

            	
              (H)

            	
              easements,
      rights-of-way, restrictions (including zoning restrictions),
      encroachments, protrusions and other similar encumbrances and minor title
      defects affecting real property that, in the aggregate, do not in any case
      materially interfere with the ordinary conduct of the business of the
      Issuer and its Subsidiaries, taken as a whole, and any exception on the
      title policies issued in connection with the mortgaged
      property;

            

    

    

    
      	
               
      

            	
              (I)

            	
              Liens
      arising from judgments or orders for the payment of
  money;

            

    

    

    
      	
               
      

            	
              (J)

            	
              Liens
      securing Indebtedness permitted under Section
  6(b)(ii)(D);

            

    

    

    
      	
               
      

            	
              (K)

            	
              leases,
      licenses, subleases or sublicenses granted to others in the ordinary
      course of business;

            

    

    

    
      	
               
      

            	
              (L)

            	
              Liens
      in favor of customs and revenue authorities arising as a matter of law to
      secure payment of customs duties in connection with the importation of
      goods in the ordinary course of
business;

            

    

    

    
      	
               
      

            	
              (M)

            	
              Liens
      (I) of a collection bank arising under Section 4-210 of the Uniform
      Commercial Code on the items in the course of collection, (II) attaching
      to commodity trading accounts or other commodities brokerage accounts
      incurred in the ordinary course of business and (III) in favor of a
      banking or other financial institution arising as a matter of law
      encumbering deposits or other funds maintained with a financial
      institution (including the right of set off) and that are within the
      general parameters customary in the banking
  industry;

            

    

    

    
      	
               
      

            	
              (N)

            	
              Liens
      (I) on cash advances in favor of the seller of any property to be acquired
      in an investment to be applied against the purchase
  

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    price
for such investment or (II) consisting of an agreement to dispose of any
property;

     

    
      	
               
      

            	
              (O)

            	
              Liens
      in favor of the Issuer or a Subsidiary securing Indebtedness permitted
      under Section 6(b)(ii)(C);

            

    

    

    
      	
               
      

            	
              (P)

            	
              Liens
      existing on property at the time of its acquisition or existing on the
      property of any Person at the time such Person becomes a Subsidiary and
      the Indebtedness secured thereby is permitted under Section 6(b)(ii)(D) or
      (E);

            

    

    

    
      	
               
      

            	
              (Q)

            	
              any
      interest or title of a lessor, sublessor, licensor or sublicensor or
      secured by a lessor’s, sublessor’s, licensor’s or sublicensor’s interest
      under leases or licenses entered into by the Issuer or any Subsidiary in
      the ordinary course of business;

            

    

    

    
      	
               
      

            	
              (R)

            	
              Liens
      arising out of conditional sale, title retention, consignment or similar
      arrangements for sale of goods entered into by the Issuer or any
      Subsidiary in the ordinary course of
business;

            

    

    

    
      	
               
      

            	
              (S)

            	
              Liens
      deemed to exist in connection with investments in repurchase agreements
      and reasonable customary initial deposits and margin deposits and similar
      Liens attaching to commodity trading accounts or other brokerage accounts
      maintained in the ordinary course of business and not for speculative
      purposes;

            

    

    

    
      	
               
      

            	
              (T)

            	
              Liens
      that are contractual rights of setoff (I) relating to the establishment of
      depository relations with banks or other financial institutions not given
      in connection with the issuance of Indebtedness, (II) relating to pooled
      deposit or sweep accounts of the Issuer or any of its Subsidiaries to
      permit satisfaction of overdraft or similar obligations incurred in the
      ordinary course of business of the Issuer and its Subsidiaries or (III)
      relating to purchase orders and other agreements entered into with
      customers of the Issuer or any of its Subsidiaries in the ordinary course
      of business;

            

    

    

    
      	
               
      

            	
              (U)

            	
              Liens
      solely on any cash earnest money deposits made by the Issuer or any of its
      Subsidiaries in connection with any letter of intent or purchase
      agreement;

            

    

    

    
      	
               
      

            	
              (V)

            	
              (I)
      Liens on the Equity Interests of any Subsidiary acquired pursuant to an
      acquisition to secure Indebtedness incurred pursuant to Section
      6(b)(ii)(E) in connection with such acquisition and (II) Liens on the
      assets of such Subsidiary and any of its Subsidiaries
  

            

    

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    to
secure Indebtedness (or to secure a Guarantee of such Indebtedness) incurred
pursuant to Section 6(b)(ii)(E) in connection with such acquisition;

     

    
      	
               
      

            	
              (W)

            	
              ground
      leases in respect of real property on which facilities owned or leased by
      the Issuer or any of its Subsidiaries are
  located;

            

    

    

    
      	
               
      

            	
              (X)

            	
              Liens
      arising from precautionary Uniform Commercial Code financing statement or
      similar filings;

            

    

    

    
      	
               
      

            	
              (Y)

            	
              Liens
      on insurance policies and the proceeds thereof securing the financing of
      the premiums with respect thereto;

            

    

    

    
      	
               
      

            	
              (Z)

            	
              any
      zoning or similar law or right reserved to or vested in any Governmental
      Authority to control or regulate the use of any real property that does
      not materially interfere with the ordinary conduct of the business of the
      Issuer and its Subsidiaries, taken as a
whole;

            

    

    

    
      	
               
      

            	
              (AA)

            	
              Liens
      on specific items of inventory or other goods and the proceeds thereof
      securing such Person’s obligations in respect of documentary letters of
      credit or banker’s acceptances issued or created for the account of such
      Person to facilitate the purchase, shipment or storage of such inventory
      or goods;

            

    

    

    
      	
               
      

            	
              (BB)

            	
              landlords’
      and lessors’ statutory Liens in respect of rent not in
      default;

            

    

    

    
      	
               
      

            	
              (CC)

            	
              Liens
      in connection with any
sale-leasebacks;

            

    

    

    
      	
               
      

            	
              (DD)

            	
              other
      Liens securing Indebtedness or other obligations in an aggregate principal
      amount at any time outstanding not to exceed $50,000,000;
    and

            

    

    

    
      	
               
      

            	
              (EE)

            	
              the
      modification, replacement, renewal or extension of any Lien permitted
      under this Section 6(c).

            

    

    

    (d)           Junior Subordinated Seller
Note. The Issuer shall not make, nor cause any of its Subsidiaries
to make, any prepayment of any principal amount of the Junior Subordinated
Seller Note,  so long as any principal of or interest on this Note or
any other amount payable hereunder remains unpaid.

     

    
      7.           
Events of
Default.  The following are “Events of
Default”:

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (a)           The
Issuer fails to pay any principal of this Note as and on the date when due and
such failure shall continue unremedied for more than 5 days; or

     

    (b)           The
Issuer fails to pay any interest on this Note as and on the date when due; and
such failure shall continue unremedied for more than 30 days; or

     

    (c)           The
Issuer fails to perform or observe any term, covenant or agreement contained in
Section 6(a) hereof; or

     

    (d)           The
Issuer fails to perform or observe any other covenant or agreement (not
specified above) contained in this Note on its part to be performed or observed
and such failure continues for 60 days after written notice thereof shall have
been given by the Noteholder to the Issuer; or

     

    (e)           An
event of default has occurred and is continuing under a Credit Facility with an
outstanding principal amount in excess of $100,000,000 and the Senior Creditors
thereunder have accelerated the Senior Obligations thereunder as a result
thereof; provided, however, if any such
acceleration of Senior Obligations has been rescinded, there shall no longer be
any Event of Default under this Section 7(e) with respect to such acceleration;
or

     

    (f)           The
Issuer or any Material Subsidiary institutes any proceeding under any Debtor
Relief Law, or makes a general assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator, or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator, or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered,
or consented to by such Person, in any such proceeding or an order for the
liquidation of any such Person is entered in any such proceeding or any such
Person admits in writing its inability to pay its debts generally as they become
due (such proceedings collectively, the “Insolvency
Proceedings”).

     

    Upon the
occurrence of an Event of Default, the Noteholder may declare all sums
outstanding hereunder, including all interest thereon, to be immediately due and
payable, whereupon the same shall become and be immediately due and payable,
without notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor, or other notices or demands of any kind or character,
all of which are hereby expressly waived; provided, however, that upon
the occurrence of an actual or deemed entry of an order for relief with respect
to the Issuer under the Bankruptcy Code, all sums outstanding hereunder,
including all interest thereon, shall become and be immediately due and payable,
without notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor, or other notices or demands of any kind or character,
all of which are hereby expressly waived.

     

    
      8.           
Guaranty.

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (a)           Guaranty.  Each
Guarantor hereby absolutely and unconditionally guarantees, as a guaranty of
payment and performance and not merely as a guaranty of collection, prompt
payment when due, whether at stated maturity, by required prepayment, upon
acceleration, demand or otherwise, and at all times thereafter, of any and all
existing and future indebtedness and liabilities of every kind, nature and
character, direct or indirect, absolute or contingent, liquidated or
unliquidated, voluntary or involuntary and whether for principal, interest,
premiums, fees, indemnities, damages, costs, expenses or otherwise, of the
Issuer to the Noteholder under this Note (including all renewals, extensions,
amendments, refinancings and other modifications thereof and all costs,
attorneys’ fees and expenses incurred by the Noteholder in connection with the
collection or enforcement thereof), and whether recovery upon such indebtedness
and liabilities may be or hereafter become unenforceable or shall be an allowed
or disallowed claim under any proceeding or case commenced by or against any
Guarantor or the Issuer under any Debtor Relief Law, and including interest that
accrues after the commencement by or against the Issuer of any proceeding under
any Debtor Relief Laws (such obligations, the “Guaranteed Obligations” and
such guaranty, the “Guaranty”). Notwithstanding
the foregoing, the liability of each Guarantor with respect to its Guaranteed
Obligations shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations under the Guaranty subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provision of any
state law. This Guaranty shall not be affected by the genuineness, validity,
regularity or enforceability of the Guaranteed Obligations or any instrument or
agreement evidencing any Guaranteed Obligations, or by the existence, validity,
enforceability, perfection, non-perfection or extent of any collateral therefor,
or by any fact or circumstance relating to the Guaranteed Obligations which
might otherwise constitute a defense to the obligations of any Guarantor under
this Guaranty, and each Guarantor hereby irrevocably waives any defenses it may
now have or hereafter acquire in any way relating to any or all of the
foregoing.

     

    (b)           Rights of
Noteholder.  Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of this Note.
Each Guarantor consents and agrees that the Noteholder may, at any time and from
time to time, without notice or demand, and without affecting the enforceability
or continuing effectiveness hereof:  (i) amend, extend, renew,
compromise, discharge, accelerate or otherwise change the time for payment or
the terms of the Guaranteed Obligations or any part thereof; (ii) take, hold,
exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose
of any security for the payment of this Guaranty or any Guaranteed Obligations;
(iii) apply such security and direct the order or manner of sale thereof as the
Noteholder in its sole discretion may determine; and (iv) release or substitute
one or more of any endorsers or other guarantors of any of the Guaranteed
Obligations.  Without limiting the generality of the foregoing, each
Guarantor consents to the taking of, or failure to take, any action which might
in any manner or to any extent vary the risks of such Guarantor under this
Guaranty or which, but for this provision, might operate as a discharge of such
Guarantor.

