Document:

Exhibit 10.4

 

EXECUTION
VERSION

 

SENIOR
SECURED SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

dated as
of September 17, 2008

 

among

 

LEHMAN BROTHERS HOLDINGS INC.,

a Debtor and Debtor in Possession,

as Borrower,

 

THE
LENDERS PARTY HERETO FROM TIME TO TIME,

 

BARCLAYS
BANK PLC

as
Administrative Agent and Collateral Agent,

 

and

 

BARCLAYS
CAPITAL,

as Sole
Lead Arranger, Sole Bookrunner

and Sole
Syndication Agent

 

$450
Million Senior Secured Superpriority Debtor In Possession Credit Facilities

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS AND
  INTERPRETATION

  	
  1

  
	
  1.1

  	
  Definitions

  	
  1

  
	
  1.2

  	
  Accounting Terms

  	
  24

  
	
  1.3

  	
  Interpretation, etc

  	
  24

  
	
  SECTION 2.

  	
  LOANS

  	
  25

  
	
  2.1

  	
  Term Loan Commitments

  	
  25

  
	
  2.2

  	
  Revolving Loan Commitments

  	
  25

  
	
  2.3

  	
  Borrowing Mechanics for Term Loans

  	
  26

  
	
  2.4

  	
  Borrowing Mechanics for Revolving Loans

  	
  26

  
	
  2.5

  	
  Notes

  	
  27

  
	
  2.6

  	
  Pro Rata Shares; Availability of Funds; Defaulting Lenders

  	
  27

  
	
  2.7

  	
  Use of Proceeds

  	
  28

  
	
  2.8

  	
  Evidence of Debt; Register; Lenders’ Books and Records

  	
  29

  
	
  2.9

  	
  Interest on Loans

  	
  30

  
	
  2.10

  	
  Conversion/Continuation

  	
  31

  
	
  2.11

  	
  Default Interest

  	
  32

  
	
  2.12

  	
  Fees

  	
  32

  
	
  2.13

  	
  Payment of Obligations

  	
  32

  
	
  2.14

  	
  [Reserved]

  	
  32

  
	
  2.15

  	
  Voluntary Prepayments of Term Loans; Commitment Reductions

  	
  32

  
	
  2.16

  	
  Voluntary Prepayments of Revolving Loans; Commitment Reductions

  	
  33

  
	
  2.17

  	
  Mandatory Prepayments

  	
  33

  
	
  2.18

  	
  Application of Payments

  	
  36

  
	
  2.19

  	
  General Provisions Regarding Payments

  	
  37

  
	
  2.20

  	
  Ratable Sharing

  	
  38

  
	
  2.21

  	
  Making or Maintaining Eurodollar Rate Loans

  	
  39

  
	
  2.22

  	
  Increased Costs; Capital Adequacy

  	
  40

  
	
  2.23

  	
  Taxes; Withholding, etc

  	
  42

  
	
  2.24

  	
  Obligation to Mitigate

  	
  44

  
	
  2.25

  	
  Removal or Replacement of a Lender

  	
  45

  
	
  2.26

  	
  Superpriority Nature of Obligations and Loans

  	
  45

  
	
  2.27

  	
  No Discharge; Survival of Claims

  	
  46

  
	
  2.28

  	
  Waiver of any Priming Rights

  	
  46

  
	
  2.29

  	
  Effect of Termination

  	
  46

  
	
  SECTION 3.

  	
  CONDITIONS
  PRECEDENT

  	
  46

  
	
  3.1

  	
  Closing Date

  	
  46

  
	
  3.2

  	
  Conditions Precedent to the Incremental Facility Effective Date

  	
  50

  
	
  3.3

  	
  Conditions Precedent to All Credit Extensions

  	
  52

  
	
  SECTION 4.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  52

  
	
  4.1

  	
  Organization; Requisite Power and Authority; Qualification

  	
  53

  
	
  4.2

  	
  Capital Stock and Ownership

  	
  53

  
	
  4.3

  	
  Due Authorization

  	
  53

  
	
  4.4

  	
  No Conflict

  	
  53

  
	
  4.5

  	
  Governmental Consents

  	
  53

  
				

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  4.6

  	
  Binding Obligation

  	
  54

  
	
  4.7

  	
  Historical Financial Statements

  	
  54

  
	
  4.8

  	
  DIP Budget

  	
  54

  
	
  4.9

  	
  Cash Flow Forecast

  	
  54

  
	
  4.10

  	
  No Material Adverse Change

  	
  54

  
	
  4.11

  	
  No Restricted Junior Payments

  	
  55

  
	
  4.12

  	
  Adverse Proceedings, etc

  	
  55

  
	
  4.13

  	
  Taxes

  	
  55

  
	
  4.14

  	
  Properties

  	
  55

  
	
  4.15

  	
  Environmental Matters

  	
  56

  
	
  4.16

  	
  No Defaults

  	
  56

  
	
  4.17

  	
  Material Contracts

  	
  56

  
	
  4.18

  	
  Governmental Regulation

  	
  56

  
	
  4.19

  	
  Margin Stock

  	
  57

  
	
  4.20

  	
  Employee Matters

  	
  57

  
	
  4.21

  	
  Employee Benefit Plans

  	
  57

  
	
  4.22

  	
  Certain Fees

  	
  57

  
	
  4.23

  	
  Compliance with Statutes, etc

  	
  57

  
	
  4.24

  	
  Reorganization Matters

  	
  58

  
	
  4.25

  	
  Disclosure

  	
  58

  
	
  4.26

  	
  Patriot Act

  	
  58

  
	
  4.27

  	
  Libro Holdings

  	
  59

  
	
  SECTION 5.

  	
  AFFIRMATIVE
  COVENANTS

  	
  59

  
	
  5.1

  	
  Financial Statements and Other Reports

  	
  59

  
	
  5.2

  	
  Existence

  	
  63

  
	
  5.3

  	
  Payment of Post-petition Taxes and Claims

  	
  64

  
	
  5.4

  	
  Maintenance of Properties

  	
  64

  
	
  5.5

  	
  Insurance

  	
  64

  
	
  5.6

  	
  Books and Records; Inspections

  	
  64

  
	
  5.7

  	
  Lenders Meetings

  	
  65

  
	
  5.8

  	
  Compliance with Laws

  	
  65

  
	
  5.9

  	
  Environmental

  	
  65

  
	
  5.10

  	
  Subsidiaries

  	
  66

  
	
  5.11

  	
  Further Assurances

  	
  66

  
	
  5.12

  	
  [Reserved]

  	
  66

  
	
  5.13

  	
  [Reserved]

  	
  66

  
	
  5.14

  	
  [Reserved]

  	
  66

  
	
  5.15

  	
  Chapter 11 Case

  	
  66

  
	
  5.16

  	
  [Reserved]

  	
  66

  
	
  5.17

  	
  Lenders’ Financial Advisor

  	
  66

  
	
  5.18

  	
  Cash Flow Forecast

  	
  66

  
	
  5.19

  	
  DIP Budget

  	
  67

  
	
  5.20

  	
  [Reserved]

  	
  67

  
	
  5.21

  	
  Incremental Facility Effective Date

  	
  67

  
					

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  NEGATIVE
  COVENANTS

  	
  67

  
	
  6.1

  	
  Indebtedness

  	
  67

  
	
  6.2

  	
  Liens

  	
  68

  
	
  6.3

  	
  Equitable Lien

  	
  69

  
	
  6.4

  	
  No Further Negative Pledges

  	
  70

  
	
  6.5

  	
  No Restricted Junior Payments

  	
  70

  
	
  6.6

  	
  Restrictions on Subsidiary Distributions

  	
  70

  
	
  6.7

  	
  Investments

  	
  70

  
	
  6.8

  	
  Financial Covenants

  	
  71

  
	
  6.9

  	
  Fundamental Changes; Disposition of Assets; Acquisitions

  	
  71

  
	
  6.10

  	
  Disposal of Subsidiary Interests

  	
  72

  
	
  6.11

  	
  Sales and Lease-Backs

  	
  72

  
	
  6.12

  	
  Transactions with Shareholders and Affiliates

  	
  73

  
	
  6.13

  	
  Conduct of Business

  	
  73

  
	
  6.14

  	
  Libro Holdings Maximum Liabilities

  	
  73

  
	
  6.15

  	
  Amendments or Waivers of Organizational Documents

  	
  73

  
	
  6.16

  	
  Fiscal Year

  	
  73

  
	
  6.17

  	
  No Speculative Transactions

  	
  73

  
	
  6.18

  	
  Margin Regulations

  	
  73

  
	
  6.19

  	
  Chapter 11 Claims

  	
  73

  
	
  6.20

  	
  The Orders

  	
  74

  
	
  SECTION 7.

  	
  [RESERVED]

  	
  74

  
	
  SECTION 8.

  	
  EVENTS OF
  DEFAULT

  	
  74

  
	
  8.1

  	
  Events of Default

  	
  74

  
	
  SECTION 9.

  	
  AGENTS

  	
  79

  
	
  9.1

  	
  Appointment of Agents

  	
  79

  
	
  9.2

  	
  Powers and Duties

  	
  79

  
	
  9.3

  	
  General Immunity

  	
  79

  
	
  9.4

  	
  Agents Entitled to Act as Lender

  	
  81

  
	
  9.5

  	
  Lenders’ Representations, Warranties and Acknowledgment

  	
  81

  
	
  9.6

  	
  Right to Indemnity

  	
  81

  
	
  9.7

  	
  Successor Administrative Agent and Collateral Agent; Priority of
  Payments

  	
  82

  
	
  9.8

  	
  Collateral Documents

  	
  83

  
	
  9.9

  	
  Withholding Taxes

  	
  83

  
	
  SECTION 10.

  	
  MISCELLANEOUS

  	
  84

  
	
  10.1

  	
  Notices

  	
  84

  
	
  10.2

  	
  Expenses

  	
  85

  
	
  10.3

  	
  Indemnity

  	
  86

  
	
  10.4

  	
  Set-Off

  	
  87

  
	
  10.5

  	
  Amendments and Waivers

  	
  87

  
	
  10.6

  	
  Successors and Assigns; Participations

  	
  88

  
	
  10.7

  	
  Independence of Covenants

  	
  91

  
	
  10.8

  	
  Survival of Representations, Warranties and Agreements

  	
  91

  
	
  10.9

  	
  No Waiver; Remedies Cumulative

  	
  92

  
				

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  10.10

  	
  Marshalling; Payments Set Aside

  	
  92

  
	
  10.11

  	
  Severability

  	
  92

  
	
  10.12

  	
  Obligations Several; Independent Nature of Lenders’ Rights

  	
  92

  
	
  10.13

  	
  Headings

  	
  92

  
	
  10.14

  	
  APPLICABLE LAW

  	
  93

  
	
  10.15

  	
  CONSENT TO JURISDICTION

  	
  93

  
	
  10.16

  	
  WAIVER OF JURY TRIAL

  	
  93

  
	
  10.17

  	
  Confidentiality

  	
  94

  
	
  10.18

  	
  Usury Savings Clause

  	
  95

  
	
  10.19

  	
  Counterparts

  	
  95

  
	
  10.20

  	
  Effectiveness

  	
  95

  
	
  10.21

  	
  Patriot Act

  	
  95

  
	
  10.22

  	
  Electronic Execution of Assignments

  	
  95

  
	
  10.23

  	
  [Reserved.]

  	
  96

  
	
  10.24

  	
  Judgment Currency

  	
  96

  
				

 

iv

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  APPENDICES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Appendix A

  	
  Commitments

  	
   

  
	
   

  	
   

  	
   

  
	
  Appendix B

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 4.1

  	
  Organizational Structure and Capital Structure

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 4.2

  	
  Capital Stock and Ownership

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 4.10

  	
  Material Adverse Effect

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 4.14

  	
  Real Estate

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 4.17

  	
  Material Contracts

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 6.2

  	
  Liens

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 4.12

  	
  Transactions with Shareholders and Affiliates

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 8.1

  	
  Environmental Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A-1

  	
  Form of Funding Notice

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A-2

  	
  Form Conversion/Continuation Notice

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit B-1

  	
  Form of Term Loan Note

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit B-2

  	
  Form of Revolving Loan Notice

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit C

  	
  Form of Compliance Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit D-1

  	
  Form of Opinion of Weil, Gotschal &
  Manges LLP

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit D-2

  	
  Form of Opinion of Richards, Layton &
  Finger LLP

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit E

  	
  Form of Assignment and Assumption Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit F

  	
  Form of Certificate Re Non-Bank Status

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit G

  	
  Form of Closing Date Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit H

  	
  Form of Pledge Agreement

  	
   

  

 

v

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Exhibit I

  	
  Form of Interim Order

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit J

  	
  Form of Cash Flow Forecast

  	
   

  

 

vi

 

SENIOR SECURED
SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

This SENIOR SECURED
SUPERPRIORITY DEBTOR IN POSSESSION CREDIT AGREEMENT, dated as of September 17,
2008, is entered into by and among LEHMAN BROTHERS HOLDINGS
INC., a Delaware corporation, a debtor and a debtor in possession
under chapter 11 of the Bankruptcy Code (as defined below) (“Borrower”), the Lenders party hereto from time
to time, BARCLAYS BANK PLC (“Barclays Bank”), as Administrative Agent (together
with its permitted successors in such capacity, “Administrative Agent”) and Collateral Agent (together with
its permitted successors in such capacity, “Collateral Agent”).

 

RECITALS:

 

WHEREAS, capitalized terms used in these Recitals shall have the
respective meanings set forth for such terms in Section 1.1 hereof;

 

WHEREAS, on September 15,
2008 (the “Petition
Date”), Borrower
filed a voluntary petition for relief (collectively, the “Chapter 11 Case”) under chapter 11 of the Bankruptcy
Code with the United States Bankruptcy Court for the Southern District of New
York (the “Bankruptcy
Court”);

 

WHEREAS, Borrower is continuing
to operate its business and manage its properties as debtors in possession
under sections 1107 and 1108 of the Bankruptcy Code;

 

WHEREAS, Borrower has requested
that (a) Lenders provide (a) a secured superpriority multiple draw
term loan of $250,000,000 and (b) Lenders provide a secured superpriority
revolving credit facility of $200,000,000, to fund the continued operation of
Borrower’s businesses as debtor and debtor in possession under the Bankruptcy
Code;

 

WHEREAS, Lenders are willing to
make available to Borrower such post-petition loans and other extensions of
credit upon the terms and subject to the conditions set forth herein and in the
Orders; and

 

WHEREAS, Borrower has agreed to
secure its obligations to Lenders hereunder with, inter alia,
security interests in certain assets, all as more fully provided herein, in the
Orders and in the Collateral Documents.

 

NOW, THEREFORE, in consideration of the premises and
the agreements, provisions and covenants herein contained, the parties hereto
agree as follows:

 

SECTION 1.         DEFINITIONS
AND INTERPRETATION

 

1.1          Definitions.  The following terms used herein, including in
the preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:

 

“Account
Debtor” as defined in
the UCC and includes any Person obligated in respect of an Account.

 

 

“Account” as defined in the UCC, including all
rights to payment for goods sold or leased, or for services rendered.

 

“Adjusted
Eurodollar Rate”
means, for any Interest Rate Determination Date with respect to an Interest
Period for a Eurodollar Rate Loan, the rate per annum obtained by dividing (and
rounding upward to the next whole multiple of 1/16 of 1%) (i) (a) the
rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate
determined by Administrative Agent to be the offered rate which appears on the page of
the Telerate Screen which displays an average British Bankers Association
Interest Settlement Rate (such page currently being page number 3740
or 3750, as applicable) for deposits (for delivery on the first day of such
period) with a term equivalent to such period in Dollars, determined as of
approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, or (b) in the event the rate referenced in the
preceding clause (a) does not appear on such page or service or if
such page or service shall cease to be available, the rate per annum
(rounded to the nearest 1/100 of 1%) equal to the rate determined by
Administrative Agent to be the offered rate on such other page or other
service which displays an average British Bankers Association Interest
Settlement Rate for deposits (for delivery on the first day of such period)
with a term equivalent to such period in Dollars, determined as of
approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, or (c) in the event the rates referenced in the
preceding clauses (a) and (b) are not available, the rate per annum
(rounded to the nearest 1/100 of 1%) equal to the offered quotation rate to
first class banks in the London interbank market by Barclays Bank for deposits
(for delivery on the first day of the relevant period) in Dollars of amounts in
same day funds comparable to the principal amount of the applicable Loan of
Administrative Agent, in its capacity as a Lender, for which the Adjusted
Eurodollar Rate is then being determined with maturities comparable to such
period as of approximately 11:00 a.m. (London, England time) on such
Interest Rate Determination Date, by (ii) an amount equal to (a) one minus
(b) the Applicable Reserve Requirement; provided that in no event, will
the Adjusted Eurodollar Rate be less than 3.50%.

 

“Administrative
Agent” as defined in
the preamble hereto.

 

“Adverse
Proceeding” means any
action, suit, proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration (whether or not purportedly on behalf
of Borrower or any of its Subsidiaries) at law or in equity, or before or by
any Governmental Authority, domestic or foreign (including any Environmental
Claims), whether pending or, to the knowledge of Borrower or any of its
Subsidiaries, threatened against or affecting Borrower or any of its Subsidiaries
or any property of Borrower or any of its Subsidiaries.

 

“Affected
Lender” as defined in
Section 2.21(b).

 

“Affected
Loans” as defined in Section 2.21(b).

 

“Affiliate” means, as applied to any Person, any
other Person directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling”, “controlled by”
and “under common control with”), as applied to any Person, 

 

2

 

means the possession, directly or indirectly, of the
power (i) to vote 5% or more of the Securities having ordinary voting
power for the election of directors of such Person or (ii) to direct or
cause the direction of the management and policies of that Person, whether
through the ownership of voting securities or by contract or otherwise.

 

“Agent” means each of Administrative Agent,
Collateral Agent and Syndication Agent.

 

“Aggregate
Amounts Due” as
defined in Section 2.20.

 

“Agreement” means this Senior Secured
Superpriority Debtor In Possession Credit Agreement, dated as of September 17,
2007, as it may be amended, supplemented or otherwise modified from time to
time.

 

“Applicable
Reserve Requirement”
means, at any time, for any Eurodollar Rate Loan, the maximum rate, expressed
as a decimal, at which reserves (including, without limitation, any basic
marginal, special, supplemental, emergency or other reserves) are required to
be maintained with respect thereto against “Eurocurrency
liabilities” (as such term is defined in Regulation D) under
regulations issued from time to time by the Board of Governors or other
applicable banking regulator.  Without
limiting the effect of the foregoing, the Applicable Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by
reference to which the applicable Adjusted Eurodollar Rate or any other
interest rate of a Loan is to be determined, or (ii) any category of
extensions of credit or other assets which include Eurodollar Rate Loans.  A Eurodollar Rate Loan shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefits of credit for proration, exceptions or
offsets that may be available from time to time to the applicable Lender.  The rate of interest on Eurodollar Rate Loans
shall be adjusted automatically on and as of the effective date of any change
in the Applicable Reserve Requirement.

 

“Asset Sale” means a sale, lease or sub-lease (as
lessor or sublessor), sale and leaseback, assignment, conveyance, transfer or
other disposition to, or any exchange of property with, any Person, in one transaction
or a series of transactions, of all or any part of Borrower’s or any of its
Subsidiaries’ businesses, assets or properties of any kind, whether real,
personal, or mixed and whether tangible or intangible, whether now or
previously owned or hereafter acquired, including, without limitation, the
Capital Stock of any of Borrower’s Subsidiaries, other than inventory sold or
leased in the ordinary course of business (excluding any such sales by
operations or divisions discontinued or to be discontinued).

 

“Assignment
Agreement” means an
Assignment and Assumption Agreement substantially in the form of Exhibit E,
with such amendments or modifications as may be approved by Administrative
Agent.

 

“Assignment
Effective Date” as
defined in Section 10.6(b).

 

“Authorized
Officer” means, as
applied to any Person, any individual holding the position of chairman of the
board (if an officer), chief executive officer, president or one of 

 

3

 

its vice presidents (or the equivalent thereof), chief
restructuring officer and such Person’s chief financial officer or treasurer.

 

“Availability” means, (i) with respect to the
Term Facility, an amount equal to the aggregate amount of the Term Commitments,
minus the principal amount of the Term Loans outstanding, and (ii) with
respect to the Revolving Facility, an amount equal to the aggregate Revolving
Commitment, minus the aggregate principal amount of the Revolving Loans.

 

“Bankruptcy Code” means Title 11 of the United
States Code entitled “Bankruptcy,” as now and hereafter in effect, or any
successor statute.

 

“Bankruptcy
Court” as defined in
the recitals hereto or means any other court having competent jurisdiction over
the Chapter 11 Case.

 

“Barclays
Bank” as defined in
the preamble hereto.

 

“Base Rate” means, for any day, a rate per annum
equal to the greater of (i) the Prime Rate in effect on such day and (ii) the
Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1%.  Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective day of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively; provided that in no event, will the Base Rate be less than
4.50%.

 

“Base Rate Loan” means a Loan bearing interest at a
rate determined by reference to the Base Rate.

 

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

 

“Borrower” as defined in the preamble hereto.

 

“Borrowing” means a group of Revolving Loans or
Term Loans of one Type that are made on the same day or are converted into
Revolving Loans or Term Loans of one Type on the same day.

 

“Business Day” means (i) any day excluding
Saturday, Sunday and any day which is a legal holiday under the laws of the
State of New York or is a day on which banking institutions located in such
state are authorized or required by law or other governmental action to close
and (ii) with respect to all notices, determinations, fundings and
payments in connection with the Adjusted Eurodollar Rate or any Eurodollar Rate
Loans, the term “Business Day”
shall mean any day which is a Business Day described in clause (i) and
which is also a day for trading by and between banks in Dollar deposits in the
London interbank market.

 

“Capital
Lease” means, as
applied to any Person, any lease of any property (whether real, personal or
mixed) by that Person as lessee that, in conformity with GAAP, is or should be
accounted for as a capital lease on the balance sheet of that Person.

 

4

 

“Capital
Stock” means any and
all shares, interests, participations or other equivalents (however designated)
of capital stock of a corporation, any and all equivalent ownership interests
in a Person (other than a corporation), including, without limitation,
partnership interests, trust units and membership interests, and any and all
warrants, rights or options to purchase or other arrangements or rights to
acquire any of the foregoing.

 

“Carve-Out” shall have the meaning ascribed to
such term in the Interim Order or, after the effective date thereof, the Final
Order.

 

“Cash” means money, currency or a credit
balance in any demand or deposit account.

 

“Cash
Equivalents” means,
as at any date of determination, (a) any evidence of Indebtedness with a
maturity date of ninety (90) days or less issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof; provided, that, the full faith and
credit of the United States of America is pledged in support thereof; (b) certificates
of deposit or bankers’ acceptances with a maturity of ninety (90) days or less
of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than
$1,000,000,000; (c) commercial paper (including variable rate demand
notes) with a maturity of ninety (90) days or less issued by a corporation
(except an Affiliate of Borrower) organized under the laws of any State of the
United States of America or the District of Columbia and rated at least A-1 by
S&P or at least P-1 by Moody’s; (d) repurchase obligations with a term
of not more than thirty (30) days for underlying securities of the types
described in clause (a) above entered into with any financial institution
having combined capital and surplus and undivided profits of not less than
$1,000,000,000; (e) repurchase agreements and reverse repurchase
agreements relating to marketable direct obligations issued or unconditionally
guaranteed by the United States of America or issued by any governmental agency
thereof and backed by the full faith and credit of the United States of
America, in each case maturing within ninety (90) days or less from the date of
acquisition; provided, that, the terms of such agreements comply
with the guidelines set forth in the Federal Financial Agreements of Depository
Institutions with Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985; and (f) investments in money
market funds and mutual funds which invest substantially all of their assets in
securities of the types described in clauses (a) through (e) above.

 

“Cash Flow
Forecast” means a
13-week cash flow forecast in substantially the form of Exhibit J and
otherwise in form and substance satisfactory to, and approved by,
Administrative Agent in its sole and absolute discretion, which forecast shall,
among other things, detail projected cash receipts and cash disbursements on a
weekly basis for the then current week and updated weekly thereafter.

 

“Cash Management Services”
means any services provided from time to time to Borrower in connection with
operating, collections, payroll, trust or other depository or disbursement
accounts, including automatic clearinghouse, controlled disbursement,
depository, electronic funds transfer, information reporting, lockbox, stop
payment overdraft and/or wire transfer services.

 

5

 

“Change of
Control” means, at
any time, (i) any Person or “group” (within the meaning of Rules 13d-3
and 13d-5 under the Exchange Act) (a) shall have acquired beneficial
ownership of a majority on a fully diluted basis of the voting and/or economic
interest in the Capital Stock of Borrower or (b) shall have obtained the
power (whether or not exercised) to elect a majority of the members of the
board of directors (or similar governing body) of Borrower; (ii) the
majority of the seats (other than vacant seats) on the board of directors (or
similar governing body) of Borrower cease to be occupied by Persons who either (a) were
members of the board of directors of Borrower on the Closing Date or (b) were
nominated for election by the board of directors of Borrower, a majority of
whom were directors on the Closing Date or whose election or nomination for
election was previously approved by a majority of such directors; or (iii) Borrower
shall cease to beneficially own and control 100% on a fully diluted basis of
the economic and voting interest in the Capital Stock of Neuberger unless as a
result of a transaction expressly permitted under Section 6.9.

 

“Chapter 11
Case” as defined in
the recitals hereto.

 

“Claim” has the meaning given to such term
in Section 101(5) of the Bankruptcy Code.

 

“Closing Date” means the date on which the initial
Credit Extensions are made.

 

“Closing Date
Certificate” means a
Closing Date Certificate substantially in the form of Exhibit G.

 

“Collateral” means, collectively, all of the
real, personal and mixed property (including Capital Stock) in which Liens are
granted or purported to be granted pursuant to the Collateral Documents as
security for all or any part of the Obligations.

 

“Collateral
Agent” as defined in
the preamble hereto.

 

“Collateral
Documents” means the
Pledge Agreement, the Orders, and all other instruments, documents and
agreements delivered by any Credit Party pursuant to this Agreement or any of
the other Credit Documents in order to grant to Collateral Agent, for the
benefit of Secured Parties, a Lien on any real, personal or mixed property of
such Credit Party as security for the Obligations or to preserve, protect or
perfect such Lien.

 

“Collections” means amounts
received in cash by the Credit Parties in any given budgeted week and
identified as “Collections” pursuant to the Cash
Flow Forecast (excluding amounts referred to in the Cash Flow Forecast as “Other Receipts”).

 

“Commitments” means the Revolving Loan Commitments
and the Term Loan Commitments.

 

“Committee” means the official statutory
committee of unsecured creditors appointed in the Chapter 11 Case pursuant to
section 1102 of the Bankruptcy Code or any other statutory committee appointed
in the Chapter 11 Case.

 

6

 

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

 

“Consolidated Assets”
means, as to any Person, the assets of such Person and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.

 

“Contractual
Obligation” means, as
applied to any Person, any provision of any Security issued by that Person or
of any indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.

 

“Conversion/Continuation
Date” means the
effective date of a continuation or conversion, as the case may be, as set
forth in the applicable Conversion/Continuation Notice.

 

“Conversion/Continuation
Notice” means a
Conversion/Continuation Notice substantially in the form of Exhibit A-2.

 

“Credit
Document” means any
of this Agreement, the Notes, if any, the Collateral Documents, the Orders and
all other documents, instruments or agreements executed and delivered by a
Credit Party for the benefit of any Agent or any Lender in connection herewith.

 

“Credit
Exposure” means the
sum of (i) the Revolving Loan Exposure and (ii) the Term Loan
Exposure.

 

“Credit
Extension” means the
making of a Term Loan or a Revolving Loan.

 

“Credit
Facilities” means (i) the
Term Facility and (ii) the Revolving Facility.

 

“Credit Party” means the Borrower.

 

“Currency
Agreement” means any
foreign exchange contract, currency swap agreement, futures contract, option
contract, synthetic cap or other similar agreement or arrangement, each of
which is for the purpose of hedging the foreign currency risk associated with
Borrower’s and its Subsidiaries’ operations and not for speculative purposes.

 

“Default” means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.

 

“Default
Excess” means, with
respect to any Defaulting Lender, the excess, if any, of such Defaulting Lender’s
Pro Rata Share of the aggregate outstanding principal amount of Loans of all
Lenders (calculated as if all Defaulting Lenders (including such Defaulting
Lender) had funded all of their respective Defaulted Loans) over the aggregate
outstanding principal amount of all Loans of such Defaulting Lender.

 

“Default
Period” means, with
respect to any Defaulting Lender, the period commencing on the date of the
applicable Funding Default and ending on the earliest of the following
dates:  (i) the date on which all
Commitments are cancelled or terminated and/or the 

 

7

 

Obligations are declared or become immediately due and
payable, (ii) the date on which (a) the Default Excess with respect
to such Defaulting Lender shall have been reduced to zero (whether by the
funding by such Defaulting Lender of any Defaulted Loans of such Defaulting
Lender or by the non pro rata application of any voluntary or mandatory
prepayments of the Loans in accordance with the terms of Section 2.15, Section 2.16
or Section 2.17 or by a combination thereof) and (b) such Defaulting
Lender shall have delivered to Borrower and Administrative Agent a written
reaffirmation of its intention to honor its obligations hereunder with respect
to its Commitments, and (iii) the date on which Borrower, Administrative
Agent and Requisite Lenders waive all Funding Defaults of such Defaulting
Lender in writing.

 

“Defaulted
Loan” as defined in Section 2.6(c).

 

“Defaulting
Lender” as defined in
Section 2.6(c).

 

“DIP Budget” means a forecast in form and
substance satisfactory to, and approved by, Administrative Agent in their sole
and absolute discretion, which forecast shall detail Borrower’s anticipated
income statement, balance sheet and cash flow statement, each on a
consolidating and consolidated basis for Borrower and its Subsidiaries,
together with a written set of assumptions supporting such statements, for the
period commencing on or prior to the Petition Date and ending on or after a
date that is 6 months after the Closing Date and setting forth the anticipated
uses of the Commitments on a monthly basis; and which shall include, for each
calendar month, a forecast of the aggregate Credit Exposure forecasted to be
outstanding at the end of such calendar month and the total cash disbursements
budgeted for such calendar month.

 

“Document” as defined in the UCC.

 

“Dollars” and the sign “$” mean the lawful money of the United States of America.

 

“Effective
Date” means the date
upon which a plan of reorganization in the Chapter 11 Case becomes effective.

 

“Eligible
Assignee” means (i) any
Lender, any Affiliate of any Lender and any Related Fund (any two or more
Related Funds being treated as a single Eligible Assignee for all purposes
hereof), and (ii) any commercial bank, insurance company, investment or
mutual fund or other entity that is an “accredited investor”
(as defined in Regulation D under the Securities Act) and which extends
credit or buys loans; provided, no Affiliate of Borrower shall be an
Eligible Assignee.

 

“Employee Benefit
Plan” means in
respect of the Borrower, any “employee benefit plan”
as defined in Section 3(3) of ERISA which is or was sponsored,
maintained or contributed to by, or required to be contributed by, Borrower,
any of its Subsidiaries or any of their respective ERISA Affiliates.

 

“Enforcement
Action” means any
action to enforce any Obligations or Credit Documents or to realize upon any
Collateral (whether by judicial action, self-help, notification of Account
Debtors, exercise of setoff or recoupment, or otherwise).

 

8

 

“Environmental
Claim” means any
investigation, notice, notice of violation, claim, action, suit, proceeding,
demand, abatement order or other order or directive (conditional or otherwise),
by any Governmental Authority or any other Person, arising (i) pursuant to
or in connection with any actual or alleged violation of any Environmental Law;
(ii) in connection with any Hazardous Material or any actual or alleged
Hazardous Materials Activity; or (iii) in connection with any actual or
alleged damage, injury, threat or harm to health, safety, natural resources or
the environment.

 

“Environmental
Laws” means any and
all current or future foreign or domestic, federal or state (or any subdivision
of either of them), statutes, ordinances, orders, orders-in-council rules,
regulations, judgments, Governmental Authorizations, or any other requirements
of Governmental Authorities relating to (i) environmental matters,
including those relating to any Hazardous Materials Activity; (ii) the
generation, use, storage, transportation or disposal of Hazardous Materials; or
(iii) occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare, in any manner applicable
to Borrower or any of its Subsidiaries or any Facility.

 

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

 

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

 

“ERISA Event”
means (a) any “reportable event”, as defined in Section 4043 of ERISA
or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived), (b) the existence
with respect to any Plan of an `”accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not
waived, (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan, (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan, (e) the receipt by the
Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan, (f) the incurrence by the Borrower or any
of its ERISA Affiliates of any liability with respect to the withdrawal or
partial withdrawal from any Plan or Multiemployer Plan, or (g) the receipt
by the Borrower or any ERISA Affiliate of any notice, concerning the imposition
of Withdrawal Liability or a determination that Multiemployer Plan is, or is
reasonably expected to be, insolvent or in reorganization, within the meaning
of title IV of ERISA.

 

“Eurodollar
Rate Loan” means a
Loan bearing interest at a rate determined by reference to the Adjusted
Eurodollar Rate.

 

“Event of
Default” means each
of the conditions or events set forth in Section 8.1.

 

9

 

“Exchange Act” means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.

 

“Existing
Indebtedness” means (a) Prepetition
Indebtedness and (b) any other Indebtedness of the Subsidiaries of the
Borrower existing prior to the date hereof.

 

“Extraordinary
Expenses” means all
costs, expenses or advances that any Agent or Lender may incur during a Default
or Event of Default, or during the pendency of an Insolvency Proceeding of an
Obligor, including those relating to (i) any audit, inspection,
repossession, storage, repair, appraisal, insurance, manufacture, preparation
or advertising for sale, sale, collection, or other preservation of or
realization upon any Collateral; (ii) any action, arbitration or other
proceeding (whether instituted by or against any Agent, any Lender, any
Obligor, any representative of creditors of an Obligor or any other Person) in
any way relating to any Collateral (including the validity, perfection,
priority or avoidability of Collateral Agent’s Liens with respect to any
Collateral), Credit Documents or Obligations, including any lender liability or
other Indemnitee Claims; (iii) the exercise, protection or enforcement of
any rights or remedies of any Agent or Lender in, or the monitoring of, any
Insolvency Proceeding; (iv) settlement or satisfaction of any taxes,
charges or Liens with respect to any Collateral; (v) any Enforcement
Action; or (vi) negotiation and documentation of any modification, waiver,
workout, restructuring or forbearance with respect to any Credit Documents or
Obligations.  Such costs, expenses and
advances include transfer fees, taxes, storage fees, insurance costs, permit
fees, utility reservation and standby fees, legal fees, appraisal fees, brokers’
fees and commissions, auctioneers’ fees and commissions, accountants’ fees,
environmental study fees, wages and salaries paid to employees of any Obligor
or independent contractors in liquidating any Collateral, and travel expenses.

 

“Facility” means any real property (including
all buildings, fixtures or other improvements located thereon) now, hereafter
or heretofore owned, leased, operated or used by Borrower or any of its
Subsidiaries or any of their respective predecessors or Affiliates.

 

“Federal
Funds Effective Rate”
means for any day, the rate per annum (expressed, as a decimal, rounded
upwards, if necessary, to the next higher 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided, (i) if such day is not a Business
Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to Administrative Agent, in its capacity as a Lender, on
such day on such transactions as determined by Administrative Agent.

 

“Fee Letter” as defined in Section 3.1(v).

 

“Final Order” means an order of the Bankruptcy
Court entered in the Chapter 11 Case after a final hearing under Bankruptcy Rule 4001
approving this Agreement and the other Credit Documents and authorizing the
incurrence by the Credit Parties of permanent post-petition secured and
superpriority Indebtedness in accordance with this Agreement, and as to 

 

10

 

which no stay has been entered and which has not been
reversed, modified, vacated or overturned, and which is in form and substance
satisfactory to Administrative Agent and Requisite Lenders.

 

“Financial
Officer Certification”
means, with respect to the financial statements for which such certification is
required, the certification of the chief financial officer of Borrower that
such financial statements fairly present, in all material respects, the
financial condition of Borrower and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments.

 

“Financial Plan”
as defined in Section 5.1(k).

 

“First Day
Orders” means all
orders entered by the Bankruptcy Court on the Petition Date or within five
Business Days of the Petition Date or based on motions filed on the Petition
Date.

 

“First
Priority” means, with
respect to any Lien purported to be created in any Collateral pursuant to any
Collateral Document, that such Lien is the only Lien to which such Collateral
is subject, other than any Permitted Liens which are junior in priority to
Collateral Agent’s Lien on such Collateral, valid and enforceable mortgages
existing on the Closing Date and set forth on Schedule 6.2 and inchoate Liens
arising by operation of law for which amounts are not yet due and payable.

 

“Fiscal Month” means a fiscal month of any Fiscal
Year.

 

“Fiscal
Quarter” means a
fiscal quarter of any Fiscal Year.

 

“Fiscal Year” means the fiscal year of Borrower
and its Subsidiaries ending on November 30 of each calendar year.

 

“Full Payment” means, with respect to any
Obligations, (i) the full and indefeasible cash payment thereof, including
any interest, fees and other charges accruing during an Insolvency Proceeding
(whether or not allowed in the proceeding); and (ii) a release of any
Indemnitee Claims of Obligors against Agent and Lenders arising on or before
the payment date.  No Revolving Loans
shall be deemed to have been paid in full until all Commitments related to such
Loans have expired or been terminated.

 

“Funding
Default” as defined
in Section 2.6(c).

 

“Funding
Notice” means a
notice substantially in the form of Exhibit A-1.

 

“GAAP” means, subject to the limitations on
the application thereof set forth in Section 1.2, United States generally
accepted accounting principles in effect as of the date of determination
thereof.

 

“Governmental
Authority” means any
federal, state, provincial, municipal, national or other government,
governmental department, commission, board, bureau, court, 

 

11

 

agency, central bank, tribunal or instrumentality or
political subdivision thereof or any entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to any government or any court, in each case whether associated with a state of
the United States, the United States, or a foreign entity or government.

 

“Governmental
Authorization” means
any permit, license, authorization, plan, directive, consent order or consent
decree of or from any Governmental Authority.

 

“Hazardous
Materials” means any
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any Governmental Authority or which may or could pose a hazard to
the health and safety of the owners, occupants or any Persons in the vicinity
of any Facility or to the indoor or outdoor environment.

 

“Hazardous
Materials Activity”
means any past, current, proposed or threatened activity, event or occurrence
involving any Hazardous Materials, including the use, manufacture, possession,
storage, holding, presence, existence, location, Release, threatened Release,
discharge, placement, generation, transportation, processing, construction,
treatment, abatement, removal, remediation, disposal, disposition or handling
of any Hazardous Materials, and any corrective action or response action with
respect to any of the foregoing.

 

“Hedge
Agreement” means an
Interest Rate Agreement or a Currency Agreement entered into with a Lender
Counterparty in order to satisfy the requirements of this Agreement or
otherwise in the ordinary course of Borrower’s or any of its Subsidiaries’
businesses.

 

“Highest
Lawful Rate” means
the maximum lawful interest rate, if any, that at any time or from time to time
may be contracted for, charged, or received under the laws applicable to any
Lender which are presently in effect or, to the extent allowed by law, under
such applicable laws which may hereafter be in effect and which allow a higher
maximum nonusurious interest rate than applicable laws now allow.

 

“Historical
Financial Statements”
means as of the Closing Date, (i) the audited financial statements of
Borrower and its Subsidiaries, for Fiscal Years 2005, 2006, and 2007,
consisting of balance sheets and the related consolidated statements of income,
stockholders’ equity and cash flows for such Fiscal Years, and (ii) the
unaudited financial statements of Borrower and its Subsidiaries as at the most
recently ended Fiscal Month and Fiscal Quarter for which such financial
statements are available, consisting of a balance sheet and the related
consolidated statements of income, stockholders’ equity and cash flows for the
period since the beginning of Fiscal Year 2007 ending on such date.

 

“Increased-Cost
Lenders” as defined
in Section 2.25.

 

“Incremental
Facility” means that
portion of the Credit Facilities made available to Borrower from and after the
Incremental Facility Effective Date.

 

“Incremental
Facility Effective Date”
means the date on which the conditions precedent set forth in Section 3.2
shall have been satisfied.

 

12

 

“Indebtedness”, as applied to any Person, means,
without duplication, (i) all indebtedness for borrowed money; (ii) that
portion of obligations with respect to Capital Leases that is properly
classified as a liability on a balance sheet in conformity with GAAP; (iii) notes
payable and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money; (iv) any obligation owed for
all or any part of the deferred purchase price of property or services
(excluding any such obligations incurred under ERISA), which purchase price is (a) due
more than six months from the date of incurrence of the obligation in respect
thereof or (b) evidenced by a note or similar written instrument; (v) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person; (vi) the
face amount of any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings; (vii) the
direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the indebtedness obligation of
another; (viii) any obligation of such Person the primary purpose or
intent of which is to provide assurance to an obligee that the indebtedness
obligation of the obligor thereof will be paid, or any agreement relating to
such indebtedness obligation will be complied with, or the holders thereof will
be protected (in whole or in part) against loss in respect thereof; (ix) any
liability of such Person for the indebtedness obligation of another through any
agreement (contingent or otherwise) (a) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise) or (b) to
maintain the solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under
subclauses (a) or (b) of this clause (ix), the primary purpose or
intent thereof is as described in clause (viii) above; and (x) all
obligations of such Person in respect of any exchange traded or over the
counter derivative transaction, including, without limitation, any Interest
Rate Agreement and Currency Agreement, whether entered into for hedging or
speculative purposes.

 

“Indemnified
Liabilities” means,
collectively, any and all liabilities, obligations, losses, damages (including
natural resource damages), penalties, claims (including Environmental Claims),
actions, judgments, suits, costs (including the costs of any investigation,
study, sampling, testing, abatement, cleanup, removal, remediation or other
response action necessary to remove, remediate, clean up or abate any Hazardous
Materials Activity), expenses and disbursements of any kind or nature
whatsoever (including the reasonable fees and disbursements of counsel for
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto, and any
fees or expenses incurred by Indemnitees in enforcing this indemnity), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including securities and
commercial laws, statutes, rules or regulations and Environmental Laws),
on common law or equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such Indemnitee, in any manner
relating to or arising out of (i) this Agreement or the other Credit
Documents or the transactions contemplated hereby or thereby (including Lenders’
agreement to make Credit Extensions or the use or intended use of the proceeds
thereof, or any enforcement of any of the Credit Documents (including any sale
of,

 

13

 

collection from, or other
realization upon any of the Collateral)); (ii) the statements contained in
the commitment letter delivered by any Lender to Borrower with respect to the
transactions contemplated by this Agreement; or (iii) any Environmental
Claim or any Hazardous Materials Activity relating to or arising from, directly
or indirectly, any past or present activity, operation, land ownership, or
practice of Borrower or any of its Subsidiaries.

 

“Indemnitee” as defined in Section 10.3.

 

“Indemnitee
Claims” means all
liabilities, obligations, losses, damages, penalties, judgments, proceedings,
costs and expenses of any kind (including remedial response costs, reasonable
attorneys’ fees and Extraordinary Expenses) at any time (including after Full
Payment of the Obligations, resignation or replacement of any Agent, or
replacement of any Lender) incurred by or asserted against any Indemnitee in
any way relating to (i) any Credit Document or transactions relating
thereto, (ii) any action taken or omitted to be taken by any Indemnitee in
connection with any Credit Document, (iii) the existence or perfection of
any Liens, or realization upon any Collateral, (iv) exercise of any rights
or remedies under any Credit Document or applicable law, rule, regulation or
order of any Governmental Authority, or (v) failure by any Obligor to
perform or observe any terms of any Credit Document, in each case including all
costs and expenses relating to any investigation, litigation, arbitration or
other proceeding (including an Insolvency Proceeding or appellate proceedings),
whether or not the applicable Indemnitee is a party thereto.

 

“Insolvency
Proceeding” means any
case or proceeding commenced by or against a Person under any state,
provincial, federal or foreign law for, or any agreement of such Person to, (i) the
entry or issue of an order for relief under the Bankruptcy Code, or any other
insolvency, debtor relief or debt adjustment law; (ii) the appointment of
a receiver, receiver-manager, trustee, liquidator, administrator, conservator
or other custodian for such Person or any part of its Property; or (iii) an
assignment or trust mortgage for the benefit of creditors.

 

“Intellectual
Property” as defined
in the Pledge Agreement.

 

“Interest
Payment Date” means
with respect to (i) any Base Rate Loan, the first Business Day of each
month commencing on October 1, 2008 and the Maturity Date and (ii) any
Eurodollar Rate Loan, the last day of each Interest Period applicable to such
Eurodollar Rate Loan and the Maturity Date; provided, in the case of
each Interest Period of longer than three months, “Interest Payment Date” shall
also include each date that is three months, or an integral multiple thereof,
after the commencement of such Interest Period; and upon prepayment, in each
case payable in arrears.

 

“Interest
Period” means, in
connection with a Eurodollar Rate Loan, an interest period of one-, two- or
three-months, as selected by Borrower in the applicable Funding Notice or
Conversion/Continuation Notice, (i) initially, commencing on the Closing
Date or Conversion/Continuation Date thereof, as the case may be; and (ii) thereafter,
commencing on the day on which the immediately preceding Interest Period
expires; provided, (a) if an Interest Period would otherwise expire
on a day that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day unless no further Business Day occurs in such
month, in which case such Interest Period shall expire on the immediately
preceding Business

 

14

 

Day; (b) any
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to clause (c) of this
definition, end on the last Business Day of the immediately following calendar
month; and (c) no Interest Period with respect to any portion of any Loan
shall extend beyond the Maturity Date.

 

“Interest
Rate Agreement” means
any interest rate swap agreement, interest rate cap agreement, interest rate
collar agreement, interest rate hedging agreement or other similar agreement or
arrangement, each of which is for the purpose of hedging the interest rate
exposure associated with Borrower’s and its Subsidiaries’ operations and not
for speculative purposes.

 

“Interest
Rate Determination Date”
means, with respect to any Interest Period, the date that is two Business Days
prior to the first day of such Interest Period.

 

“Interim
Facility” means that
portion of the Term Facility made available to Borrower prior to the
Incremental Facility Effective Date, as approved by the Interim Order.

 

“Interim Term Loan Commitment Amount” means
$200,000,000.

 

“Interim
Order” means that
certain order of the Bankruptcy Court in substantially the form of Exhibit I
and otherwise in form and substance reasonably satisfactory to Administrative
Agent and Required Lenders approving the Interim Facility, as to which no stay
has been entered and which has not been reversed, modified, vacated or
overturned.

 

“Internal
Revenue Code” means
the Internal Revenue Code of 1986, as amended.

 

“Investment” means (i) any direct or
indirect purchase or other acquisition by Borrower or any of its Subsidiaries
of, or of a beneficial interest in, any of the Securities of any other Person; (ii) any
direct or indirect redemption, retirement, purchase or other acquisition for
value, by any Subsidiary of Borrower from any Person (other than Borrower), of
any Capital Stock of such Person; and (iii) any direct or indirect loan,
advance (other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course of
business) or capital contributions by Borrower or any of its Subsidiaries to
any other Person (other than Borrower), including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business. The amount
of any Investment shall be the original cost of such Investment plus the cost
of all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment,
and the outstanding amount thereof, in each case, at any time shall be
calculated net of any principal repayment or return of capital with respect
thereto following the Closing Date (such repayment or return not to be in
excess of the original amount invested).

 

“Joint
Venture” means a
joint venture, partnership or other similar arrangement, whether in corporate,
partnership or other legal form; provided, in no event shall any
corporate Subsidiary of any Person be considered to be a Joint Venture to which
such Person is a party.

 

“Judgment
Conversion Date” as
defined in Section 10.24(a).

 

15

 

“Judgment
Currency” as defined
in Section 10.24(a).

 

“LBI Asset
Purchase Agreement” means
the Asset Purchase Agreement, dated as of the date hereof (this “Agreement”), among the Borrower, Lehman Brothers Inc., LB 745
LLC and Barclays Capital Inc.

 

“LBI Asset Purchase
Agreement Termination Date” “LBI Asset Purchase Agreement
Termination Date” means, the earliest to occur of:

 

(i)            if the
LBI Asset Purchase Agreement terminates after the drop dead date pursuant to Section 4.4(a) thereof,
the date of the earlier of: (a) the Bankruptcy Court’s approval of any
alternative transaction, and (b) 30 days after the termination of the LBI
Asset Purchase Agreement;

 

(ii)           if the LBI
Asset Purchase Agreement terminates by mutual consent pursuant to Section 4.4(b) thereof,
30 days after the termination of the LBI Asset Purchase Agreement;

 

(iii)          if
the LBI Asset Purchase Agreement terminates pursuant to Section 4.4(c) thereof
as a result of an injunction or otherwise, 30 days after the termination of the
LBI Asset Purchase Agreement;

 

(iv)          if the LBI
Asset Purchase Agreement terminates pursuant to Section 4.4(d) thereof
as a result of the Bankruptcy Court’s approval of a Competing Transaction (as
defined in the LBI Asset Purchase Agreement), the date of such termination; and

 

(v)           if the LBI
Asset Purchase Agreement terminates pursuant to Section 4.4(e) thereof
as a result of the Breakup Fee and Competing Bid Order (as defined in the LBI
Asset Purchase Agreement) not being approved by the Bankruptcy Court, 30 days
after the termination of the LBI Asset Purchase Agreement.

 

“LBI
Transaction” means the asset sale or purchase transactions
contemplated under the LBI Asset Purchase Agreement.

 

“Lead Lender”
means (i) Barclays Bank, so long as Barclays’ and its Affiliates’
aggregate Commitment is not less than $225,000,000 (or if the Commitments have
terminated, not less than 25% of the outstanding principal balance of the Loans
is funded by Barclays Bank and its Affiliates)

 

“Lender” means each financial institution
listed on the signature pages hereto as a Lender, and any other Person
that becomes a party hereto pursuant to an Assignment Agreement.

 

“Lender
Counterparty” means
each Lender or any Affiliate of a Lender counterparty to a Hedge Agreement
(including any Person who is a Lender (and any Affiliate thereof) as of the
Closing Date but subsequently, whether before or after entering into a Hedge
Agreement, ceases to be a Lender) including, without limitation, each such
Affiliate that enters into a joinder agreement with Collateral Agent.

 

16

 

“Libro
Holdings” means Libro
Holdings I Inc., a Delaware corporation.

 

“License” means any license or agreement under
which an Obligor is authorized to use Intellectual Property in connection with
any manufacture, marketing, distribution or disposition of Collateral, any use
of Property or any other conduct of its business.

 

“Licensor” means any Person from whom an
Obligor obtains the right to use any Intellectual Property.

 

“Lien” means (i) any lien, mortgage,
pledge, assignment, security interest, hypothec, deemed trust, charge or
encumbrance of any kind (including any agreement to give any of the foregoing,
any conditional sale or other title retention agreement, and any lease in the
nature thereof) and any option, trust or other preferential arrangement having
the practical effect of any of the foregoing and (ii) in the case of
Securities, any purchase option, call or similar right of a third party with
respect to such Securities.

 

“Loan” means any Revolving Loan or Term
Loan made by a Lender under this Agreement.

 

“Margin Stock” as defined in Regulation U of
the Board of Governors as in effect from time to time.

 

“Material
Adverse Effect” means
a material adverse effect on and/or material adverse developments with respect
to (i) the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Borrower and its Subsidiaries taken as a whole; (ii) the
ability of any Credit Party to fully and timely perform its Obligations; (iii) the
legality, validity, binding effect or enforceability against a Credit Party of
a Credit Document to which it is a party; (iv) the material rights,
remedies and benefits available to, or conferred upon, any Agent and any Lender
or any Secured Party under any Credit Document; or (v) the perfection or
priority of the Liens granted pursuant to this Agreement, the Collateral
Documents and the Orders; provided however, any reference to a “Material
Adverse Effect” specifically relating to Neuberger shall mean a material
adverse effect on and/or material adverse developments with respect to the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Neuberger and its Subsidiaries taken as a whole.

 

“Material
Contract” means (a) any
post-petition contract or other agreement (other than the Credit Documents),
written or oral, of Borrower involving monetary liability of or to any Person
in an amount in excess of $500,000 in any Fiscal Year and (b) any other
post-petition contract or other arrangement to which Borrower or any of its
Subsidiaries is a party (other than the Credit Documents) for which breach,
nonperformance, cancellation or failure to renew could reasonably be expected
to have a Material Adverse Effect.

 

“Material Subsidiary”
means any Subsidiary with consolidated assets greater than or equal to 7.5% of
the Consolidated Assets of the Borrower. 
For the purposes of this definition, the Consolidated Assets of the Borrower
or any of its Subsidiaries at any time shall be determined on the basis of the
most recent financial statements delivered at or prior to such time pursuant to
Section 5.1 (or the Historical Financial Statement, if financial
statements have not been theretofore delivered pursuant to Section 5.1).

 

17

 

“Maturity
Date” means the
earliest to occur of (i) the Scheduled Maturity Date, (ii) twenty-five
(25) days after the date hereof, if the Final Order has not yet been entered by
the Bankruptcy Court (and become final and non-appealable as set forth in the
definition of “Final Order”) prior to such date
(or such longer period as may be agreed to by the Administrative Agent in its
sole discretion), (iii) the LBI Asset Purchase Agreement Termination Date,
(iii) the date that all Loans shall become due and payable in full
hereunder, and (iv) in the case each of the Term Facility and Revolving
Facility, the date of termination of all of the Commitments under such Term
Facility or Revolving Facility, pursuant to Section 2.15 or Section 2.16,
as the case may be.

 

“Moody’s” means Moody’s Investor Services, Inc.

 

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

 

“NAIC” means The National Association of
Insurance Commissioners, and any successor thereto.

 

“Narrative
Report” means, with
respect to the financial statements for which such narrative report is
required, a narrative report describing the operations of Borrower and its
Subsidiaries in the form prepared for presentation to senior management thereof
for the applicable month, Fiscal Month or Fiscal Year and for the period from
the beginning of the then current Fiscal Year to the end of such period to
which such financial statements relate.

 

“Net Asset
Sale Proceeds” means,
with respect to any Asset Sale by Borrower, and any Asset Sale of the ordinary
course of business by Borrower’s Subsidiaries, an amount equal to:  (i) Cash payments (including any Cash
received by way of deferred payment pursuant to, or by monetization of, a note
receivable or otherwise, but only as and when so received) received by Borrower
or any of its Subsidiaries from such Asset Sale, minus (ii) any
bona fide direct costs incurred in connection with such Asset Sale, including (a) income
or gains taxes payable by the seller as a result of any gain recognized in
connection with such Asset Sale, (b) payment of the outstanding principal
amount of, premium or penalty, if any, and interest on (x) with respect to
Borrower, any Indebtedness (other than the Obligations) that is secured by a
Lien perfected and unavoidable on the stock or assets in question and that is
required by the Bankruptcy Court to be repaid under the terms thereof as a
result of such Asset Sale and (y) with respect to any Subsidiary, any
Indebtedness required to be repaid as a result of such Asset Sale, and (c) a
reasonable reserve for any indemnification payments (fixed or contingent)
attributable to seller’s indemnities and representations and warranties to
purchaser in respect of such Asset Sale undertaken by Borrower or any of its
Subsidiaries in connection with such Asset Sale.

 

“Net
Insurance/Condemnation Proceeds” means an amount equal to: 
(i) any Cash payments or proceeds received by Borrower or any of
its Subsidiaries (a) under any casualty insurance policy in respect of a
covered loss thereunder or (b) as a result of the taking of any assets of
Borrower or any of its Subsidiaries by any Person pursuant to the power of
eminent domain, condemnation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, minus
(ii) (a) any actual and reasonable costs incurred by Borrower or any
of its Subsidiaries in connection with the adjustment or settlement of any

 

18

 

claims of Borrower or
such Subsidiary in respect thereof, and (b) any bona fide direct costs
incurred in connection with any sale of such assets as referred to in clause
(i)(b) of this definition, including income taxes payable as a result of
any gain recognized in connection therewith.

 

“Neuberger” means Neuberger Berman Holdings LLC.

 

“Neuberger Entity”
means Neuberger and any Subsidiary of Neuberger.

 

“Neuberger Transaction”
means the sale, transfer or other disposition of assets of Neuberger and its
Subsidiaries or capital stock of Neuberger, except immaterial sales, transfers
or other dispositions of such assets (excluding sales, transfers or other
dispositions of assets among Neuberger and its Subsidiaries).

 

“Nonpublic
Information” means
information that has not been disseminated in a manner making it available to
investors generally, within the meaning of Regulation FD.

 

“Non-Consenting
Lender” as defined in
Section 2.25.

 

“Non-Neuberger
Entity” means any Subsidiary
of the Borrower that is not a Neuberger Entity.

 

“Non-US
Lender” as defined in
Section 2.23(c).

 

“Note” means a promissory note in the form
of Exhibit B-1 or B-2, as applicable, as the same may be amended, supplemented
or otherwise modified from time to time.

 

“Notice” means a Funding Notice, or a
Conversion/Continuation Notice.

 

“Obligation
Currency” as defined
in Section 10.24(a).

 

“Obligations” means all obligations of every
nature of each Credit Party, including obligations from time to time owed to
Agents (including former Agents), Lenders or any of them and Lender
Counterparties, under any Credit Document or Hedge Agreement, including,
without limitation, with respect to (i) the Loans, (ii) interest,
expenses, fees and other sums payable under the Credit Documents, (iii) obligations
under any indemnity for Claims, (iv) Extraordinary Expenses, (v) Cash
Management Services, and (vi) other Indebtedness, obligations and
liabilities of any kind owing pursuant to the Credit Documents, in each case
whether for principal, interest, payments for early termination of Hedge
Agreements, fees, expenses, indemnification or otherwise.

 

“Obligor” means Borrower and any other Person
that is liable for payment of any Obligations or that has granted a Lien in
favor of Collateral Agent on its assets to secure any Obligations.

 

“Operating Disbursements” means
amounts spent in support of the operations of the Borrower and its Subsidiaries
and identified as “Operating Disbursements” pursuant to the Cash Flow Forecast.

 

19

 

“Orders” (a) at any time prior to the
Incremental Facility Effective Date, the Interim Order and (b) thereafter,
the Interim Order and the Final Order.

 

“Organizational
Documents” means (i) with
respect to any corporation, its certificate or articles of incorporation or
organization, as amended, and its by-laws, as amended, (ii) with respect
to any limited partnership, its certificate or declaration of limited
partnership, as amended, and its partnership agreement, as amended, (iii) with
respect to any general partnership, its partnership agreement, as amended, and (iv) with
respect to any limited liability company, its articles of organization, as
amended, and its operating agreement, as amended.  In the event any term or condition of this
Agreement or any other Credit Document requires any Organizational Document to
be certified by a secretary of state or similar governmental official, the
reference to any such “Organizational Document” shall only be to a document of
a type customarily certified by such governmental official.

 

“Payment Item” means each check, draft or other
item of payment payable to Borrower, including those constituting proceeds of
any Collateral.

 

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

 

“Permitted
Liens” means each of
the Liens permitted pursuant to Section 6.2.

 

“Person” means and includes natural persons,
corporations, limited partnerships, general partnerships, limited liability
companies, unlimited liability companies, limited liability partnerships, joint
stock companies, Joint Ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not legal
entities, and Governmental Authorities.

 

“Petition
Date” as defined in
the recitals hereto.

 

“Platform” as defined in Section 5.1(r).

 

“Plan” means any
employee pension benefit (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302
of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or,
if such plan were terminated, would under Section 4069 of ERISA be deemed
to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Pledge
Agreement” means the
Pledge Agreement to be executed by Borrower substantially in the form of Exhibit H,
as it may be amended, supplemented or otherwise modified from time to time.

 

“Prepetition
Indebtedness” means
all Indebtedness of Borrower outstanding immediately prior to the commencement
of the Chapter 11 Case.

 

“Prime Rate” means the rate per annum equal to
the prime rate of interest announced by Barclays from time to time as its “prime
rate” (it being acknowledged that such

 

20

 

announced prime rate may
not necessarily be the lowest rate charged by Barclays to any of its
customers), changing when and as said prime rate changes.

 

“Principal
Office” means
Administrative Agent’s “Principal Office” as set forth on Appendix B, or such
other office or office of a third party or sub-agent, as appropriate, as such
Person may from time to time designate in writing to Borrower and each Lender.

 

“Property” means any interest in any kind of
property or asset, whether real, personal or mixed, or tangible or intangible.

 

“Pro Rata
Share” means with
respect to all payments, computations and other matters (a) relating to
the Revolving Loans of any Revolving Lender, the percentage obtained by
dividing (i) the Revolving Loan Exposure of that Revolving Lender by (ii) the
aggregate Revolving Loan Exposure of all Revolving Lenders, and (b) relating
to the Term Loan of any Term Lender, the percentage obtained by dividing (i) the
Term Loan Exposure of that Term Lender by (ii) the aggregate Term Loan
Exposure of all Term Lenders.

 

“Real Estate
Asset” means, at any
time of determination, any interest (fee, leasehold or otherwise) then owned by
any Credit Party in any real property.

 

“Register” as defined in Section 2.8(b).

 

“Regulation D” means Regulation D of the Board
of Governors, as in effect from time to time.

 

“Regulation
FD” means Regulation
FD as promulgated by the US Securities and Exchange Commission under the
Securities Act and Exchange Act as in effect from time to time.

 

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

 

“Release” means any release, spill, emission,
leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of any Hazardous Material into the
indoor or outdoor environment (including the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Material), including the movement of any Hazardous Material through the air,
soil, surface water or groundwater.

 

“Replacement
Lender” as defined in
Section 2.25.

 

“Reporting
Month” means each
Fiscal Month other than any Fiscal Month ending the same date as any Fiscal
Quarter.

 

“Requisite
Lenders” means the
Lead Lender, or to the extent Barclays no longer qualifies as a Lead Lender,
one or more Lenders having or holding Credit Exposure and representing more
than 50% of the sum of the aggregate Credit Exposure of all Lenders.

 

21

 

“Requisite
Revolving Lenders”
means the Lead Lender, or to the extent the Lead Lender no longer exists, one
or more Revolving Lenders having or holding Revolving Loan Exposure and
representing more than 50.0% of the sum of the aggregate Revolving Loan
Exposure of all Revolving Lenders.

 

“Requisite
Term Lenders” means
the Lead Lender, or to the extent the Lead Lender no longer exists, one or more
Term Lenders having or holding Term Loan Exposure and representing more than
50.0% of the sum of the aggregate Term Loan Exposure of all Term Lenders.

 

“Restricted
Junior Payment” means
(i) any dividend or other distribution, direct or indirect, on account of
any shares of any class of stock of Borrower now or hereafter outstanding; (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of Borrower now or hereafter outstanding; (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of stock of Borrower now or
hereafter outstanding, and (iv) any loan or advance by any of Borrower’s
Subsidiaries to Borrower except to the extent expressly provided for in, and
consistent with, the Cash Flow Forecast and the DIP Budget.

 

“Revolving
Facility” means the
Revolving Credit Commitments and the provisions herein related to the Revolving
Loans.

 

“Revolving
Lender” means each
Lender that (a) has a Revolving Loan Commitment or (b) holds a
Revolving Loan.

 

“Revolving
Loan” means a
Revolving Loan made by a Lender to Borrower pursuant to Section 2.2.

 

“Revolving
Loan Commitment”
means the commitment of a Lender to make or otherwise fund a Revolving Loan and
“Revolving Loan Commitments” means
such commitments of all Lenders in the aggregate.  The amount of each Lender’s Revolving Loan
Commitment is set forth on Appendix A or in the applicable Assignment
Agreement, subject to any adjustment or reduction pursuant to the terms and
conditions hereof.  The aggregate amount
of the Revolving Loan Commitments as of the Closing Date is $200,000,000.

 

“Revolving
Loan Exposure” means,
with respect to any Lender, as of any date of determination while Revolving
Loans are outstanding, the aggregate outstanding principal amount of Revolving
Loans of such Lender; provided, that at any time no Revolving Loans are
outstanding, the Revolving Loan Exposure of any Lender shall be equal to the
outstanding amount of the Revolving Loan Commitment of such Lender.

 

“S&P” means Standard & Poor’s
Ratings Group, a division of The McGraw Hill Corporation.

 

“Scheduled
Maturity Date” means
the earlier of (i) the six-month anniversary of the Closing Date, and (ii) the
Effective Date.

 

22

 

“Secured
Parties” has the
meaning assigned to that term in the Pledge Agreement.

 

“Securities” means any stock, shares, partnership
interests, trust units, voting trust certificates, certificates of interest or
participation in any profit-sharing agreement or arrangement, options,
warrants, bonds, debentures, notes, or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as “securities” or
any certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

 

“Securities
Act” means the
Securities Act of 1933, as amended from time to time, and any successor
statute.

 

“Settlement
Confirmation” as
defined in Section 10.6(b).

 

“Settlement
Service” as defined
in Section 10.6(d).

 

“Subsidiary” means, with respect to any Person,
any corporation, partnership, limited liability company, association, joint
venture or other business entity of which more than 50% of the total voting
power of shares of stock or other ownership interests entitled (without regard
to the occurrence of any contingency) to vote in the election of the Person or
Persons (whether directors, managers, trustees or other Persons performing
similar functions) having the power to direct or cause the direction of the
management and policies thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof; provided, in determining the percentage
of ownership interests of any Person controlled by another Person, no ownership
interest in the nature of a “qualifying share”
of the former Person shall be deemed to be outstanding.

 

“Syndication
Agent” means Barclays
Capital.

 

“Tax” means any present or future tax,
levy, impost, duty, assessment, charge, fee, deduction or withholding of any
nature and whatever called, imposed by a Governmental Authority (including
interest, penalties and additions thereto); provided, “Tax on the
overall net income” of a Person shall be construed as a reference to a tax
imposed by the jurisdiction in which that Person is organized or in which that
Person’s applicable principal office (and/or, in the case of a Lender, its
lending office) is located or in which that Person (and/or, in the case of a
Lender, its lending office) is deemed to be doing business on all or part of
the net income, profits or gains (whether worldwide, or only insofar as such
income, profits or gains are considered to arise in or to relate to a
particular jurisdiction, or otherwise) of that Person (and/or, in the case of a
Lender, its applicable lending office).

 

“Term
Facility” means the
Term Loan Commitments and the provisions herein related to the Term Loans.

 

“Term Lender” means each Lender that (a) has
a Term Loan Commitment or (b) holds a Term Loan.

 

23

 

“Term Loan” means a Term Loan made by a Lender
to Borrower pursuant to Section 2.1.

 

“Term Loan
Commitment” means the
commitment of a Lender to make or otherwise fund a Term Loan and “Term Loan Commitments” means such commitments of all
Lenders in the aggregate.  The amount of
each Lender’s Term Loan Commitment is set forth on Appendix A or in the
applicable Assignment Agreement, subject to any adjustment or reduction
pursuant to the terms and conditions hereof. 
The aggregate amount of the Term Loan Commitments as of the Closing Date
is $250,000,000.