     

    (c)           Certain
Waivers.  Each Guarantor waives (i) any defense arising by
reason of any disability or other defense of the Issuer or any other guarantor,
or the cessation from any cause whatsoever (including any act or omission of the
Noteholder) of the liability of the Issuer; 

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (ii) any
defense based on any claim that such Guarantor’s obligations exceed or are more
burdensome than those of the Issuer; (iii) the benefit of any statute of
limitations affecting such Guarantor’s liability hereunder; (iv) any right to
require the Noteholder to proceed against the Issuer, proceed against or exhaust
any security for the Indebtedness, or pursue any other remedy in the
Noteholder’s power whatsoever; (v) any benefit of and any right to participate
in any security now or hereafter held by the Noteholder; and (vi) to the fullest
extent permitted by law, any and all other defenses or benefits that may be
derived from or afforded by applicable law limiting the liability of or
exonerating guarantors or sureties.  Each Guarantor expressly waives
all setoffs and counterclaims and all presentments, demands for payment or
performance, notices of nonpayment or nonperformance, protests, notices of
protest, notices of dishonor and all other notices or demands of any kind or
nature whatsoever with respect to the Guaranteed Obligations, and all notices of
acceptance of this Guaranty or of the existence, creation or incurrence of new
or additional Guaranteed Obligations.

     

    (d)           Subrogation.  Each
Guarantor shall not exercise any right of subrogation, contribution, indemnity,
reimbursement or similar rights with respect to any payments it makes under this
Guaranty until all of the Guaranteed Obligations and any amounts payable under
this Guaranty have been indefeasibly paid and performed in full.  If
any amounts are paid to such Guarantor in violation of the foregoing limitation,
then such amounts shall be held in trust for the benefit of the Noteholder and
shall forthwith be paid to the Noteholder to reduce the amount of the Guaranteed
Obligations, whether matured or unmatured.

     

    (e)           Termination;
Reinstatement.  (i) This Guaranty is a continuing and
irrevocable guaranty of all Guaranteed Obligations now or hereafter existing and
shall remain in full force and effect until all Guaranteed Obligations and any
other amounts payable under this Guaranty are indefeasibly paid in full in
cash.  Notwithstanding the foregoing, this Guaranty shall continue in
full force and effect or be revived, as the case may be, if any payment by or on
behalf of the Issuer or any Guarantor is made, or the Noteholder exercises its
right of setoff, in respect of the Guaranteed Obligations and such payment or
the proceeds of such setoff or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Noteholder 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, all as if such payment had
not been made or such setoff had not occurred and whether or not the Noteholder
is in possession of or has released this Guaranty and regardless of any prior
revocation, rescission, termination or reduction.  The obligations of
each Guarantor under this paragraph shall survive termination of this
Guaranty.

     

    (ii)           Notwithstanding
Section 8(e)(i) above, if any Guarantor ceases to be a co-borrower or a
guarantor  of the obligations under the Credit Agreement pursuant to
the terms thereof, such Guarantor shall be automatically released from its
Guaranty without any further action from the Noteholder.

     

    (f)           Additional
Guarantors.  To the extent that any Subsidiary shall become a
co-borrower or a guarantor of the obligations under the Credit Agreement
pursuant to the terms thereof, the Issuer will cause concurrently such
Subsidiary to execute a joinder agreement in 

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    form and
substance reasonably satisfactory to the Noteholder, whereupon such Subsidiary
shall become a “Guarantor” as defined herein.

     

    9.           Set-Off.  Notwithstanding
any provision to the contrary herein, the parties hereto agree that any Set-Off
Amount (as defined in the Stock Purchase Agreement) shall be applied to reduce
this Note or the Junior Subordinated Seller Note in accordance with the
provisions of Section 9.06(d) of the Stock Purchase Agreement.

     

    10.           Successors and
Assigns. The provisions of this Note shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that neither the Issuer nor any Guarantor may assign
its rights and obligations under this Note other than pursuant to a Permitted
Merger. The Noteholder may at any time assign its rights and obligations under
this Note (which assignment shall be in respect of not less than all of its
obligations hereunder) to any other Person with the consent of the Issuer, which
consent shall not be unreasonably withheld, conditioned or
delayed,  provided that the
Issuer shall have been offered the right of first refusal with respect to such
assignment (other than any assignment as collateral security for Indebtedness)
for a period of 30 days and the Issuer shall have elected not to exercise such
right upon the earlier to occur of such election or the expiry of such 30 day
period, and provided further that, in no
event shall the Issuer be required to consent to a potential assignee that has
been determined by the majority of the directors of the board of directors
unaffiliated with the Noteholder to be an “Adverse Person”.

     

    11.           Definitions. As used in
this Agreement, the following terms shall have the following
meanings:

     

    “Affiliate” means, with
respect to any Person, any other Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, such Person. For
purposes of this definition, “control” (including, with correlative meanings,
the terms “controlling,” “controlled by” and “under common control with”) with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.

     

    
      	
               
      

            	
              “Bankruptcy Code” means
      The Bankruptcy Reform Act of 1978, as codified as 11 U.S.C. Section 101
      et.seq.

            

    

     

    
      	
               
      

            	
              “Company” has the meaning
      set forth in Section 1.

            

    

     

    
      	
               
      

            	
              “Business Day” means any
      day other than Saturday, Sunday or other day on which commercial banks are
      authorized to close, or are in fact closed in New York, New
      York.

            

    

     

    
      	
               
      

            	
              “Capitalized Lease” means
      a lease under which the Issuer or any of its Subsidiaries is the lessee or
      obligor, the discounted future rental payment obligations under which are
      required to be capitalized on the balance sheet of the lessee or obligor
      in accordance with GAAP.

            

    

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              “Cash Management
      Obligations” means any obligations of the Issuer or any Subsidiary
      in respect of overdrafts and related liabilities arising from treasury,
      depository or cash management
services.

            

    

     

    
      	
               
      

            	
              “Change of Control” means
      an event or series of events by which any “person” or “group” (as such
      terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act
      of 1934, but excluding any employee benefit plan of such person or its
      subsidiaries, and any person or entity acting in its capacity as trustee,
      agent or other fiduciary or administrator of any such plan) (any such
      person or group, an “Acquiror”), other than
      an Excluded Person, becomes the “beneficial owner” (within the meaning of
      Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934), directly
      or indirectly, of 40% or more of the equity securities of the Issuer
      entitled to vote for members of the board of directors or equivalent
      governing body of the Issuer (“Issuer Voting
      Securities”) on a fully-diluted basis (a “Control Interest”);
      provided
      that no Change of Control shall be deemed to have occurred if (i) the
      Acquiror acquires or has acquired any Issuer Voting Securities directly or
      indirectly from any Payee Party or any Affiliate of a Payee Party at any
      time from and after the date hereof or (ii) the Acquiror has entered into
      any agreement, arrangement or understanding (whether written or oral) in
      connection with the acquisition, disposition or voting of, or any other
      matter relating to, any of the Issuer Voting Securities held by any Payee
      Party or Affiliate thereof (unless, in the case of clause (i) only,
      the Acquiror acquires such Control Interest pursuant to a transaction in
      which the Acquiror offered to acquire all outstanding Issuer Voting
      Securities, so long as all holders of Issuer Voting Securities received
      identical consideration in such
transaction).

            

    

     

    
      	
               
      

            	
              “Consolidated EBITDA”
      means, at any date of determination, an amount equal to Consolidated Net
      Income of the Issuer and its Subsidiaries on a consolidated basis for the
      most recently completed Measurement Period, plus (a) the following to the
      extent deducted in calculating such Consolidated Net Income: (i)
      Consolidated Total Interest Expense, (ii) the provision for Federal,
      state, local and foreign income taxes (net of any tax credits), (iii)
      depreciation and amortization expense, (iv) other expenses or losses
      reducing such Consolidated Net Income which do not represent a cash item
      in such period (including LIFO reserves) or any future period and (v)
      expenses deducted in such period resulting from the issuance of Equity
      Interests permitted under the Credit Agreement, provided that such
      expenses are and will be non-cash items in the period when taken and in
      all later fiscal periods (in each case of or by the Issuer and its
      Subsidiaries for such Measurement Period), minus (b) all non-cash gains
      increasing Consolidated Net Income (in each case of or by the Issuer and
      its Subsidiaries for such Measurement Period), all as determined on a
      consolidated basis in accordance with
GAAP.

            

    

     

    
      	
               
      

            	
              “Consolidated Net Income”
      means, as of any date of determination, the net income of the Issuer and
      its Subsidiaries for the most recently completed Measurement Period, all
      as determined on a consolidated basis in accordance with GAAP, provided,
      however, that there shall be excluded (a) extraordinary gains (or
      extraordinary losses) for 

            

    

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    such Measurement Period, (b) the income (or loss) of any
Subsidiary during such Measurement Period in which any other Person has a joint
interest, except to the extent of the amount of cash dividends or other
distributions actually paid in cash to such Subsidiary during such period, (c)
the income (or loss) of any Person during such Measurement Period and accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated with
the Issuer or any of its Subsidiaries or such Person’s assets are acquired by
the Issuer or any of its Subsidiaries, and (d) the income of any Subsidiary to
the extent that the declaration or payment of dividends or similar distributions
by that Subsidiary of that income is not at the time permitted by operation of
the terms of its organization documents or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary, except that the Issuer’s equity in any net loss of any such
Subsidiary for such Measurement Period shall be included in determining
Consolidated Net Income.

     

    
      “Consolidated Total Interest
Expense” means, for any period, for the Issuer and its Subsidiaries on a
consolidated basis, all interest and all amortization of debt discount and
expense (including commitment fees, letter of credit fees, balance deficiency
fees and similar expense) on all Indebtedness of the Issuer and the Subsidiaries
on a consolidated basis (including outstanding letters of credit), paid or
required to be paid during such period, all as determined in accordance with
GAAP, together with the portion of rent expense of the Issuer and its
Subsidiaries with respect to such period under Capitalized Leases that would be
treated as interest under GAAP.

    

     

    
      	
               
      

            	
              “Credit Agreement” means
      that certain Credit Agreement, dated as of September 30, 2009 (together
      with all exhibits and schedules thereto and as amended, restated, amended
      and restated, extended, replaced, refinanced, supplemented or otherwise
      modified in writing from time to time) among the Company, as a borrower,
      certain subsidiaries of the Company, as designated co-borrowers, Bank of
      America, N.A., as administrative agent and the other financial
      institutions party thereto.

            

    

     

    
      	
               
      

            	
              “Credit Facilities” means
      (i) one or more debt facilities (including without limitation, the Credit
      Agreement) or commercial paper facilities, in each case with banks or
      lenders providing for revolving credit loans, term loans, receivables
      financing or letters of credit, and (ii) any notes, bonds or other
      instruments issued and sold in a public offering, Rule 144A or other
      private transaction (together with related indentures, note purchase
      agreements or similar agreements), in each case as to clauses (i) and
      (ii), (A) as amended, restated, modified, renewed, refunded, replaced or
      refinanced in whole or in part form time to time and (B) excluding Pari
      Passu/Junior Indebtedness.

            

    

     

    “Credit Facility Indebtedness”
means, collectively, the Indebtedness of the Borrower and its Subsidiaries under
any Credit Facility, including any “Secured Obligations” under, and as defined
in, the Credit Agreement.

     

    
      	
               
      

            	
              “Debtor Relief Laws”
      means the Bankruptcy Code, and all other liquidation, conservatorship,
      bankruptcy, assignment for the benefit of creditors, moratorium,
      

            

    

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    rearrangement, receivership, insolvency, reorganization, or
similar debtor relief laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

     

    
      	
               
      

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

            

    

     

    
      	
               
      

            	
              “Dollar” mean lawful
      money of the United States.