 

“Term Loan
Exposure” means, with
respect to any Lender, as of any date of determination, the outstanding
principal amount of the Term Loans of such Lender; provided, that at any
time prior to the making of the Term Loans, the Term Loan Exposure of any
Lender shall be equal to such Lender’s Term Loan Commitment.

 

“Terminated
Lender” as defined in
Section 2.25.

 

“Type” means, with respect to Term Loans or
Revolving Loans, a Base Rate Loan or a Eurodollar Rate Loan.

 

“UCC” means the Uniform Commercial Code
(or any similar or equivalent legislation) as in effect in any applicable
jurisdiction; provided that where the perfection, effect of perfection or
non-perfection or priority of any Lien granted under any Collateral Document is
governed by the laws as the Province of Ontario, UCC shall include the Personal
Property Security Act (Ontario) as the context requires.

 

“U.S. Trustee” means the United States Trustee for
the Southern District of New York.

 

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

 

1.2          Accounting Terms.  Except as otherwise expressly provided
herein, all accounting terms not otherwise defined herein shall have the
meanings assigned to them in conformity with GAAP.  Financial statements and other information
required to be delivered by Borrower to Lenders pursuant to Section 5.1(b) and
5.1(c) shall be prepared in accordance with GAAP as in effect at the time
of such preparation (and delivered together with the reconciliation statements
provided for in Section 5.1(g), if applicable).  Subject to the foregoing, calculations in
connection with the definitions, covenants and other provisions hereof shall
utilize accounting principles and policies in conformity with those used to
prepare the Historical Financial Statements.

 

1.3          Interpretation, etc.  Any of the terms defined herein may, unless
the context otherwise requires, be used in the singular or the plural,
depending on the reference.  References
herein to any Section, Appendix, Schedule or Exhibit shall be to a
Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof
unless otherwise specifically provided. 
The use herein of the word “include” or “including”, when following any
general statement, term or

 

24

 

matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
non-limiting language (such as “without limitation” or “but not limited to” or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter.  Unless the prior written consent of Requisite
Lenders is required hereunder for an amendment, restatement, supplement or
other modification to any such agreement and such consent is not obtained,
references in this Agreement to such agreement shall be to such agreement as so
amended, restated, supplemented or modified. 
References in this Agreement to any statute shall be to such statute as
amended or modified from time to time and to any successor legislation thereto,
in each case as in effect at the time any such reference is operative.  The terms “Lender,” “Administrative Agent,” “Collateral
Agent,” “Syndication Agent” and “Agent” include, without limitation, their
respective successors.

 

SECTION 2.         LOANS

 

2.1          Term Loan
Commitments.

 

(a)           Term Loans.  Subject to the terms and conditions hereof,
each Term Lender severally agrees to make (i) from time to time until the
Incremental Facility Effective Date, Term Loans to Borrower in an aggregate
principal amount outstanding at any time not greater than an amount equal to
80% of such Revolving Lender’s Term Loan Commitment (provided that the
aggregate principal amount of outstanding Term Loans shall not exceed the
Interim Term Loan Commitment Amount prior to the Incremental Facility Effective
Date) and (ii) from time to time from Incremental Facility Effective Date
until the 90th day after the date hereof, Term Loans to Borrower in
an aggregate amount outstanding at any time not greater than an amount equal to
any remaining undrawn amount of such Term Lender’s Term Loan Commitment; provided
that, until the Incremental Facility Effective Date, Borrower may request no
more than two (2) Borrowings under the Term Facility and no more than four
(4) additional Borrowings under the Term Facility shall be permitted
thereafter. Any amount borrowed under this Section 2.1 and subsequently
repaid or prepaid may not be reborrowed. 
Subject to Section 2.17, all amounts owed hereunder with respect to
the Term Loans shall be paid in full no later than the Maturity Date.  Each Lender’s Term Loan Commitment shall
terminate immediately and without further action on the 90th day
after the date hereof.

 

(b)           If the Incremental
Facility Effective Date shall not have occurred on or before the twenty-fifth
(25th) day after the entry by the Bankruptcy Court of the Interim Order, the
aggregate remaining undrawn Term Loan Commitments shall be permanently
terminated on such day.

 

2.2          Revolving Loan
Commitments.

 

(a)           Revolving Loans.  Subject to the terms and conditions hereof,
each Revolving Lender severally agrees to make, from time to time from the
later of (i) the date on which the Term Loan Facility has been drawn in
full (or if earlier, the date on which the Term Loan Commitments expire
pursuant to Section 2.1(a)) and (ii) the Incremental Facility
Effective Date through the Maturity Date, Revolving Loans to Borrower in an
aggregate amount

 

25

 

outstanding at any time not greater than such
Revolving Lender’s Revolving Loan Commitment. 
Subject to Section 2.17, all amounts owed hereunder with respect to
the Revolving Loans shall be paid in full no later than the Maturity Date.  Each Lender’s Revolving Loan Commitment shall
terminate immediately and without further action on the Maturity Date.  In no event shall Lenders have any obligation
to honor a request for a Revolving Loan if the unpaid balance of Revolving
Loans outstanding at such time (including the requested Revolving Loan) would
exceed the aggregate Revolving Loan Commitments.

 

(b)           [Reserved].

 

(c)           [Reserved].

 

(d)           [Reserved].

 

(e)           If the Incremental
Facility Effective Date shall not have occurred on or before the twenty-fifth
(25th) day after the entry by the Bankruptcy Court of the Interim Order, the
aggregate Revolving Loan Commitments shall be permanently terminated on such
day.

 

2.3          Borrowing Mechanics
for Term Loans.

 

(a)           Subject to Section 2.1,
Borrower shall deliver to Administrative Agent a fully executed Funding Notice
no later than 11:00 a.m. (x) on the Business Day of the proposed
Borrowing, in the case of Base Rate Loans, and (y) at least 3 Business
Days prior to the date of the proposed Borrowing, in the case of Eurodollar
Rate Loans.  Notices received after 11:00 a.m.
shall be deemed received on the next Business Day.  Each Notice of Borrowing shall be
irrevocable.  Promptly upon receipt by
Administrative Agent of such Funding Notice, Administrative Agent shall notify
each Term Lender of the proposed Borrowing.

 

(b)           Each Term Lender shall
make its Term Loan available to the Administrative Agent not later than 2:00 p.m.
(New York City time) on the date of each proposed Borrowing, by wire transfer
of same day funds in Dollars, at the Principal Office designated by the
Administrative Agent.  Upon satisfaction
or waiver of the conditions precedent specified in Section 3.3,
Administrative Agent shall make the proceeds of the Term Loans available to
Borrower on the date of each proposed Borrowing by causing an amount of same
day funds in Dollars equal to the proceeds of all such Term Loans received from
Term Lenders to be credited to the account of Borrower at the Principal Office
designated by Administrative Agent or credit (or sent by wire transfer) to such
other account as may be designated in writing to Administrative Agent by
Borrower.

 

2.4          Borrowing Mechanics
for Revolving Loans.

 

(a)           Funding Notice.

 

(i)            Subject
to Section 2.2, Borrower shall deliver to Administrative Agent a fully
executed Funding Notice no later than 11:00 a.m. (x) on the Business
Day of the proposed Borrowing, in the case of Base Rate Loans, and (y) at
least 3 Business Days prior to the date of the proposed Borrowing, in the case
of Eurodollar Rate Loans.  Notices
received after 11:00 a.m. shall be deemed received on the next Business
Day.

 

26

 

Each Notice of
Borrowing shall be irrevocable.  Promptly
upon receipt by Administrative Agent of such Funding Notice, Administrative
Agent shall notify each Revolving Lender of the proposed Borrowing.

 

(ii)           Unless
payment is otherwise timely made by Borrower, the becoming due of any
Obligations (whether principal, interest, fees or other charges) shall be
deemed to be a request for Base Rate Loans on the due date and in the amount of
such Obligations.  The proceeds of such
Revolving Loans shall be disbursed as direct payment of the relevant
Obligation.

 

(iii)          [Reserved].

 

(b)           Fundings by Lenders.  Each Revolving Lender shall make its
Revolving Loan available to the Administrative Agent not later than 2:00 p.m.
(New York City time) on the date of each proposed Borrowing, by wire transfer
of same day funds in Dollars, at the Principal Office designated by the
Administrative Agent.  Upon satisfaction
or waiver of the conditions precedent specified in Section 3.3,
Administrative Agent shall make the proceeds of the Revolving Loans available
to Borrower on the date of each proposed Borrowing by causing an amount of same
day funds in Dollars equal to the proceeds of all such Revolving Loans received
from Revolving Lenders to be credited to the account of Borrower at the
Principal Office designated by Administrative Agent or credit (or sent by wire
transfer) to such other account as may be designated in writing to
Administrative Agent by Borrower.

 

(i)            [Reserved].

 

2.5          Notes.  At any time after the date hereof, upon
request of any Lender, Borrower shall execute and deliver to such Lender
(and/or, if applicable and if so specified in such notice, to any Person who is
an assignee of such Lender pursuant to Section 10.6) promptly after
Borrower’s receipt of such notice a Note or Notes to evidence such Lender’s
Loan.

 

2.6          Pro Rata Shares;
Availability of Funds; Defaulting Lenders.

 

(a)           Pro Rata Shares.  All (x) Term Loans shall be made by Term
Lenders simultaneously and proportionately to their respective Pro Rata Shares
and (y) Revolving Loans shall be made by Revolving Lenders simultaneously
and proportionately to their respective Pro Rata Shares; it being understood
that, in each case, no Lender shall be responsible for any default by any other
Lender in such other Lender’s obligation to make a Loan requested hereunder nor
shall any Loan Commitment of any Lender be increased or decreased as a result
of a default by any other Lender in such other Lender’s obligation to make a
Loan requested hereunder.

 

(b)           Availability of
Funds.  Unless Administrative Agent
shall have been notified by any Lender prior to the date of any proposed
Borrowing that such Lender does not intend to make available to the
Administrative Agent the amount of such Lender’s Loan requested on such date,
the Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date and the Administrative Agent
may, in its sole discretion, but shall not be obligated to, make available to
Borrower a corresponding amount on such date. 
If such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be entitled
to recover such

 

27

 

corresponding amount on demand from such Lender
together with interest thereon, for each day from the date of such proposed
Borrowing until the date such amount is paid to the Administrative Agent, at
the customary rate set by the Administrative Agent for the correction of errors
among banks for three Business Days and thereafter at the Base Rate.  If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent’s demand therefor,
the Administrative Agent shall promptly notify Borrower and Borrower shall
immediately pay such corresponding amount to the Administrative Agent together
with interest thereon, for each day from the date of such proposed Borrowing
until the date such amount is paid to the Administrative Agent, at the rate
payable hereunder for Base Rate Loans. 
Nothing in this Section 2.6(b) shall be deemed to relieve any
Lender from its obligation to fulfill its Commitments hereunder or to prejudice
any rights that Borrower may have against any Lender as a result of any default
by such Lender hereunder.

 

(c)           Defaulting Lenders.  Anything contained herein to the contrary
notwithstanding, in the event that any Lender, other than at the direction or
request of any regulatory agency or authority, defaults (a “Defaulting Lender”) in its obligation to fund (a “Funding Default”) any Loan (in each case, a “Defaulted Loan”), then (i) during any Default
Period with respect to such Defaulting Lender, such Defaulting Lender shall be
deemed not to be a “Lender” for purposes of voting on any matters (including
the granting of any consents or waivers) with respect to any of the Credit
Documents; (ii) to the extent permitted by applicable law, until such time
as the Default Excess with respect to such Defaulting Lender shall have been
reduced to zero, (A) any voluntary prepayment of the Loans shall, if
Borrower so directs at the time of making such voluntary prepayment, be applied
to the outstanding Loans of other Lenders as if such Defaulting Lender had no
Loans outstanding, and (B) any mandatory prepayment of the Loans shall, if
Borrower so directs at the time of making such mandatory prepayment, be applied
to the Loans of other Lenders (but not to the Loans of such Defaulting Lender)
as if such Defaulting Lender had funded all Defaulted Loans of such Defaulting
Lender, it being understood and agreed that Borrower shall be entitled to
retain any portion of any mandatory prepayment of the Loans that is not paid to
such Defaulting Lender solely as a result of the operation of the provisions of
this clause (ii); (iii) such Defaulting Lender’s Commitments and
outstanding Loans shall be excluded for purposes of calculating the fee payable
to Lenders pursuant to Section 2.12 in respect of any day during any
Default Period with respect to such Defaulting Lender, and such Defaulting
Lender shall not be entitled to receive any fee pursuant to Section 2.12
with respect to such Defaulting Lender’s Commitments in respect of any Default
Period with respect to such Defaulting Lender; and (iv) the Revolving
Loans as at any date of determination shall be calculated as if such Defaulting
Lender had funded all Defaulted Loans of such Defaulting Lender.  No Commitment of any Lender shall be
increased or otherwise affected, and, except as otherwise expressly provided in
this Section 2.6(c), performance by Borrower of its obligations hereunder
and the other Credit Documents shall not be excused or otherwise modified as a
result of any Funding Default or the operation of this Section 2.6(c).  The rights and remedies against a Defaulting
Lender under this Section 2.6(c) are in addition to other rights and
remedies which Borrower may have against such Defaulting Lender with respect to
any Funding Default and which Administrative Agent or any Lender may have
against such Defaulting Lender with respect to any Funding Default.

 

2.7          Use of Proceeds.  The proceeds of the Loans shall be applied by
Borrower solely as follows:  (i) with
respect to each Facility, (a) to fund post-petition operating expenses of
the

 

28

 

Borrower (and direct obligations of the Borrower
relating to the business of the Borrower and its Subsidiaries as a whole, but
to the extent any such expenses relate to the business of any Subsidiary, such
expenses shall be reimbursed by such Subsidiary to the Borrower promptly
thereafter) incurred in the ordinary course of business consistent with past
practice (and, in any event, after the Incremental Facility Effective Date, in
accordance with the DIP Budget) and to fund such amounts authorized under the
First Day Orders, (b) to pay certain other costs and expenses of
administration of the Chapter 11 Case, and (c) for working capital,
capital expenditures and other general corporate purposes of the Borrower not
in contravention of any requirement of law or the Credit Documents, in each
case of this clause (ii) to the extent permitted by the Cash Flow Forecast
and, after the Incremental Facility Effective Date, the DIP Budget.  Borrower shall use the entire amount of the
proceeds of each Loan in accordance with this Section 2.7; provided,
however, that (A) nothing herein shall in any way prejudice or
prevent Administrative Agent or Lenders from objecting, for any reason, to any
requests, motions or applications made in the Bankruptcy Court, including,
without limitation, any applications for interim or final allowances of
compensation for services rendered or reimbursement of expenses incurred under
sections 105(a), 330 or 331 of the Bankruptcy Code, by any party in interest,
and (B) Borrower shall not use the proceeds from any Loans for any purpose
that is prohibited under the Bankruptcy Code.

 

2.8          Evidence of Debt;
Register; Lenders’ Books and Records.

 

(a)           Lenders’ Evidence of
Debt.  Each Lender shall maintain on
its internal records an account or accounts evidencing the Obligations of
Borrower to such Lender e, including the amounts of the Loans made by it and
each repayment and prepayment in respect thereof.  Any such recordation shall be conclusive and
binding on Borrower, absent manifest error; provided, that the failure
to make any such recordation, or any error in such recordation, shall not
affect Borrower’s Obligations in respect of any applicable Loans; and provided
further, in the event of any inconsistency between the Register and any
Lender’s records, the recordations in the Register shall govern.

 

(b)           Register.  Administrative Agent (or its agent or
sub-agent appointed by it) shall maintain at its Principal Office a register
for the recordation of the names and addresses of Lenders, Loans of each Lender
from time to time (the “Register”).  The Register shall be available for inspection
by Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.  Administrative
Agent shall record, or shall cause to be recorded, in the Register the Loans in
accordance with the provisions of Section 10.6, and each repayment or
prepayment in respect of the principal amount of the Loans, and any such
recordation shall be conclusive and binding on Borrower and each Lender, absent
manifest error; provided, failure to make any such recordation, or any
error in such recordation, shall not affect Borrower’s Obligations in respect
of any Loan.  Borrower hereby designates
Barclay’s Bank to serve as Borrower’s agent solely for purposes of maintaining
the Register as provided in this Section 2.8, and Borrower hereby agrees
that, to the extent Barclay’s Bank serves in such capacity, Barclay’s Bank and
its officers, directors, employees, agents, sub-agents and affiliates shall
constitute “Indemnitees.”

 

29

 

2.9          Interest on Loans.

 

(a)           Except as otherwise set
forth herein, each Term Loan shall bear interest on the unpaid principal amount
thereof from the date made through repayment (whether by acceleration or
otherwise) thereof as follows:

 

(i)            if a
Base Rate Loan, at the Base Rate plus 5.00% per annum (which shall
increase to 6.50% per annum beginning on the 60th day following the date
hereof); or

 

(ii)           if a
Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus 6.00% per
annum (which shall increase to 7.50% per annum beginning on the 60th day
following the date hereof);

 

(b)           Except as otherwise set
forth herein, each Revolving Loan shall bear interest on the unpaid principal
amount thereof from the date made through repayment (whether by acceleration or
otherwise) thereof as follows:

 

(i)            if a
Base Rate Loan, at the Base Rate plus 5.00% per annum (which shall
increase to 6.50% per annum beginning on the 60th day following the date
hereof); or

 

(ii)           if a
Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus 6.00% per
annum (which shall increase to 7.50% per annum beginning on the 60th day
following the date hereof).

 

(c)           The basis for
determining the rate of interest with respect to any Loan, and the Interest
Period with respect to any Eurodollar Rate Loan, shall be selected by Borrower
and notified to Administrative Agent and Lenders pursuant to the applicable
Funding Notice or Conversion/Continuation Notice, as the case may be; provided,
until the date that Administrative Agent notifies Borrower and the
Administrative Agent that the primary syndication of the Loans has been
completed, as determined by Administrative Agent, the Loans shall be maintained
as either (1) Eurodollar Rate Loans having an Interest Period of no longer
than one month or (2) Base Rate Loans. 
If on any day a Loan is outstanding with respect to which a Funding
Notice or a Conversion/Continuation Notice has not been delivered to
Administrative Agent in accordance with the terms hereof specifying the
applicable basis for determining the rate of interest, then for that day such
Loan shall be a Base Rate Loan.

 

(d)           In connection with
Eurodollar Rate Loans there shall be no more than ten (10) Interest
Periods outstanding at any time.  In the
event Borrower fails to specify between a Base Rate Loan or a Eurodollar Rate
Loan in the applicable Funding Notice or Conversion/Continuation Notice, such
Loan (if outstanding as a Eurodollar Rate Loan) will be automatically converted
into a Base Rate Loan on the last day of the then-current Interest Period for
such Loan (or if outstanding as a Base Rate Loan will remain as, or (if not
then outstanding) will be made as, a Base Rate Loan).  In the event Borrower fails to specify an
Interest Period for any Eurodollar Rate Loan in the applicable Funding Notice
or Conversion/Continuation Notice, Borrower shall be deemed to have selected an
Interest Period of one month.  As soon as
practicable after 10:00 a.m. (New York City time) on each Interest Rate
Determination Date, Administrative Agent shall determine (which determination
shall, absent manifest error, be final,

 

30

 

conclusive and binding upon all parties) the interest
rate that shall apply to the Eurodollar Rate Loans for which an interest rate
is then being determined for the applicable Interest Period and shall promptly
give notice thereof (in writing or by telephone confirmed in writing) to
Borrower and each Lender.

 

(e)           Interest payable
pursuant to Sections 2.9(a) and (b) shall be computed (i) in the
case of Base Rate Loans on the basis of a 365-day or 366-day year, as the case
may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of a
360-day year, in each case for the actual number of days elapsed in the period
during which it accrues.  In computing
interest on any Loan, the date of the making of such Loan or the first day of
an Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded; provided,
if a Loan is repaid on the same day on which it is made, one day’s interest
shall be paid on that Loan.

 

(f)            [Reserved].

 

(g)           [Reserved].

 

(h)           [Reserved].

 

2.10        Conversion/Continuation.

 

(a)           Subject to Section 2.21
and so long as no Default or Event of Default shall have occurred and then be
continuing, Borrower shall have the option:

 

(i)            to
convert at any time all or any part of any Loan equal to $1,000,000 and
integral multiples of $1,000,000 in excess of that amount from one Type of Loan
to another Type of Loan; provided, a Eurodollar Rate Loan may only be
converted on the expiration of the Interest Period applicable to such
Eurodollar Rate Loan unless Borrower shall pay all amounts due under Section 2.21
in connection with any such conversion; or

 

(ii)           upon the
expiration of any Interest Period applicable to any Eurodollar Rate Loan, to
continue all or any portion of such Loan equal to $1,000,000 and integral
multiples of $1,000,000 in excess of that amount as a Eurodollar Rate Loan.

 

(b)           Borrower shall deliver
a Conversion/Continuation Notice to Administrative Agent no later than 11:00 a.m.
(New York City time) at least one Business Day in advance of the proposed
conversion date (in the case of a conversion to a Base Rate Loan) and at least
three Business Days in advance of the proposed conversion/continuation date (in
the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan).  Except as otherwise provided
herein, a Conversion/Continuation Notice for conversion to, or continuation of,
any Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be
irrevocable, and Borrower shall be bound to effect a conversion or continuation
in accordance therewith.

 

31

 

2.11        Default Interest.  Upon the occurrence and during the
continuance of any Event of Default, the principal amount of all Loans
outstanding and, to the extent permitted by applicable law, any interest
payments on the Loans or any fees or other amounts owed hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable on
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable hereunder with respect to the applicable Loans (or, in the case of any
such fees and other amounts, at a rate which is 2% per annum in excess of the
interest rate otherwise payable hereunder for Base Rate Loans); provided,
in the case of Eurodollar Rate Loans, upon the expiration of the Interest
Period in effect at the time any such increase in interest rate is effective
such Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall
thereafter bear interest payable upon demand at a rate which is 2% per annum in
excess of the interest rate otherwise payable hereunder for Base Rate Loans.  Payment or acceptance of the increased rates
of interest provided for in this Section 2.11 is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent or any Lender.

 

2.12        Fees.

 

(a)           Unused Line Fee.  Borrower shall pay to Administrative Agent,
for the benefit of Lenders in proportion to their respective Pro Rata Shares, a
fee equal to 1.00% per annum on the amount of the average daily balance of
undrawn Commitments.  Such fee shall be
payable in arrears, on the first day of each month and on the Maturity Date, in
each case until the applicable Commitments have been terminated in accordance
with the terms hereof.  The unused line
fee shall be computed for the actual days elapsed based on a year of 360 days.

 

(b)           [Reserved].

 

(c)           Fee Letter.  Borrower shall pay all fees in accordance
with the Fee Letter.

 

(d)           [Reserved].

 

2.13        Payment of Obligations.  Upon the Maturity Date (whether by
acceleration or otherwise) each Agent and each Lender shall be entitled to
immediate payment of any of the Obligations under this Agreement or under any
of the other Credit Documents, without further application or order of the
Bankruptcy Court, and Borrower shall immediately pay all Obligations.

 

2.14        [Reserved].

 

2.15        Voluntary Prepayments
of Term Loans; Commitment Reductions.

 

(a)           Term Loans may be
prepaid from time to time, without penalty or premium.

 

(b)           All such prepayments
shall be made:

 

(1)           upon not
less than one Business Day’s prior written or telephonic notice in the case of
Base Rate Loans; and

 

32

 

(2)           upon not
less than three Business Days’ prior written or telephonic notice in the case
of Eurodollar Rate Loans;

 

in each case given to Administrative Agent by 12:00 p.m.
(New York City time) on the date required and, if given by telephone, promptly
confirmed in writing to Administrative Agent (and Administrative Agent will
promptly transmit such telephonic or original notice for Term Loans by
telefacsimile or telephone to each Term Lender).  Upon the giving of any such notice, the
principal amount of the Term Loans specified in such notice shall become due
and payable on the prepayment date specified therein.

 

(c)           Borrower may permanently
reduce the Term Loan Commitments, on a Pro Rata basis for each Term Lender,
from time to time upon written notice to Administrative Agent, which notice
shall specify the amount of the reduction, shall be irrevocable once given,
shall be given at least five Business Days prior to the end of a month and
shall be effective as of the first day of the next month.  Each reduction shall be in a minimum amount
of $5,000,000, or an increment of $1,000,000 in excess thereof

 

2.16        Voluntary Prepayments
of Revolving Loans; Commitment Reductions.

 

(a)           Revolving Loans may be
prepaid from time to time, without penalty or premium.

 

(b)           All such prepayments
shall be made:

 

(1)           upon not
less than one Business Day’s prior written or telephonic notice in the case of
Base Rate Loans; and

 

(2)           upon not
less than three Business Days’ prior written or telephonic notice in the case
of Eurodollar Rate Loans;

 

in each case given to Administrative Agent by 12:00 p.m.
(New York City time) on the date required and, if given by telephone, promptly
confirmed in writing to Administrative Agent (and Administrative Agent will
promptly transmit such telephonic or original notice for Revolving Loans by
telefacsimile or telephone to each Revolving Lender).  Upon the giving of any such notice, the
principal amount of the Revolving Loans specified in such notice shall become
due and payable on the prepayment date specified therein.

 

(c)           Borrower may
permanently reduce the Revolving Loan Commitments, on a Pro Rata basis for each
Revolving Lender, from time to time upon written notice to Administrative
Agent, which notice shall specify the amount of the reduction, shall be
irrevocable once given, shall be given at least five Business Days prior to the
end of a month and shall be effective as of the first day of the next
month.  Each reduction shall be in a
minimum amount of $5,000,000, or an increment of $1,000,000 in excess thereof.

 

2.17        Mandatory Prepayments.

 

(a)           Asset Sales.  No later than the Business Day following the
date of receipt by Borrower or any of its Subsidiaries of any Net Asset Sale
Proceeds, Borrower shall prepay the

 

33

 

Loans as set forth in clause (h) below in an
aggregate amount equal to such Net Asset Sale Proceeds.

 

(b)           Insurance/Condemnation
Proceeds.  No later than the Business
Day following the date of receipt by Borrower or any of its Subsidiaries, or
Collateral Agent as loss payee, of any Net Insurance/Condemnation Proceeds with
respect to Collateral, Borrower shall prepay the Loans as set forth in clause (h) below
in an aggregate amount equal to such Net Insurance/Condemnation Proceeds.

 

(c)           Issuance of Equity
Securities.  On the date of receipt
by Borrower of any Cash proceeds from a capital contribution to, or the issuance
of any Capital Stock of, Borrower or any of its Subsidiaries (other than
pursuant to any employee stock or stock option compensation plan), Borrower
shall prepay the Loans as set forth in clause (h) below in an aggregate
amount equal to 100% of such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses.

 

(d)           Issuance of
Indebtedness.  On the date of receipt
by Borrower or any of its Subsidiaries of any Cash proceeds from the incurrence
of any Indebtedness of Borrower or any of its Subsidiaries (other than with
respect to any Indebtedness permitted to be incurred pursuant to Section 6.1),
Borrower shall prepay the Loans and/or the Revolving Loan Commitments shall be
permanently reduced as set forth in clause (h) below in an aggregate
amount equal to 100% of such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses.

 

(e)           Excess
Cash and Cash Equivalents.  If, at
the end of any Business Day, the Borrower is holding Cash and Cash Equivalents
(including, without limitation, any Cash and Cash Equivalents held by the
Borrower on the Petition Date to the extent that the Bankruptcy Court has
approved the Borrower’s use thereof) in an aggregate amount in excess of the
sum of (x) $5,000,000 and (y) amounts necessary to cover the
aggregate amount of checks issued by the Borrower that remain outstanding as of
such date in an amount of up to $7,000,000 without the prior consent of the
Administrative Agent which shall not be unreasonably withheld, Borrower shall,
on the immediately succeeding Business Day, pay to the Administrative Agent
that amount in excess of the sum of items (x) and (y) above, which
shall be applied to repayment of the Revolving Loans as provided in subsection (h) of
this Section 2.17 (and shall not be required to be applied to the
repayment of the Term Loans).

 

(f)            Extraordinary
Receipts.  No later than the Business
Day following the date of receipt by Borrower or any of its Subsidiaries of any
Cash proceeds from any United States, State, local or foreign tax refund or any
indemnitee, purchase price adjustment or other payment received outside of the
ordinary course of business, Borrower shall prepay the Loans as set forth in Section 2.18
in an aggregate amount equal to 100% of such proceeds, net of reasonable costs
and expenses associated therewith, including reasonable legal fees and expenses.

 

(g)           Prepayment
Certificate.  Concurrently with any
prepayment of the Loans and/or reduction of the Revolving Loan Commitments
pursuant to Sections 2.17(a) through 2.17(f), Borrower shall deliver to
Administrative Agent a certificate of an Authorized Officer

 

34

 

demonstrating the calculation of the amount of the
applicable net proceeds.  In the event
that Borrower shall subsequently determine that the actual amount received
exceeded the amount set forth in such certificate, Borrower shall promptly make
an additional prepayment of the Loans and/or the Revolving Loan Commitments
shall be permanently reduced as set forth in Section 2.18 in an amount
equal to such excess, and Borrower shall concurrently therewith deliver to
Administrative Agent a certificate of an Authorized Officer demonstrating the
derivation of such excess.

 

(h)           Application of
Mandatory Prepayments.

 

(i)            Subject
to the provisions of Section 2.18(c), any prepayments made by Borrower
pursuant to clause (a) of this Section 2.17 with respect to the
Neuberger Transaction shall be applied as follows:

 

(1)           first,
interest;

 

(2)           second,
to repay the outstanding principal balance of the Revolving Loans until the
Revolving Loans shall have been paid in full;

 

(3)           third, to
repay the outstanding principal balance of the Term Loans until the Term Loans
shall have been prepaid in full; and

 

(4)           fourth,
ratably to repay all other outstanding Obligations.

 

(ii)           Subject
to the provisions of Section 2.18(c), any prepayments made by Borrower
pursuant to clause (a) of this Section 2.17 with respect to the LBI
Transaction shall be applied as follows:

 

(1)           first,
interest;

 

(2)           second,
to repay the outstanding principal balance of the Term Loans until the Term Loans
shall have been prepaid in full;

 

(3)           third, to
repay the outstanding principal balance of the Revolving Loans until the
Revolving Loans shall have been paid in full; and

 

(4)           fourth,
ratably to repay all other outstanding Obligations.

 

(iii)          Subject
to the provisions of Section 2.18(c), any prepayments made by Borrower
pursuant to clause (a) of this Section 2.17 other than with respect
to the Neuberger Transaction or the LBI Transaction shall be applied as
follows:

 

(1)           first,
interest;

 

(2)           second, an
amount equal to the lesser of (x) 50% of the Net Asset Sale Proceeds and (y) the
outstanding principal balance of the Term Loans, shall be applied to repay the
outstanding principal balance of the Term Loans;

 

35

 

(3)           third, to
repay the outstanding principal balance of the Revolving Loans until the
Revolving Loans shall have been paid in full; and

 

(4)           fourth,
ratably to repay all other outstanding Obligations.

 

(iv)          Subject to
the provisions of Section 2.18(c), any prepayments made by Borrower
pursuant to clause (b) through and including (g) of this Section 2.17
shall be applied as follows:

 

(1)           first,
interest;

 

(2)           second,
to repay the outstanding principal balance of the Term Loans until the Term
Loans shall have been prepaid in full;

 

(3)           third, to
repay the outstanding principal balance of the Revolving Loans until the
Revolving Loans shall have been paid in full;

 

(4)           fourth,
ratably to repay all other Obligations.

 

All repayments of Revolving Loans required to be made
pursuant to clauses (i) through and including (iv) of this Section 2.17(h) shall
result in a permanent reduction of the Revolving Loan Commitments in an amount
equal to the aggregate principal amount of the Revolving Loans prepaid.

 

2.18        Application of Payments.

 

(a)           Application of
Prepayments to Base Rate Loans and Eurodollar Rate Loans.  Any prepayment of Term Loans shall be applied
first to Base Rate Loans to the full extent thereof before application to
Eurodollar Rate Loans, in each case in a manner which minimizes the amount of
any payments required to be made by Borrower pursuant to Section 2.21(c).

 

(b)           [Reserved].

 

(c)           Post-Default
Allocation of Payments.

 

(i)            Allocation.  Notwithstanding anything herein to the
contrary, during an Event of Default, monies to be applied to the Obligations,
whether arising from payments by Obligors, realization on Collateral, setoff or
otherwise, shall be allocated as follows:

 

(1)           first, to
all costs, expenses and indemnities to the Agents and Lenders, including
Extraordinary Expenses and Indebtedness owing with respect to any Cash
Management Services, owing to Agents;

 

(2)           second,
to all Obligations constituting fees and interest;

 

(3)           third,
ratably to repay the Loans; and

 

36

 

(4)           fourth,
to all other Obligations.

 

Amounts shall be applied to each category of
Obligations set forth above until Full Payment thereof and then to the next
category.  If amounts are insufficient to
satisfy a category, they shall be applied on a pro rata basis among the
Obligations in the category.  The
allocations set forth in this Section are solely to determine the rights
and priorities of the Agents and Lenders as among themselves, and may be
changed by agreement among them without the consent of any Obligor.  This Section is not for the benefit of
or enforceable by Borrower.

 

(ii)           Erroneous
Application.  Agents shall not be
liable for any application of amounts made by it in good faith and, if any such
application is subsequently determined to have been made in error, the sole
recourse of any Lender or other Person to which such amount should have been
made shall be to recover the amount from the Person that actually received it
(and, if such amount was received by any Lender, such Lender hereby agrees to
return it).