            

    

     

    
      	
               
      

            	
              “Equity Interests” means,
      with respect to any Person, all of the shares of capital stock of (or
      other ownership or profit interests in) such Person, all of the warrants,
      options or other rights for the purchase or acquisition from such Person
      of shares of capital stock of (or other ownership or profit interests in)
      such Person, all of the securities convertible into or exchangeable for
      shares of capital stock of (or other ownership or profit interests in)
      such Person or warrants, rights or options for the purchase or acquisition
      from such Person of such shares (or such other interests), and all of the
      other ownership or profit interests in such Person (including partnership,
      member or trust interests therein), whether voting or nonvoting, and
      whether or not such shares, warrants, options, rights or other interests
      are outstanding on any date of
determination.

            

    

     

    
      	
               
      

            	
              “Excluded Indebtedness”
      means Permitted Indebtedness constituting (a) Indebtedness pursuant to
      Section 6(b)(ii)(C) or (b) Pari Passu/Junior
  Indebtedness.

            

    

     

    
      	
               
      

            	
              “Excluded Person” means
      (a) each Payee, his or her lineal descendants, members of his or her
      immediate family and trusts for the benefit of any such individuals or the
      executor or administrator of the estate or legal representative of any
      such individuals or any Affiliate of any of the foregoing (the “Payee Parties”) or (b)
      any “group” (as such term is used in Sections 13(d) and 14(d) of the
      Securities Exchange Act of 1934) that includes one or more Payee
      Parties.

            

    

     

    
      	
               
      

            	
              “Events of Default” has
      the meaning specified in Section 7.

            

    

     

    
      	
               
      

            	
              “GAAP” means generally
      accepted accounting principles in the United States set forth in the
      opinions and pronouncements of the Accounting Principles Board and the
      American Institute of Certified Public Accountants and statements and
      pronouncements of the Financial Accounting Standards Board or such other
      principles as may be approved by a significant segment of the accounting
      profession in the United States, that are applicable to the circumstances
      as of the date of determination, consistently
  applied.

            

    

    

    
      	
               
      

            	
              “Governmental Authority”
      means the government of the United States or any other nation, or of any
      political subdivision thereof, whether state or local, and any agency,
      authority, instrumentality, regulatory body, court, central bank or other
      entity exercising executive, legislative, judicial, taxing, regulatory or
      administrative powers or functions of or pertaining to government
      (including any supra-national bodies such as the European Union or the
      European Central Bank).

            

    

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    “Guarantee” by any Person (the
“guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including
any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or advance or supply funds for the purchase of)
any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, or (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation.

     

    
      	
               
      

            	
              “Guaranteed Obligations”
      has the meaning specified in Section
8(a).

            

    

     

    
       
“Guarantors” means the Initial
Guarantors and each Subsidiary who becomes or is required to become a Guarantor
pursuant to Section 8(f).

    

     

    
      	
               
      

            	
              “Guaranty” has the
      meaning specified in Section 8(a).

            

    

     

    
      	
               
      

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

            

    

     

    “Incur” means, with respect to
any Indebtedness, to incur, create, issue, assume, Guarantee or otherwise become
liable for or with respect to, or become responsible for, the payment of such
Indebtedness (and “Incurrence” and “Incurred” will have meanings
correlative to the foregoing).

     

    
      	
               
      

            	
              “Indebtedness” of any Person means, without
      duplication, (a) all obligations of such Person for borrowed money or with
      respect to deposits or advances of any kind, (b) all obligations of such
      Person evidenced by bonds, debentures, notes or similar instruments, (c)
      all obligations of such Person on which interest charges are customarily
      paid, (d) all obligations of such Person under conditional sale or other
      title retention agreements relating to property acquired by such Person,
      (e) all obligations of such Person in respect of the deferred purchase
      price of property or services (excluding current accounts payable incurred
      in the ordinary course of business), (f) all Indebtedness of others
      secured by (or for which the holder of such Indebtedness has an existing
      right, contingent or otherwise, to be secured by) any Lien on property
      owned or acquired by such Person, whether or not the Indebtedness secured
      thereby has been assumed, (g) all Guarantees by such Person of
      Indebtedness of others, and (h) all obligations under Capitalized
      Leases.

            

    

     

    
      	
               
      

            	
              “Initial Guarantors”
      shall mean the Subsidiaries that are co-borrowers or guarantors on the
      date hereof under the Credit
Agreement.

            

    

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              “Insolvency Proceedings”
      has the meaning specified in Section
7(e).

            

    

     

    
      	
               
      

            	
              “Interest Charge Coverage
      Ratio” means, as of any date of determination, the ratio of (a)
      Consolidated EBITDA for the Measurement Period ending on such date to (b)
      Consolidated Total Interest Expense for such Measurement
      Period.

            

    

     

    “Issuer” shall mean the Company
and its permitted successors and assigns.

     

    
      	
               
      

            	
              “Junior Subordinated Seller
      Note” means that certain Junior Subordinated Seller Note dated
      September 30, 2009 made by the Issuer and payable to the order of the
      Payee(s).

            

    

     

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

     

    
      	
               
      

            	
              “Material Adverse Effect”
      means a material adverse effect on the business, operations or financial
      condition of the Issuer and its Subsidiaries, taken as a
      whole.

            

    

     

    
      	
               
      

            	
              “Material Subsidiary”
      means any Subsidiary of the Company which at the date of determination is
      a “significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X
      under the Securities Exchange Act of 1934 (as such Regulation is in effect
      on the date hereof).

            

    

     

    
      	
               
      

            	
              “Maturity Date” means
      December 15, 2010.

            

    

     

    
      “Measurement Period” means, at
any date of determination, the most recently completed twelve (12) consecutive
fiscal months of the Issuer for which financial statements have or should have
been delivered in accordance with Section 5(a).

    

     

    
      “Note” means this Senior
Subordinated Seller Note, as amended, restated, extended, supplemented or
otherwise modified in writing from time to time.

    

     

    
      	
               
      

            	
              “Noteholder” means the
      Payee and his permitted successors and
assigns.

            

    

     

    “Paid in Full” means with
respect to Senior Obligations, the payment in full in cash and other
satisfaction in full of such obligations in accordance with the terms of the
applicable Senior Debt Document.

    

    
      	
               
      

            	
              “Pari Passu/Junior
      Indebtedness” means Indebtedness which is expressed to be pari passu or
      subordinated to this Note (which, for the avoidance of doubt, shall
      include the Junior Subordinated Seller
Note).

            

    

     

    
      	
               
      

            	
              “Payee” has the meaning
      set forth in Section 1.

            

    

     

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              “Payee Parties” has the
      meaning set forth in the definition of “Excluded
      Person”.

            

    

     

    
      	
               
      

            	
              “Payment Blockage Notice”
      means a notice by the Senior Debt Agent (a) stating that one or more
      defaults shall have occurred and be continuing under the applicable Senior
      Debt Document (and listing such default(s) in reasonable detail), and (b)
      directing that all payments under this Note be subject to Section
      4(b).

            

    

     

    
      	
               
      

            	
              “Payment Blockage Period”
      means the period commencing from the receipt by the Issuer or the
      Noteholder of a Payment Blockage Notice and ending on the earliest to
      occur of (a) the date on which the default(s) listed in such Payment
      Blockage Notice shall have been cured or waived in accordance with the
      terms of the Senior Debt Documents, (b) if arising as a result of any
      default other than a payment default, 180 days from the commencement of
      such period, or (c) the revocation, withdrawal or termination of such
      Payment Blockage Notice by the Senior Debt
  Agent.

            

    

     

    
      	
               
      

            	
              “Permitted Indebtedness”
      means Indebtedness permitted by Section
6(b).

            

    

     

    
      	
               
      

            	
              “Permitted
      Merger”  has the meaning specified in Section
      6(a).

            

    

     

    
      	
               
      

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

            

    

     

    
      	
               
      

            	
              “Repurchase Date” has the
      meaning specified in Section
2(b)(ii).

            

    

     

    “Responsible Officer” means the
chief executive officer, president, chief financial officer, vice
president-finance, vice president-corporate finance, treasurer, assistant
treasurer, controller or assistant controller of the Issuer.

     

    
      	
               
      

            	
              “Senior Creditors” means
      (a) as long as the Credit Agreement has not been terminated or any
      obligations remain outstanding thereunder, the holders of Senior
      Obligations that have entered into an intercreditor agreement or
      arrangement acceptable to the Administrative Agent (as defined in the
      Credit Agreement) with the Administrative Agent and (b) otherwise, the
      holders of the Senior Obligations.

            

    

     

    
      	
               
      

            	
              “Senior Debt Agent” means
      (a) as long as the Credit Agreement has not been terminated or any
      obligations remain outstanding thereunder, the “Administrative Agent” as
      defined in the Credit Agreement and (b) otherwise, the holders of a
      majority of the Senior Obligations outstanding under the Credit Facilities
      or their respective representative or
agent.

            

    

     

    
      	
               
      

            	
              “Senior Debt Documents”
      means collectively, (a) the “Loan Documents” as defined in the Credit
      Agreement and (b) such other documents evidencing the Senior
      Obligations.

            

    

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

       

    

    “Senior Obligations” means,
collectively, (a) the Credit Facility Indebtedness of the Issuer or any
Guarantor, (b) any Cash Management Obligations of the Issuer or any Guarantor,
(c)  all obligations of the Issuer or any Guarantor under any Hedging
Agreement, (d) all obligations,
contingent or otherwise, of the Issuer or any Guarantor as an account party in
respect of letters of credit and letters of guaranty, (e) all obligations,
contingent or otherwise, of the Issuer or any Guarantor in respect of bankers’ acceptances
and (f) all obligations of the Issuer or any Guarantor as obligor in
respect of Permitted Indebtedness other than Excluded Indebtedness.

     

    
      	
               
      

            	
              “Set-Off Amount” has the
      meaning specified in Section 9.

            

    

     

    
      	
               
      

            	
              “Stock Purchase
      Agreement” means that stock purchase agreement dated August 7, 2009
      among the Company and the Payees relating to the purchase and sale of 100%
      of the capital stock of Barnes & Noble College Booksellers,
      Inc.

            

    

     

    
      	
               
      

            	
              “Subsidiary” of a Person
      means a corporation, partnership, joint venture, limited liability company
      or other business entity of which a majority of the shares of securities
      or other interests having ordinary voting power for the election of
      directors or other governing body (other than securities or interests
      having such power only by reason of the happening of a contingency) are at
      the time beneficially owned, or the management of which is otherwise
      controlled, directly, or indirectly through one or more intermediaries, or
      both, by such Person.  Unless otherwise specified, all
      references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
      Subsidiary or Subsidiaries of the
Issuer.

            

    

     

    “Uniform Commercial Code” means
the Uniform Commercial Code as in effect from time to time.

     

    
      	
            	
              12.

            	
              Miscellaneous.

            

    

     

    (a)           All
financial computations required under this Note shall be made, and all financial
information required under this Note shall be prepared, in accordance with GAAP
as in  effect from time to time consistently applied.

     

    (b)           No
amendment or waiver of any provision of this Note and no consent by the
Noteholder to any departure therefrom by the Issuer or any Guarantor shall be
effective unless such amendment, waiver or consent shall be in writing and
signed by the Noteholder, and any such amendment, waiver or consent shall then
be effective only for the period and on the conditions and for the specific
instance specified in such writing.  No failure or delay by the
Noteholder in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other rights, power
or privilege.

     

    (c)           Except
as otherwise expressly provided herein, notices and other communications to each
party provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed or sent by telecopy to the address provided
from time to time by such party.  All notices and other communications
shall be effective upon receipt.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (d)           If
any provision of this Note is held to be illegal, invalid or unenforceable, (i)
the legality, validity and enforceability of the remaining provisions of this
Note shall not be affected or impaired thereby and (ii) the parties shall
endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions.  The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

     

    (e)           THIS
NOTE IS GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW
RULES OF SUCH STATE. THE
ISSUER AND EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT AND EACH STATE COURT IN THE CITY OF NEW YORK AND ANY APPELLATE COURT
FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT.  THE ISSUER AND EACH GUARANTOR IRREVOCABLY CONSENTS
TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES OF SUCH PROCESS TO THE ISSUER OR SUCH GUARANTOR AT ITS ADDRESS
SET FORTH BENEATH ITS SIGNATURE HERETO.  THE ISSUER AND EACH GUARANTOR
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     

    (g)           THE
ISSUER, EACH GUARANTOR AND THE NOTEHOLDER EACH WAIVE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS NOTE OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

     

    (h)           THIS NOTE REPRESENTS THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

     

    
      

      
         

         

        
          	
                   

                   

                  BARNES
      & NOBLE, INC.

                	 
	 	 	 	 
	By:	/s/ Joseph J.
      Lombardi	 
	Name:
      	Joseph J.
      Lombardi	 
	Title:
      	Chief Financial
      Officer	 

        

    

     

     

     

    25Exhibit
10.3

    
      

       

      JUNIOR
SUBORDINATED SELLER NOTE

       

       

      
         

        
          	$150,000,000	September 30,
      2009

        

         

      

       

      1.           FOR
VALUE RECEIVED, the undersigned, BARNES &
NOBLE,
INC., a Delaware
corporation (the
“Company”), hereby
promises to pay to the order of Leonard Riggio and Louise Riggio (each a “Payee”) the principal amount
of One Hundred and Fifty Million Dollars ($150,000,000) or, if less, the
aggregate unpaid principal amount of this Note, on the Maturity Date (or, if
such day is not a Business Day, on the immediately preceding Business Day),
subject to the provisions herein. The Issuer further promises to pay interest on
the unpaid principal amount of this Note from time to time at a rate per annum
equal to 10.0%.  Interest on this Note shall be due and payable in
arrears in cash on each December 29 and June 30 of each calendar year, provided that if any
such day is not a Business Day, payment shall be made on the immediately
preceding Business Day. Payments of principal hereof and interest hereon shall
be made in Dollars in immediately available funds to such account of the
Noteholder located in New York, New York, as the Noteholder may designate in
writing to the Issuer.

       

       2.           Prepayments.

       

      (a)           Optional
Prepayment.      Subject to the provisions
herein (including, without limitation, the restrictions on payment contained in
Section 3 and the subordination provisions contained in Section 4), the Issuer
may, at any time prior to the Maturity Date and so long as such prepayment is
not prohibited under the Senior Debt Documents, prepay the principal amount of
this Note, in whole or in part, without penalty or premium, on any Business Day;
provided that
the Issuer may not prepay the Note, in whole or in part, so long as any
principal of or interest on the Senior Subordinated Seller Note or any other
amount payable thereunder remains unpaid.  Prepayments of this Note
must be accompanied by payment of accrued and unpaid interest on the principal
amount prepaid to and including the date of payment.

       

       (b)           Change of Control
Payment.      Subject to the provisions herein
(including, without limitation, the restrictions on payment contained in Section
3 and the subordination provisions contained in Section 4):

       

      
        	
                 
      

              	
                (i)

              	
                upon
      a Change of Control, the Noteholder shall have the right to require the
      Issuer to repurchase this Note at a repurchase price in cash equal to 100%
      of the principal amount thereof plus accrued and unpaid interest if any,
      to the date of repurchase, in accordance with the terms contemplated in
      clause (ii) below;

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                within
      10 Business Days following any Change of Control, the Issuer shall notify
      the Noteholder that a Change of Control has occurred. Such notice shall
      provide that the Noteholder has the right to require the Issuer to
      repurchase this Note at a
repurchase

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        

        
          	
                   
      

                	
                   

                	
                  price
      in cash equal to 100% of the principal amount thereof plus accrued and
      unpaid interest, if any, to the date of repurchase and set forth the
      proposed date of repurchase (which shall be a Business Day and shall in no
      event be earlier than 10 Business Days from the date of such notice (such
      date, the “Repurchase
      Date”));

                

        

         

      

      
        	
                 
      

              	
                (iii)

              	
                the
      Noteholder shall notify the Issuer of its election to tender the Note for
      purchase by the Issuer on the terms set forth in the notice by no later
      than 10 Business Days after receipt of such notice, which election shall
      be irrevocable and shall be in respect of not less than the entire Note.
      If the Noteholder shall not have informed the Issuer of its election at
      the expiration of such 10 Business Day period, the Noteholder shall be
      deemed conclusively not to have elected to tender the Note for purchase by
      the Issuer; and

              

      

      

      
        	
                 
      

              	
                (iv)

              	
                on
      the Repurchase Date, the Noteholder shall tender the Note to the Issuer
      against the deposit by the Issuer in the Noteholder’s account (which
      account shall be the same account as set forth in Section 1 above) of
      funds sufficient to pay the purchase price of the Note so
      tendered.  Upon repurchase of the Note by the Issuer pursuant to
      this Section 2(b), the Note shall be cancelled and all obligations of the
      Issuer thereunder shall be
terminated.

              

      

      

      3.          
 Other Payment
Provisions.      Notwithstanding anything to the
contrary herein, no payment or prepayment of principal of or interest on this
Note (including, without limitation, under Section 2 or Section 8 hereof) may be
made, directly or indirectly to the Noteholder (and shall instead be paid over
to the Senior Debt Agent under Section 4(b) to the extent permitted by
applicable law), if:           

       

      
        	 	(i) 	the
      Issuer or its properties is subject to any Insolvency
  Proceeding;
	 	 	 
	
                 
      

              	
                (ii)

              	
                a
      payment default shall have occurred and be continuing with respect to any
      Senior Obligations; or

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                a
      Payment Blockage Period shall have occurred and be
    continuing.

              

      

       

      
        4.          
 Subordination
Provisions.

      

       

      (a)           Subordination.     
Payment of this Note (including, without limitation, under Section 2 or
Section 8 hereof) is and shall be expressly subordinate and junior in right of
payment to the prior payment in full in cash of the Senior Obligations to the
extent and in the manner set forth herein, and this Note is hereby so
subordinated as a claim against the Issuer or any of the assets of the Issuer,
whether such claim be made (i) in the event of any Insolvency 

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      Proceeding,
or (ii) other than in connection with an Insolvency Proceeding, prior to the
Senior Obligations being Paid in Full.

       

      (b)           Payment
Over.       If the Noteholder shall receive
any payment (including, without limitation, under Section 2 or Section 8
hereto)  in violation of the terms hereof, it shall hold such payment
in trust for the benefit of the Senior Creditors and forthwith pay it over to
the Senior Debt Agent, for application in accordance with the Senior Debt
Documents.  In the event that any payment hereunder shall be due and,
at such time, the Issuer shall be prohibited by the terms of this Note from
making such payment to the Noteholder, the Issuer shall instead, to the extent
permitted by applicable law, make such payment to the Senior Debt Agent to the
extent the Senior Debt Obligations have not been Paid In Full.

       

      (c)           Insolvency Proceedings; Acceleration
of Senior Obligations.      
(i)  In the event of any Insolvency Proceeding relative to the Issuer
or any Guarantor or its properties or any acceleration of any Senior
Obligations, then all of the Senior Obligations shall first be Paid in Full
before the Noteholder may receive and retain any payment upon this Note, and in
any such proceedings any payment or distribution of any kind or character,
whether in cash or property or securities, which may be payable or deliverable
in respect of this Note shall be paid or delivered directly to the Senior Debt
Agent to the extent of any unpaid Senior Obligations, unless and until all such
Senior Obligations are Paid in Full, and the Noteholder hereby irrevocably
authorizes the Senior Debt Agent, as attorney-in-fact for such Noteholder, to
prove any claim in such proceedings on this Note, and to demand, sue for,
collect and receive any such payment or distribution, and to apply such payment
or distribution to the payment of the then unpaid Senior Obligations, and to
take such other action (including acceptance or rejection of any plan of
reorganization in any Insolvency Proceeding) in the name of such Noteholder or
of the relevant Senior Creditors as the Senior Debt Agent may deem necessary or
advisable for the enforcement of the provisions hereof.  The
Noteholder shall execute and deliver such other and further powers of attorney,
assignments, proofs of claim or other instruments as may be requested by the
Senior Debt Agent in order to accomplish the foregoing, but only with respect to
such Noteholder’s capacity as a Noteholder hereunder and not in respect of any
other relationship between such Noteholder and the Issuer.

       

      (ii)           In
the event that, notwithstanding the foregoing, upon any such Insolvency
Proceeding, any payment or distribution of the assets of the Issuer of any kind
or character, whether in cash, property or securities, shall be received by the
Noteholder in respect of this Note before all Senior Obligations are Paid in
Full, such payment or distribution shall be held in trust for the Senior
Creditors and shall forthwith be paid over to the Senior Debt Agent to the
extent any Senior Obligations have not been Paid in Full after giving effect to
any concurrent payment or distribution to the Senior Debt Agent.

       

      (iii)           In
the event of any Insolvency Proceeding against the Issuer or any Guarantor or
any of their assets, the Noteholder hereby agrees not to contest and hereby
waives any right to object to and expressly consents to (A) any post-petition
financing of or use of cash collateral by Issuer or any Guarantor, to the extent
approved or provided by the Senior Debt Agent, and the granting by Issuer or any
Guarantor to Senior Debt 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

         

      

      Agent of
senior liens and priorities in connection therewith and (B) any sale or other
disposition of any property securing all of any part of the Senior Obligations
free and clear of security interests, liens or other claims of Noteholder under
Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code
if the Senior Debt Agent has approved or consented to such sale or
disposition.

       

       (d)           Standstill; Certain Other
Agreements.      
(i)  The Noteholder agrees that, until the earlier to occur of the
Maturity Date or the date the Senior Obligations are Paid in Full (A) if a
payment default shall have occurred and be continuing with respect to any Senior
Obligations or a Payment Blockage Period shall have occurred and be continuing
or if an Insolvency Proceeding shall have commenced, it will not take, demand or
receive, or take any action to accelerate or collect, any payment of all or any
part of this Note and (B) it will not file, join in or facilitate any petition
or proceeding seeking the involuntary bankruptcy of the Issuer or any
Guarantor.

       

      (ii)           The
Noteholder further agrees (A) that it shall not request, seek, obtain or
maintain any lien on or security interest in any property, tangible or
intangible, of the Issuer or any Guarantor as security for payment of the
obligation under this Note and that it shall not attach or levy or take any
action against any property, tangible or intangible, of the Issuer or any
Guarantor under any circumstances and (B) that it shall not take, nor consent to
or acquiesce in the taking of, any action to set aside, challenge or otherwise
dispute the existence, validity or priority of the Senior Obligations or the
creation, attachment, validity, perfection, priority or continuation of any lien
or security interest of the Senior Debt Agent or the Senior Creditors in any
property, tangible or intangible, of the Issuer, any Guarantor or any of their
Subsidiaries.