 

2.19        General Provisions Regarding Payments.

 

(a)           All payments by
Borrower of principal, interest, fees and other Obligations shall be made in
Dollars in same day funds, without defense, setoff or counterclaim, free of any
restriction or condition, and delivered to the Administrative Agent not later
than 12:00 p.m. (New York City time) on the date due at the Principal
Office designated by the Administrative Agent for the account of Lenders; for
purposes of computing interest and fees, funds received by the Administrative
Agent after that time on such due date shall be deemed to have been paid by
Borrower on the next succeeding Business Day.

 

(b)           All payments in respect
of the principal amount of any Loan (other than voluntary prepayments of Loans)
shall be accompanied by payment of accrued interest on the principal amount
being repaid or prepaid, and all such payments (and, in any event, any payments
in respect of any Loan on a date when interest is due and payable with respect
to such Loan) shall be applied to the payment of interest then due and payable
before application to principal.

 

(c)           The Administrative
Agent (or its agent or sub-agent appointed by it) shall promptly distribute to
each Lender at such address as such Lender shall indicate in writing, such
Lender’s applicable Pro Rata Share of all payments and prepayments of principal
and interest due hereunder, together with all other amounts due thereto,
including, without limitation, all fees payable with respect thereto, to the
extent received by the Administrative Agent.

 

(d)           Notwithstanding the
foregoing provisions hereof, if any Conversion/ Continuation Notice is
withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate
Loans in lieu of its Pro Rata Share of any Eurodollar Rate Loans, the
Administrative Agent shall give effect thereto in apportioning payments
received thereafter.

 

(e)           Whenever any payment to
be made hereunder with respect to any Loan shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day.

 

37

 

(f)            Borrower hereby
authorizes the Administrative Agent in order to cause timely payment to be made
to Agents of all principal, interest, fees and expenses due hereunder (subject
to sufficient funds being available in its accounts for that purpose).

 

(g)           Administrative Agent
shall deem any payment by or on behalf of Borrower hereunder that is not made
in same day funds prior to 12:00 p.m. (New York City time) to be a
non-conforming payment.  Any such payment
shall (except for the purpose of Section 8.1(a)) not be deemed to have
been received by the Administrative Agent until the later of (i) the time
such funds become available funds, and (ii) the applicable next Business
Day.  Administrative Agent shall give
prompt telephonic notice to Borrower and each applicable Lender (confirmed in
writing) if any payment is non-conforming. 
Interest shall continue to accrue on any principal as to which a
non-conforming payment is made until such funds become available funds (but in
no event less than the period from the date of such payment to the next
succeeding applicable Business Day) at the rate determined pursuant to Section 2.11
from the date such amount was due and payable until the date such amount is
paid in full.

 

(h)           [Reserved]

 

(i)            If and to the extent
any payment owed to any Agent or any Lender is not made when due, the Borrower
hereby authorizes each Agent and such Lender, subject to any notice period
provided in the Orders, to setoff and charge any amount so due against any
deposit account maintained by the Borrower with the Administrative Agent or
such Lender, whether or not the deposit therein is then due.

 

2.20        Ratable Sharing.  Lenders hereby agree among themselves that if
any of them shall, whether by voluntary payment (other than a voluntary
prepayment of Loans made and applied in accordance with the terms hereof),
through the exercise of any right of set-off or banker’s lien, by counterclaim
or cross action or by the enforcement of any right under the Credit Documents
or otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of fees and
other amounts then due and owing to such Lender hereunder or under the other
Credit Documents (collectively, the “Aggregate Amounts Due”
to such Lender) which is greater than the proportion received by any other
Lender in respect of the Aggregate Amounts Due to such other Lender, then the
Lender receiving such proportionately greater payment shall (a) notify
Administrative Agent and each other Lender of the receipt of such payment and (b) apply
a portion of such payment to purchase participations (which it shall be deemed
to have purchased from each seller of a participation simultaneously upon the
receipt by such seller of its portion of such payment) in the Aggregate Amounts
Due to the other Lenders so that all such recoveries of Aggregate Amounts Due
shall be shared by all Lenders in proportion to the Aggregate Amounts Due to
them; provided, if all or part of such proportionately greater payment
received by such purchasing Lender is thereafter recovered from such Lender
upon the bankruptcy or reorganization of Borrower or otherwise, those purchases
shall be rescinded and the purchase prices paid for such participations shall
be returned to such purchasing Lender ratably to the extent of such recovery,
but without interest.  Borrower expressly
consents to the foregoing arrangement and agrees that any holder of a
participation so purchased may exercise any and all rights of banker’s lien,
set-off or

 

38

 

counterclaim with respect to any and all monies owing
by Borrower to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.

 

2.21        Making or Maintaining Eurodollar Rate Loans.

 

(a)           Inability to
Determine Applicable Interest Rate. 
In the event that Administrative Agent shall have determined (which
determination shall be final and conclusive and binding upon all parties
hereto), on any Interest Rate Determination Date with respect to any Eurodollar
Rate Loans, that by reason of circumstances affecting the London interbank
market adequate and fair means do not exist for ascertaining the interest rate
applicable to such Loans on the basis provided for in the definition of
Adjusted Eurodollar Rate, Administrative Agent shall on such date give notice
(by telefacsimile or by telephone confirmed in writing) to Borrower and each
Lender of such determination, whereupon (i) no Loans may be made as, or
converted to, Eurodollar Rate Loans until such time as Administrative Agent
notifies Borrower and Lenders that the circumstances giving rise to such notice
no longer exist, and (ii) any Funding Notice or Conversion/Continuation
Notice given by Borrower with respect to the Loans in respect of which such
determination was made shall be deemed to be rescinded by Borrower.

 

(b)           Illegality or
Impracticability of Eurodollar Rate Loans. 
In the event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Borrower and Administrative
Agent) that the making, maintaining or continuation of its Eurodollar Rate
Loans (i) has become unlawful as a result of compliance by such Lender in
good faith with any law, treaty, governmental rule, regulation, guideline or
order (or would conflict with any such treaty, governmental rule, regulation,
guideline or order not having the force of law even though the failure to
comply therewith would not be unlawful), or (ii) has become impracticable,
as a result of contingencies occurring after the date hereof which materially
and adversely affect the London interbank market or the position of such Lender
in that market, then, and in any such event, such Lender shall be an “Affected Lender” and it shall on that day give notice
(by telefacsimile or by telephone confirmed in writing) to Borrower and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). 
Thereafter (1) the obligation of the Affected Lender to make Loans
as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until such
notice shall be withdrawn by the Affected Lender, (2) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Borrower pursuant to a Funding Notice or a
Conversion/Continuation Notice, the Affected Lender shall make such Loan as (or
continue such Loan as or convert such Loan to, as the case may be) a Base Rate
Loan, (3) the Affected Lender’s obligation to maintain its outstanding
Eurodollar Rate Loans (the “Affected Loans”)
shall be terminated at the earlier to occur of the expiration of the Interest
Period then in effect with respect to the Affected Loans or when required by
law, and (4) the Affected Loans shall automatically convert into Base Rate
Loans on the date of such termination. 
Notwithstanding the foregoing, to the extent a determination by an
Affected Lender as described above relates to a Eurodollar Rate Loan then being
requested by Borrower pursuant to a Funding Notice or a Conversion/Continuation
Notice, Borrower shall have the option, subject to the provisions of Section 2.21(c),
to rescind such Funding Notice or Conversion/Continuation Notice as to all
Lenders by giving notice (by telefacsimile or by telephone confirmed in
writing) to Administrative Agent of such rescission on the date on which the
Affected Lender gives notice

 

39

 

of its determination as described above (which notice
of rescission Administrative Agent shall promptly transmit to each other
Lender).  Except as provided in the
immediately preceding sentence, nothing in this Section 2.21(b) shall
affect the obligation of any Lender other than an Affected Lender to make or
maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance
with the terms hereof.

 

(c)           Compensation for
Breakage or Non-Commencement of Interest Periods.  Borrower shall compensate each Lender, upon
written request by such Lender (which request shall set forth the basis for
requesting such amounts), for all reasonable losses, expenses and liabilities
(including any interest paid by such Lender to Lenders of funds borrowed by it
to make or carry its Eurodollar Rate Loans and any loss, expense or liability
sustained by such Lender in connection with the liquidation or re-employment of
such funds but excluding loss of anticipated profits) which such Lender may
sustain: (i) if for any reason (other than a default by such Lender) a
borrowing of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Funding Notice or a telephonic request for borrowing, or a
conversion to or continuation of any Eurodollar Rate Loan does not occur on a
date specified therefor in a Conversion/Continuation Notice or a telephonic
request for conversion or continuation; (ii) if any prepayment or other
principal payment of, or any conversion of, any of its Eurodollar Rate Loans
occurs on a date prior to the last day of an Interest Period applicable to that
Loan; or (iii) if any prepayment of any of its Eurodollar Rate Loans is
not made on any date specified in a notice of prepayment given by Borrower.

 

(d)           Booking of
Eurodollar Rate Loans.  Any Lender
may make, carry or transfer Eurodollar Rate Loans at, to, or for the account of
any of its branch offices or the office of an Affiliate of such Lender.

 

(e)           Assumptions
Concerning Funding of Eurodollar Rate Loans.  Calculation of all amounts payable to a
Lender under this Section 2.21 and under Section 2.22 shall be made
as though such Lender had actually funded each of its relevant Eurodollar Rate
Loans through the purchase of a Eurodollar deposit bearing interest at the rate
obtained pursuant to clause (i) of the definition of Adjusted Eurodollar
Rate in an amount equal to the amount of such Eurodollar Rate Loan and having a
maturity comparable to the relevant Interest Period and through the transfer of
such Eurodollar deposit from an offshore office of such Lender to a domestic
office of such Lender in the United States of America; provided, however,
each Lender may fund each of its Eurodollar Rate Loans in any manner it sees
fit and the foregoing assumptions shall be utilized only for the purposes of
calculating amounts payable under this Section 2.21 and under Section 2.22.

 

2.22        Increased Costs; Capital Adequacy.

 

(a)           Compensation For
Increased Costs and Taxes.  Subject
to the provisions of Section 2.23 (which shall be controlling with respect
to the matters covered thereby), in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes

 

40

 

effective after the date hereof (in the case of each
Lender listed on the signature pages hereof on the Closing Date) or after
the effective date of the Assignment Agreement pursuant to which such Lender
became a Lender (in the case of each other Lender), or compliance by such
Lender with any guideline, request or directive issued or made after the date
hereof (in the case of each Lender listed on the signature pages hereof on
the Closing Date) or after the effective date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each other
Lender) by any central bank or other governmental or quasi-governmental
authority (whether or not having the force of law): (i) subjects such
Lender (or its applicable lending office) to any additional Tax (other than any
Tax on the overall net income of such Lender) with respect to this Agreement or
any of the other Credit Documents or any of its obligations hereunder or
thereunder or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder; (ii) imposes,
modifies or holds applicable any reserve (including any marginal, emergency,
supplemental, special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such Lender
(other than any such reserve or other requirements with respect to Eurodollar
Rate Loans that are reflected in the definition of Adjusted Eurodollar Rate);
or (iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or its
obligations hereunder or the London interbank market; and the result of any of
the foregoing is to increase the cost to such Lender of agreeing to make,
making or maintaining Loans hereunder or to reduce any amount received or
receivable by such Lender (or its applicable lending office) with respect thereto;
then, in any such case, Borrower shall promptly pay to such Lender, upon
receipt of the statement referred to in the next sentence, such additional
amount or amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender in its sole discretion
shall determine) as may be necessary to compensate such Lender for any such
increased cost or reduction in amounts received or receivable hereunder.  Such Lender shall deliver to Borrower (with a
copy to Administrative Agent) a written statement, setting forth in reasonable
detail the basis for calculating the additional amounts owed to such Lender
under this Section 2.22(a), which statement shall be conclusive and
binding upon all parties hereto absent manifest error.

 

(b)           Capital Adequacy
Adjustment.  In the event that any
Lender shall have determined that the adoption, effectiveness, phase-in or
applicability after the Closing Date of any law, rule or regulation (or
any provision thereof) regarding capital adequacy, or any change therein or in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its applicable lending
office) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling
such Lender as a consequence of, or with reference to, such Lender’s Loans or
participations therein, or other obligations hereunder with respect to the
Loans to a level below that which such Lender or such controlling corporation
could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Borrower
from such Lender of the statement referred

 

41

 

to in the next sentence, Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Borrower (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to Lender under this Section 2.22(b), which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.

 

2.23        Taxes; Withholding, etc.

 

(a)           Payments to Be Free
and Clear.  All sums payable by any
Credit Party hereunder and under the other Credit Documents shall (except to
the extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on the
overall net income of any Lender) imposed, levied, collected, withheld or
assessed by or within the United States of America or any political subdivision
in or of the United States of America or any other jurisdiction from or to
which a payment is made by or on behalf of any Credit Party or by any
federation or organization of which the United States of America or any such
jurisdiction is a member at the time of payment.

 

(b)           Withholding of Taxes.  If any Credit Party or any other Person is
required by law to make any deduction or withholding on account of any such Tax
from any sum paid or payable by any Credit Party to Administrative Agent,
Collateral Agent or any Lender under any of the Credit Documents: (i) Borrower
shall notify Administrative Agent of any such requirement or any change in any
such requirement as soon as Borrower becomes aware of it; (ii) Borrower
shall pay any such Tax before the date on which penalties attach thereto, such
payment to be made (if the liability to pay is imposed on any Credit Party) for
its own account or (if that liability is imposed on Administrative Agent,
Collateral Agent or such Lender, as the case may be) on behalf of and in the
name of Administrative Agent, Collateral Agent or such Lender; (iii) the
sum payable by such Credit Party in respect of which the relevant deduction,
withholding or payment is required shall be increased to the extent necessary
to ensure that, after the making of that deduction, withholding or payment,
Administrative Agent, Collateral Agent or such Lender, as the case may be,
receives on the due date a net sum equal to what it would have received had no
such deduction, withholding or payment been required or made; and (iv) within
thirty days after paying any sum from which it is required by law to make any deduction
or withholding, and within thirty days after the due date of payment of any Tax
which it is required by clause (ii) above to pay, Borrower shall deliver
to Administrative Agent evidence satisfactory to the other affected parties of
such deduction, withholding or payment and of the remittance thereof to the
relevant taxing or other authority; provided, no such additional amount
shall be required to be paid to any Lender under clause (iii) above except
if, and only to the extent that, any change after the date hereof (in the case
of each Lender listed on the signature pages hereof on the Closing Date)
or after the effective date of the Assignment Agreement pursuant to which such
Lender became a Lender (in the case of each other Lender) in any such requirement
for a deduction, withholding or payment as is mentioned therein shall result in
an increase in the rate of such deduction, withholding or payment from that in
effect at the date hereof or at the date of such Assignment Agreement, as the
case may be, in respect of payments to such Lender.

 

(c)           Evidence of
Exemption From U.S. Withholding Tax. 
Each Lender that is not a United States Person (as such term is defined
in Section 7701(a)(30) of the Internal

 

42

 

Revenue Code) for U.S. federal income tax purposes (a “Non-US Lender”) shall deliver to Administrative
Agent for transmission to Borrower, on or within five (5) Business Days of
the Closing Date (in the case of each Lender listed on the signature pages hereof
on the Closing Date) or on or prior to the date of the Assignment Agreement
pursuant to which it becomes a Lender (in the case of each other Lender), and
at such other times as may be necessary in the determination of Borrower or
Administrative Agent (each in the reasonable exercise of its discretion):

 

(i)            two
original copies of Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY
(or any successor forms), properly completed and duly executed by such Lender,
and such other documentation required under the Internal Revenue Code and
reasonably requested by Borrower to establish that such Lender is not subject
to deduction or withholding of United States federal income tax, or subject to
deduction or withholding at a reduced rate, with respect to any payments to
such Lender of principal, interest, fees or other amounts payable under any of
the Credit Documents; or

 

(ii)           if such
Lender is claiming the benefits of the exemption for portfolio interest under
section 881(c) of the Internal Revenue Code, (x) a certificate in the
form of Exhibit F to the effect that such Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the
Internal Revenue Code, (B) a “10 percent shareholder”
of Borrower within the meaning of section 871(h)(3)(B) of the Internal
Revenue Code, or (C) a “controlled foreign
corporation” related to Borrower as described in section 881(c)(3)(C) of
the Internal Revenue Code; (y) duly completed copies of Internal Revenue
Service Form W-8BEN; and (z) and such other documentation required
under the Internal Revenue Code and reasonably requested by Borrower to
establish that such Lender is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such Lender of
interest payable under any of the Credit Documents.

 

Each Lender required to promptly deliver any forms,
certificates or other evidence with respect to United States federal income tax
withholding matters pursuant to this Section 2.23(c) hereby agrees,
from time to time after the initial delivery by such Lender of such forms,
certificates or other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other evidence obsolete or
inaccurate in any material respect, that such Lender shall promptly deliver to
Administrative Agent for transmission to Borrower two new original copies of
Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY, or the Certificate
described in clause (ii) above and two original copies of Internal Revenue
Service Form W-8BEN (or any successor form), as the case may be, properly
completed and duly executed by such Lender, and such other documentation
required under the Internal Revenue Code and reasonably requested by Borrower
to confirm or establish that such Lender is not subject to deduction or
withholding of United States federal income tax, or subject to deduction or
withholding at a reduced rate, with respect to payments to such Lender under
the Credit Documents, or notify Administrative Agent and Borrower of its
inability to deliver any such forms, certificates or other evidence.  Borrower shall not be required to pay any
additional amount to any Non-US Lender under Section 2.23(b)(iii) if
such Lender shall have failed (1) to deliver the forms, certificates or
other evidence referred to in this Section 2.23(c), or (2) to notify
Administrative Agent and Borrower of its inability to deliver any such forms,
certificates or

 

43

 

other evidence, as the case may be; provided,
if such Lender shall have satisfied the requirements of this Section 2.23(c) on
the Closing Date or on the date of the Assignment Agreement pursuant to which
it became a Lender, as applicable, nothing in this last sentence of this Section 2.23(c) shall
relieve Borrower of its obligation to pay any additional amounts pursuant this Section 2.23
in the event that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to withholding as
described herein

 

(d)           Treatment of Certain
Refunds.  If Administrative Agent or
any Lender in its sole discretion determines that it has received a refund of
any Taxes as to which it has been indemnified by Borrower or with respect to
which Borrower has paid additional amounts pursuant to this Agreement, it shall
pay to Borrower an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by Borrower under this
Agreement with respect to the Taxes giving rise to such refund), net of all
reasonable out-of-pocket expenses of Administrative Agent or such Lender, as
the case may be, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided,
that Borrower, upon the request of Administrative Agent, or such Lender, agrees
to repay the amount paid over to Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to Administrative
Agent or such Lender in the event Administrative Agent or such Lender is
required to repay such refund to such Governmental Authority.  This subsection shall not be construed to
require Administrative Agent or any Lender to apply for any such refund of
Taxes or to make available its tax returns (or any other information relating
to its taxes that it deems confidential) to Borrower or any other Person.

 

2.24        Obligation to Mitigate.  Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Loans becomes aware of the occurrence of an event or the existence of a
condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender to receive payments under Section 2.21, 2.22 or
2.23, it will, to the extent not inconsistent with the internal policies of
such Lender and any applicable legal or regulatory restrictions, use reasonable
efforts to (a) make or maintain its Credit Extensions, including any
Affected Loans, through another office of such Lender, or (b) take such
other measures as such Lender may deem reasonable, if as a result thereof the
circumstances which would cause such Lender to be an Affected Lender would
cease to exist or the additional amounts which would otherwise be required to
be paid to such Lender pursuant to Section 2.21, 2.22 or 2.23 would be
materially reduced and if, as determined by such Lender in its sole discretion,
the making or maintaining of such Loans through such other office or in
accordance with such other measures, as the case may be, would not otherwise
adversely affect such Loans or the interests of such Lender; provided,
such Lender will not be obligated to utilize such other office pursuant to this
Section 2.24 unless Borrower agrees to pay all incremental expenses
incurred by such Lender as a result of utilizing such other office as described
above.  A certificate as to the amount of
any such expenses payable by Borrower pursuant to this Section 2.24
(setting forth in reasonable detail the basis for requesting such amount)
submitted by such Lender to Borrower (with a copy to Administrative Agent)
shall be conclusive absent manifest error.

 

44

 

2.25        Removal or Replacement of
a Lender.  Anything contained herein
to the contrary notwithstanding, in the event that: (a) (i) any
Lender (an “Increased-Cost
Lender”) shall give
notice to Borrower that such Lender is an Affected Lender or that such Lender
is entitled to receive payments under Section 2.21 (other than Section 2.22
or 2.23, (ii) the circumstances which have caused such Lender to be an
Affected Lender or which entitle such Lender to receive such payments shall
remain in effect, and (iii) such Lender shall fail to withdraw such notice
within five Business Days after Borrower’s request for such withdrawal; or (b) (i) any
Lender shall become a Defaulting Lender, (ii) the Default Period for such
Defaulting Lender shall remain in effect, and (iii) such Defaulting Lender
shall fail to cure the default as a result of which it has become a Defaulting
Lender within five Business Days after Borrower’s request that it cure such
default; or (c) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions hereof as
contemplated by Section 10.5(b), the consent of Requisite Lenders shall
have been obtained but the consent of one or more of such other Lenders (each a
“Non-Consenting
Lender”) whose
consent is required shall not have been obtained; then, with respect to each
such Increased-Cost Lender or Non-Consenting Lender (each a “Terminated Lender”), Borrower or Administrative Agent
(at the direction of Requisite Lenders) may, by giving written notice to
Administrative Agent and any Terminated Lender of its election to do so, elect
to cause such Terminated Lender (and such Terminated Lender hereby irrevocably
agrees) to assign its outstanding Loans in full to one or more Eligible
Assignees (each a “Replacement Lender”)
in accordance with the provisions of Section 10.6 and Borrower shall pay
the fees, if any, payable thereunder in connection with any such assignment and
the Defaulting Lender shall pay the fees, if any, payable thereunder in
connection with any such assignment from such Defaulting Lender; provided,
(1) on the date of such assignment, the Replacement Lender shall pay to
Terminated Lender an amount equal to the sum of principal of, and all accrued
interest on, all outstanding Loans of the Terminated Lender; (2) on the
date of such assignment, Borrower shall pay any amounts payable to such
Terminated Lender pursuant to Section 2.21(c), 2.22 or 2.23; or otherwise
as if it were a prepayment and (3) in the event such Terminated Lender is
a Non-Consenting Lender, each Replacement Lender shall consent, at the time of
such assignment, to each matter in respect of which such Terminated Lender was
a Non-Consenting Lender.  Upon the
prepayment of all amounts owing to any Terminated Lender and the termination of
such Terminated Lender’s Loan Commitments, such Terminated Lender shall no
longer constitute a “Lender” for
purposes hereof; provided, any rights of such Terminated Lender to
indemnification hereunder shall survive as to such Terminated Lender.

 

Each Lender agrees that, if it becomes a Terminated
Lender and its rights and claims are assigned hereunder to a Replacement Lender
pursuant to this Section 2.25, it shall execute and deliver to
Administrative Agent an Assignment Agreement to evidence such assignment,
together with any Note (if such Loans are evidenced by a Note) evidencing the
Loans subject to such Assignment Agreement; provided, however,
that the failure of any Terminated Lender to execute an Assignment Agreement
shall not render such assignment invalid.

 

2.26        Superpriority Nature of Obligations and Loans.

 

(a)           The Liens and security
interests granted to the Collateral Agent, for the benefit of the Secured
Parties, shall have the senior secured status afforded by Section 364(c) of
the Bankruptcy Code, all as more fully provided in the Orders.

 

45

 

(b)           The Obligations shall
constitute superpriority administrative expense claims in the Chapter 11 Case,
as more full provided in the Interim Order and the Final Order.  Except as expressly set forth herein or in
the Interim Order or Final Order, no other claim having a priority superior or pari passu to that granted to the
Obligations shall be granted or approved.

 

2.27        No Discharge; Survival of Claims.  (a) The Obligations shall survive the
entry of an order (i) confirming any plan of reorganization in the Chapter
11 Case; (ii) converting the Chapter 11 Case to a case under chapter 7 of
the Bankruptcy Code; or (iii) dismissing the Chapter 11 Case, and (b) until
the Full Payment of the Obligations, the superpriority administrative claim
granted to the Obligations and all Liens granted to the Collateral Agent shall
continue in full force and effect and maintain their priority as set forth in
the Orders.

 

2.28        Waiver of any Priming Rights. 
Other than the Carve-Out, Borrower hereby irrevocably waives any right,
pursuant to Sections 364(c) or 364(d) of the Bankruptcy Code or
otherwise, to grant any Lien of equal or greater priority than the Liens
securing the Obligations, or to approve or grant a claim of equal or superior
priority than the Obligations.

 

2.29        Effect of Termination.  On the effective date of any termination of
the Commitments, all Obligations shall be immediately due and payable.  All undertakings of Borrower contained in the
Credit Documents shall survive any termination, and Collateral Agent shall
retain its Liens in the Collateral and all of its rights and remedies under the
Credit Documents until Full Payment of the Obligations.  Notwithstanding Full Payment of the
Obligations, Collateral Agent shall not be required to terminate its Liens in
any Collateral unless, with respect to any damages Administrative Agent may
incur as a result of the dishonor or return of Payment Items applied to
Obligations, Administrative Agent receives a written agreement, executed by
Borrower and any Person whose advances are used in whole or in part to satisfy
the Obligations, indemnifying Agents and Lenders from any such damages.  The provisions of Sections 2.14, 2.22, 2.23,
9, 10.3, 10.10 and this Section, and the obligation of each Obligor and Lender
with respect to each indemnity given by it in any Credit Document, shall
survive Full Payment of the Obligations and any release relating to the Credit
Facilities.

 

SECTION 3.         CONDITIONS
PRECEDENT

 

3.1          Closing Date.  In addition to the conditions set forth in Section 3.3,
the obligation of Administrative Agent and each Lender to make a Term Loan on
the Closing Date is subject to the satisfaction, or waiver in accordance with Section 10.5,
of the following conditions on or before the Closing Date; provided, however
that the Closing Date shall occur upon the satisfaction of the conditions set
forth in clauses (a), (b), (c), (e), (g), (i), (k), (n), (o), (p), (r)(i), (t),
(w), (x), (y), (z), (aa) and (bb) below, in which case (i) all remaining
conditions set forth in this Section 3.1 shall be satisfied not later than
the date which is two Business Days following the Closing Date and (ii) until
satisfaction of such remaining conditions, (and notwithstanding any other
provision of this Agreement) not more than $1,000,000 in Term Loans shall be
advanced pursuant to this Agreement.

 

46

 

(a)           Orders and Other
Bankruptcy Court Filings; Automatic Stay.

 

(i)            The
Bankruptcy Court shall have entered the Interim Order by no later than 4 days
after the Petition Date, in form and substance satisfactory to Administrative
Agent (A) authorizing and approving the Credit Facilities and the
transactions contemplated hereby and by the other Credit Documents, including,
without limitation, the granting of the superpriority status, security
interests and liens, and the payment of all fees, referred to herein, in any
other Credit Document and in the Fee Letter and (B) lifting the automatic
stay to permit the Credit Parties to perform their obligations and the Agents
and the Lenders to exercise their rights and remedies with respect to the
Credit Facilities, this Agreement and the other Credit Documents, which Interim
Order shall be in full force and effect, shall not have been reversed, vacated
or stayed and shall not have been amended, supplemented or otherwise modified
without the prior written consent of Administrative Agent and Lead Lender.  All orders entered by the Bankruptcy Court
pertaining to cash management and adequate protection shall and all other
motions and documents filed or to be filed with, and submitted to, the
Bankruptcy Court in connection therewith shall be in form and substance
satisfactory to Administrative Agent in its sole discretion.

 

(ii)           [Reserved].

 

(iii)          Pursuant
to the terms of the Interim Order the automatic stay shall have been modified
to permit the creation and perfection of the Secured Parties’ Liens and
security interests and shall have been automatically vacated to permit
enforcement of Secured Parties’ rights and remedies under this Agreement and
the other Credit Documents.

 

(b)           Credit Documents.  Administrative Agent shall have received
sufficient copies of each Credit Document originally executed and delivered by
each applicable Credit Party for each Lender.

 

(c)           Organizational
Documents; Incumbency. 
Administrative Agent shall have received (i) sufficient copies of
each Organizational Document executed and delivered by each Credit Party, as
applicable, and, to the extent applicable, certified as of a recent date by the
appropriate governmental official, for each Lender, each dated the Closing Date
or a recent date prior thereto; (ii) signature and incumbency certificates
of the officers of such Person executing the Credit Documents to which it is a
party; (iii) resolutions of the Board of Directors or similar governing
body of the Credit Party approving and authorizing the execution, delivery and
performance of this Agreement and the other Credit Documents to which it is a
party or by which it or its assets may be bound as of the Closing Date,
certified as of the Closing Date by its secretary or an assistant secretary as
being in full force and effect without modification or amendment; (iv) a
good standing certificate or equivalent from the applicable Governmental
Authority of the respective jurisdiction of incorporation, organization or
formation of the Credit Party, and in each jurisdiction in which it is
qualified as a foreign corporation or other entity to do business (to the
extent that the failure to maintain good standing in such jurisdiction could
reasonably be expected to have a Material Adverse Effect), each dated a recent
date prior to the Closing Date; and (v) such other documents as
Administrative Agent may reasonably request.

 

47

 

(d)           Organizational and
Capital Structure.  The
organizational structure and capital structure of Borrower and its Material
Subsidiaries, shall be as set forth on Schedule 4.1.

 

(e)           [Reserved].

 

(f)            Financial Advisor.  Borrower shall have appointed an investment
banker or other financial advisor satisfactory to the Administrative Agent.

 

(g)           Governmental
Authorizations and Consents.  The
Credit Party shall have obtained all Governmental Authorizations and all
consents of other Persons, in each case that are necessary or advisable in
connection with the Credit Facilities and the other transactions contemplated
by the Credit Documents and each of the foregoing shall be in full force and
effect and in form and substance reasonably satisfactory to Administrative
Agent.  All applicable waiting periods
shall have expired without any action being taken or threatened by any
competent authority which would restrain, prevent or otherwise impose adverse conditions
on the transactions contemplated by the Credit Documents or the financing
thereof and no action, request for stay, petition for review or rehearing,
reconsideration, or appeal with respect to any of the foregoing shall be
pending, and the time for any applicable agency to take action to set aside its
consent on its own motion shall have expired.

 

(h)           Personal Property
Collateral.  In order to create in
favor of Collateral Agent, for the benefit of Secured Parties, a valid,
perfected First Priority security interest in the Collateral, Collateral Agent
shall have received:

 

(i)            evidence
satisfactory to Collateral Agent of the compliance by each Credit Party of its
obligations under the Pledge Agreement and the other Collateral Documents
(including, without limitation, their obligations to execute, deliver and/or
file UCC financing statements, originals of securities, instruments and chattel
paper);

 

(ii)           [Reserved]

 

(iii)          [Reserved]

 

(iv)          evidence
that each Credit Party shall have taken or caused to be taken any other action,
executed and delivered or caused to be executed and delivered any other
agreement, document and instrument (including without limitation, any
intercompany notes evidencing Indebtedness permitted to be incurred pursuant to
Section 6.1(c)) and made or caused to be made any other filing and
recording (other than as set forth herein) reasonably required by Collateral
Agent; and

 

(v)           copies of
recent UCC search reports as of a recent date listing all effective financing
statements (or equivalent filings) that name any Credit Party as debtor,
together with copies of such financing statements, none of which shall cover
the Collateral.

 

(i)            Neuberger LLC
Agreement Amendment. Delivery of an amendment to the limited liability
company agreement of Neuberger, in form and substance satisfactory to the

 

48

 

Administrative Agent, a true and correct copy of which
shall have been provided to the Administrative Agent.

 

(j)            [Reserved].

 

(k)           Applications.  All applications, motions and other documents
filed in connection with the Credit Facilities and all First Day Orders shall
be in form and substance satisfactory to Administrative Agent and Lead Lender.

 

(l)            Opinions of Counsel
to Credit Parties.  Lenders,
Administrative Agent and their respective counsel shall have received
originally executed copies of the favorable written opinion of each of (i) Weil,
Gotshal & Manges LLP, counsel for Borrower, in the form of Exhibit D-1,
and (ii) Richard Layton & Finger, Delaware counsel for Borrower,
in the form of Exhibit D-2, in each case as to such matters as
Administrative Agent and Collateral Agent may reasonably request, dated as of
the Closing Date and otherwise in form and substance reasonably satisfactory to
Administrative Agent and Collateral Agent (and the Borrower hereby instructs
each such counsel to deliver such opinion to Agents and Lenders).

 

(m)          Fees and Expenses.  Borrower shall have paid concurrently with
the initial extensions of credit hereunder (i) to Agents and Lenders the
fees and expenses payable on the Closing Date referred to in Section 2.12
or otherwise pursuant to the Fee Letter and (ii) all other fees and
expenses required to be paid on or before the Closing Date.

 

(n)           Closing Date
Certificate.  Borrower shall have
delivered to Administrative Agent and Collateral Agent an originally executed
Closing Date Certificate, together with all attachments thereto.

 

(o)           No Litigation.  There shall not exist any unstayed action,
suit, investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or before any arbitrator or
Governmental Authority that, in the reasonable opinion of Administrative Agent,
singly or in the aggregate, materially impairs any of the transactions
contemplated by the Credit Documents or that could have a Material Adverse
Effect.

 

(p)           Completion of
Proceedings.  All partnership,
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto shall be
reasonably satisfactory in form and substance to Administrative Agent and its
counsel, and Administrative Agent and its counsel shall have received all such
counterpart originals or certified copies of such documents as Administrative
Agent or its counsel may reasonably request.

 

(q)           Exhibits.  All exhibits to this Agreement shall be
finalized in form and substance acceptable to the Administrative Agent.

 

(r)            [Reserved].