       

      (iii)           The
Senior Creditors, or any of them, may, at any time and from time to time,
without the consent of or notice to the Noteholder, without incurring any
responsibility to the Noteholder, and without impairing or releasing any of the
rights of any of the Senior Creditors, or any of the obligations of the
Noteholder:

       

      
        	
                 
      

              	
                (A)

              	
                change
      the amount (subject to Section 6(b)) or terms of or renew or extend any
      Senior Obligations or amend any Senior Debt Document, as the case may be,
      in any manner or enter into or amend in any manner any other agreement
      relating to any Senior Obligations;

              

      

       

      
        	
                 
      

              	
                (B)

              	
                sell,
      exchange, release or otherwise deal with any property at any time pledged
      or mortgaged or subject to any lien to secure any Senior
      Obligations;

              

      

       

      
        	
                 
      

              	
                (C)

              	
                release
      anyone liable in any manner for the payment or collection of any Senior
      Obligations; and

              

      

       

      
        	
                 
      

              	
                (D)

              	
                exercise
      or refrain from exercising any rights against the Issuer, any Guarantor or
      any other Person (including the
Noteholder).

              

      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

         

      

      (e)           Certain
Waivers.      (i)  The Noteholder
hereby waives notice of or proof of reliance by any Senior Creditor upon the
provisions hereof, and the Senior Obligations shall conclusively be deemed to
have been created, contracted, incurred and maintained in reliance upon the
provisions hereof.

       

      (ii)       The
Issuer hereby waives diligence, presentment, demand, protest and notice of any
kind whatsoever.  The non-exercise by the Noteholder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.

       

      (f)           Acknowledgement of Subordination and
Payment Restrictions.  The subordination provisions contained
herein and the provisions contained in Section 3 hereof are for the benefit of
the Senior Debt Agent, Senior Creditors and their respective successors and
assigns and may not be rescinded or cancelled or modified in any way without the
prior written consent of the Senior Debt Agent. The Noteholder hereby expressly acknowledges and
agrees to the subordination provisions and payment restrictions contained herein.

       

      5.          
 Affirmative
Covenants.  So long as any principal of and interest on this
Note or any other amount payable hereunder remains unpaid or
unsatisfied:

       

      
        	
                 
      

              	
                (a)

              	
                Information.  The
      Issuer shall deliver to the
Noteholder:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                as
      soon as available, but in any event within 90 days after the end of each
      fiscal year of the Issuer, a consolidated balance sheet of the Issuer and
      its Subsidiaries as at the end of such fiscal year, and related
      consolidated statements of income, operations, shareholders’ equity and
      cash flows for such fiscal year, all in reasonable detail and prepared in
      accordance with GAAP, setting forth in each case in comparative form the
      figures for the previous fiscal year and audited and accompanied by a
      report and opinion of a firm of independent public accountants of
      recognized national standing (without a “going concern” or  like
      qualification or exception and without any qualification or exception as
      to the scope of audit) as presenting fairly in all material respects, the
      financial position, results of operations and cash flows of the Issuer and
      its Subsidiaries on a consolidated basis in accordance with
      GAAP;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                as
      soon as available, but in any event within 45 days after the end of each
      of the first three fiscal quarters of each fiscal year of the Issuer, a
      consolidated balance sheet of the Issuer and its Subsidiaries as at the
      end of such fiscal quarter and the related statements of operations,
      stockholders’ equity and cash flows for such fiscal quarter and for the
      then elapsed portion of such fiscal year, setting forth in each case in
      comparative form the figures for the corresponding period or periods of
      (or, in the case of the balance sheet, as of the end of) the previous
      fiscal year, all certified by a Responsible Officer as presenting fairly
      in all material respects the financial position, results of operations and
      cash 

              

      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

         

      

      flows
of the Issuer and its Subsidiaries on a consolidated basis in accordance with
GAAP, subject to normal year-end adjustments and the absence of
footnotes;

       

      
        	
                 
      

              	
                (iii)

              	
                within
      5 Business Days after the occurrence of any Default of which a Responsible
      Officer has obtained knowledge, a notice setting forth such Default and
      stating what action the Issuer has taken or proposes to take with respect
      thereto; and

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                within
      5 Business Days of the occurrence of any matter that has resulted or could
      reasonably be expected to result in a Material Adverse Effect, including
      the commencement of any material litigation or proceeding affecting the
      Issuer or any Material Subsidiary, a notice setting forth such event and
      actions taken (if any) with respect
thereto.

              

      

       

      (b)           Preservation of Existence,
Etc.     The Issuer shall (i) preserve, renew and
maintain in full force and effect its legal existence under the laws of the
jurisdiction of its organization except in a transaction permitted hereunder and
(ii) take all reasonable action to maintain all rights, privileges, permits,
licenses and franchises necessary or desirable in any material respect in the
normal conduct of its business, except to the extent that failure to do so could
not be reasonably be expected to have a Material Adverse Effect.

       

      (c)           Maintenance of
Properties.      The Issuer shall, and shall
cause each of its Subsidiaries, to maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

       

      (d)           Compliance with
Law.      The Issuer shall, and shall cause each
of its Subsidiaries to, comply in all material respects with the requirements of
all laws and all orders, writs, injunctions and decrees applicable to it or to
its business or property, except in such instances in which (x) such requirement
of law or order, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (y) the failure to comply
therewith could not be reasonable be expected to have a Material Adverse
Effect.

       

      (e)           Maintenance of Books and
Records.     The Issuer shall, and shall cause each
of its Subsidiaries to, maintain proper books of record and account, in which
full, true and correct entries in conformity with GAAP consistently applied
shall be made of all financial transactions and matters involving the assets and
business of the Issuer or such Subsidiary, as the case may be.

       

      6.          
 Negative
Covenants.  So long as any principal of and interest on this
Note or any other amount payable hereunder remains unpaid or
unsatisfied:

       

      (a)           Mergers and
Consolidations.     The Issuer shall not merge or
consolidate with or into any Person or sell all or substantially all of its
assets, except that so long as both prior to and subsequent to such merger or
consolidation, no Event of Default has occurred and is

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      continuing,
the Issuer may merge or consolidate with any Person, provided that (x) the
Issuer shall be the continuing or surviving Person or (y) if the Issuer shall
not be the surviving Person, such surviving Person shall have assumed the
obligations of the Issuer hereunder pursuant to documentation in form and
substance reasonably satisfactory to the Noteholder (each such merger or
consolidation, a “Permitted
Merger”).

       

      (b)           Indebtedness.     
(i)     The Issuer shall not, and shall not permit any of
its Subsidiaries to, Incur any Indebtedness; provided, however, that the
Issuer or any Subsidiary may Incur Indebtedness, if the Interest Charge Coverage
Ratio for the Measurement Period immediately preceding the date on which such
additional Indebtedness is Incurred would have been at least 2 to 1, determined
on a pro forma basis
(including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been Incurred at the beginning of such Measurement Period.

       

      
        	
                 
      

              	
                (ii)

              	
                Notwithstanding
      Section 6(b)(i) above, the Issuer and the Subsidiaries may Incur the
      following Indebtedness:

              

      

       

      (A)           Credit
Facility Indebtedness in an aggregate outstanding principal amount not to exceed
$2,000,000,000;

      

      (B)           Guarantees
by the Issuer and its Subsidiaries in respect of Indebtedness otherwise
permitted hereunder of the Issuer or any of its Subsidiaries;

      

      (C)           Indebtedness
of the Issuer or any Subsidiary owing to the Issuer or any other
Subsidiary;

      

      (D)           Indebtedness
in respect of Capitalized Leases and Indebtedness Incurred in financing the
acquisition, construction, repair, replacement or improvement of fixed or
capital assets by the Issuer or any Subsidiary;

      

      (E)           Indebtedness
of the Issuer or any Subsidiary (I) assumed in connection with or (II) Incurred
to finance, in each case, any acquisition of property and assets or businesses
of any Person or of assets constituting a business unit, a line of business or
division of such Person, or Equity Interests in a Person;

      

      (F)           Indebtedness
representing deferred compensation to employees of the Issuer and its
Subsidiaries incurred in the ordinary course of business;

      

      (G)           Indebtedness
to current or former officers, directors, managers, consultants and employees,
their respective estates, spouses or former spouses to finance the purchase or
redemption of Equity Interests of the Issuer (or any direct or indirect parent
thereof);

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

         

      

      (H)           Indebtedness
Incurred by the Issuer or any Subsidiary in an acquisition, or any disposition
of assets, in each case to the extent constituting indemnification obligations
or obligations in respect of purchase price (including earn-outs) or other
similar adjustments;

      

      (I)           Indebtedness
consisting of obligations of the Issuer and any Subsidiary under deferred
compensation or other similar arrangements incurred by such Person in connection
with (I) the transactions contemplated by the Stock Purchase Agreement, or (II)
other acquisitions or dispositions of assets;

      

      (J)           Cash
Management Obligations and other Indebtedness in respect of netting services,
automatic clearinghouse arrangements, overdraft protections, employee credit
card programs and other cash management and similar arrangements in the ordinary
course of business and any guarantees thereof;

      

      (K)           Indebtedness
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;

      

      (L)           Indebtedness
incurred by the Issuer or any Subsidiary in respect of letters of credit, bank
guarantees, bankers’ acceptances, warehouse receipts or similar instruments
issued or created in the ordinary course of business or consistent with past
practice, including in respect of workers compensation claims, health,
disability or other employee benefits or property, casualty or liability
insurance or self-insurance or other Indebtedness with respect to
reimbursement-type obligations regarding workers compensation
claims;

      

      (M)           obligations
in respect of performance, bid, appeal and surety bonds and performance and
completion guarantees and similar obligations provided by the Issuer or any
Subsidiary or obligations in respect of letters of credit, bank guarantees or
similar instruments related thereto, in each case in the ordinary course of
business or consistent with past practice;

      

      (N)           all
premiums (if any), interest (including post-petition interest), fees, expenses,
charges and additional or contingent interest on obligations described in
clauses (A) through (M) above and (O) through (R) below;

      

      (O)           Guarantees
Incurred in the ordinary course of business in respect of obligations to
suppliers, customers, franchisees, lessors and licensees;

      

      (P)           Indebtedness
Incurred in the ordinary course of business in respect of obligations of the
Issuer or any Subsidiary to pay the deferred purchase 

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      price of
goods or services or progress payments in connection with such goods and
services;

      

      (Q)           Indebtedness
resulting from the refinancing, refunding, replacement, renewal or extension of
Indebtedness described in clauses (A) through (P) above; and

      

      (R)           Indebtedness
resulting from the refinancing, refunding, replacement, renewal or extension of
Indebtedness described in Section 6(b)(i) above.

      

       (c)           Liens.     
The Issuer shall not, and shall not permit any of its Subsidiaries to, create,
incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired to secure Pari Passu/Junior
Indebtedness, without making, or causing such Subsidiary to make effective
provision for securing this Note equally and ratably with such Pari Passu/Junior
Indebtedness or in the event such Pari Passu/Junior Indebtedness is subordinate
in right of payment to this Note, prior to such Indebtedness, as to such
property or assets for so long as such Pari Passu/Junior Indebtedness shall be
secured. The foregoing restrictions shall not apply to the following
Liens:

       

      
        	
                 
      

              	
                (A)

              	
                Liens
      existing on the date hereof;

              

      

      

      
        	
                 
      

              	
                (B)

              	
                Liens
      securing any Senior Obligations;

              

      

      

      
        	
                 
      

              	
                (C)

              	
                Liens
      for taxes, assessments or governmental charges that are not overdue for a
      period of more than 120 days or that are being contested in good faith and
      by appropriate proceedings for which appropriate reserves have been
      established in accordance with
GAAP;

              

      

      

      
        	
                 
      

              	
                (D)

              	
                statutory
      or common law Liens of landlords, carriers, warehousemen, mechanics,
      materialmen, repairmen, construction contractors or other like Liens
      arising in the ordinary course of business, so long as, in each case, such
      Liens arise in the ordinary course of
business;

              

      

      

      
        	
                 
      

              	
                (E)

              	
                (I)
      pledges or deposits in the ordinary course of business in connection with
      workers’ compensation, unemployment insurance and other social security
      legislation and (II) pledges and deposits in the ordinary course of
      business securing liability for reimbursement or indemnification
      obligations of (including obligations in respect of letters of credit or
      bank guarantees for the benefit of) insurance carriers providing property,
      casualty or liability insurance to the Issuer or any
      Subsidiary;

              

      

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      
 

      
        	
                 
      

              	
                (F)

              	
                deposits
      to secure the performance of bids, trade contracts, governmental contracts
      and leases (other than Indebtedness for borrowed money), statutory
      obligations, surety, stay, customs and appeal bonds, performance bonds and
      other obligations of a like nature (including those to secure health,
      safety and environmental obligations) incurred in the ordinary course of
      business;

              

      

      

      
        	
                 
      

              	
                (G)

              	
                Liens
      securing Cash Management Obligations, Hedging Agreements and other
      Indebtedness in respect of netting services, automatic clearinghouse
      arrangements, overdraft protections, employee credit card programs and
      other cash management and similar arrangements in the ordinary course of
      business and any guarantees
thereof;

              

      

      

      
        	
                 
      

              	
                (H)

              	
                easements,
      rights-of-way, restrictions (including zoning restrictions),
      encroachments, protrusions and other similar encumbrances and minor title
      defects affecting real property that, in the aggregate, do not in any case
      materially interfere with the ordinary conduct of the business of the
      Issuer and its Subsidiaries, taken as a whole, and any exception on the
      title policies issued in connection with the mortgaged
      property;

              

      

      

      
        	
                 
      

              	
                (I)

              	
                Liens
      arising from judgments or orders for the payment of
  money;

              

      

      

      
        	
                 
      

              	
                (J)

              	
                Liens
      securing Indebtedness permitted under Section
  6(b)(ii)(D);

              

      

      

      
        	
                 
      

              	
                (K)

              	
                leases,
      licenses, subleases or sublicenses granted to others in the ordinary
      course of business;

              

      

      

      
        	
                 
      

              	
                (L)

              	
                Liens
      in favor of customs and revenue authorities arising as a matter of law to
      secure payment of customs duties in connection with the importation of
      goods in the ordinary course of
business;

              

      

      

      
        	
                 
      

              	
                (M)

              	
                Liens
      (I) of a collection bank arising under Section 4-210 of the Uniform
      Commercial Code on the items in the course of collection, (II) attaching
      to commodity trading accounts or other commodities brokerage accounts
      incurred in the ordinary course of business and (III) in favor of a
      banking or other financial institution arising as a matter of law
      encumbering deposits or other funds maintained with a financial
      institution (including the right of set off) and that are within the
      general parameters customary in the banking
  industry;

              

      

      

      
        	
                 
      

              	
                (N)

              	
                Liens
      (I) on cash advances in favor of the seller of any property to be acquired
      in an investment to be applied against the purchase
  

              

      

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

         

        price for such investment
or (II) consisting of an agreement to dispose of any property;

         

      

      
        	
                 
      

              	
                (O)

              	
                Liens
      in favor of the Issuer or a Subsidiary securing Indebtedness permitted
      under Section 6(b)(ii)(C);

              

      

      

      
        	
                 
      

              	
                (P)

              	
                Liens
      existing on property at the time of its acquisition or existing on the
      property of any Person at the time such Person becomes a Subsidiary and
      the Indebtedness secured thereby is permitted under Section 6(b)(ii)(D) or
      (E);

              

      

      

      
        	
                 
      

              	
                (Q)

              	
                any
      interest or title of a lessor, sublessor, licensor or sublicensor or
      secured by a lessor’s, sublessor’s, licensor’s or sublicensor’s interest
      under leases or licenses entered into by the Issuer or any Subsidiary in
      the ordinary course of business;

              

      

      

      
        	
                 
      

              	
                (R)

              	
                Liens
      arising out of conditional sale, title retention, consignment or similar
      arrangements for sale of goods entered into by the Issuer or any
      Subsidiary in the ordinary course of
business;

              

      

      

      
        	
                 
      

              	
                (S)

              	
                Liens
      deemed to exist in connection with investments in repurchase agreements
      and reasonable customary initial deposits and margin deposits and similar
      Liens attaching to commodity trading accounts or other brokerage accounts
      maintained in the ordinary course of business and not for speculative
      purposes;

              

      

      

      
        	
                 
      

              	
                (T)

              	
                Liens
      that are contractual rights of setoff (I) relating to the establishment of
      depository relations with banks or other financial institutions not given
      in connection with the issuance of Indebtedness, (II) relating to pooled
      deposit or sweep accounts of the Issuer or any of its Subsidiaries to
      permit satisfaction of overdraft or similar obligations incurred in the
      ordinary course of business of the Issuer and its Subsidiaries or (III)
      relating to purchase orders and other agreements entered into with
      customers of the Issuer or any of its Subsidiaries in the ordinary course
      of business;

              

      

      

      
        	
                 
      

              	
                (U)

              	
                Liens
      solely on any cash earnest money deposits made by the Issuer or any of its
      Subsidiaries in connection with any letter of intent or purchase
      agreement;

              

      

      

      
        	
                 
      

              	
                (V)

              	
                (I)
      Liens on the Equity Interests of any Subsidiary acquired pursuant to an
      acquisition to secure Indebtedness incurred pursuant to Section
      6(b)(ii)(E) in connection with such acquisition and (II) Liens on the
      assets of such Subsidiary and any of its Subsidiaries
  

              

      

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

         

      

      to secure Indebtedness (or
to secure a Guarantee of such Indebtedness) incurred pursuant to Section
6(b)(ii)(E) in connection with such acquisition;

       

      
        	
                 
      

              	
                (W)

              	
                ground
      leases in respect of real property on which facilities owned or leased by
      the Issuer or any of its Subsidiaries are
  located;

              

      

      

      
        	
                 
      

              	
                (X)

              	
                Liens
      arising from precautionary Uniform Commercial Code financing statement or
      similar filings;

              

      

      

      
        	
                 
      

              	
                (Y)

              	
                Liens
      on insurance policies and the proceeds thereof securing the financing of
      the premiums with respect thereto;

              

      

      

      
        	
                 
      

              	
                (Z)

              	
                any
      zoning or similar law or right reserved to or vested in any Governmental
      Authority to control or regulate the use of any real property that does
      not materially interfere with the ordinary conduct of the business of the
      Issuer and its Subsidiaries, taken as a
whole;

              

      

      

      
        	
                 
      

              	
                (AA)

              	
                Liens
      on specific items of inventory or other goods and the proceeds thereof
      securing such Person’s obligations in respect of documentary letters of
      credit or banker’s acceptances issued or created for the account of such
      Person to facilitate the purchase, shipment or storage of such inventory
      or goods;

              

      

      

      
        	
                 
      

              	
                (BB)

              	
                landlords’
      and lessors’ statutory Liens in respect of rent not in
      default;

              

      

      

      
        	
                 
      

              	
                (CC)

              	
                Liens
      in connection with any
sale-leasebacks;

              

      

      

      
        	
                 
      

              	
                (DD)

              	
                other
      Liens securing Indebtedness or other obligations in an aggregate principal
      amount at any time outstanding not to exceed $50,000,000;
    and

              

      

      

      
        	
                 
      

              	
                (EE)

              	
                the
      modification, replacement, renewal or extension of any Lien permitted
      under this Section 6(c).

              

      

      

      
        7.            Events of
Default.  The following are “Events of
Default”:

      

       

      (a)           The
Issuer fails to pay any principal of this Note as and on the date when due and
such failure shall continue unremedied for more than 5 days; or

       

      (b)           The
Issuer fails to pay any interest on this Note as and on the date when due; and
such failure shall continue unremedied for more than 30 days; or

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

         

      

      (c)           The
Issuer fails to perform or observe any term, covenant or agreement contained in
Section 6(a) hereof; or

       

      (d)           The
Issuer fails to perform or observe any other covenant or agreement (not
specified above) contained in this Note on its part to be performed or observed
and such failure continues for 60 days after written notice thereof shall have
been given by the Noteholder to the Issuer; or

       

      (e)           An
event of default has occurred and is continuing under a Credit Facility with an
outstanding principal amount in excess of $100,000,000 and the Senior Creditors
thereunder have accelerated the Senior Obligations thereunder as a result
thereof; provided, however, if any such
acceleration of Senior Obligations has been rescinded, there shall no longer be
any Event of Default under this Section 7(e) with respect to such acceleration;
or

       

      (f)           The
Issuer or any Material Subsidiary institutes any proceeding under any Debtor
Relief Law, or makes a general assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator, or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator, or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered,
or consented to by such Person, in any such proceeding or an order for the
liquidation of any such Person is entered in any such proceeding or any such
Person admits in writing its inability to pay its debts generally as they become
due (such proceedings collectively, the “Insolvency
Proceedings”).

       

      Upon the
occurrence of an Event of Default, the Noteholder may declare all sums
outstanding hereunder, including all interest thereon, to be immediately due and
payable, whereupon the same shall become and be immediately due and payable,
without notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor, or other notices or demands of any kind or character,
all of which are hereby expressly waived; provided, however, that upon
the occurrence of an actual or deemed entry of an order for relief with respect
to the Issuer under the Bankruptcy Code, all sums outstanding hereunder,
including all interest thereon, shall become and be immediately due and payable,
without notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor, or other notices or demands of any kind or character,
all of which are hereby expressly waived.

       

      
        8.           
Guaranty.

      

       

      (a)           Guaranty.  Each
Guarantor hereby absolutely and unconditionally guarantees, as a guaranty of
payment and performance and not merely as a guaranty of collection, prompt
payment when due, whether at stated maturity, by required prepayment, upon
acceleration, demand or otherwise, and at all times thereafter, of any and all
existing and future indebtedness and liabilities of every kind, nature and
character, direct or indirect, absolute or contingent, 

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      liquidated
or unliquidated, voluntary or involuntary and whether for principal, interest,
premiums, fees, indemnities, damages, costs, expenses or otherwise, of the
Issuer to the Noteholder under this Note (including all renewals, extensions,
amendments, refinancings and other modifications thereof and all costs,
attorneys’ fees and expenses incurred by the Noteholder in connection with the
collection or enforcement thereof), and whether recovery upon such indebtedness
and liabilities may be or hereafter become unenforceable or shall be an allowed
or disallowed claim under any proceeding or case commenced by or against any
Guarantor or the Issuer under any Debtor Relief Law, and including interest that
accrues after the commencement by or against the Issuer of any proceeding under
any Debtor Relief Laws (such obligations, the “Guaranteed Obligations” and
such guaranty, the “Guaranty”).  Notwithstanding
the foregoing, the liability of each Guarantor with respect to its Guaranteed
Obligations shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations under the Guaranty subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provision of any
state law. This Guaranty shall not be affected by the genuineness, validity,
regularity or enforceability of the Guaranteed Obligations or any instrument or
agreement evidencing any Guaranteed Obligations, or by the existence, validity,
enforceability, perfection, non-perfection or extent of any collateral therefor,
or by any fact or circumstance relating to the Guaranteed Obligations which
might otherwise constitute a defense to the obligations of any Guarantor under
this Guaranty, and each Guarantor hereby irrevocably waives any defenses it may
now have or hereafter acquire in any way relating to any or all of the
foregoing.