 

(s)           [Reserved].

 

49

 

(t)            Access.  Administrative Agent and any Lender shall
have been given such access to and be satisfied with the management, records,
books of account, contracts, and properties of Borrower and its Subsidiaries,
agents, consultants advisors and brokers and shall have received such
financial, business, legal and other information regarding Borrower and its
Subsidiaries as Administrative Agent shall have reasonably requested.

 

(u)           [Reserved]

 

(v)           Fee
Letter.  The performance of all
obligations required as of the Closing Date pursuant to the Fee Letter (the “Fee Letter”) dated as of September 17,
2008, by and between Borrower and Barclays Bank, pursuant to documentation in
form and substance satisfactory to Barclays Bank.

 

(w)          [Reserved].

 

(x)            Patriot Act
Information.  Each of the Credit
Parties shall have provided the documentation and other information to Lenders
that is required by regulatory authorities under applicable “know your customer” and anti-money-laundering rules and
regulations, including, without limitation, the Patriot Act.

 

(y)           Funding Notice.  Administrative Agent shall have received a
fully executed and delivered Funding Notice.

 

(z)            Delivery of LBI
Asset Purchase Agreement. 
Administrative Agent shall have received a fully executed copy of the LBI
Asset Purchase Agreement.

 

(aa)         Representations and
Warranties.  The representations and
warranties contained herein and in the other Credit Documents shall be true and
correct in all respects on and as of the Closing Date.

 

(bb)         No Event of Default.  No event shall have occurred and be
continuing or would result from the consummation of the applicable Credit
Extension that would constitute an Event of Default or a Default.

 

(cc)         Schedules.  The Administrative Agent shall have received
Schedules to the Credit Documents in form and substance satisfactory to it in
its sole discretion, and upon confirmation by the Administrative Agent that
this condition is satisfied such Schedules shall be deemed incorporated into
each Credit Document as applicable.

 

3.2          Conditions Precedent to
the Incremental Facility Effective Date. 
The obligation of each Lender to make the Loans requested to be made by
it under the Incremental Facility is subject to the satisfaction or due waiver
in accordance with Section 10.5 of each of the following conditions
precedent on or before 25 days after the date hereof:

 

(a)           [Reserved].

 

(b)           [Reserved].

 

50

 

(c)           Final Order;
Automatic Stay.

 

(i)            The
Bankruptcy Court shall have entered the Final Order by no later than 30 days
after the Petition Date, in form and substance satisfactory to Administrative
Agent (i) authorizing and approving the Credit Facilities and the
transactions contemplated hereby and by the other Credit Documents, including,
without limitation, the granting of the superpriority status, security
interests and liens, and the payment of all fees, referred to herein, in any
other Credit Document and in the Fee Letter and (ii) lifting the automatic
stay to permit the Credit Parties to perform their obligations and the Agents
and the Lenders to exercise their rights and remedies with respect to the
Credit Facilities, this Agreement and the other Credit Documents, which Final
Order shall be in full force and effect, shall not have been reversed, vacated
or stayed and shall not have been amended, supplemented or otherwise modified
without the prior written consent of Administrative Agent and Lead
Lenders.  All orders entered by the
Bankruptcy Court pertaining to cash management and adequate protection shall
and all other motions and documents filed or to be filed with, and submitted
to, the Bankruptcy Court in connection therewith shall be in form and substance
satisfactory to Administrative Agent in its sole discretion.

 

(ii)           [Reserved].

 

(iii)          Pursuant
to the terms of the Final Order, the automatic stay shall have been modified to
permit the creation and perfection of the Secured Parties’ Liens and security
interests and shall have been automatically vacated to permit enforcement of
Secured Parties’ rights and remedies under this Agreement and the other Credit
Documents.

 

(d)           DIP Budget.  Administrative Agent shall have received from
Borrower at least six Business Days prior to the Incremental Facilities
Effective Date a DIP Budget in a form and substance acceptable to, and approved
by, Administrative Agent and Lead Lenders in their sole and absolute
discretion.

 

(e)           Cash Flow Forecast.  Administrative Agent shall have received from
Borrower the Cash Flow Forecast, and the Cash Flow Forecast shall have been
approved by Administrative Agent and Lead Lender in their sole and absolute
discretion.

 

(f)            [Reserved].

 

(g)           [Reserved].

 

(h)           [Reserved].

 

(i)            Representations and
Warranties.  The representations and
warranties contained herein and in the other Credit Documents shall be true and
correct in all respects on and as of the Incremental Facility Effective Date.

 

51

 

(j)            No Event of Default.  No event shall have occurred and be
continuing or would result from the consummation of the applicable Credit
Extension that would constitute an Event of Default or a Default.

 

(k)           Fees and Expenses.  Borrower shall have paid (i) to Agents
the fees and expenses payable on or before the Incremental Facility Effective
Date referred to in Section 2.12 or otherwise pursuant to the Fee Letter
and (ii) all other fees and expenses required to be paid on or before the
Incremental Facility Effective Date.

 

3.3          Conditions Precedent to
All Credit Extensions.  The
obligation of Administrative Agent and each Lender to make each Credit
Extension is subject to the satisfaction, or waiver in accordance with Section 10.5,
of each of the following applicable conditions:

 

(a)           Funding Notice.  With respect to any Loan, Administrative
Agent shall have received a duly executed Funding Notice.

 

(b)           No Event of Default.  No event shall have occurred and be
continuing or would result from the consummation of the applicable Credit
Extension that would constitute an Event of Default or a Default;

 

(c)           Representations and
Warranties.  The representations and
warranties contained herein and in the other Credit Documents shall be true and
correct in all material respects on and as of, and upon giving effect to, such
Credit Extension (except for representations and warranties that expressly
relate to an earlier date); and

 

(d)           No Material Adverse
Effect.  Except as disclosed in
Schedule 4.10, other than the filing of the Chapter 11 Case, since December 31,
2007, with respect to Neuberger, no event shall have occurred or circumstance
exist, either in any case or in the aggregate, that has or could reasonably be
expected to have a Material Adverse Effect.

 

(e)           [Reserved].

 

(f)            [Reserved].

 

Each request (or deemed request) by Borrower for a
Credit Extension shall constitute a representation by Borrower that the
foregoing conditions are satisfied on the date of such request and on the date
of such Credit Extension.  As an
additional condition to any Credit Extension, Administrative Agent shall have
received such other information, documents, instruments and agreements as it
may reasonably request.

 

SECTION 4.         REPRESENTATIONS
AND WARRANTIES

 

In order to induce Lenders to enter into this
Agreement and to make each Credit Extension to be made thereby, each Credit
Party represents and warrants to each Lender, on the Closing Date, that the
following statements are true and correct:

 

52

 

4.1          Organization; Requisite
Power and Authority; Qualification. 
Each of Borrower and its Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization as identified in Schedule 4.1, (b), subject to the entry or
issue of the Orders, has all requisite power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, (in the case of each Credit Party) to enter into the Credit Documents
to which it is a party and to carry out the transactions contemplated thereby,
and (c) is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, except in jurisdictions where the failure to be so
qualified or in good standing has not had, and could not be reasonably expected
to have, a Material Adverse Effect, in each case, to the extent applicable
under the laws of such jurisdiction.

 

4.2          Capital Stock and
Ownership.  The Capital Stock of each
of Borrower and its Material Subsidiaries has been duly authorized and validly
issued and is fully paid and non-assessable. 
Except as set forth on Schedule 4.2, as of the date hereof, there is no
existing option, warrant, call, right, commitment or other agreement to which
any Subsidiary of Borrower is a party requiring, and there is no membership
interest or other Capital Stock of any Subsidiary of Borrower outstanding which
upon conversion or exchange would require, the issuance by any Subsidiary of
Borrower of any additional membership interests or other Capital Stock of any
Subsidiary of Borrower or other Securities convertible into, exchangeable for
or evidencing the right to subscribe for or purchase, a membership interest or
other Capital Stock of Subsidiary of Borrower. 
Schedule 4.2 correctly sets forth the ownership interests in each
Subsidiary of Borrower and in their respective Subsidiaries as of the Closing
Date.

 

4.3          Due Authorization.  The execution, delivery and performance of
the Credit Documents have been duly authorized by all necessary action on the
part of each Credit Party that is a party thereto.

 

4.4          No Conflict.  Subject to the entry or issue of the Orders,
the execution, delivery and performance by Credit Parties of the Credit
Documents to which they are parties and the consummation of the transactions
contemplated by the Credit Documents do not and will not (a) violate (i) any
material provision of any applicable law or any applicable governmental rule or
regulation applicable to Borrower or any of its material properties or assets, (ii) any
of the Organizational Documents of Borrower or any of its material properties
or assets, or (iii) any order, judgment or decree of any court or other
agency of government binding on or any of its material properties or assets; (b) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any material Contractual Obligation of Borrower; (c) result
in or require the creation or imposition of any Lien upon any of the properties
or assets of Borrower or any of its Subsidiaries (other than any Liens created
under any of the Credit Documents in favor of Collateral Agent, on behalf of
Secured Parties or Liens created); or (d) require any approval of
stockholders, members or partners or any approval or consent of any Person
under any Contractual Obligation of Borrower, except for such approvals or
consents which will be obtained on or before the Closing Date and disclosed in
writing to Lenders.

 

4.5          Governmental Consents.  The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not
and will not require any registration 

 

53

 

with, consent or approval
of, or notice to, or other action to, with or by, any Governmental Authority
except for consents or approvals that have been or will be, prior to the
Closing Date, obtained and filings and recordings with respect to the
Collateral to be made, or otherwise delivered to Collateral Agent for filing
and/or recordation, as of the Closing Date.

 

4.6          Binding Obligation.  Each Credit Document has been duly executed
and delivered by each Credit Party that is a party thereto and, subject to the
entry or issue of the Orders, is the legally valid and binding obligation of
such Credit Party, enforceable against such Credit Party in accordance with its
respective terms.

 

4.7          Historical Financial
Statements.  The Historical Financial
Statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position, on a consolidated basis, of the
Persons described in such financial statements as at the respective dates
thereof and the results of operations and cash flows, on a consolidated basis,
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments. 
Except a otherwise disclosed to the Administrative Agent as of the
Closing Date, neither Borrower nor any of its Subsidiaries has any contingent
liability or liability for taxes, long-term lease or unusual forward or
long-term commitment that is not reflected in the Historical Financial
Statements or the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Borrower and any of its Subsidiaries taken as a
whole.

 

4.8          DIP Budget.  The DIP Budget has been prepared by Borrower
and its Subsidiaries in light of the past operations of the business of
Borrower and its Subsidiaries, and reflects projections for the 8-month period
beginning on the Closing Date on a month by month basis.  The DIP Budget is based upon estimates and
assumptions stated therein, all of which Borrower and its Subsidiaries believe
to be reasonable and fair in light of current conditions and current facts
known to Borrower and its Subsidiaries and, as of the Closing Date, reflect
Borrower’s and its Subsidiaries’ good faith and reasonable estimates of the
future financial performance of Borrower and its Subsidiaries and of the other
information projected therein for the periods set forth therein.

 

4.9          Cash Flow Forecast.  The Cash Flow Forecast has been prepared by
Borrower and its Subsidiaries in light of the past operations of the business
of Borrower and its Subsidiaries, and reflects projections for the 13-week
period beginning on the Closing Date (or, to the extent amended pursuant to Section 5.18,
such the date reflected therein), on a week-by-week basis.  The Cash Flow Forecast is based upon
estimates and assumptions stated therein, all of which Borrower and its
Subsidiaries believe to be reasonable and fair in light of current conditions
and current facts known to Borrower and its Subsidiaries and, as of the Closing
Date, reflect Borrower’s and its Subsidiaries’ good faith and reasonable
estimates of the future financial performance of Borrower and its Subsidiaries
and of the other information projected therein for the periods set forth
therein.

 

4.10        No Material Adverse Change.  Except as disclosed in Schedule 4.10, other
than the filing of the Chapter 11 Case, since December 31, 2007, with
respect to Neuberger, no event, 

 

54

 

circumstance or change
has occurred that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect.

 

4.11        No Restricted Junior
Payments.  Since November 30,
2007, the Borrower has not directly or indirectly declared, ordered, paid or
made, or set apart any sum or property for, any Restricted Junior Payment or
agreed to do so except as permitted pursuant to Section 6.5 or as publicly
disclosed.

 

4.12        Adverse Proceedings, etc.  Other than the Chapter 11 Case, there are no
unstayed Adverse Proceedings, individually or in the aggregate, that could
reasonably be expected to have a Material Adverse Effect.  Neither Borrower nor any of its Subsidiaries (a) is
in violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or (b) is subject to or in default with respect
to any final judgments, writs, orders, injunctions, decrees, rules or
regulations of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.

 

4.13        Taxes.  Except as otherwise permitted under Section 5.3,
all tax returns and reports of Borrower and its Subsidiaries required to be
filed by any of them have been timely filed, and all taxes shown on such tax
returns to be due and payable and all assessments, fees and other governmental
charges upon Borrower and its Subsidiaries and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been
paid when due and payable.  Borrower
knows of no proposed tax assessment against Borrower or any of its Subsidiaries
which is not being actively contested by Borrower or such Subsidiary in good
faith and by appropriate proceedings; provided, such reserves or other
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor. 
Borrower does not intend to treat the Loans and the related transactions
contemplated hereby as being a “reportable transaction”
(within the meaning of Treasury Regulation Section 1.6 011-4 of the
Internal Revenue Code)

 

4.14        Properties.

 

(a)           Title.  Each of Borrower and its Material Subsidiaries
has (i) good, sufficient and legal title to (in the case of fee interests
in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), and (iii) good title to
(in the case of all other personal property), all of their respective
properties and assets reflected in their respective Historical Financial
Statements referred to in Section 4.7 and in the most recent financial
statements delivered pursuant to Section 5.1, in each case except for
assets disposed of since the date of such financial statements in the ordinary
course of business or as otherwise permitted under Section 6.9.  Except as permitted by this Agreement, all
such properties and assets are free and clear of Liens.

 

(b)           Real Estate.  As of the Incremental Facility Effective Date,
Schedule 4.14 contains a true, accurate and complete list of (i) all
Real Estate Assets, and (ii) all Indebtedness with respect thereto.

 

55

 

(c)           Neuberger.  The Borrower has delivered true and correct
copies of all organizational documents of Neuberger.

 

4.15        Environmental Matters.  Neither Borrower nor any of its Subsidiaries
nor any of their respective Facilities or operations is subject to any
outstanding written order, consent decree or settlement agreement with any
Person relating to any Environmental Law, any Environmental Claim, or any
Hazardous Materials Activity that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.  Neither Borrower nor any of its Subsidiaries
has received any letter or request for information under Section 104
of the Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. § 9604) or any other comparable law.  There are and, to each of Borrower’s and its
Subsidiaries’ knowledge, have been, no conditions, occurrences, or Hazardous
Materials Activities which could reasonably be expected to form the basis of an
Environmental Claim against Borrower or any of its Subsidiaries that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.  Neither
Borrower nor any of its Subsidiaries nor, to any Credit Party’s knowledge, any
predecessor of Borrower or any of its Subsidiaries has filed any notice under
any Environmental Law indicating past or present treatment of Hazardous
Materials at any Facility, and none of Borrower’s or any of its Subsidiaries’
operations involves the generation, transportation, treatment, storage or
disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any
other equivalent in each case that could be expected to have a Material Adverse
Effect.  Compliance with all current or
reasonably foreseeable future requirements pursuant to or under Environmental
Laws could not be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect.  No
event or condition has occurred or is occurring with respect to Borrower or any
of its Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity which individually or in the
aggregate has had, or could reasonably be expected to have, a Material Adverse
Effect.

 

4.16        No Defaults.  Neither Borrower nor any of its Subsidiaries
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in its Material Contracts, and
no condition exists which, with the giving of notice or the lapse of time or
both, could constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, could not reasonably be expected
to have a Material Adverse Effect.

 

4.17        Material Contracts.  Except as disclosed in Schedule 4.17, all
Material Contracts are in full force and effect and no default exists
thereunder as of the Closing Date or as of the Incremental Facility Effective
Date.

 

4.18        Governmental Regulation.  Neither Borrower nor any of its Subsidiaries
is subject to regulation under the Investment Company Act of 1940 or under any
other federal, state or provincial statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable. 
Neither Borrower nor any of its Subsidiaries is a “registered
investment company” or a company “controlled”
by a “registered investment company” or a “principal underwriter” of a “registered
investment company” as such terms are defined in the Investment
Company Act of 1940.

 

56

 

4.19        Margin Stock.  No part of the proceeds of the Loans made to
such Credit Party will be used to purchase or carry any such Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock or for any purpose that violates, or is inconsistent with, the
provisions of Regulation T, U or X of the Board of Governors.

 

4.20        Employee Matters.  Neither Borrower nor any of its Subsidiaries
is engaged in any unfair labor practice that could reasonably be expected to
have a Material Adverse Effect.  There is
(a) no unfair labor practice complaint pending against Borrower or any of
its Subsidiaries, or to the best knowledge of Borrower, threatened against any
of them before the National Labor Relations Board and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement that is so pending against Borrower or any of its Subsidiaries or to
the best knowledge of Borrower, threatened against any of them, (b) no
strike or work stoppage in existence or threatened involving Borrower or
any of its Subsidiaries, and (c) to the best knowledge of Borrower, no
union representation question existing with respect to the employees of
Borrower or any of its Subsidiaries and, to the best knowledge of Borrower, no
union organization activity that is taking place, except (with respect to any
matter specified in clause (a), (b) or (c) above, either individually
or in the aggregate) such as is not reasonably likely to have a Material
Adverse Effect.

 

4.21        Employee Benefit Plans.

 

(a)           ERISA.  No ERISA Event has occurred or is reasonable
expected to occur that, when taken together with all other such ERISA Events
for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect.  The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the
date of the most recent financial statements reflecting such amounts, exceed
the current fair market value of the assets of such Plan by an amount that
could reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Effect, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did not,
as of the date of the most recent financial statements reflecting such amounts,
exceed the fair market value of the assets of all such underfunded Plans by an
amount that could reasonable be expected to result, individually or in the
aggregate, in a Material Adverse Effect.

 

(b)           [Reserved].

 

4.22        Certain Fees.  Except as provided in the Orders, no broker’s
or finder’s fee or commission will be payable with respect to the transactions
contemplated hereby.

 

4.23        Compliance with Statutes,
etc.  Each of Borrower and its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all Governmental
Authorities, in respect of the conduct of its business and the ownership of its
property (including compliance with all applicable Environmental Laws with
respect to any Real Estate Asset or governing its business and the requirements
of any permits issued under such Environmental Laws with respect to any such
Real Estate Asset or the 

 

57

 

operations of Borrower or
any of its Subsidiaries), except such non-compliance that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

4.24        Reorganization Matters.

 

(a)           The Chapter 11 Case was
commenced on the Petition Date in accordance with applicable law and proper
notice thereof and proper notice of the hearings to consider entry of the
Interim Orders has been given and proper notice of the hearings to consider
entry of the Final Order will be given.

 

(b)           After the entry of the
Interim Order and the Final Order, as applicable, the Obligations will
constitute allowed administrative expense claims in the Chapter 11 Case having
priority over all administrative expense claims and unsecured claims against
Borrower, of any kind whatsoever, to the extent provided and as more fully set
forth in the Interim Order and the Final Order.

 

(c)           After the entry of the
Interim Order and the Final Order, the Obligations will be secured by valid and
perfected Liens on all of the Collateral, and such Liens shall have the
priorities set forth in the Interim Order, the Final Order and the other Credit
Documents

 

(d)           The Interim Order or
the Final Order, as the case may be, is in full force and effect and has not
been reversed, stayed, modified, varied or amended without the consent of each
of Administrative Agent and Lead Lenders.

 

(e)           After the entry of the
Interim Order (with respect to the period prior to entry of the Final Order) or
the Final Order (with respect to the period on and after entry of the Final
Order), notwithstanding the provisions of Section 362 of the Bankruptcy
Code, upon the Maturity Date (whether by acceleration or otherwise) of any of
the Obligations, the Agents and Lenders shall be entitled to immediate payment
of such Obligations and to enforce the remedies provided for hereunder and
under the other Credit Documents, without further application to or order by
the Bankruptcy Court, as more fully set forth in the Interim Order and the
Final Order.

 

4.25        Disclosure.  No representation or warranty of any Credit
Party contained in any Credit Document or in any other documents, certificates
or written statements furnished to any Agent or Lender by or on behalf of
Borrower or any of its Subsidiaries for use in connection with the transactions
contemplated hereby (taken as a whole) contains any untrue statement of a
material fact or omits to state a material fact (known to Borrower, in the case
of any document not furnished by either of them) necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. 
Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Borrower to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results.

 

4.26        Patriot Act.  To the extent applicable, each Credit Party
is in compliance, in all material respects, with the (i) Trading with the
Enemy Act, as amended, and each of the foreign assets control regulations of
the Untied States Treasury Department (31 CFR, Subtitle B, Chapter V, 

 

58

 

as amended) and any other
enabling legislation or executive order relating thereto, and (ii) Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA Patriot Act of 2001).  No part of the proceeds of the Loans will be
used, directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for political
office, or anyone else acting in an official capacity, in order to obtain,
retain or direct business or obtain any improper advantage, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended.

 

4.27        Libro Holdings.  Libro
Holdings (i) is a direct wholly-owned Subsidiary of the Borrower, (ii) is
the holder of a 1% limited liability company interest in Neuberger and (iii) does
not have consolidated liabilities in excess of $40,000.

 

SECTION 5.         AFFIRMATIVE COVENANTS

 

Each Credit Party covenants and agrees that, until
payment in full of all Obligations, each Credit Party shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this Section 5.

 

5.1          Financial Statements and
Other Reports.  Borrower will deliver
to Administrative Agent for distribution to Lenders within the time periods set
forth below:

 

(a)           [Reserved]

 

(b)           Monthly Reports.  When and to the extent available, and in any
event within 30 days after the end of each Reporting Month ending after the
Closing Date, the consolidated balance sheet of Borrower and its Subsidiaries
as at the end of such Reporting Month and the related consolidated statements
of income, stockholders’ equity and cash flows of Borrower and its Subsidiaries
for such Reporting Month and for the period from the beginning of the then
current Fiscal Year to the end of such Reporting Month, and a schedule
comparing Adjusted EBITDA by business (as determined by Borrower) for such
month and for the period from the beginning of the then current Fiscal Year to
the end of such month with the corresponding figures from the Financial Plan
for the current Fiscal Year, to the extent prepared on a monthly basis, all in
reasonable detail, together with a Financial Officer Certification and a
Narrative Report with respect thereto;

 

(c)           Quarterly Financial
Statements.  As soon as available,
and in any event within 45 days after the end of each Fiscal Quarter of each
Fiscal Year other than the last Fiscal Quarter of such Fiscal Year, commencing
with the Fiscal Quarter in which the Closing Date occurs, the consolidated and
consolidating balance sheets of Borrower and its Subsidiaries as at the end of
such Fiscal Quarter and the related consolidated (and with respect to
statements of income, consolidating) statements of income, stockholders’ equity
and cash flows of Borrower and its Subsidiaries for such Fiscal Quarter and for
the period from the beginning of the then current Fiscal Year to the end of
such Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal
Year, the related consolidated statements of cash flows of Borrower and its
Subsidiaries for such Fiscal Quarter and for the period from the beginning of
the then current Fiscal Year to the end of such 

 

59

 

Fiscal Quarter, all in
reasonable detail, together with a Financial Officer Certification and a
Narrative Report with respect thereto;

 

(d)           Annual Financial
Statements.  No later than the
earlier of (x) 120 days after the close of each Fiscal Year of the
Borrower and (y) 30 days after the annual report shall be required to be
filed with the SEC pursuant to the Exchange Act, the consolidated audited
statements of financial condition of the Borrower and its Subsidiaries as of
the last day of such Fiscal Year and the related consolidated audited
statements of income and changes in stockholders’ equity and cash flows for
such Fiscal Year, in each case setting forth comparative figures for the prior
Fiscal Year, all of which shall be prepared in accordance with GAAP,
consistently applied, and shall be certified by independent certified public
accountant of recognized national standing, together with a Financial Officer
Certification and a Narrative Report with respect thereto.

 

(e)           Report On Cash Flow
Forecast; Report On DIP Budget.

 

(i)            As soon
as available and in any event at least once in every week (or more frequently
as may be requested by Administrative Agent), a report with respect to the Cash
Flow Forecast in form and substance satisfactory to Administrative Agent and
Requisite Lenders, (A) setting forth in comparative form the actual cash
receipts and cash disbursements for the prior week and the variance from the
projections in the Cash Flow Forecast for such prior week and (B) a
detailed explanation of any such variance; and

 

(ii)           As soon
as available and in any event at least once in every month (or more frequently
as may be requested by Administrative Agent), a report with respect to the DIP
Budget in form and substance satisfactory to Administrative Agent and Requisite
Lenders, (A) setting forth in comparative form the actual operating
performance for the prior month and any variance from the DIP Budget for such
prior month and (B) a detailed explanation of any such variance;

 

(f)            Compliance
Certificate.  Together with each
delivery of financial statements of Borrower and its Subsidiaries pursuant to
Sections 5.1(b) and 5.1(c), a duly executed and completed Compliance
Certificate;

 

(g)           Statements of
Reconciliation after Change in Accounting Principles.  If, as a result of any change in accounting
principles and policies from those used in the preparation of the Historical
Financial Statements, the consolidated financial statements of Borrower and its
Subsidiaries delivered pursuant to Section 5.1(b) or 5.1(c) will
differ in any material respect from the consolidated financial statements that
would have been delivered pursuant to such subdivisions had no such change in
accounting principles and policies been made, then, together with the first
delivery of such financial statements after such change, one or more statements
of reconciliation for all such prior financial statements in form and substance
reasonably satisfactory to Administrative Agent and Syndication Agent;

 

(h)           Notice of Default.  Within two Business Days of any officer of
Borrower obtaining knowledge (i) of any condition or event that
constitutes a Default or an Event of 

 

60

 

Default or that notice
has been given to Borrower with respect thereto; (ii) that any Person has
given any notice to Borrower or any of its Material Subsidiaries or taken any
other action with respect to any event or condition set forth in Section 8.1(b);
or (iii) of the occurrence of any event or change that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect, a
certificate of its Authorized Officer specifying the nature and period of existence
of such condition, event or change, or specifying the notice given and action
taken by any such Person and the nature of such claimed Event of Default,
Default, default, event or condition, and what action Borrower has taken, is
taking and proposes to take with respect thereto;

 

(i)            Notice of
Litigation.  Promptly upon any
officer of Borrower obtaining knowledge of (i) the institution of, or
non-frivolous threat of, any unstayed Adverse Proceeding not previously
disclosed in writing by Borrower to Lenders, or (ii) any material
development in any unstayed Adverse Proceeding that, in the case of either
clause (i) or (ii), if adversely determined could be reasonably expected
to have a Material Adverse Effect, or seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby, written notice thereof together with such
other information as may be reasonably available to Borrower to enable Lenders
and their counsel to evaluate such matters;

 

(j)            ERISA.  Promptly after the Borrower knows of the
occurrence of an ERISA Event that could result in a liability that is
reasonably likely to exceed $100,000,000, the Borrower will give written notice
of such occurrence to the Administrative Agent. 
Such notice shall be accompanied by a statement of the Chief Financial
Officer or Treasurer of the Borrower setting forth details of such occurrence
and stating what action the Borrower or the ERISA Affiliate proposes to take
with respect thereto.  In addition to any
certificates or notices of any material notices received by the Borrower, any
Subsidiary or any ERISA Affiliate (i) from any governmental agency with
respect to any Plan having aggregate unfunded liabilities in excess of $100,000,000
and (ii) from any government agency, plan administrator, sponsor or
trustee with respect to any Multiemployer Plan having aggregate unfunded
liabilities in excess of $100,000,000 shall be delivered to the Administrative
Agent no later than 15 days after the later of the date such notice has been
filed with the Internal Revenue Service or received by the Borrower or the
Subsidiary or the ERISA Affiliate;

 

(k)           Financial Plan.  To the extent requested by the Administrative
Agent, as soon as practicable and in any event no later than thirty days prior
to the beginning of each Fiscal Year, a consolidated plan and financial
forecast for such Fiscal Year and each Fiscal Year (or portion thereof) through
the final maturity date of the Loans (a “Financial Plan”),
including (i) a forecasted consolidated balance sheet and forecasted
consolidated statements of income and cash flows of Borrower and its
Subsidiaries for each such Fiscal Year, together with pro forma Compliance
Certificates for each such Fiscal Year and an explanation of the assumptions on
which such forecasts are based and (ii) forecasted consolidated statements
of income and cash flows and a balance sheet of Borrower and its Subsidiaries
for each month of each such Fiscal Year;

 

61

 

(l)            Insurance Report.

 

(i)            As soon
as practicable and in any event by the last day of each Fiscal Year, or at such
other time as the Administrative Agent shall reasonably request, a certificate
from Borrower’s insurance broker(s) in form and substance satisfactory to
Administrative Agent and Syndication Agent outlining all material insurance
coverage maintained as of the date of such certificate by Borrower and its
Subsidiaries and all material insurance coverage planned to be maintained by
Borrower and its Subsidiaries in the immediately succeeding Fiscal Year;

 

(ii)           Promptly,
and in any event within ten Business Days thereof, written notice (in
reasonable detail) in the event that any of Borrower or any of its Subsidiaries
has been refused insurance for any material coverage for which it had applied
or has had any policy of insurance terminated (other than at its request);

 

(m)          Notice of Change in
Board of Directors.  With reasonable
promptness, written notice of any change in the board of directors (or similar
governing body) of Borrower.

 

(n)           Notice Regarding
Material Contracts.  Promptly, and in
any event within ten Business Days (i) after any Material Contract (which
satisfies the criteria in clause (b) of the definition thereof) of
Borrower or any of its Subsidiaries is terminated or amended in a manner that
is materially adverse to Borrower or such Subsidiary, as the case may be, or (ii) any
new Material Contract (which satisfies the criteria in clause (b) of the
definition thereof) is entered into, a written statement describing such event,
and upon request by Administrative Agent or Syndication Agent, copies of such
material amendments or new contracts, delivered to Administrative Agent (to the
extent such delivery is permitted by the terms of any such Material Contract,
provided, no such prohibition on delivery shall be effective if it were
bargained for by Borrower or its applicable Subsidiary with the intent of
avoiding compliance with this Section 5.1(n)), and an explanation of any
actions being taken with respect thereto;

 

(o)           Information
Regarding Collateral.

 

(i)            Borrower
will furnish to Collateral Agent prompt written notice of any change (i) in
any Credit Party’s name, (ii) in any Credit Party’s identity or structure,
(iii) in any Credit Party’s jurisdiction of organization, or (iv) in
any Credit Party’s Federal Taxpayer Identification Number or state
organizational identification number. 
Borrower agrees not to effect or permit any change referred to in the preceding
sentence unless all filings have been made under the UCC or otherwise that are
required in order for Collateral Agent to continue at all times following such
change to have a valid, legal and perfected security interest in all the
Collateral as contemplated in the Collateral Documents.

 

(ii)           [Reserved].

 

(iii)          [Reserved].

 

(iv)          [Reserved].

 

62

 

(p)           [Reserved]

 

(q)           Other Information.  (i) Promptly upon their becoming
available, copies of (A) all financial statements, reports, notices and
proxy statements sent or made available generally by Borrower to its security
holders acting in such capacity or by any of its Material Subsidiaries to its
security holders other than Borrower or another Subsidiary of Borrower, (B) all
regular and periodic reports and all registration statements and prospectuses,
if any, filed by Borrower or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any governmental or
private regulatory authority, and (C) all press releases and other
statements made available generally by Borrower or any of its Subsidiaries to
the public concerning material developments in the business of Borrower or any
of its Subsidiaries, and (ii) such other information and data with respect
to Borrower or any of its Subsidiaries as from time to time may be reasonably
requested by Administrative Agent or Syndication Agent or any Lender;

 

(r)            Certification of
Public Information.  Concurrently
with the delivery of any document or notice required to be delivered pursuant
to this Section 5.1, Borrower shall indicate in writing whether such
document or notice contains Nonpublic Information.  Borrower and each Lender acknowledge that
certain of Lenders may be “public-side”
Lenders (Lenders that do not wish to receive material non-public information
with respect to Borrower, its Subsidiaries or their securities) and, if
documents or notices required to be delivered pursuant to this Section 5.1
or otherwise are being distributed through IntraLinks/IntraAgency or another
relevant website (the “Platform”),
any document or notice that Borrower has indicated contains Nonpublic
Information shall not be posted on that portion of the Platform designated for
such public-side Lenders.  If Borrower
has not indicated whether a document or notice delivered pursuant to this Section 5.1
contains Nonpublic Information, Administrative Agent reserves the right to post
such document or notice solely on that portion of the Platform designated for
Lenders who wish to receive material nonpublic information with respect to
Borrower, its Subsidiaries and their securities; and

 

(s)           [Reserved].

 

(t)            Reorganization
Matters.  Borrower will submit to
Administrative Agent all reports, projections or other similar materials,
including valuations, as well as all pleadings, motions, applications and
judicial information, in each case filed by or on behalf of Borrower with the
Bankruptcy Court or provided by or to the U.S. Trustee (or any information officer,
examiner or interim receiver, if any, appointed in the Chapter 11 Case) or any
Committee, at the time such document is filed with the Bankruptcy Court, or
provided by or, to the U.S. Trustee (or any information officer, monitor or
interim receiver, if any, appointed in the Chapter 11 Case) or any Committee.