       

      (b)           Rights of
Noteholder.  Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of this Note.
Each Guarantor consents and agrees that the Noteholder may, at any time and from
time to time, without notice or demand, and without affecting the enforceability
or continuing effectiveness hereof:  (i) amend, extend, renew,
compromise, discharge, accelerate or otherwise change the time for payment or
the terms of the Guaranteed Obligations or any part thereof; (ii) take, hold,
exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose
of any security for the payment of this Guaranty or any Guaranteed Obligations;
(iii) apply such security and direct the order or manner of sale thereof as the
Noteholder in its sole discretion may determine; and (iv) release or substitute
one or more of any endorsers or other guarantors of any of the Guaranteed
Obligations.  Without limiting the generality of the foregoing, each
Guarantor consents to the taking of, or failure to take, any action which might
in any manner or to any extent vary the risks of such Guarantor under this
Guaranty or which, but for this provision, might operate as a discharge of such
Guarantor.

       

      (c)           Certain
Waivers.  Each Guarantor waives (i) any defense arising by
reason of any disability or other defense of the Issuer or any other guarantor,
or the cessation from any cause whatsoever (including any act or omission of the
Noteholder) of the liability of the Issuer; (ii) any defense based on any claim
that such Guarantor’s obligations exceed or are more burdensome than those of
the Issuer; (iii) the benefit of any statute of limitations affecting such
Guarantor’s liability hereunder; (iv) any right to require the Noteholder to
proceed against the Issuer, proceed against or exhaust any security for the
Indebtedness, or pursue any other remedy in the Noteholder’s power whatsoever;
(v) any benefit of and any right to participate in any 

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

         

      

      security
now or hereafter held by the Noteholder; and (vi) to the fullest extent
permitted by law, any and all other defenses or benefits that may be derived
from or afforded by applicable law limiting the liability of or exonerating
guarantors or sureties.  Each Guarantor expressly waives all setoffs
and counterclaims and all presentments, demands for payment or performance,
notices of nonpayment or nonperformance, protests, notices of protest, notices
of dishonor and all other notices or demands of any kind or nature whatsoever
with respect to the Guaranteed Obligations, and all notices of acceptance of
this Guaranty or of the existence, creation or incurrence of new or additional
Guaranteed Obligations.

       

      (d)           Subrogation.  Each
Guarantor shall not exercise any right of subrogation, contribution, indemnity,
reimbursement or similar rights with respect to any payments it makes under this
Guaranty until all of the Guaranteed Obligations and any amounts payable under
this Guaranty have been indefeasibly paid and performed in full.  If
any amounts are paid to such Guarantor in violation of the foregoing limitation,
then such amounts shall be held in trust for the benefit of the Noteholder and
shall forthwith be paid to the Noteholder to reduce the amount of the Guaranteed
Obligations, whether matured or unmatured.

       

      (e)           Termination;
Reinstatement.  (i)      This Guaranty
is a continuing and irrevocable guaranty of all Guaranteed Obligations now or
hereafter existing and shall remain in full force and effect until all
Guaranteed Obligations and any other amounts payable under this Guaranty are
indefeasibly paid in full in cash.  Notwithstanding the foregoing,
this Guaranty shall continue in full force and effect or be revived, as the case
may be, if any payment by or on behalf of the Issuer or any Guarantor is made,
or the Noteholder exercises its right of setoff, in respect of the Guaranteed
Obligations and such payment or the proceeds of such setoff or any part thereof
is subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Noteholder 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, all as if such payment had not been made or such setoff had not
occurred and whether or not the Noteholder is in possession of or has released
this Guaranty and regardless of any prior revocation, rescission, termination or
reduction.  The obligations of each Guarantor under this paragraph
shall survive termination of this Guaranty.

       

      (ii)           Notwithstanding
Section 8(e)(i) above, if any Guarantor ceases to be a co-borrower or a
guarantor  of the obligations under the Credit Agreement pursuant to
the terms thereof, such Guarantor shall be automatically released from its
Guaranty without any further action from the Noteholder.

       

      (f)           Additional
Guarantors.  To the extent that any Subsidiary shall become a
co-borrower or a guarantor of the obligations under the Credit Agreement
pursuant to the terms thereof, the Issuer will cause concurrently such
Subsidiary to execute a joinder agreement in form and substance reasonably
satisfactory to the Noteholder, whereupon such Subsidiary shall become a
“Guarantor” as defined herein.

       

      9.         
  Set-Off.    
Notwithstanding any provision to the contrary herein, the parties hereto agree
that any Set-Off Amount (as defined in the Stock Purchase Agreement) shall be

       

      
        
          
          

        

        
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      applied
to reduce this Note or the Senior Subordinated Seller Note in accordance with
the provisions of Section 9.06(d) of the Stock Purchase Agreement.

       

      10.           Successors and
Assigns.      The provisions of this Note shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that neither the
Issuer nor any Guarantor may assign its rights and obligations under this Note
other than pursuant to a Permitted Merger. The Noteholder may at any time assign
its rights and obligations under this Note (which assignment shall be in respect
of not less than all of its obligations hereunder) to any other Person with the
consent of the Issuer, which consent shall not be unreasonably withheld,
conditioned or delayed,  provided that the
Issuer shall have been offered the right of first refusal with respect to such
assignment (other than any assignment as collateral security for Indebtedness)
for a period of 30 days and the Issuer shall have elected not to exercise such
right upon the earlier to occur of such election or the expiry of such 30 day
period, and provided further that, in no
event shall the Issuer be required to consent to a potential assignee that has
been determined by the majority of the directors of the board of directors
unaffiliated with the Noteholder to be an “Adverse Person”.

       

      11.           Definitions.     
As used in this Agreement, the following terms shall have the following
meanings:

       

      “Affiliate” means, with
respect to any Person, any other Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, such Person. For
purposes of this definition, “control” (including, with correlative meanings,
the terms “controlling,” “controlled by” and “under common control with”) with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.

       

      
        “Bankruptcy Code” means The
Bankruptcy Reform Act of 1978, as codified as 11 U.S.C. Section 101
et.seq.

      

       

      
        “Company” has the meaning set
forth in Section 1.

      

       

      
        “Business Day” means any day
other than Saturday, Sunday or other day on which commercial banks are
authorized to close, or are in fact closed in New York, New
York.

      

       

      
        “Capitalized Lease” means a
lease under which the Issuer or any of its Subsidiaries is the lessee or
obligor, the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of the lessee or obligor in
accordance with GAAP.

      

       

      
        “Cash Management Obligations”
means any obligations of the Issuer or any Subsidiary in respect of overdrafts
and related liabilities arising from treasury, depository or cash management
services.

      

       

      
        
          
          

        

        
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        “Change of Control” means an
event or series of events by which any “person” or “group” (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such person or its subsidiaries, and any
person or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) (any such person or group, an “Acquiror”), other than an
Excluded Person, becomes the “beneficial owner” (within the meaning of Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934), directly or
indirectly, of 40% or more of the equity securities of the Issuer entitled to
vote for members of the board of directors or equivalent governing body of the
Issuer (“Issuer Voting
Securities”) on a fully-diluted basis (a “Control Interest”); provided that no
Change of Control shall be deemed to have occurred if (i) the Acquiror acquires
or has acquired any Issuer Voting Securities directly or indirectly from any
Payee Party or any Affiliate of a Payee Party at any time from and after the
date hereof or (ii) the Acquiror has entered into any agreement, arrangement or
understanding (whether written or oral) in connection with the acquisition,
disposition or voting of, or any other matter relating to, any of the Issuer
Voting Securities held by any Payee Party or Affiliate thereof (unless, in the
case of clause (i) only, the Acquiror acquires such Control Interest
pursuant to a transaction in which the Acquiror offered to acquire all
outstanding Issuer Voting Securities, so long as all holders of Issuer Voting
Securities received identical consideration in such
transaction).

      

       

      
         
“Consolidated EBITDA” means, at
any date of determination, an amount equal to Consolidated Net Income of the
Issuer and its Subsidiaries on a consolidated basis for the most recently
completed Measurement Period, plus (a) the following to the extent deducted in
calculating such Consolidated Net Income: (i) Consolidated Total Interest
Expense, (ii) the provision for Federal, state, local and foreign income taxes
(net of any tax credits), (iii) depreciation and amortization expense, (iv)
other expenses or losses reducing such Consolidated Net Income which do not
represent a cash item in such period (including LIFO reserves) or any future
period and (v) expenses deducted in such period resulting from the issuance of
Equity Interests permitted under the Credit Agreement, provided that such
expenses are and will be non-cash items in the period when taken and in all
later fiscal periods (in each case of or by the Issuer and its Subsidiaries for
such Measurement Period), minus (b) all non-cash gains increasing Consolidated
Net Income (in each case of or by the Issuer and its Subsidiaries for such
Measurement Period), all as determined on a consolidated basis in accordance
with GAAP.

      

       

      
         
“Consolidated Net Income”
means, as of any date of determination, the net income of the Issuer and its
Subsidiaries for the most recently completed Measurement Period, all as
determined on a consolidated basis in accordance with GAAP, provided, however,
that there shall be excluded (a) extraordinary gains (or extraordinary losses)
for such Measurement Period, (b) the income (or loss) of any Subsidiary during
such Measurement Period in which any other Person has a joint interest, except
to the extent of the amount of cash dividends or other distributions actually
paid in cash to such Subsidiary during such period, (c) the income (or loss) of
any Person during such 

         

        
          
            
            

          

          
            17

            
              

            

          

          
            
            

          

        

         

        Measurement
Period and accrued prior to the date it becomes a Subsidiary or is merged into
or consolidated with the Issuer or any of its Subsidiaries or such Person’s
assets are acquired by the Issuer or any of its Subsidiaries, and (d) the income
of any Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its organization documents or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, except that the Issuer’s equity in any
net loss of any such Subsidiary for such Measurement Period shall be included in
determining Consolidated Net Income.

      

       

      
        “Consolidated Total Interest
Expense” means, for any period, for the Issuer and its Subsidiaries on a
consolidated basis, all interest and all amortization of debt discount and
expense (including commitment fees, letter of credit fees, balance deficiency
fees and similar expense) on all Indebtedness of the Issuer and the Subsidiaries
on a consolidated basis (including outstanding letters of credit), paid or
required to be paid during such period, all as determined in accordance with
GAAP, together with the portion of rent expense of the Issuer and its
Subsidiaries with respect to such period under Capitalized Leases that would be
treated as interest under GAAP.

      

       

      
         
“Credit Agreement” means that
certain Credit Agreement, dated as of September 30, 2009 (together with all
exhibits and schedules thereto and as amended, restated, amended and restated,
extended, replaced, refinanced, supplemented or otherwise modified in writing
from time to time) among the Company, as a borrower, certain subsidiaries of the
Company, as designated co-borrowers, Bank of America, N.A., as administrative
agent and the other financial institutions party thereto.