 

(u)           [Reserved]

 

5.2          Existence.  Except as otherwise permitted under Section 6.9,
each Credit Party will, and will cause each of its Material Subsidiaries to, at
all times preserve and keep in full force and effect its existence and all
rights and franchises, licenses and permits material to its business; provided,
no Credit Party (other than Borrower with respect to existence) or any of its 

 

63

 

Subsidiaries shall be
required to preserve any such existence, right or franchise, licenses and
permits if such Person’s board of directors (or similar governing body) shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of such Person, and that the loss thereof is not
disadvantageous in any material respect to such Person or to Lenders.

 

5.3          Payment of Post-petition
Taxes and Claims.  The Borrower will,
and will cause each of its Subsidiaries to, pay all Taxes imposed after the
Petition Date upon it or any of its properties or assets or in respect of any
of its income, businesses or franchises before any penalty or fine accrues
thereon, and all claims (including claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; provided, no
such Tax or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long
as (a) adequate reserve or other appropriate provision, as shall be
required in conformity with GAAP shall have been made therefor, and (b) in
the case of a Tax or claim which has or may become a Lien against any of the
Collateral, such contest proceedings conclusively operate to stay the sale of
any portion of the Collateral to satisfy such Tax or claim.  No Credit Party will, nor will it permit any
of its Subsidiaries to, file or consent to the filing of any consolidated
income tax return with any Person (other than Borrower or any of its
Subsidiaries).

 

5.4          Maintenance of
Properties.  Except as otherwise
required by the Bankruptcy Court, each Credit Party will, and will cause each
of its Material Subsidiaries to, maintain or cause to be maintained in good
repair, working order and condition, ordinary wear and tear excepted, all
material properties used or useful in the business of Borrower and its Subsidiaries
and from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof.

 

5.5          Insurance.  Borrower will maintain or cause to be
maintained, with financially sound and reputable insurers, such public liability
insurance, third party property damage insurance, business interruption
insurance and casualty insurance with respect to liabilities, losses or damage
in respect of the assets, properties and businesses of Borrower and its
Subsidiaries as may customarily be carried or maintained under similar
circumstances by Persons of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance),
with such deductibles, covering such risks and otherwise on such terms and
conditions as shall be customary for such Persons.

 

5.6          Books and Records;
Inspections.  Each Credit Party will,
and will cause each of its Subsidiaries to, keep proper books of record and
accounts in which full, true and correct entries in conformity in all material
respects with GAAP shall be made of all dealings and transactions in relation
to its business and activities.  Each
Credit Party will, and will cause each of its Subsidiaries to, permit any
authorized representatives designated by any Lender or Agent to visit and
inspect any of the properties of any Credit Party and any of its respective
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, to meet with Borrower’s and any other Credit Party’s
management and any advisor to the Credit Parties, and to discuss its and their
affairs, finances and accounts with its and their officers and independent
public accountants, and unless an Event of Default has occurred and is
continuing, all upon notice and at such reasonable times as would not cause a
material 

 

64

 

interruption to the
conduct of business and as often as may reasonably be requested (and, after an
Event of Default has occurred and is continuing, all upon notice, and access
will not be limited to any specific time).

 

5.7          Lenders Meetings.  Borrower will, upon the request of
Administrative Agent or Lead Lender, participate in a meeting of Administrative
Agent and Lenders once during each Fiscal Quarter or as otherwise requested by
Administrative Agent to be held at Borrower’s corporate offices (or at such
other location as may be agreed to by Borrower and Administrative Agent) at
such time as may be agreed to by Borrower and Administrative Agent.

 

5.8          Compliance with Laws.  Each Credit Party will comply, and shall
cause each of its Subsidiaries and all other Persons, if any, on or occupying
any Facilities to comply, with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including all
Environmental Laws, ERISA and tax laws), noncompliance with which could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

5.9          Environmental.

 

(a)           Environmental
Disclosure.  Borrower will deliver to
Administrative Agent and Lenders:

 

(i)            promptly
upon the occurrence thereof, written notice describing in reasonable
detail) any Environmental Claim or liability relating to a Release or to
Hazardous Materials Activity that, individually or in the aggregate, have a
reasonable possibility of resulting in a Material Adverse Effect;

 

(ii)           prompt
written notice describing in reasonable detail any proposed acquisition of
stock, assets, or property or assumption of liabilities by, or changes to the
business of, Borrower or any of its Subsidiaries that could reasonably be
expected to expose Borrower or any of its Subsidiaries to, or result in,
Environmental Claims or liability relating to a Release or Hazardous Materials
Activity that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; and

 

(iii)          with
reasonable promptness, such other documents and information as from time to
time may be reasonably requested by Administrative Agent or Syndication Agent
in relation to any matters disclosed pursuant to this Section 5.9(a).

 

(b)           Compliance with
Environmental Laws, Etc.  Except as
otherwise required by the Bankruptcy Code, each Credit Party shall promptly
take, and shall cause each of its Subsidiaries promptly to take, any and all
actions necessary to (i) cure any violation of applicable Environmental
Laws by such Credit Party or its Subsidiaries that could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, and (ii) make
an appropriate response to any Environmental Claim against such Credit Party or
any of its Subsidiaries and discharge any obligations it may have to any Person
thereunder where failure to do so could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

 

65

 

5.10        Subsidiaries.

 

(a)           [Reserved.]

 

(b)           [Reserved.]

 

(c)           Notice of Material
Subsidiaries.  With respect to each
newly created or acquired Subsidiary, Borrower shall promptly send to
Administrative Agent written notice setting forth with respect to such Person (i) the
date on which such Person became a Subsidiary of Borrower, and (ii) all of
the data required to be set forth in Schedules 4.1 and 4.2 with respect to all
Subsidiaries of Borrower; provided, such written notice shall be deemed
to supplement Schedule 4.1 and 4.2 for all purposes hereof.

 

5.11        Further Assurances.  At any time or from time to time upon the
request of Administrative Agent or Syndication Agent, each Credit Party will,
at its expense, promptly execute, acknowledge and deliver such further
documents and do such other acts and things as Administrative Agent,
Syndication Agent or Collateral Agent may reasonably request in order to effect
fully the purposes of the Credit Documents. 
In furtherance and not in limitation of the foregoing, each Credit Party
shall take such actions as Administrative Agent, Syndication Agent or
Collateral Agent may reasonably request from time to time to ensure that the
Obligations are secured by the Collateral.

 

5.12        [Reserved].

 

5.13        [Reserved].

 

5.14        [Reserved].

 

5.15        Chapter 11
Case.  The Credit Parties will
use their best efforts to obtain the approval of the Bankruptcy Court of this
Agreement and the other Credit Documents. 
The Credit Parties shall immediately provide to each Lender copies of
all material pleadings, notices, orders, agreements, and all other documents
served, filed, issued or entered, as the case may be, in connection with, or in
relation to, the Chapter 11 Case.

 

5.16        [Reserved]

 

5.17        Lenders’ Financial Advisor.  The Lenders shall have the right at any time
to appoint and retain at Borrower’s expense a financial advisor satisfactory to
Lenders in connection with this Agreement and the other Credit Documents, which
financial advisor shall be permitted to exercise the rights of the Lender Parties
under Section 5.6 hereof, and the fees and expenses of which shall be
payable by Borrower in accordance with Section 10.2.

 

5.18        Cash Flow Forecast.  Borrower and its Subsidiaries:

 

(a)           for any period
subsequent to the week ending immediately after entry of the Final Order as set
forth in the Cash Flow Forecast, cumulative Operating Disbursements shall not
exceed an aggregate amount equal to up to and including the date which is four
weeks following the Closing Date, 110%;

 

66

 

(b)           for any period
subsequent to the week ending immediately after entry of the Final Order as set
forth in the Cash Flow Forecast, shall achieve cumulative Collections in an
aggregate amount in excess of up to and including the date which is four weeks
following the Closing Date, 95%; and

 

(c)           provide to the Lenders
on a monthly basis an updated 13-week cash flow forecast in the same form as
the Cash Flow Forecast; provided that no such update shall be deemed to replace
or supersede the Cash Flow Forecast for the purposes of this Agreement.

 

5.19        DIP Budget.  Borrower and its Subsidiaries shall comply
with and shall not incur any expenditures not set forth in the DIP Budget.

 

5.20        [Reserved]

 

5.21        Incremental Facility
Effective Date.  Borrower shall use
its commercially reasonably efforts to cause the occurrence of the Incremental
Facility Effective Date prior to October 2, 2008.

 

SECTION 6.         NEGATIVE COVENANTS

 

Each Credit Party covenants and agrees that, until
payment in full of all Obligations, such Credit Party shall perform, and shall
cause each of its  Material Subsidiaries
to perform, all covenants in this Section 6.

 

6.1          Indebtedness.  No Credit Party shall, nor shall it permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume or
guaranty, or otherwise become or remain directly or indirectly liable with
respect to, or permit to exist, any Indebtedness, or guarantee, assume,
endorse, or otherwise become responsible for directly or indirectly, such Indebtedness
of any other Person except:

 

(a)           the Obligations;

 

(b)           Existing Indebtedness;

 

(c)           Indebtedness among the
Borrower’s Subsidiaries;

 

(d)           Indebtedness incurred
by Borrower or any of its Subsidiaries incurred on or after the Incremental
Facility Effective Date and set forth in the DIP Budget;

 

(e)           Indebtedness which may
be deemed to exist pursuant to any guaranties, performance, surety, statutory,
appeal or similar obligations incurred in the ordinary course of business;

 

(f)            Indebtedness in
respect of netting services, overdraft protections and otherwise in connection
with deposit accounts;

 

(g)           guaranties in the
ordinary course of business of the obligations of suppliers, customers,
franchisees and licensees of Borrower and its Subsidiaries;

 

67

 

(h)           guaranties by a
Subsidiary of Borrower of Indebtedness of Borrower with respect, in each case,
to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.1;
provided, that if the Indebtedness that is being guarantied is unsecured
and/or subordinated to the Obligations, the guaranty shall also be unsecured
and/or subordinated to the Obligations;

 

(i)            Indebtedness incurred
by any of the Borrower’s Subsidiaries (other than Neuberger) after the Closing
Date but prior to the Incremental Facility Effective Date, together with
amounts invested pursuant to Section 6.7(j) hereof, in the aggregate
amount of $5,000,000; and

 

(j)            Indebtedness incurred
by Neuberger to the extent permitted under Section 6.7(i).

 

6.2          Liens.  No Credit Party shall, nor shall it permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of any
kind (including any document or instrument in respect of goods or accounts
receivable) of Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:

 

(a)           Liens in favor of
Collateral Agent for the benefit of Secured Parties granted pursuant to any
Credit Document;

 

(b)           Liens for Taxes if
obligations with respect to such Taxes are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted;

 

(c)           statutory Liens of
landlords, banks (and rights of set-off), of carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law (other than
any such Lien imposed pursuant to Section 401 (a)(29) or 412(n) of
the Internal Revenue Code or by ERISA), in each case incurred in the ordinary
course of business (i) for amounts not yet overdue or (ii) for
amounts that are overdue and that (in the case of any such amounts overdue for
a period in excess of five days) are being contested in good faith by
appropriate proceedings, so long as such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made for any
such contested amounts;

 

(d)           Liens incurred in the
ordinary course of business in connection with workers’ compensation, unemployment
insurance and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money bonds
and other similar obligations (exclusive of obligations for the payment of
borrowed money or other Indebtedness), so long as no foreclosure, sale or
similar proceedings have been commenced with respect to any portion of the
Collateral on account thereof;

 

(e)           easements, rights-of-way,
restrictions, encroachments, and other minor defects or irregularities in
title, in each case which do not and will not interfere in any material respect
with the ordinary conduct of the business of Borrower or any of its
Subsidiaries;

 

68

 

(f)            any interest or title
of a lessor or sublessor under any lease of real estate not prohibited
hereunder;

 

(g)           Liens solely on any
cash earnest money deposits made by Borrower or any of its Subsidiaries in
connection with any letter of intent or purchase agreement permitted hereunder;

 

(h)           purported Liens
evidenced by the filing of precautionary UCC financing statements relating
solely to operating leases of personal property entered into in the ordinary
course of business;

 

(i)            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;

 

(j)            any zoning or similar
law or right reserved to or vested in any governmental office or agency to
control or regulate the use of any real property;

 

(k)           Licenses of patents,
trademarks and other intellectual property rights granted by Borrower or any of
its Subsidiaries in the ordinary course of business and not interfering in any
respect with the ordinary conduct of the business of Borrower or any
Subsidiary;

 

(l)            Liens of the
Subsidiaries existing as of the date hereof and Liens of the Borrower, as
described in Schedule 6.2;

 

(m)          Liens securing
Indebtedness permitted pursuant to Section 6.1(i);

 

(n)           [Reserved]; and

 

(o)           any rights of first
refusal of joint venture partners existing on the Closing Date and set forth on
Schedule 6.2.

 

Provided, however, that no reference herein to Liens
permitted hereunder (including Permitted Liens), including any statement or
provision as to the acceptability of any Liens (including Permitted Liens),
shall in any way constitute or be construed as to provide for a subordination
of any rights of the Agents or Lenders hereunder or arising under any of the other
Credit Documents in favor of such Liens.

 

6.3          Equitable Lien.  If any Credit Party shall create or assume
any Lien upon any of its properties or assets, whether now owned or hereafter
acquired, other than Permitted Liens, it shall make or cause to be made
effective provisions whereby the Obligations will be secured by such Lien
having the priority required hereby and by the other Credit Documents to any
and all other Indebtedness secured thereby as long as any such Indebtedness
shall be so secured; provided, notwithstanding the foregoing, this
covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not otherwise permitted hereby.

 

69

 

6.4          No Further Negative
Pledges.  Except with respect to (a) specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to a permitted Asset Sale, and (b) restrictions
by reason of customary provisions restricting assignments, subletting or other
transfers contained in leases, licenses and similar agreements entered into in
the ordinary course of business (provided that such restrictions are limited to
the property or assets secured by such Liens or the property or assets subject
to such leases, licenses or similar agreements, as the case may be), no Credit
Party nor any of its Subsidiaries shall enter into any agreement prohibiting
the creation or assumption of any Lien upon any of its properties or assets,
whether now owned or hereafter acquired, to secure the Obligations.

 

6.5          No Restricted Junior
Payments.  No Credit Party shall, nor
shall it permit any of its Subsidiaries or Affiliates through any manner or
means or through any other Person to, directly or indirectly, declare, order,
pay, make or set apart, or agree to declare, order, pay, make or set apart, any
sum for any Restricted Junior Payment.

 

6.6          Restrictions on
Subsidiary Distributions.  Except as
provided herein, no Credit Party shall, nor shall it permit any of its
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary of Borrower to (a) pay dividends or make any other distributions
on any of such Subsidiary’s Capital Stock owned by Borrower or any Subsidiary
of Borrower, (b) repay or prepay any Indebtedness owed by such Subsidiary
to Borrower or any Subsidiary of Borrower, (c) make loans or advances to
Borrower or any Subsidiary of Borrower, or (d) transfer any of its
property or assets to Borrower or any Subsidiary of Borrower other than
restrictions (i) existing prior to the Closing Date, (ii) in
agreements evidencing Indebtedness permitted by Section 6.1(i), (iii) by
reason of customary provisions restricting assignments, subletting or other
transfers contained in leases, licenses, joint venture agreements and similar
agreements entered into in the ordinary course of business, or (iv) that
are or were created by virtue of any transfer of, agreement to transfer or
option or right with respect to any property, assets or Capital Stock not
otherwise prohibited under this Agreement.

 

6.7          Investments.  No Credit Party shall, nor shall it permit
any of its Subsidiaries to, directly or indirectly, make or own any Investment
in any Person, including without limitation any Joint Venture, except:

 

(a)           Investments in Cash and
Cash Equivalents;

 

(b)           equity Investments
owned as of the Closing Date in any Subsidiary;

 

(c)           Investments (i) in
any Securities received in satisfaction or partial satisfaction thereof from
financially troubled account debtors and (ii) deposits, prepayments and
other credits to suppliers made in the ordinary course of business consistent
with the past practices of Borrower and its Subsidiaries;

 

(d)           capital expenditures
set forth in the DIP Budget;

 

70

 

(e)           loans and advances to
employees of Borrower and its Subsidiaries made in the ordinary course of
business in an aggregate principal amount not to exceed $50,000 in the
aggregate in any Fiscal Year;

 

(f)            Investments in
Subsidiaries of Borrower in the form of intercompany loans, which are permitted
by Section 6.1;

 

(g)           Investments existing on
the Closing Date;

 

(h)           obligations of Account
Debtors to any Credit Party arising from accounts which are past due evidenced
by a promissory note in customary form (without any subordination provisions)
made by such account debtor payable to such Credit Party;

 

(i)            Investments by Borrower
in Neuberger after the Closing Date but prior to the Incremental Facility
Effective Date in an aggregate amount of $20,000,000; provided that such
investments are permitted under Section 6.1(j) hereof, are evidenced
by a promissory note in customary form (without any subordination provisions)
and are promptly endorsed to the order of and delivered to the Collateral Agent
pursuant to the Pledge Agreement; and

 

(j)            Investments by
Borrower in its Subsidiaries (other than Neuberger) after the Closing Date but
prior to the Incremental Facility Effective Date in an aggregate amount
together with the aggregate outstanding principal amount of Indebtedness
incurred under Section 6.1 hereof of $5,000,000.

 

Notwithstanding the foregoing, in no event shall any Credit
Party make any Investment which results in or facilitates in any manner any
Restricted Junior Payment or Indebtedness not otherwise permitted under the
terms of Section 6.5 or 6.1, respectively.

 

6.8          Financial Covenants.  Following the Incremental Facility Effective
Date, the Borrower will not permit any negative variance in respect of the
aggregate Credit Exposure at any time during any calendar month to exceed a
percentage to be specified by the Administrative Agent in its discretion after
consultation with Borrower of the aggregate Credit Exposure forecasted in the
DIP Budget to be outstanding at the end of such calendar month. In addition,
the Borrower shall not permit any negative variance in respect of the Borrower’s
actual total cash disbursements expended during any calendar month to exceed a
percentage to be specified by the Administrative Agent in its discretion after
consultation with Borrower of the total cash disbursements provided in the DIP
Budget for such calendar month.

 

6.9          Fundamental Changes;
Disposition of Assets; Acquisitions. 
The Borrower shall not, nor shall it permit any of its Subsidiaries to,
enter into any transaction of merger, amalgamation or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
exchange, transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, assets or property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
whether now owned or hereafter acquired, or acquire by purchase or otherwise
(other than purchases or other acquisitions of inventory, materials and
equipment and capital expenditures in the ordinary course of business) the
business, property or fixed assets of, or stock 

 

71

 

or other evidence of
beneficial ownership of, any Person or any division or line of business or
other business unit of any Person, except:

 

(a)           sales or other
dispositions of assets that do not constitute Asset Sales;

 

(b)           Asset Sales approved by
Administrative Agent and Requisite Lenders in each case the Net Asset Sale
Proceeds thereof shall be applied as required by Section 2.17; provided
however, that no such approval is required for Neuberger so long as the Net
Asset Sale Proceeds are equal or greater to the aggregate outstanding amount of
Loans and accrued interest hereunder at such time;

 

(c)           Investments made in
accordance with Section 6.7;

 

(d)           sales or other
dispositions of assets between Non-Neuberger Entities;

 

(e)           sales or other
dispositions of assets between Neuberger Entities; and

 

(f)            sales or other
dispositions of assets between Non-Neuberger Entities, on the one hand, and
Neuberger Entities, on the other hand; provided that (i) all sales
or other dispositions of assets made in reliance on this clause (f) shall
be for no less than the fair market value of such assets at the time of sale or
disposition, (ii) the fair market value of all assets sold or otherwise
disposed of by Neuberger Entities to Non-Neuberger Entities in reliance on this
clause (f) shall not exceed $10,000,000 in the aggregate (or such higher
amount as the Administrative Agent may agree to in writing in its sole
discretion); provided  further that, notwithstanding the
foregoing, no Capital Stock of any Subsidiary of Neuberger may be sold or
disposed of in reliance on this clause (f);

 

provided, however, that the
foregoing limitations are not intended to prevent any Credit Party from
rejecting unexpired leases or executory contracts pursuant to section 365 of
the Bankruptcy Code in connection with the Chapter 11 Case

 

6.10        Disposal of
Subsidiary Interests.  Except
for any sale of all of its interests in the Capital Stock of any of its
Subsidiaries in compliance with the provisions of Section 6.9, no Credit
Party shall, nor shall it permit any of its Subsidiaries to, (a) directly
or indirectly sell, assign, pledge or otherwise encumber or dispose of any Capital
Stock of any of its Subsidiaries, except to qualify directors if required by
applicable law; or (b) permit any of its Subsidiaries directly or
indirectly to sell, assign, pledge or otherwise encumber or dispose of any
Capital Stock of any of its Subsidiaries, in each case, (i) except to
another Credit Party (subject to the restrictions on such disposition otherwise
imposed hereunder), or to qualify directors if required by applicable law; and
(ii), except for pledges of such Capital Stock to Collateral Agent.

 

6.11        Sales and Lease-Backs.  No Credit Party shall, nor shall it permit
any of its Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, which such Credit Party (a) has sold or transferred or is to
sell or to transfer to any other Person (other than Borrower or any of its
Subsidiaries), or (b) intends to use for substantially the same purpose as
any other property which has been or is to be sold or 

 

72

 

transferred by such
Credit Party to any Person (other than Borrower or any of its Subsidiaries) in
connection with such lease.

 

6.12        Transactions with
Shareholders and Affiliates.  No
Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of Borrower on terms that are less favorable to
Borrower or that Subsidiary, as the case may be, than those that might be
obtained at the time from a Person who is not such a shareholder or Affiliate; provided,
the foregoing restriction shall not apply to (a) reasonable and customary
fees paid to members of the board of directors (or similar governing body) of
Borrower and its Subsidiaries; (b) compensation arrangements for officers
and other employees of Borrower and its Subsidiaries entered into in the
ordinary course of business; and (c) transactions described in Schedule
6.12.

 

6.13        Conduct of Business.  From and after the Closing Date, no Credit
Party shall, nor shall it permit any of its Subsidiaries to, engage in any
business other than (i) the businesses engaged in by such Credit Party on
the Closing Date and similar or related businesses and (ii) such other
lines of business as may be consented to by Requisite Lenders.

 

6.14        Libro Holdings Maximum
Liabilities.  The Borrower shall not
permit, and shall cause Libro Holdings not to permit, the consolidated
liabilities of Libro Holdings to exceed $40,000 at any time.

 

6.15        Amendments or Waivers of Organizational Documents.  The Borrower shall not, nor shall it permit
any of its Subsidiaries to, agree to any amendment, restatement, supplement or
other modification to, or waiver of, any
of its Organizational Documents which in each case is materially adverse to the
interests of Lenders after the Closing Date without in each case
obtaining the prior written consent of Requisite Lenders to such amendment,
restatement, supplement or other modification or waiver.

 

6.16        Fiscal Year.  No Credit Party shall, nor shall it permit
any of its Subsidiaries to change its Fiscal Year-end from November 30.

 

6.17        No Speculative
Transactions.  The Borrower shall
not, nor shall it permit any Subsidiary to, engage in any speculative
transaction or in any transaction involving Interest Rate Agreements or
Currency Agreements except for the sole purpose of hedging in the normal course
of business and consistent with industry practices.

 

6.18        Margin Regulations.  Borrower shall not, and shall not permit any
Subsidiary to, use all or any portion of the proceeds of any credit extended
hereunder to purchase or carry Margin Stock in contravention of Regulation U of
the Board of Governors.

 

6.19        Chapter 11 Claims.  No Credit Party shall, nor shall any Credit
Party permit any of its Subsidiaries to, agree to, incur, create, assume, suffer
to exist or permit (a) any administrative expense, unsecured claim, or
other superpriority claim or lien which is pari passu with or senior to the
claims of the Secured Parties against the Credit Parties hereunder, or apply to
the Bankruptcy Court for authority to do so, except for the Carve-Out or (b) any
obligation to make or provide adequate protection (whether by the payment of
cash or otherwise) other than as 

 

73

 

expressly set forth in
the Orders, without the consent of Administrative Agent and Requisite Lenders.

 

6.20        The Orders.  No Credit Party shall, nor shall any Credit
Party permit any of its Subsidiaries to, make or permit to be made any change,
amendment or modification, or any application or motion for any change,
amendment or modification, to the Orders without the prior written consent of
Administrative Agent and Requisite Lenders.

 

SECTION 7.         [RESERVED]

 

SECTION 8.         EVENTS OF DEFAULT

 

8.1          Events of Default.  If any one or more of the following
conditions or events shall occur:

 

(a)           Failure to Make
Payments When Due.  Failure by (A) Borrower
to pay when due (i) any installment of principal of any Loan, whether at
stated maturity, by acceleration, by notice of voluntary prepayment, by
mandatory prepayment or otherwise or (ii) any interest on any Loan or any
fee or any other amount due hereunder; or (B) any Credit Party to pay when
due any amount due hereunder; or

 

(b)           Default in Other
Agreements.  (i) Failure of any
Credit Party to pay when due any principal of or interest on or any other
amount payable in respect of one or more items of post-petition Indebtedness
(other than Indebtedness referred to in Section 8.1(a)) in an individual
principal amount with respect to such Indebtedness of $1,000,000 or more, in
each case beyond the grace period, if any, provided therefor; (ii) failure
of any Subsidiary (which is not a Credit Party) of any Credit Party to pay when
due any principal of or interest on or any other amount payable in respect of
one or more items of Indebtedness in an individual principal amount with
respect to such Indebtedness of $100,000 or more, in each case beyond the grace
period, if any, provided therefor; or (iii) breach or default by any
Credit Party or any Subsidiary of any Credit Party with respect to any other
material term of (1) one or more items of Indebtedness in the individual
amounts referred to in clause (i) or (ii) above or (2)  any loan
agreement, mortgage, indenture or other agreement relating to such item(s) of
Indebtedness, in each case beyond the grace period, if any, provided therefor,
if the effect of such breach or default is to cause, or to permit the holder or
holders of that Indebtedness (or a trustee on behalf of such holder or
holders), to cause, that Indebtedness to become or be declared due and payable
(or redeemable) prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be; or

 

(c)           Breach of Certain
Covenants.  Failure of any Credit
Party to perform or comply with any term or condition contained in Section 2.7,
Sections 5.1(b), 5.1(c), 5.1(d), 5.1(e) and 5.1(f), Section 5.2 (with
respect to the Borrower), Section 5.6, Section 5.7, , Section 5.15,
Section 5.16, Section 5.18, Section 5.19 or Section 6; or

 

(d)           Breach of
Representations, etc.  Any
representation, warranty, certification or other statement made or deemed made
by any Credit Party in any Credit Document or in any statement or certificate
at any time given by any Credit Party in writing pursuant hereto or 

 

74

 

thereto or in connection
herewith or therewith shall be false in any material respect as of the date
made or deemed made; or

 

(e)           Other Defaults Under
Credit Documents.  Any Credit Party
shall default in the performance of or compliance with any term contained
herein or any of the other Credit Documents, other than any such term referred
to in any other Section of this Section 8.1, and such default shall
not have been remedied or waived within fifteen days after the earlier of (i) an
officer of such Credit Party becoming aware of such default or (ii) receipt
by Borrower of notice from Administrative Agent or any Lender of such default;
or

 

(f)            Involuntary
Bankruptcy; Appointment of Receiver, etc. 
Except in connection with or in furtherance of the LBI Transaction,
except with respect to such Subsidiaries of which the Administrative Agent has
received notice prior to the entry of the Interim Order and except in
connection with (and except as a direct result of) the Chapter 11 Case, (i) a
court of competent jurisdiction shall enter a decree or order for relief or
similar relief in respect of any of Borrower’s Material Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law (domestic or foreign) now or hereafter in
effect, which decree or order is not stayed; or any other similar relief shall
be granted under, any applicable federal, state or foreign law; or (ii) an
involuntary case shall be commenced against any of Borrower’s Material
Subsidiaries under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law (domestic or foreign) now or hereafter in
effect; or a decree or order of a court having jurisdiction shall have been
entered for the appointment of a receiver, interim receiver, receiver-manager,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over any of Borrower’s Material Subsidiaries, or over all or a
substantial part of its property; or there shall have occurred the involuntary
appointment of an interim receiver, receiver-manager, trustee or other
custodian of any of Borrower’s Material Subsidiaries for all or a substantial
part of its property; or a warrant of attachment, execution or similar process
shall have been issued against any substantial part of the property of Borrower
or any of its Material Subsidiaries, and any such event described in this
clause (ii) shall continue for thirty days without having been dismissed,
bonded or discharged; or

 

(g)           Voluntary
Bankruptcy; Appointment of Receiver, etc. 
Except in connection with or in furtherance of the LBI Transaction,
except with respect to such Subsidiaries of which the Administrative Agent has
received notice prior to the entry of the Interim Order and except in
connection with (and except as a direct result of) the Chapter 11 Case, (i) any
of Borrower’s Material Subsidiaries shall have an order for relief entered with
respect to it or shall commence a voluntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law (domestic or
foreign) now or hereafter in effect, or shall consent to the entry of an order
for relief in an involuntary case, or to the conversion of an involuntary case
to a voluntary case, under any such law, or shall consent to the appointment of
or taking possession by a receiver, liquidator, sequestrator, interim receiver,
receiver-manager, trustee or other custodian for all or a substantial part of its
property; or any of Borrower’s Material Subsidiaries shall make any assignment
for the benefit of creditors; or (ii) any of Borrower’s Material
Subsidiaries shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due; or the board
of directors (or similar governing body) of any of Borrower’s Material
Subsidiaries (or any committee thereof) shall 

 

75

 

adopt any resolution or
otherwise authorize any action to approve any of the actions referred to herein
or in Section 8.1(f); or

 

(h)           Judgments and
Attachments.  Any unstayed money
judgment, writ or warrant of attachment or similar process by a court of
competent jurisdiction involving (i) in any individual case an amount in
excess of $500,000 or (ii) in the aggregate at any time an amount in
excess of $1,000,000 (in either case to the extent not adequately covered by
insurance as to which a solvent insurance company has acknowledged coverage)
shall be entered or filed against Borrower or any of its Material Subsidiaries
or any of their respective assets (other than the allowance but not enforcement
of prepetition claims in the Chapter 11 Case) and shall remain undischarged,
unvacated, unbonded or unstayed (including pursuant to section 362 of the
Bankruptcy Code) for a period of thirty (30) days (or in any event later than
five days prior to the date of any proposed sale thereunder); or

 

(i)            Dissolution.  Any order, judgment or decree shall be entered
against any Credit Party decreeing the dissolution, winding up, arrangement or
split up of such Credit Party and such order shall remain undischarged or
unstayed for a period in excess of thirty days; or

 

(j)            Employee Benefit
Plans.  (i) There shall occur
one or more ERISA Events which individually or in the aggregate results in or
might reasonably be expected to result in liability of Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates could individually or
in the aggregate reasonably be expected to result in a Material Adverse Effect
during the term hereof; or (ii) there exists any fact or circumstance that
could reasonably be expected to result in the imposition of a Lien or security
interest under Section 412(n) of the Internal Revenue Code or under
ERISA; or

 

(k)           Environmental
Matters.  Other than as set forth on
Schedule 8.1, one or more of Borrower and any of its Subsidiaries shall have
entered into one or more consent or settlement decrees or agreements or similar
arrangements with a Governmental Authority or one or more judgments, orders,
decrees or similar actions shall have been entered against one or more of
Borrower and its Subsidiaries, which is unstayed, based on or arising from the
violation of or pursuant to any Environmental Law, or the generation, storage,
transportation, treatment, disposal or Release of any Hazardous Materials and
which individually or in the aggregate could reasonably be expected to result
in a Material Adverse Effect; or

 

(l)            Change of Control.  A Change of Control shall occur; or

 

(m)          Collateral Documents
and other Credit Documents.  At any
time (i) this Agreement, any Collateral Document or any other Credit
Document ceases to be in full force and effect (other than by reason of the
satisfaction in full of the Obligations in accordance with the terms hereof) or
shall be declared null and void, or Collateral Agent shall not have or shall
cease to have a valid and perfected Lien in any Collateral purported to be
covered by the Collateral Documents with the priority required by the
Collateral Document and the Orders, or (ii) any Credit Party shall contest
the validity or enforceability of any Credit Document, or the Liens and claim
priorities provided for in the Credit Documents and the Orders, in writing or
deny in writing that it has any further liability, including with respect to
future advances by Lenders, under any Credit Document; or

 

76

 

(n)           Indictment by
Governmental Authority.  The
indictment by any Governmental Authority, or as Administrative Agent and
Syndication Agent may reasonably and in good faith determine, the threatened
indictment by any Governmental Authority, of any Credit Party, in either case,
as to which there is a reasonable possibility of an adverse determination, in
the good faith determination of Administrative Agent and Syndication Agent,
under any criminal statute, or commencement or threatened commencement of
criminal or civil proceedings against such Credit Party pursuant to which
statute or proceedings the penalties or remedies sought or available include
forfeiture of (i) any of the Collateral having a value in excess of
$1,000,000 or (ii) any other property of any Credit Party which is
necessary or material to the conduct of its business; or

 

(o)           [Reserved].

 

(p)           The Chapter 11 Case.