      

       

      
         
“Credit Facilities” means (i)
one or more debt facilities (including without limitation, the Credit Agreement)
or commercial paper facilities, in each case with banks or lenders providing for
revolving credit loans, term loans, receivables financing or letters of credit,
and (ii) any notes, bonds or other instruments issued and sold in a public
offering, Rule 144A or other private transaction (together with related
indentures, note purchase agreements or similar agreements), in each case as to
clauses (i) and (ii), (A) as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part form time to time and (B) excluding
Pari Passu/Junior Indebtedness.

      

       

      “Credit Facility Indebtedness”
means, collectively, the Indebtedness of the Borrower and its Subsidiaries under
any Credit Facility, including any “Secured Obligations” under, and as defined
in, the Credit Agreement.

       

      
        “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.

      

       

      
        
          
          

        

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

      

       

      
        “Dollar” mean lawful money of
the United States.

      

       

      
        “Equity Interests” means, with
respect to any Person, all of the shares of capital stock of (or other ownership
or profit interests in) such Person, all of the warrants, options or other
rights for the purchase or acquisition from such Person of shares of capital
stock of (or other ownership or profit interests in) such Person, all of the
securities convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person or warrants, rights or
options for the purchase or acquisition from such Person of such shares (or such
other interests), and all of the other ownership or profit interests in such
Person (including partnership, member or trust interests therein), whether
voting or nonvoting, and whether or not such shares, warrants, options, rights
or other interests are outstanding on any date of
determination.

      

       

      
        “Excluded Indebtedness” means
Permitted Indebtedness constituting (a) Indebtedness pursuant to Section
6(b)(ii)(C) or (b) Pari Passu/Junior Indebtedness.

      

       

      
        “Excluded Person” means (a)
each Payee, his or her lineal descendants, members of his or her immediate
family and trusts for the benefit of any such individuals or the executor or
administrator of the estate or legal representative of any such individuals or
any Affiliate of any of the foregoing (the “Payee Parties”) or (b) any
“group” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934) that includes one or more Payee
Parties.

      

       

      
        “Events of Default” has the
meaning specified in Section 7.

      

       

      
        “GAAP” means generally accepted
accounting principles in the United States set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or such other principles as may be approved by a
significant segment of the accounting profession in the United States, that are
applicable to the circumstances as of the date of determination, consistently
applied.

      

      

      
         
“Governmental Authority” means
the government of the United States or any other nation, or of any political
subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government (including any supra-national bodies
such as the European Union or the European Central Bank).

      

       

      “Guarantee” by any Person (the
“guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the “primary
obligor”) in any 

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      manner,
whether directly or indirectly, and including any obligation of the guarantor,
direct or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase (or
advance or supply funds for the purchase of) any security for the payment
thereof, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or other obligation of the
payment thereof, or (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other
obligation.

       

      
        “Guaranteed Obligations” has
the meaning specified in Section 8(a).

      

       

      
        “Guarantors” means the Initial
Guarantors and each Subsidiary who becomes or is required to become a Guarantor
pursuant to Section 8(f).

      

       

      
        “Guaranty” has the meaning
specified in Section 8(a).

      

       

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

      

       

      “Incur” means, with respect to
any Indebtedness, to incur, create, issue, assume, Guarantee or otherwise become
liable for or with respect to, or become responsible for, the payment of such
Indebtedness (and “Incurrence” and “Incurred” will have meanings
correlative to the foregoing).

       

      
        “Indebtedness” of any Person means, without
duplication, (a) all obligations of such Person for borrowed money or with
respect to deposits or advances of any kind, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person on which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person
of Indebtedness of others, and (h) all obligations under Capitalized
Leases.

      

       

      
        “Initial Guarantors” shall mean
the Subsidiaries that are co-borrowers or guarantors on the date hereof under
the Credit Agreement.

        
           

          “Insolvency Proceedings” has
the meaning specified in Section 7(e).

        

      

       

      
        
          
          

        

        
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        “Interest Charge Coverage
Ratio” means, as of any date of determination, the ratio of (a)
Consolidated EBITDA for the Measurement Period ending on such date to (b)
Consolidated Total Interest Expense for such Measurement
Period.

      

       

       “Issuer” shall mean the Company
and its permitted successors and assigns.

       

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

       

      
        “Material Adverse Effect” means
a material adverse effect on the business, operations or financial condition of
the Issuer and its Subsidiaries, taken as a whole.

      

       

      
        “Material Subsidiary” means any
Subsidiary of the Company which at the date of determination is a “significant
subsidiary” as defined in Rule 1-02(w) of Regulation S-X under the Securities
Exchange Act of 1934 (as such Regulation is in effect on the date
hereof).

      

       

      
        “Maturity Date” means September
30, 2014.

      

       

      
        “Measurement Period” means, at
any date of determination, the most recently completed twelve (12) consecutive
fiscal months of the Issuer for which financial statements have or should have
been delivered in accordance with Section 5(a).

      

       

      
        “Note” means this Junior
Subordinated Seller Note, as amended, restated, extended, supplemented or
otherwise modified in writing from time to time.

      

       

      
        “Noteholder” means the Payee
and his permitted successors and assigns.

      

       

      
        “Paid in Full” means with
respect to Senior Obligations, the payment in full in cash and other
satisfaction in full of such obligations in accordance with the terms of the
applicable Senior Debt Document.

      

       

      
        “Pari Passu/Junior
Indebtedness” means Indebtedness which is expressed to be pari passu or subordinated to
this Note.

      

       

      
        “Payee” has the meaning set
forth in Section 1.

      

       

      
        “Payee Parties” has the meaning
set forth in the definition of “Excluded
Person”.

      

       

      
        “Payment Blockage Notice” means
a notice by the Senior Debt Agent (a) stating that one or more defaults shall
have occurred and be continuing under the applicable 

         

        
          
            
            

          

          
            21

            
              

            

          

          
            
            

          

           

        

        Senior
Debt Document (and listing such default(s) in reasonable detail), and (b)
directing that all payments under this Note be subject to Section
4(b).

      

       

      
        “Payment Blockage Period” means
the period commencing from the receipt by the Issuer or the Noteholder of a
Payment Blockage Notice and ending on the earliest to occur of (a) the date on
which the default(s) listed in such Payment Blockage Notice shall have been
cured or waived in accordance with the terms of the Senior Debt Documents, (b)
if arising as a result of any default other than a payment default, 180 days
from the commencement of such period, or (c) the revocation, withdrawal or
termination of such Payment Blockage Notice by the Senior Debt
Agent.

      

       

      
        “Permitted Indebtedness” means
Indebtedness permitted by Section 6(b).

      

       

      
        “Permitted
Merger”  has the meaning specified in Section
6(a).

      

       

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

      

       

      
        “Repurchase Date” has the
meaning specified in Section 2(b)(ii).

      

       

      “Responsible Officer” means the
chief executive officer, president, chief financial officer, vice
president-finance, vice president-corporate finance, treasurer, assistant
treasurer, controller or assistant controller of the Issuer.

       

      
        “Senior Creditors” means (a) as
long as the Credit Agreement has not been terminated or any obligations remain
outstanding thereunder, the holders of Senior Obligations that have entered into
an intercreditor agreement or arrangement acceptable to the Administrative Agent
(as defined in the Credit Agreement) with the Administrative Agent and (b)
otherwise, the holders of the Senior Obligations.

      

       

      
        “Senior Debt Agent” means (a)
as long as the Credit Agreement has not been terminated or any obligations
remain outstanding thereunder, the “Administrative Agent” as defined in the
Credit Agreement and (b) otherwise, the holders of a majority of the Senior
Obligations outstanding under the Credit Facilities or their respective
representative or agent.

      

       

      
        “Senior Debt Documents” means
collectively, (a) the “Loan Documents” as defined in the Credit Agreement and
(b) such other documents evidencing the Senior Obligations.

      

       

      “Senior Obligations” means,
collectively, (a) the Credit Facility Indebtedness of the Issuer or any
Guarantor, (b) any Cash Management Obligations of the Issuer or any Guarantor,
(c)  all obligations of the Issuer or any Guarantor under any Hedging
Agreement, (d) all obligations,
contingent or otherwise, of the Issuer or any Guarantor as an account party in
respect of letters of credit and letters of guaranty, (e) all obligations,
contingent or otherwise, of the Issuer or any Guarantor in respect of bankers’ acceptances

       

      
        
          
          

        

        
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      and
(f) all obligations of the Issuer or any Guarantor as obligor in respect of
Permitted Indebtedness other than Excluded Indebtedness.

       

      
        “Senior Subordinated Seller
Note” means that certain Senior Subordinated Seller Note dated September
30, 2009 made by the Issuer and payable to the order of the
Payee(s).

      

       

      
        “Set-Off Amount” has the
meaning specified in Section 9.

      

       

      
        “Stock Purchase Agreement”
means that stock purchase agreement dated August 7, 2009 among the Company and
the Payees relating to the purchase and sale of 100% of the capital stock of
Barnes & Noble College Booksellers, Inc.

      

       

      
        “Subsidiary” of a Person means
a corporation, partnership, joint venture, limited liability company or other
business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other
governing body (other than securities or interests having such power only by
reason of the happening of a contingency) are at the time beneficially owned, or
the management of which is otherwise controlled, directly, or indirectly through
one or more intermediaries, or both, by such Person.  Unless otherwise
specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall
refer to a Subsidiary or Subsidiaries of the Issuer.

      

       

      “Uniform Commercial Code” means
the Uniform Commercial Code as in effect from time to time.

       

      
        12.         
Miscellaneous.

      

       

      (a)           All
financial computations required under this Note shall be made, and all financial
information required under this Note shall be prepared, in accordance with GAAP
as in  effect from time to time consistently applied.

       

      (b)           No
amendment or waiver of any provision of this Note and no consent by the
Noteholder to any departure therefrom by the Issuer or any Guarantor shall be
effective unless such amendment, waiver or consent shall be in writing and
signed by the Noteholder, and any such amendment, waiver or consent shall then
be effective only for the period and on the conditions and for the specific
instance specified in such writing.  No failure or delay by the
Noteholder in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other rights, power
or privilege.

       

      (c)           Except
as otherwise expressly provided herein, notices and other communications to each
party provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed or sent by telecopy to the address provided
from time to time by such party.  All notices and other communications
shall be effective upon receipt.

       

      
        
          
          

        

        
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      (d)           If
any provision of this Note is held to be illegal, invalid or unenforceable, (i)
the legality, validity and enforceability of the remaining provisions of this
Note shall not be affected or impaired thereby and (ii) the parties shall
endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions.  The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

       

      (e)           THIS
NOTE IS GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW
RULES OF SUCH STATE. THE
ISSUER AND EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT AND EACH STATE COURT IN THE CITY OF NEW YORK AND ANY APPELLATE COURT
FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT.  THE ISSUER AND EACH GUARANTOR IRREVOCABLY CONSENTS
TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES OF SUCH PROCESS TO THE ISSUER OR SUCH GUARANTOR AT ITS ADDRESS
SET FORTH BENEATH ITS SIGNATURE HERETO.  THE ISSUER AND EACH GUARANTOR
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

       

      (g)           THE
ISSUER, EACH GUARANTOR AND THE NOTEHOLDER EACH WAIVE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS NOTE OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

       

      (h)           THIS NOTE REPRESENTS THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      
        

        
           

           

          
            	
                     

                     

                    BARNES
      & NOBLE, INC.

                  	 
	 	 	 	 
	By:	/s/ Joseph J.
      Lombardi	 
	Name:
      	Joseph J.
      Lombardi	 
	Title:
      	Chief Financial
      Officer	 

          

        

      

      
 

       

      25

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