 

(i)            the
bringing of a motion, taking of any action or the filing of any plan of
reorganization or disclosure statement attendant thereto by Borrower in the
Chapter 11 Case:  (v) to obtain additional
financing under Section 364(c) or (d) of the Bankruptcy Code or
not otherwise permitted pursuant to the Credit Documents except, with the
consent of each of Administrative Agent and Requisite Lenders, in connection
with any financing the proceeds of which shall be used to repay in full the
Obligations (other than contingent indemnity obligations); (w) to grant
any Lien on any Collateral except as permitted hereunder and under the other
Credit Documents; (x) except as provided in the Interim Order or Final
Order, as the case may be, to use cash collateral of  the Secured Parties under Section 363(c) of
the Bankruptcy Code without the prior written consent of each of Administrative
Agent and Requisite Lenders; (y) except as permitted hereunder, which is
materially adverse to the Agents and the Lenders or their rights and remedies
hereunder, or their interest in the Collateral, including, without limitation,
any such action or actions which seek to reduce, set-off or subordinate the
Obligations or challenge any Secured Party’s Lien in any of the Collateral; or (z) that
seeks to reduce, set-off or subordinate the Obligations or challenge Collateral
Agent’s or any Lender’s Lien in any of the Collateral; or

 

(ii)           the
filing by any Credit Party of any plan of reorganization that does not provide
for indefeasible payment in full and satisfaction of the Obligations as
required herein, prior to the effective date of such plan of reorganization; or

 

(iii)          any
Order shall be reversed, amended, supplemented, stayed, vacated or otherwise
modified (or any Credit Party shall apply for authority to do so) without the
prior written consent of Administrative Agent and Requisite Lenders; or

 

(iv)          the
dismissal of the Chapter 11 Case, or the conversion of the Chapter 11 Case from
one under Chapter 11 to one under Chapter 7 of the Bankruptcy Code or any
Credit Party shall file a motion or other pleading seeking the dismissal or
conversion of the Chapter 11 Case; or

 

77

 

(v)           the entry
of an order by the Bankruptcy Court granting relief from or modifying the
automatic stay of Section 362 of the Bankruptcy Code (x) to allow any
creditor to execute upon or enforce a Lien on any Collateral in excess of
$50,000 in the aggregate, or (y) with respect to any Lien of or the
granting of any Lien on any Collateral to any state or local environmental or
regulatory agency or authority that would have a Material Adverse Effect; or

 

(vi)          [Reserved];
or

 

(vii)         the
Final Order is not entered within 25 days of the date of entry of the Interim
Order, or, in any event, the Final Order is not entered immediately following
the expiration of the Interim Order; or

 

(viii)        the
payment, prior to payment in full of the Obligations (other than contingent
indemnity obligations), of any claim or claims under Section 506(c) of
the Bankruptcy Code against or with respect to any of the Collateral; or

 

(ix)           the entry
of an order in the Chapter 11 Case avoiding or requiring repayment of any
portion of the payments made on account of the Obligations; or

 

(x)            the
failure of any Credit Party to perform any of its obligations under the Interim
Order or the Final Order; or

 

(xi)           the
appointment of an interim or permanent trustee in the Chapter 11 Case or the
appointment of a receiver, responsible officer or an examiner in the Chapter 11
Case with powers beyond the duty to investigate and report, as set forth in Section 1106(a)(3) of
the Bankruptcy Code; or the sale without the consent of Administrative Agent
and Requisite Lenders, of all or substantially all of Borrower’s assets (except
as permitted by Section 6.9) either through a sale under Section 363
of the Bankruptcy Code, through a confirmed plan of reorganization in the
Chapter 11 Case, or otherwise, that does not provide for payment in full of the
Obligations (other than contingent indemnity obligations) and termination of
Lenders’ commitment to make Loans or other extensions of credit hereunder; or

 

(xii)          the
entry of an order in the Chapter 11 Case granting any other superpriority
administrative claim or Lien equal or superior to that granted to any Agent, on
behalf if itself and Lenders (other than the Carve-Out), or any Credit Party
shall file any pleading requesting such relief; or

 

(xiii)         the
Interim Order (prior to the entry of the Final Order) or the Final Order (after
entry of same) ceases to be in full force and effect or is stayed in any
respect;

 

THEN, (1) upon the
occurrence of any Event of Default described in Section 8.1(f) or
8.1(g), automatically, and (2) upon the occurrence of any other Event of
Default, at the request of (or with the consent of) Requisite Lenders, upon
notice to Borrower by Administrative Agent, without further order of,
application to, or action by, the Bankruptcy Court, (A) the Revolving Loan
Commitments shall immediately terminate; (B) each of the following shall
immediately become due and payable, in each case without presentment, demand,
protest or other 

 

78

 

requirements of any kind, all of which are hereby
expressly waived by each Credit Party: (I) the unpaid principal amount of
and accrued interest on the Loans and (II) all other Obligations; and (C) Administrative
Agent may (subject to Section 9.8(b)) cause Collateral Agent to enforce
any and all Liens and security interests created pursuant to Collateral
Documents. In addition, subject solely to any requirement of the giving of
notice by the terms of the Orders (provided that no such notice shall be
required for the purpose of freezing or blocking any deposit or securities
accounts which are Collateral), the automatic stay provided in section 362 of
the Bankruptcy Code shall be deemed automatically vacated without further
action or order of the Bankruptcy Court and Administrative Agent, Collateral
Agent, the other Agents and the Lenders shall be entitled to exercise all of
their respective rights and remedies under the Credit Documents, including,
without limitation, all rights and remedies with respect to the Collateral.  In addition to the remedies set forth above,
the Agents and the Lenders may exercise any other remedies provided for by the
Credit Documents and the Orders in accordance with the terms hereof and thereof
or any other remedies provided by applicable law.

 

SECTION 9.         AGENTS

 

9.1          Appointment of Agents.  Barclays Bank is hereby appointed
Administrative Agent and Collateral Agent hereunder and under the other Credit
Documents and each Lender hereby authorizes Barclays Bank to act as
Administrative Agent and Collateral Agent in accordance with the terms hereof
and the other Credit Documents.  Each
Agent hereby agrees to act in its capacity as such upon the express conditions
contained herein and the other Credit Documents, as applicable.  The provisions of this Section 9 are
solely for the benefit of Agents and Lenders and no Credit Party shall have any
rights as a third party beneficiary of any of the provisions thereof.  In performing its functions and duties
hereunder, each Agent shall act solely as an agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Borrower or any of its
Subsidiaries.

 

9.2          Powers and Duties.  Each Lender irrevocably authorizes each Agent
to take such action on such Lender’s behalf and to exercise such powers, rights
and remedies hereunder and under the other Credit Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental
thereto.  Each Agent shall have only
those duties and responsibilities that are expressly specified herein and the
other Credit Documents.  Each Agent may
exercise such powers, rights and remedies and perform such duties by or through
its agents or employees.  No Agent shall
have, by reason hereof or any of the other Credit Documents, a fiduciary
relationship in respect of any Lender; and nothing herein or any of the other
Credit Documents, expressed or implied, is intended to or shall be so construed
as to impose upon any Agent any obligations in respect hereof or any of the
other Credit Documents except as expressly set forth herein or therein.

 

9.3          General Immunity.

 

(a)           No Responsibility
for Certain Matters.  No Agent shall
be responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency hereof or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial 

 

79

 

or other statements,
instruments, reports or certificates or any other documents furnished or made
by any Agent to Lenders or by or on behalf of any Credit Party, and Lender or
any person providing the Settlement Service to any Agent or any Lender in
connection with the Credit Documents and the transactions contemplated thereby
or for the financial condition or business affairs of any Credit Party or any
other Person liable for the payment of any Obligations, nor shall any Agent be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained in any of
the Credit Documents or as to the use of the proceeds of the Loans or as to the
existence or possible existence of any Event of Default or Default or to make
any disclosures with respect to the foregoing. 
Anything contained herein to the contrary notwithstanding, Administrative
Agent shall not have any liability arising from confirmations of the amount of
outstanding Loans.

 

(b)           Exculpatory
Provisions.  No Agent nor any of its
officers, partners, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any Agent under or in connection with any of
the Credit Documents except to the extent caused by such Agent’s gross
negligence or willful misconduct.  Each
Agent shall be entitled to refrain from any act or the taking of any action (including
the failure to take an action) in connection herewith or any of the other
Credit Documents or from the exercise of any power, discretion or authority
vested in it hereunder or thereunder unless and until such Agent shall have
received instructions in respect thereof from Requisite Lenders (or such other
Lenders as may be required to give such instructions under Section 10.5)
and, upon receipt of such instructions from Requisite Lenders (or such other
Lenders, as the case may be), such Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions.  Without prejudice to the generality of the
foregoing, (i) each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any communication, instrument or document believed
by it to be genuine and correct and to have been signed or sent by the proper
Person or Persons, including any Settlement Confirmation or other communication
issues by any Settlement Service, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Borrower and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any
right of action whatsoever against any Agent as a result of such Agent acting
or (where so instructed) refraining from acting hereunder or any of the other
Credit Documents in accordance with the instructions of Requisite Lenders (or
such other Lenders as may be required to give such instructions under Section 10.5).

 

(c)           Delegation of Duties.
Administrative Agent may perform any and all of its duties and exercise its
rights and powers under this Agreement or under any other Credit Document by or
through any one or more sub-agents appointed by Administrative Agent.  Administrative Agent and any such sub-agent
may perform any and all of its duties and exercise its rights and powers by or
through their respective Affiliates. The exculpatory, indemnification and other
provisions of this Section 9.3 and of Section 9.6 shall apply to any
the Affiliates of Administrative Agent and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.  All
of the rights, benefits, and privileges (including the exculpatory and
indemnification provisions) of this Section 9.3 and of Section 9.6
shall apply to any such sub-agent and to the Affiliates of any such sub-agent,
and shall apply to their respective activities as sub-agent as if such
sub-agent and Affiliates were named herein. 
Notwithstanding anything herein to the 

 

80

 

contrary, with respect to
each sub-agent appointed by Administrative Agent, (i) such sub-agent shall
be a third party beneficiary under this Agreement with respect to all such
rights, benefits and privileges (including exculpatory rights and rights to
indemnification) and shall have all of the rights and benefits of a third party
beneficiary, including an independent right of action to enforce such rights,
benefits and privileges (including exculpatory rights and rights to
indemnification) directly, without the consent or joinder of any other Person,
against any or all of the Credit Parties and Lenders, (ii) such rights,
benefits and privileges (including exculpatory rights and rights to
indemnification) shall not be modified or amended without the consent of such
sub-agent, and (iii) such sub-agent shall only have obligations to
Administrative Agent and not to any Credit Party, Lender or any other Person
and no Credit Party, Lender or any other Person shall have any rights, directly
or indirectly, as a third party beneficiary or otherwise, against such
sub-agent.

 

9.4          Agents Entitled to Act
as Lender.  The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, any Agent in its individual capacity as a Lender
hereunder.  Each Agent shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as if it were not performing the duties and functions delegated to it
hereunder, and the term “Lender” shall,
unless the context clearly otherwise indicates, include each Agent in its
individual capacity.  Any Agent and its
Affiliates may accept deposits from, lend money and issue letters of credit to,
own securities of, and generally engage in any kind of banking, trust, financial
advisory or other business with Borrower or any of its Affiliates as if it were
not performing the duties specified herein, and may accept fees and other
consideration from Borrower for services in connection herewith and otherwise
without having to account for the same to Lenders.

 

9.5          Lenders’ Representations, Warranties and Acknowledgment.

 

(a)           Each Lender represents
and warrants that it has made its own independent investigation of the
financial condition and affairs of Borrower and its Subsidiaries in connection
with Credit Extensions hereunder and that it has made and shall continue to
make its own appraisal of the creditworthiness of Borrower and its
Subsidiaries.  No Agent shall have any
duty or responsibility, either initially or on a continuing basis, to make any
such investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter, and no Agent shall have any responsibility with respect to
the accuracy of or the completeness of any information provided to Lenders.

 

(b)           Each Lender, by
delivering its signature page to this Agreement or an Assignment and
funding Loan on the Closing Date shall be deemed to have acknowledged receipt
of, and consented to and approved, each Credit Document and each other document
required to be approved by any Agent, Requisite Lenders or Lenders, as
applicable on the Closing Date.

 

9.6          Right to Indemnity.  Each Lender, in proportion to its Pro Rata
Share, severally agrees to indemnify each Agent, to the extent that such Agent
shall not have been reimbursed by any Credit Party, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including counsel fees and disbursements) or 

 

81

 

disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
such Agent in exercising its powers, rights and remedies or performing its
duties hereunder or under the other Credit Documents or otherwise in its
capacity as such Agent in any way relating to or arising out of this Agreement
or the other Credit Documents; provided, no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Agent’s gross negligence or willful misconduct. 
If any indemnity furnished to any Agent for any purpose shall, in the
opinion of such Agent, be insufficient or become impaired, such Agent may call
for additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished; provided, in no
event shall this sentence require any Lender to indemnify any Agent against any
liability, obligation, loss, damage, penalty, action, judgment, suit, cost,
expense or disbursement in excess of such Lender’s Pro Rata Share thereof; and provided
further, this sentence shall not be deemed to require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement described in the proviso
in the immediately preceding sentence.

 

9.7          Successor Administrative
Agent and Collateral Agent; Priority of Payments.  (a)  Administrative Agent may resign at
any time by giving thirty days’ prior written notice thereof to Lenders and
Borrower, and Administrative Agent may be removed at any time with or without
cause by an instrument or concurrent instruments in writing delivered to
Borrower and Administrative Agent and signed by Requisite Lenders.  Upon any such notice of resignation or any
such removal, Requisite Lenders shall have the right, upon five Business Days’
notice to Borrower, to appoint a successor Administrative Agent.  Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, that
successor Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring or removed
Administrative Agent and the retiring or removed Administrative Agent shall
promptly (i) transfer to such successor Administrative Agent all sums,
Securities and other items of Collateral held under the Collateral Documents,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Administrative
Agent under the Credit Documents, and (ii) execute and deliver to such
successor Administrative Agent such amendments to financing statements, and
take such other actions, as may be necessary or appropriate in connection with
the assignment to such successor Administrative Agent of the security interests
created under the Collateral Documents, whereupon such retiring or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder.  After any retiring or removed
Administrative Agent’s resignation or removal hereunder as Administrative
Agent, the provisions of this Section 9.7 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative
Agent hereunder.  Any resignation or
removal of Barclays Bank as Administrative Agent pursuant to this Section 9.7
shall also constitute the resignation or removal of Barclays Bank or its
successor as Collateral Agent, and any successor Administrative Agent appointed
pursuant to this Section shall, upon its acceptance of such appointment,
become the successor Collateral Agent for all purposes hereunder.

 

(b)           Notwithstanding any
other provision herein, outstanding Obligations under this Agreement owed to
the Agents shall have priority with respect to the application of any payments
hereunder by or on behalf of the Borrower over any payment obligations to any
other Person hereunder.

 

82

 

9.8          Collateral Documents.

 

(a)           Agents under
Collateral Documents.  Each Secured
Party hereby further authorizes Administrative Agent or Collateral Agent, as
applicable, on behalf of and for the benefit of Secured Parties, to be the
agent for and representative of the Secured Parties with respect to the
Collateral and the Collateral Documents. 
Subject to Section 10.5, without further written consent or
authorization from the Secured Parties, Administrative Agent or Collateral
Agent, as applicable may execute any documents or instruments necessary to in
connection with a sale or disposition of assets permitted by this Agreement,
release any Lien encumbering any item of Collateral that is the subject of such
sale or other disposition of assets or to which Requisite Lenders (or such
other Lenders as may be required to give such consent under Section 10.5)
have otherwise consented.

 

(b)           Right to Realize on
Collateral.  Anything contained in
any of the Credit Documents to the contrary notwithstanding, Borrower, Administrative
Agent, Collateral Agent and each Lender hereby agree that (i) no Lender
shall have any right individually to realize upon any of the Collateral, it
being understood and agreed that all powers, rights and remedies hereunder may
be exercised solely by Administrative Agent, on behalf of Lenders in accordance
with the terms hereof and all powers, rights and remedies under the Collateral
Documents may be exercised solely by Collateral Agent, and (ii) in the
event of a foreclosure by Collateral Agent on any of the Collateral pursuant to
a public or private sale, Collateral Agent or any Lender may be the purchaser
of any or all of such Collateral at any such sale and Collateral Agent, as
agent for and representative of Secured Parties (but not any Lender or Lenders
in its or their respective individual capacities unless Requisite Lenders shall
otherwise agree in writing) shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply any of the
Obligations as a credit on account of the purchase price for any collateral
payable by Collateral Agent at such sale.

 

(c)           Agents’ Authority to
Satisfy Prior Liens and Indebtedness. 
Each of the parties hereto hereby consent to and expressly authorize
Administrative Agent and Collateral Agent to take such action following the
occurrence and during the continuance of an Event of Default to discharge any
prior Lien or Indebtedness which Administrative Agent and Collateral Agent
determine would be desirable to better enable the exercise of remedies pursuant
to the Collateral Documents with respect to any Collateral subject to such
Lien.  Any amounts so expended by
Administrative Agent or Collateral Agent pursuant to this paragraph (c) shall
be an expense Obligation of Borrower payable upon demand.

 

9.9          Withholding Taxes.  To the extent required by any applicable law,
Administrative Agent may withhold from any payment to any Lender an amount
equivalent to any applicable withholding tax. 
If the Internal Revenue Service or any other Governmental Authority
asserts a claim that Administrative Agent did not properly withhold tax from
amounts paid to or for the account of any Lender because the appropriate form
was not delivered or was not properly executed or because such Lender failed to
notify Administrative Agent of a change in circumstance which rendered the
exemption from, or reduction of, withholding tax ineffective or for any other
reason, such Lender shall indemnify Administrative Agent fully for all amounts
paid, directly or indirectly, by Administrative Agent as tax or otherwise,
including any penalties

 

83

 

or interest and together with all expenses (including legal expenses,
allocated internal costs and out-of-pocket expenses) incurred.

 

SECTION 10.       MISCELLANEOUS

 

10.1        Notices.

 

(a)           Notices Generally.  Any notice or other communication herein
required or permitted to be given to a Credit Party, Collateral Agent,
Administrative Agent or Syndication Agent shall be sent to such Person’s
address as set forth on Appendix B or in the other relevant Credit Document,
and in the case of any Lender, the address as indicated on Appendix B or
otherwise indicated to Administrative Agent in writing.  Except as otherwise set forth in paragraph (b) below,
each notice hereunder shall be in writing and may be personally served, telexed
or sent by telefacsimile or United States mail or courier service and shall be
deemed to have been given when delivered in person or by courier service and
signed for against receipt thereof, upon receipt of telefacsimile or telex, or
three Business Days after depositing it in the United States mail with postage
prepaid and properly addressed; provided, no notice to any Agent shall
be effective until received by such Agent; provided  further, any
such notice or other communication shall at the request of Administrative Agent
be provided to any sub-agent appointed pursuant to Section 9.3(c) hereto
as designated by Administrative Agent from time to time.

 

(b)           Electronic
Communications.

 

(i)            Notices
and other communications to Lenders hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites,
including the Platform) pursuant to procedures approved by Administrative
Agent, provided that the foregoing shall not apply to notices to any
Lender pursuant to Section 2 if such Lender, has notified Administrative
Agent that it is incapable of receiving notices under such Section by
electronic communication.  Administrative
Agent or Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may
be limited to particular notices or communications.  Unless Administrative Agent otherwise
prescribes, (i) notices and other communications sent to an e-mail address
shall be deemed received upon the sender’s receipt of an acknowledgement from
the intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement), provided
that if such notice or other communication is not sent during the normal
business hours of the recipient, such notice or communication shall be deemed
to have been sent at the opening of business on the next Business Day for the
recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

 

(ii)           Each of the
Credit Parties understands that the distribution of material through an
electronic medium is not necessarily secure and that there are

 

84

 

confidentiality
and other risks associated with such distribution and agrees and assumes the
risks associated with such electronic distribution, except to the extent caused
by the willful misconduct or gross negligence of Administrative Agent.

 

(iii)          The
Platform and any Approved Electronic Communications are provided “as is” and “as
available”.  None of the Agents or any of
their respective officers, directors, employees, agents, advisors or
representatives (the “Agent Affiliates”)
warrant the accuracy, adequacy, or completeness of the Approved Electronic
Communications or the Platform and each expressly disclaims liability for
errors or omissions in the Platform and the Approved Electronic
Communications.  No warranty of any kind,
express, implied or statutory, including any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or
freedom from viruses or other code defects is made by the Agent Affiliates in
connection with the Platform or the Approved Electronic Communications.

 

(iv)          Each of
the Credit Parties, the Lenders and the Agents agree that Administrative Agent
may, but shall not be obligated to, store any Approved Electronic
Communications on the Platform in accordance with Administrative Agent’s
customary document retention procedures and policies.

 

10.2        Expenses.  Whether or not the transactions contemplated
hereby shall be consummated, Borrower agrees to pay promptly (a) all the
actual and reasonable costs and expenses of preparation of the Credit Documents
and any consents, amendments, waivers or other modifications thereto; (b) all
the costs of furnishing all opinions by counsel for Borrower and the other
Credit Parties; (c) the reasonable and documented fees, expenses and
disbursements of each counsel to Agents and Lenders (in each case including
allocated costs of internal counsel) in connection with the negotiation,
preparation, execution and administration of the Credit Documents and any
consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Borrower; (d) all the actual costs and
reasonable expenses of creating, perfecting and recording Liens in favor of
Collateral Agent, for the benefit of the Secured Parties, including filing and
recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums and reasonable fees, expenses and disbursements of
counsel to each Agent and of counsel providing any opinions that any Agent or
Requisite Lenders may request in respect of the Collateral or the Liens created
pursuant to the Collateral Documents; (e) all the actual costs and
reasonable fees, expenses and disbursements of any auditors, accountants,
consultants or appraisers (including Barrier Advisors) of each Agent or Lender;
(f) all the actual costs and reasonable expenses (including the reasonable
fees, expenses and disbursements of any appraisers, consultants, advisors and
agents employed or retained by Collateral Agent and its counsel) in connection
with the custody or preservation of any of the Collateral; (g) all other
actual and reasonable costs and expenses incurred by each Agent in connection
with the syndication of the Loans and Commitments and the negotiation,
preparation and execution of the Credit Documents and any consents, amendments,
waivers or other modifications thereto and the transactions contemplated
thereby; and (h) after the occurrence of a Default or an Event of Default,
all costs and expenses, including reasonable attorneys’ fees (including
allocated costs of internal counsel) and costs of settlement, incurred by any
Agent and Lenders in enforcing any Obligations of or in collecting any payments
due from any Credit Party hereunder or under the other Credit Documents by
reason of such Default or

 

85

 

Event of Default (including in connection with the
sale of, collection from, or other realization upon any of the Collateral) or
in connection with any refinancing or restructuring of the credit arrangements
provided hereunder in the nature of a “work-out” or pursuant to any insolvency
or bankruptcy cases or proceedings.

 

10.3        Indemnity.

 

(a)           In addition to the
payment of expenses pursuant to Section 10.2, whether or not the
transactions contemplated hereby shall be consummated, each Credit Party agrees
to defend (subject to Indemnitees’ selection of counsel), indemnify, pay and
hold harmless, each Agent and each Lender and the officers, partners, members,
directors, trustees, advisors, employees, agents, sub-agents and Affiliates
each Agent and Lender (each, an “Indemnitee”),
from and against any and all Indemnified Liabilities; provided, no
Credit Party shall have any obligation to any Indemnitee hereunder with respect
to any Indemnified Liabilities to the extent such Indemnified Liabilities arise
from the gross negligence or willful misconduct of that Indemnitee.  To the extent that the undertakings to
defend, indemnify, pay and hold harmless set forth in this Section 10.3
may be unenforceable in whole or in part because they are violative of any law
or public policy, the applicable Credit Party shall contribute the maximum
portion that it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees
or any of them.

 

(b)           To the extent permitted
by applicable law, no Credit Party shall assert, and each Credit Party hereby
waives, any claim against each Lender, each Agent and their respective
Affiliates, directors, employees, attorneys, agents or sub-agents, on any
theory of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) (whether or not the claim therefor is
based on contract, tort or duty imposed by any applicable legal requirement)
arising out of, in connection with, arising out of, as a result of, or in any
way related to, this Agreement or any Credit Document or any agreement or
instrument contemplated hereby or thereby or referred to herein or therein, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof or any act or omission or event occurring in connection therewith, and
Borrower hereby waives, releases and agrees not to sue upon any such claim or
any such damages, whether or not accrued and whether or not known or suspected
to exist in its favor.

 

10.4        Set-Off.  In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence of any Event of Default each Lender is hereby authorized by
each Credit Party at any time or from time to time subject to the consent of
Administrative Agent (such consent not to be unreasonably withheld or delayed),
without notice to any Credit Party or to any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set
off and to appropriate and to apply any and all deposits (general or special,
including Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by such Lender to or for the credit or the account of any
Credit Party against and on account of the obligations and liabilities of any
Credit Party to such Lender hereunder and participations therein and under the
other Credit Documents, including all claims of any nature or description
arising out of or connected hereto, and participations therein and under the
other Credit Documents, irrespective of whether or not (a) such Lender
shall have made any demand

 

86

 

hereunder or (b) the principal of or the interest on the Loans or
any other amounts due hereunder shall have become due and payable pursuant to Section 2
and although such obligations and liabilities, or any of them, may be
contingent or unmatured.

 

10.5        Amendments and Waivers.

 

(a)           Requisite Lenders’
Consent.  Subject to Sections 10.5(b) and
10.5(c), no amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders provided, that (i) Requisite Revolving Lenders,
or Requisite Term Lenders, as the case may be, or Administrative Agent with the
consent of such Lenders, on the one hand, and Borrower, on the other hand, may
amend, supplement or otherwise modify or waive any of the terms and provisions
(and related definitions) (x) related solely to the applicable Credit
Facility and (y) solely affecting the relative rights, remedies,
obligations and priorities among the Lenders under such Credit Facility, which
does not adversely affect any Lender under the other Credit Facility and (ii) Administrative
Agent may, with the consent of Borrower only, such consent not to be unreasonably
withheld or delayed, amend, modify or supplement this Agreement to cure any
ambiguity, omission, defect or inconsistency, so long as such amendment,
modification or supplement does not adversely affect the rights of any Lender.

 

(b)           Affected Lenders’ Consent.  Without the written consent of each Lender
(other than a Defaulting Lender), no amendment, modification, termination, or
consent shall be effective if the effect thereof would:

 

(i)            extend
the scheduled final maturity of any Loan or Note;

 

(ii)           waive,
reduce or postpone any scheduled repayment (but not prepayment);

 

(iii)          reduce
the rate of interest on any Loan (other than any waiver of any increase in the
interest rate applicable to any Loan pursuant to Section 2.11) or any fee
or any premium payable hereunder;

 

(iv)          extend the
time for payment of any such interest or fees;

 

(v)           reduce
the principal amount of any Revolving Loan;

 

(vi)          amend,
modify, terminate or waive any provision of Section 2.17, this Section 10.5(b),
Section 10.5(c) or any other provision of this Agreement that
expressly provides that the consent of all Lenders is required;

 

(vii)         amend
the definition of “Incremental Facility Effective Date”, “Requisite Revolving Lenders”, “Requisite Term Lenders”, “Requisite Lenders”, or “Pro Rata Share”;  provided, with the consent
of Requisite Lenders, additional extensions of credit pursuant hereto may be
included in the determination of “Requisite Revolving Lenders”, “Requisite Term Lenders”, “Requisite Lenders” or “Pro Rata

 

87

 

Share” on substantially the same basis as
the Loan Commitments and the Loans are included on the Closing Date;

 

(viii)        increase
any advance rate above the rate set forth herein or increase total Revolving
Loan Commitments;

 

(ix)           release
all or substantially all of the Collateral except as expressly provided in the
Credit Documents;

 

(x)            consent
to the assignment or transfer by any Credit Party of any of its rights and
obligations under any Credit Document;

 

(xi)           consent
to (A) any change to the DIP Budget or the Cash Flow Forecast or (B) waive
any Event of Default; or

 

(xii)          [Reserved].

 

(c)           Agent Consents.  No amendment, modification, termination or
waiver of any provision of the Credit Documents, or consent to any departure by
any Credit Party therefrom shall amend, modify, terminate or waive any
provision of Section 9 as the same applies to any Agent, or any other
provision hereof as the same applies to any Agent, in each case without the
consent of such Agent.

 

(d)           [Reserved.]

 

(e)           Execution of
Amendments, etc.  Administrative
Agent may, but shall have no obligation to, with the concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of such
Lender.  Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.  No notice to or demand on
any Credit Party in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances.  Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 10.5 shall be
binding upon each Lender at the time outstanding, each future Lender and, if
signed by a Credit Party, on such Credit Party.

 

10.6        Successors and Assigns; Participations.

 

(a)           Generally.  This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns of Lenders.  No Credit Party’s rights or obligations
hereunder nor any interest therein may be assigned or delegated by any Credit
Party without the prior written consent of all Lenders.  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, Affiliates of each of Agents and Lenders)
any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)           Register.  Borrower, Administrative Agent and Lenders
shall deem and treat the Persons listed as Lenders in the Register as the
holders and owners of the corresponding Commitments and Loans listed therein
for all purposes hereof, and no assignment or transfer of

 

88

 

any such Commitment or Loan shall be effective, in
each case, unless and until recorded in the Register following receipt of (x) a
written or electronic confirmation of an assignment issued by a Settlement
Service pursuant to Section 10.6(d) (a “Settlement Confirmation”) or (y) an Assignment Agreement
effecting the assignment or transfer thereof, in each case, as provided in Section 10.6(d).  Each assignment shall be recorded in the Register
on the Business Day the Settlement Confirmation or Assignment Agreement is
received by Administrative Agent, if received by 12:00 noon New York City time,
and on the following Business Day if received after such time, prompt notice
thereof shall be provided to Borrower and a copy of such Assignment Agreement
or Settlement Confirmation shall be maintained, as applicable.  The date of such recordation of a transfer
shall be referred to herein as the “Assignment Effective Date.”  Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be conclusive
and binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans.

 

(c)           Right to Assign.  Each Lender shall have the right at any time
to sell, assign or transfer all or a portion of its rights and obligations
under this Agreement, including, without limitation, all or a portion of its
Commitment or Loans owing to it or other Obligations (provided, however,
that each such assignment shall be of a uniform, and not varying, percentage of
all rights and obligations under and in respect of any Loan and any related
Commitments):

 

(i)            to any
Person meeting the criteria of clause (i) of the definition of the term of
“Eligible Assignee” upon the giving of notice to Borrower and Administrative
Agent; and

 

(ii)           to any
Person meeting the criteria of clause (ii) of the definition of the term
of “Eligible Assignee” upon giving of notice to Borrower and Administrative
Agent, provided, that each such assignment pursuant to this Section 10.6(c)(ii) shall
be in an aggregate amount of not less than $1,000,000 (or such lesser amount as
may be agreed to by Borrower and Administrative Agent or as shall constitute
the aggregate amount of the Loan of the assigning Lender) with respect to the
assignment of Loans.

 

(d)           Mechanics.  Assignments of Loans by Lenders may be made
via an electronic settlement system acceptable to Administrative Agent as
designated in writing from time to time to Lenders by Administrative Agent (the
“Settlement
Service”).  Each such assignment shall be effected by the
assigning Lender and proposed assignee pursuant to the procedures then in
effect under the Settlement Service, which procedures shall be consistent with
the other provisions of this Section 10.6. 
Each assignor Lender and proposed assignee shall comply with the
requirements of the Settlement Service in connection with effecting any
transfer of Loans pursuant to the Settlement Service.  Administrative Agent’s and Borrower’s consent
shall be deemed to have been granted pursuant to Section 10.6(c)(ii) with
respect to any transfer effected through the Settlement Service.  Subject to the other requirements of this Section 10.6,
assignments and assumptions of Loans may also be effected by manual execution
and delivery to Administrative Agent of an Assignment Agreement.  Initially, assignments and assumptions of
Loans shall be effected by such manual execution until Administrative Agent
notifies Lenders to the contrary. 
Assignments made pursuant to the foregoing provision shall be effective
as of the Assignment Effective Date.  In
connection with all assignments there shall be delivered to Administrative
Agent such forms, certificates or other evidence, if any, with respect to
United

 

89

 

States federal income tax withholding matters as the
assignee under such Assignment Agreement may be required to deliver pursuant to
Section 2.23(c).  Notwithstanding
anything herein or in any Assignment Agreement to the contrary and (i) unless
notice to the contrary is delivered to Lenders from Administrative Agent or (ii) so
long as no Default or Event of Default has occurred and is continuing, payment
to the assignor by the assignee in respect of the settlement of an assignment
of any Loan shall include such compensation to the assignor as may be agreed
upon by the assignor and the assignee with respect to all unpaid interest which
has accrued on such Loan to but excluding the Assignment Effective Date.  On and after the applicable Assignment
Effective Date, the applicable assignee shall be entitled to receive all
interest paid or payable with respect to the assigned Loan, whether such
interest accrued before or after the applicable Assignment Effective Date.

 

(e)           Representations and
Warranties of Assignee.  Each Lender,
upon execution and delivery hereof or upon succeeding to an interest in Loans,
as the case may be, represents and warrants as of the Closing Date or as of the
Assignment Effective Date that (i) it is an Eligible Assignee; (ii) it
has experience and expertise in the making of or investing in loans such as the
applicable Loans; and (iii) it will make or invest in Loans for its own
account in the ordinary course and without a view to distribution of such Loans
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of this Section 10.6,
the disposition of such Loans or any interests therein shall at all times
remain within its exclusive control).

 

(f)            Effect of
Assignment.  Subject to the terms and
conditions of this Section 10.6, as of the “Assignment Effective Date” (i) the
assignee thereunder shall have the rights and obligations of a “Lender”
hereunder to the extent of its interest in the Loans as reflected in the
Register and shall thereafter be a party hereto and a “Lender” for all purposes
hereof; (ii) the assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned to the assignee, relinquish
its rights (other than any rights which survive the termination hereof under Section 10.8)
and be released from its obligations hereunder (and, in the case of an
assignment covering all or the remaining portion of an assigning Lender’s
rights and obligations hereunder, such Lender shall cease to be a party hereto
on the Assignment Effective Date; provided, anything contained in any of
the Credit Documents to the contrary notwithstanding, such assigning Lender
shall continue to be entitled to the benefit of all indemnities hereunder as
specified herein with respect to matters arising out of the prior involvement
of such assigning Lender as a Lender hereunder); and (iii) if any such
assignment occurs after the issuance of any Note hereunder, the assigning
Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its applicable Notes to Administrative Agent
for cancellation, and thereupon Borrower shall issue and deliver new Notes, if
so requested by the assignee and/or assigning Lender, to such assignee and/or
to such assigning Lender, with appropriate insertions, to reflect the
outstanding Loans of the assignee and/or the assigning Lender.

 

(g)           Participations.  Each Lender shall have the right at any time
to sell one or more participations to any Person (other than Borrower, any of
its Subsidiaries or any of its Affiliates) in all or any part of its Commitments,
Loans or in any other Obligation.  The
holder of any such participation, other than an Affiliate of the Lender
granting such participation, shall not be entitled to require such Lender to
take or omit to take any action hereunder except with

 

90

 

respect to any amendment, modification or waiver that
would (i) extend the final scheduled maturity of any Loan or Note in which
such participant is participating, or reduce the rate or extend the time of
payment of interest or fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant’s
participation over the amount thereof then in effect (it being understood that
a waiver of any Default or Event of Default shall not constitute a change in
the terms of such participation, and that an increase in any Loan shall be
permitted without the consent of any participant if the participant’s
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by any Credit Party of any of its rights and obligations
under this Agreement or (iii) release all or substantially all of the
Collateral under the Collateral Documents (except as expressly provided in the
Credit Documents) supporting the Loans hereunder in which such participant is
participating.  Borrower agrees that each
participant shall be entitled to the benefits of Sections 2.21(c), 2.22 and
2.23 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (c) of this Section; provided, (i) a
participant shall not be entitled to receive any greater payment under Section 2.22
or 2.23 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such participant, unless the sale of the
participation to such participant is made with Borrower’s prior written consent
and (ii) a participant that would be a Non-US Lender if it were a Lender
shall not be entitled to the benefits of Section 2.23 unless Borrower is
notified of the participation sold to such participant and such participant
agrees, for the benefit of Borrower, to comply with Section 2.23 as though
it were a Lender.  To the extent
permitted by law, each participant also shall be entitled to the benefits of Section 10.4
as though it were a Lender, provided such Participant agrees to be subject to Section 2.20
as though it were a Lender.

 

(h)           Certain Other Assignments.  In addition to any other assignment permitted
pursuant to this Section 10.6, any Lender may assign and/or pledge all or
any portion of its Loans, the other Obligations owed by or to such Lender, and
its Notes, if any, to secure obligations of such Lender including, without
limitation, any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors and any operating circular issued
by such Federal Reserve Bank; provided, no Lender, as between Borrower
and such Lender, shall be relieved of any of its obligations hereunder as a
result of any such assignment and pledge, and provided  further,
in no event shall the applicable Federal Reserve Bank, pledgee or trustee be
considered to be a “Lender” or be entitled to require the assigning Lender to
take or omit to take any action hereunder.

 

10.7        Independence of Covenants.  All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.

 

10.8        Survival of Representations,
Warranties and Agreements.  All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.  Notwithstanding anything herein or implied by
law to the contrary, the agreements of each Credit Party set forth in Sections
2.21(c), 2.22, 2.23,

 

91

 

10.2, 10.3 and 10.4 and the agreements of Lenders set
forth in Sections 2.20, 9.3(b) and 9.6 shall survive the payment of
the Loans, and the termination hereof.

 

10.9        No Waiver; Remedies
Cumulative.  No failure or delay on
the part of any Agent or any Lender in the exercise of any power, right or
privilege hereunder or under any other Credit Document shall impair such power,
right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other power, right or privilege.  The
rights, powers and remedies given to each Agent and each Lender hereby are
cumulative and shall be in addition to and independent of all rights, powers
and remedies existing by virtue of any statute or rule of law or in any of
the other Credit Documents or any of the Hedge Agreements.  Any forbearance or failure to exercise, and
any delay in exercising, any right, power or remedy hereunder shall not impair
any such right, power or remedy or be construed to be a waiver thereof, nor
shall it preclude the further exercise of any such right, power or remedy.

 

10.10      Marshalling; Payments Set
Aside.  Neither any Agent nor any
Lender shall be under any obligation to marshal any assets in favor of any
Credit Party or any other Person or against or in payment of any or all of the
Obligations.  To the extent that any
Credit Party makes a payment or payments to Administrative Agent or Lenders (or
to Administrative Agent, on behalf of Lenders), or any Agent or Lenders enforce
any security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies
therefor or related thereto, shall be revived and continued in full force and
effect as if such payment or payments had not been made or such enforcement or
setoff had not occurred.

 

10.11      Severability.  In case any provision in or obligation
hereunder or under any other Credit Document shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

 

10.12      Obligations Several;
Independent Nature of Lenders’ Rights. 
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitment of any other Lender
hereunder.  Nothing contained herein or
in any other Credit Document, and no action taken by Lenders pursuant hereto or
thereto, shall be deemed to constitute Lenders as a partnership, an
association, a joint venture or any other kind of entity. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights arising out
hereof and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.

 

10.13      Headings.  Section headings herein are included
herein for convenience of reference only and shall not constitute a part hereof
for any other purpose or be given any substantive effect.

 

92

 

10.14      APPLICABLE LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT, UNLESS THE
CONTEXT REQUIRES OTHERWISE, REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

 

10.15      CONSENT TO
JURISDICTION.  ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER
CREDIT DOCUMENT, OR ANY OF THE OBLIGATIONS, SHALL BE BROUGHT IN EITHER (i) THE
BANKRUPTCY COURT, OR (ii) THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, BOROUGH OF MANHATTAN OR, IF THAT COURT DOES NOT
HAVE SUBJECT MATTER JURISDICTION, IN ANY STATE COURT LOCATED IN THE CITY OF NEW
YORK.  BY EXECUTING AND DELIVERING THIS
AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE JURISDICTION AND
VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES
THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE
APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1;
(D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT
TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT PARTY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; AND (E) AGREES THAT AGENTS AND LENDERS RETAIN
THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER JURISDICTION.

 

10.16      WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS.  EACH PARTY HERETO
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED
FUTURE DEALINGS.  EACH PARTY HERETO
FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL

 

93

 

COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.  THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER
THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 10.16
AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF
THE OTHER CREDIT DOCUMENTS OR TO
ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

10.17      Confidentiality.  Each Lender shall hold all non-public
information regarding Borrower and its Subsidiaries and their businesses
identified as such by Borrower and obtained by such Lender pursuant to the
requirements hereof in accordance with such Lender’s customary procedures for
handling confidential information of such nature, it being understood and
agreed by Borrower that, in any event, a Lender may make (i) disclosures
of such information to Affiliates of such Lender and to their agents and
advisors (and to other persons authorized by a Lender or Agent to organize,
present or disseminate such information in connection with disclosures
otherwise made in accordance with this Section 10.17), (ii) disclosures
of such information reasonably required by any bona fide or potential assignee,
transferee or participant in connection with the contemplated assignment,
transfer or participation by such Lender of any Loans or any participations
therein or by any direct or indirect contractual counterparties (or the
professional advisors thereto) in Hedge Agreements (provided, such
counterparties and advisors are advised of and agree to be bound by the
provisions of this Section 10.17), (iii) disclosure to any rating
agency when required by it, provided that, prior to any disclosure, such
rating agency shall undertake in writing to preserve the confidentiality of any
confidential information relating to the Credit Parties received by it from any
of Agents or any Lender, and (iv) disclosures required or requested by any
governmental agency or representative thereof or by the NAIC or pursuant to
legal or judicial process; provided, unless specifically prohibited by
applicable law or court order, each Lender shall make reasonable efforts to
notify Borrower of any request by any governmental agency or representative
thereof (other than any such request in connection with any examination of the
financial condition or other routine examination of such Lender by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information. 
Notwithstanding anything to the contrary set forth herein, each party
(and each of their respective employees, representatives or other agents) may
disclose to any and all persons, without limitations of any kind, the tax
treatment and tax structure of the transactions contemplated by this Agreement
and all materials of any kind (including opinions and other tax analyses) that
are provided to any such party relating to such tax treatment and tax
structure.  However, any information
relating to the tax treatment or tax structure shall remain subject to the
confidentiality provisions hereof (and the foregoing sentence shall not apply)
to the extent reasonably necessary to enable the parties hereto, their
respective Affiliates, and their and their respective Affiliates’ directors and
employees to comply with applicable securities laws.  For this purpose, “tax structure” means any
facts relevant to the federal income tax treatment of the transactions
contemplated by this Agreement but does not include information relating to the
identity of any of the parties hereto or any of their respective Affiliates.

 

94

 

10.18      Usury Savings Clause.

 

(a)           Credit Parties.  Notwithstanding any other provision herein,
in respect of each Credit Party, the aggregate interest rate charged with
respect to any of the Obligations, including all charges or fees in connection
therewith deemed in the nature of interest under applicable law shall not
exceed the Highest Lawful Rate.  If the
rate of interest (determined without regard to the preceding sentence) under
this Agreement at any time exceeds the Highest Lawful Rate, the outstanding
amount of the Loans made hereunder shall bear interest at the Highest Lawful
Rate until the total amount of interest due hereunder equals the amount of
interest which would have been due hereunder if the stated rates of interest
set forth in this Agreement had at all times been in effect.  In addition, if when the Loans made hereunder
are repaid in full the total interest due hereunder (taking into account the
increase provided for above) is less than the total amount of interest which
would have been due hereunder if the stated rates of interest set forth in this
Agreement had at all times been in effect, then to the extent permitted by law,
Borrower shall pay to Administrative Agent an amount equal to the difference
between the amount of interest paid and the amount of interest which would have
been paid if the Highest Lawful Rate had at all times been in effect.  Notwithstanding the foregoing, it is the
intention of Lenders and Borrower to conform strictly to any applicable usury
laws.  Accordingly, if any Lender
contracts for, charges, or receives any consideration which constitutes
interest in excess of the Highest Lawful Rate, then any such excess shall be
cancelled automatically and, if previously paid, shall at such Lender’s option
be applied to the outstanding amount of the Loans made hereunder or be refunded
to Borrower.

 

(b)           [Reserved]

 

10.19      Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed
an original, but all such counterparts together shall constitute but one and
the same instrument.

 

10.20      Effectiveness.  This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto and receipt
by Borrower and Administrative Agent of written or telephonic notification of
such execution and authorization of delivery thereof.

 

10.21      Patriot Act.  Each Lender and Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies each Credit Party that
pursuant to the requirements of the Patriot Act or other applicable laws
relating to money laundering and/or terrorist financing, it is required to
obtain, verify and record information that identifies each Credit Party, which
information includes the name and address of Borrower and other information
that will allow such Lender or Administrative Agent, as applicable, to identify
Borrower in accordance with the Patriot Act or other applicable laws relating
to money laundering and/or terrorist financing.

 

10.22      Electronic Execution of
Assignments.  The words “execution,” “signed,”
“signature,” and words of like import in any Assignment Agreement shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any 

 

95

 

applicable law, including
the Federal Electronic Signatures in Global and National Commerce Act, the New
York State Electronic Signatures and Records Act, or any other similar state
laws based on the Uniform Electronic Transactions Act.

 

10.23      [Reserved.]

 

10.24      Judgment Currency.

 

(a)           If, for the purpose of
obtaining or enforcing judgment against any Credit Party in any court in any
jurisdiction, it becomes necessary to convert into any other currency (such
other currency being hereinafter in this Section 10.24 referred to as the “Judgment Currency”) an amount due under any Credit
Document in any currency (the “Obligation Currency”)
other than the Judgment Currency, the conversion shall be made at the rate of
exchange prevailing on the Business Day immediately preceding the date of
actual payment of the amount due, in the case of any proceeding in the courts
of any jurisdiction that will give effect to such conversion being made on such
date, or the date on which the judgment is given, in the case of any proceeding
in the courts of any other jurisdiction (the applicable date as of which such
conversion is made pursuant to this Section 10.24 being hereinafter in
this Section 10.24 referred to as the “Judgment Conversion Date”).

 

(b)           If, in the case of any
proceeding in the court of any jurisdiction referred to in Section 10.24(a),
there is a change in the rate of exchange prevailing between the Judgment
Conversion Date and the date of actual receipt for value of the amount due, the
applicable Credit Party or Parties shall pay such additional amount (if any,
but in any event not a lesser amount) as may be necessary to ensure that the
amount actually received in the Judgment Currency, when converted at the rate
of exchange prevailing on the date of payment, will produce the amount of the
Obligation Currency which could have been purchased with the amount of the
Judgment Currency stipulated in the judgment or judicial order at the rate of
exchange prevailing on the Judgment Conversion Date.  Any amount due from any Credit Party under
this Section 10.24(b) shall be due as a separate debt and shall not
be affected by judgment being obtained for any other amounts due under or in
respect of any of the Credit Documents.

 

(c)           The term “rate of exchange” in this Section 10.24 means the
rate of exchange at which Administrative Agent, on the relevant date at or
about 12:00 noon (New York time), would be prepared to sell, in accordance with
Administrative Agent’s normal course foreign currency exchange practices, the
Obligation Currency against the Judgment Currency.

 

[Remainder of page intentionally left blank]

 

96

 

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

 

	
   

  	
  LEHMAN BROTHERS HOLDINGS INC.,

  
	
   

  	
  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Seerey, Jr.

  
	
   

  	
   

  	
  Name: James P. Seerey, Jr.

  
	
   

  	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BARCLAYS BANK PLC,

  
	
   

  	
  as Administrative Agent, Collateral Agent and a 

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip Capparis

  
	
   

  	
   

  	
  Name: Philip Capparis

  
	
   

  	
   

  	
  Title: Director

  

 

 

[SIGNATURE PAGE TO
CREDIT AGREEMENT]

 

1

 

APPENDIX A

 

TO SENIOR SECURED
SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

Commitments

 

	
  Lender

  	
   

  	
  Revolving Loan Commitment

  	
   

  	
  Pro Rata Share

  	
   

  
	
  Barclays Bank
  plc

  	
   

  	
  $

  	
  200,000,000.00

  	
   

  	
  100

  	
  %

  
	
  Total

  	
   

  	
  $

  	
  200,000,000.00

  	
   

  	
  100

  	
  %

  

 

	
  Lender

  	
   

  	
  Term Loan Commitment

  	
   

  	
  Pro Rata Share

  	
   

  
	
  Barclays Bank
  plc

  	
   

  	
  $

  	
  250,000,000.00

  	
   

  	
  100

  	
  %

  
	
  Total

  	
   

  	
  $

  	
  250,000,000.00

  	
   

  	
  100

  	
  %

  

 

APPENDIX A

 

1

 

APPENDIX B

 

TO SENIOR SECURED
SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

Notice Addresses

 

LEHMAN
BROTHERS HOLDINGS INC.

745 7th Avenue

New York, NY

Attention: Chief Financial Officer

 

BARCLAYS
BANK PLC,

 

Administrative Agent’s and Collateral Agent’s
Principal Office and as Lender:

 

200 Park Ave

New York, NY 10166

Attention: Diane Rolfe

Telecopier: 212-412-7600

Email and for delivery of final financial statements for posting:
diane.rolfe@barcap.com

 

with a copy to:

 

BARCLAYS CAPITAL

 

200 Park Ave

New York, NY 10166

Attention: Diane Rolfe

Telecopier: 212-412-7600

Email: diane.rolfe@barcap.com

 

with a copy to:

 

CLEARY GOTTLIEB STEEN & HAMILTON LLP

1 Liberty Plaza

New York, NY 10006

	
  Attention:

  	
  Lisa Schweitzer, Esq.

  
	
   

  	
  lschweitzer@cgsh.com

  
	
   

  	
  Margaret Peponis, Esq.

  
	
   

  	
  mpeponis@cgsh.com

  
	
  Facsimile:

  	
  (212) 225-3999

  

 

APPENDIX B

 

1

 

EXHIBIT A-1 TO

SENIOR SECURED SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

FORM OF
FUNDING NOTICE

 

Reference is made to the
Senior Secured Superpriority Debtor in Possession Credit Agreement, dated as of
September 17, 2008 (as it
may be amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation, a debtor
and a debtor in possession under chapter 11 of the Bankruptcy Code (“Borrower”), the Lenders party thereto from time to time,
BARCLAYS BANK PLC (“Barclays Bank”),
as Administrative Agent and Collateral Agent.

 

Pursuant to [Section 2.3]/[Section 2.4]
of the Credit Agreement, Borrower desires that Lenders make the following Loans
to Borrower in accordance with the applicable terms and conditions of the
Credit Agreement on [mm/dd/yy], (the “Borrowing Date”):

 

	
   

  	
  1.
  

  	
  Revolving
  Loans

  	
   

  	
  $[      ,      ,      ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o        [Base
  Rate Loans:]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o        [Eurodollar
  Rate Loans, with an initial

  	
   

  	
  $[      ,      ,      ]

  
	
   

  	
   

  	
              Interest
  Period of
                  
  month(s):]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.
  

  	
  Term
  Loans

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o        [Base
  Rate Loans:]

  	
   

  	
  $[      ,      ,      ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o        [Eurodollar
  Rate Loans, with an initial

  	
   

  	
   

  
	
   

  	
   

  	
              Interest
  Period of
                  
  month(s):]

  	
   

  	
  $[      ,      ,      ]

  

 

Borrower
hereby certifies that:

 

(i)                                                             as of the Borrowing Date, the representations
and warranties contained in each of the Credit Documents are true and correct
in all material respects on and as of such Borrowing Date to the same extent as
though made on and as of such date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case such
representations and warranties are true, correct and complete in all material
respects on and as of such earlier date;

 

(ii)                                                          as of the Borrowing Date, no event has
occurred and is continuing or would result from the consummation of the borrowing
contemplated hereby that would constitute an Event of Default or a Default.

 

EXHIBIT A-1-1

 

	
  Date:
  [mm/dd/yy]

  	
  LEHMAN
  BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

EXHIBIT A-1-2

 

EXHIBIT A-2 TO

SENIOR SECURED SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

CONVERSION/CONTINUATION
NOTICE

 

Reference is made to the
Senior Secured Superpriority Debtor in Possession Credit Agreement, dated as of
September 17, 2008 (as it
may be amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation, a debtor
and a debtor in possession under chapter 11 of the Bankruptcy Code (“Borrower”), the Lenders party thereto from time to time,
BARCLAYS BANK PLC (“Barclays Bank”),
as Administrative Agent and Collateral Agent.

 

Pursuant to Section 2.10
of the Credit Agreement, Borrower desires to convert or to continue the
following Loans, each such conversion and/or continuation to be effective as of
[                                  ]:

 

1.  Term Loans:

 

	
  $[      ,      ,     ]

  	
  Eurodollar
  Rate Loans to be continued with Interest Period of [        ]
  month(s)

  
	
   

  	
   

  
	
  $[      ,      ,     ]

  	
  Base
  Rate Loans to be converted to Eurodollar Rate Loans with Interest Period of [        ]
  month(s)

  
	
   

  	
   

  
	
  $[      ,      ,     ]

  	
  Eurodollar
  Rate Loans to be converted to Base Rate Loans

  

 

2.  Revolving Loans:

 

	
  $[      ,      ,     ]

  	
  Eurodollar
  Rate Loans to be continued with Interest Period of
  [        ] month(s)

  
	
   

  	
   

  
	
  $[      ,      ,     ]

  	
  Base
  Rate Loans to be converted to Eurodollar Rate Loans with Interest Period of
  [        ] month(s)

  
	
   

  	
   

  
	
  $[      ,      ,     ]

  	
  Eurodollar
  Rate Loans to be converted to Base Rate Loans 

  

 

Borrower hereby certifies
that as of the date hereof, no Default or Event of Default has occurred and is
now continuing. 

 

	
  Date:
  [mm/dd/yy]

  	
  LEHMAN
  BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

EXHIBIT A-2-1

 

EXHIBIT B-1 TO

SENIOR SECURED SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

TERM
LOAN NOTE

 

	
  $[                               ]

  	
   

  
	
  [                          ,
      , 20]

  	
  New York, New York

  

 

FOR VALUE
RECEIVED, LEHMAN
BROTHERS HOLDINGS INC., a
Delaware corporation (“Borrower”),
promises to pay [NAME OF LENDER] (“Payee”) or its registered assigns the
principal amount of [                                  ]
dollars ($[                            ])
in the installments referred to below.

 

Borrower also promises to
pay interest on the unpaid principal amount hereof, from the date hereof until
paid in full, at the rates and at the times which shall be determined in
accordance with the provisions of that certain Senior Secured Superpriority
Debtor in Possession Credit Agreement (dated as of September 17, 2008 (as it may be amended, supplemented or
otherwise modified, the “Credit Agreement”;
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among Borrower, a debtor and a debtor in possession
under chapter 11 of the Bankruptcy Code, the Lenders party thereto from time to
time, BARCLAYS BANK PLC (“Barclays Bank”),
as Administrative Agent and Collateral Agent.

 

Borrower shall make
principal payments on this Note as set forth in Section 2.13 of the Credit
Agreement.

 

This Note is in the
aggregate principal amount of $[                            ]
and is issued pursuant to and entitled to the benefits of the Credit Agreement,
to which reference is hereby made for a more complete statement of the terms
and conditions under which the Loan evidenced hereby was made and is to be repaid.

 

All payments of principal
and interest in respect of this Note shall be made in lawful money of the
United States of America in same day funds at the Principal Office of
Administrative Agent or at such other place as shall be designated in writing for
such purpose in accordance with the terms of the Term Loan Agreement.  Unless and until an Assignment Agreement
effecting the assignment or transfer of the obligations evidenced hereby shall
have been accepted by Administrative Agent and recorded in the Register,
Borrower, each Agent and Lenders shall be entitled to deem and treat Payee as
the owner and holder of this Note and the obligations evidenced hereby.

 

This Note is subject to
mandatory prepayment and to prepayment at the option of Borrower, each as
provided in the Credit Agreement.

 

THIS NOTE AND THE RIGHTS AND
OBLIGATIONS OF BORROWER AND PAYEE HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

 

Upon the occurrence and
during the continuance of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may 

 

EXHIBIT B-1-1

 

be
declared to be, due and payable in the manner, upon the conditions and with the
effect provided in the Credit Agreement.

 

The terms of this Note are
subject to amendment only in the manner provided in the Credit Agreement.

 

No reference herein to the
Credit Agreement and no provision of this Note or the Credit Agreement shall
alter or impair the obligations of Borrower, which are absolute and
unconditional, to pay the principal of and interest on this Note at the place,
at the respective times, and in the currency herein prescribed.

 

Borrower promises to pay all
costs and expenses, including reasonable attorneys’ fees, all as provided in
the Credit Agreement, incurred in the collection and enforcement of this
Note.  Borrower and any endorsers of this
Note hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest,
demand notice of every kind and, to the full extent permitted by law, the right
to plead any statute of limitations as a defense to any demand hereunder.

 

[Remainder of page intentionally
left blank]

 

EXHIBIT B-1-2

 

IN WITNESS
WHEREOF, Borrower has
caused this Note to be duly executed and delivered by its officer thereunto
duly authorized as of the date and at the place first written above.

 

	
   

  	
  LEHMAN
  BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

EXHIBIT B-1-3

 

EXHIBIT B-2 TO

SENIOR SECURED SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

REVOLVING
LOAN NOTE

 

$[                                  ]

	
  [                          ,
      , 20    ]

  	
   

  	
  New York, New York

  

 

FOR VALUE
RECEIVED, LEHMAN
BROTHERS HOLDINGS INC., a
Delaware corporation (“Borrower”),
promises to pay [NAME OF LENDER] (“Payee”) or its registered assigns the
principal amount equal to the lesser of (a) [                                  ]
dollars ($[                            ])
and (b) the aggregate unpaid principal amount of all Revolving Loans (as
defined in the Credit Agreement referred to below) made by Lenders to Borrower.

 

Borrower also promises to
pay interest on the unpaid principal amount hereof, from the date hereof until
paid in full, at the rates and at the times which shall be determined in
accordance with the provisions of that certain Senior Secured Superpriority
Debtor in Possession Credit Agreement, dated as of September 17, 2008 (as it may be amended, supplemented or
otherwise modified, the “Credit Agreement”;
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among Borrower, a debtor and a debtor in possession
under chapter 11 of the Bankruptcy Code, the Lenders party thereto from time to
time, BARCLAYS BANK PLC (“Barclays Bank”),
as Administrative Agent and Collateral Agent.

 

Borrower shall make
principal payments on this Note as set forth in Section 2.13 of the Credit
Agreement.

 

This Note is in the
aggregate principal amount of $[                            ]
and is issued pursuant to and entitled to the benefits of the Credit Agreement,
to which reference is hereby made for a more complete statement of the terms
and conditions under which the Loan evidenced hereby was made and is to be
repaid.

 

All payments of principal
and interest in respect of this Note shall be made in lawful money of the
United States of America in same day funds at the Principal Office of
Administrative Agent or at such other place as shall be designated in writing
for such purpose in accordance with the terms of the Credit Agreement.  Unless and until an Assignment Agreement
effecting the assignment or transfer of the obligations evidenced hereby shall
have been accepted by Administrative Agent and recorded in the Register,
Borrower, each Agent and Lenders shall be entitled to deem and treat Payee as
the owner and holder of this Note and the obligations evidenced hereby.  Payee hereby agrees, by its acceptance
hereof, that before disposing of this Note or any part hereof it will make a
notation hereon of all principal payments previously made hereunder and of the
date to which interest hereon has been paid; provided, the failure to make a
notation of any payment made on this Note shall not limit or otherwise affect
the obligations of Borrower hereunder with respect to payments of principal of
or interest on this Note.

 

This Note is subject to
mandatory prepayment and to prepayment at the option of Borrower, each as
provided in the Credit Agreement.

 

EXHIBIT B-2

 

 

THIS NOTE AND THE RIGHTS AND
OBLIGATIONS OF BORROWER AND PAYEE HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

 

Upon the occurrence and
during the continuance of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner, upon
the conditions and with the effect provided in the Credit Agreement.

 

The terms of this Note are
subject to amendment only in the manner provided in the Credit Agreement.

 

No reference herein to the
Credit Agreement and no provision of this Note or the Credit Agreement shall
alter or impair the obligations of Borrower, which are absolute and
unconditional, to pay the principal of and interest on this Note at the place,
at the respective times, and in the currency herein prescribed.

 

Borrower promises to pay all
costs and expenses, including reasonable attorneys’ fees, all as provided in
the Credit Agreement, incurred in the collection and enforcement of this
Note.  Borrower and any endorsers of this
Note hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest,
demand notice of every kind and, to the full extent permitted by law, the right
to plead any statute of limitations as a defense to any demand hereunder.

 

[Remainder of page intentionally left blank]

 

EXHIBIT B-2

 

IN WITNESS
WHEREOF, Borrower has
caused this Note to be duly executed and delivered by its officer thereunto
duly authorized as of the date and at the place first written above.

 

	
   

  	
  LEHMAN
  BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

EXHIBIT B-2

 

TRANSACTIONS ON

REVOLVING LOAN NOTE

 

	
  Date

  	
   

  	
  Amount of Loan 

  Made This Date

  	
   

  	
  Amount of Principal 

  Paid This Date

  	
   

  	
  Outstanding Principal

  Balance This Date

  	
   

  	
  Notation 

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

EXHIBIT B-2

 

EXHIBIT C TO

SENIOR SECURED SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

COMPLIANCE
CERTIFICATE

 

THE UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS:

 

1.                                       I am the Chief Financial Officer of each of
LEHMAN BROTHERS HOLDINGS INC. (“Borrower”).

 

2.                                       I have reviewed the terms of that certain
Senior Secured Superpriority Debtor in Possession Credit Agreement, dated as of
September 17, 2008 (as it
may be amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation, a debtor
and a debtor in possession under chapter 11 of the Bankruptcy Code (“Borrower”), the Lenders party thereto from time to time,
BARCLAYS BANK PLC (“Barclays Bank”),
as Administrative Agent and Collateral Agent, and I have made, or have caused
to be made under my supervision, a review in reasonable detail of the
transactions and condition of Borrower and its Subsidiaries during the
accounting period covered by the attached financial statements.

 

3.                                       The examination described in paragraph 2
above did not disclose, and I have no knowledge of, the existence of any
condition or event which constitutes an Event of Default or Default during or
at the end of the accounting period covered by the attached financial
statements or as of the date of this Certificate, except as set forth in a
separate attachment, if any, to this Certificate, describing in detail, the
nature of the condition or event, the period during which it has existed and
the action which Borrower has taken, is taking, or proposes to take with
respect to each such condition or event.

 

The foregoing
certifications, together with the financial statements delivered with this Certificate
in support hereof, are made and delivered pursuant to Section 5.1(f) of
the Credit Agreement.

 

 

	
   

  	
  LEHMAN
  BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:
  Chief Financial Officer

  

 

EXHIBIT C

 

 

EXHIBIT D-1 TO

SENIOR SECURED SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

OPINION
OF WEIL, GOTSCHAL & MANGES LLP SPECIAL COUNSEL

 

 

 

EXHIBIT D-1

 

 

EXHIBIT D-2 TO

SENIOR SECURED SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

OPINION
OF RICHARDS, LAYTON & FINGER LLP SPECIAL COUNSEL

 

 

 

EXHIBIT D-2

 

 

EXHIBIT E TO

SENIOR SECURED SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

ASSIGNMENT
AND ASSUMPTION AGREEMENT

 

This Assignment and
Assumption Agreement (the “Assignment”)
is dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor]
(the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein
shall have the meanings given to them in that certain Senior Secured
Superpriority Debtor in Possession Credit Agreement, dated as of September 17, 2008 (as it may be
amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among
LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation, a debtor and a debtor in
possession under chapter 11 of the Bankruptcy Code (“Borrower”),
the Lenders party thereto from time to time, BARCLAYS BANK PLC (“Barclays Bank”), as Administrative Agent
and Collateral Agent, receipt of a copy of which is hereby acknowledged by the
Assignee.  The Standard Terms and
Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment as if set
forth herein in full.

 

For an agreed consideration,
the Assignor hereby irrevocably sells and assigns to the Assignee, and the
Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit
Agreement, as of the Effective Date inserted by the Administrative Agent as
contemplated below, the interest in and to all of the Assignor’s rights and
obligations under the Credit Agreement and any other documents or instruments
delivered pursuant thereto that represents the amount and percentage interest
identified below of all of the Assignor’s outstanding rights and obligations
under the respective facilities identified below (the “Assigned Interest”).  Such sale and assignment is without recourse
to the Assignor and, except as expressly provided in this Assignment and the
Credit Agreement, without representation or warranty by the Assignor.

 

1.                           Assignor:

 

2.                           Assignee:                                                                                                                          [and
is an Affiliate/Approved Fund(1)]

 

3.                           Borrower:                                                                                                  Lehman Brothers Holdings Inc.

 

4.                           Administrative Agent:                               Barclays Bank Plc, as the administrative agent under the Credit
Agreement

 

5.                           Assigned Interest:

 

	
  Facility Assigned

  	
   

  	
  Aggregate Amount of

  Term 

  Commitment/Loans

  for all Lenders

  	
   

  	
  Amount of Term 

  Commitment/Loans

  Assigned

  	
   

  	
  Percentage Assigned of 

  Term 

  Commitment/Loans(2)

  	
   

  
	
  Term
  Loan Commitment

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
										

 

(1)                                  Select as applicable

(2)                                  Set forth, to at least 9 decimals, as a
percentage of the Term Loans of all Lenders thereunder.

 

EXHIBIT E-1

 

	
  Facility Assigned

  	
   

  	
  Aggregate Amount of

  Revolving Loans

  for all Lenders

  	
   

  	
  Amount of Revolving 

  Loans

  Assigned

  	
   

  	
  Percentage Assigned of

  Revolving Loans(3)

  	
   

  
	
  Revolving
  Loan Commitment

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
										

 

6.                                       Effective Date:
                            ,
20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

 

7.                                       Notice and Wire Instructions:

 

 

	
  [NAME OF ASSIGNOR]

  	
   

  	
  [NAME OF ASSIGNEE]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Notices:

  	
   

  	
  Notices:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  	
  Attention:

  
	
   

  	
  Telecopier:

  	
   

  	
   

  	
  Telecopier:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  with
  a copy to:

  	
   

  	
  with
  a copy to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  	
  Attention:

  
	
   

  	
  Telecopier:

  	
   

  	
   

  	
  Telecopier:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wire
  Instructions:

  	
   

  	
  Wire
  Instructions:

  

 

(3)                                  Set forth, to at least 9 decimals, as a
percentage of the Revolving Loans of all Lenders thereunder.

 

EXHIBIT E-2

 

The terms set forth in this
Assignment are hereby agreed to:

 

	
   

  	
  ASSIGNOR

  
	
   

  	
  [NAME
  OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
  [NAME
  OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  

 

[Consented
to and](4) Accepted:

 

BARCLAYS
BANK PLC, as

   Administrative Agent

 

	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
  [Consented
  to:](5)

  	
   

  
	
   

  	
   

  
	
  FEDDERS NORTH AMERICA, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  

 

(4)                                  To be added only if the consent of the
Administrative Agent is required by the terms of the Credit Agreement.

(5)                                  To be added only if
the consent of the Borrower is required by the terms of the Credit Agreement.

 

EXHIBIT E-3

 

ANNEX 1

 

STANDARD TERMS AND
CONDITIONS FOR ASSIGNMENT

AND ASSUMPTION AGREEMENT

 

1.             Representations
and Warranties.

 

1.1           Assignor.  The Assignor (a) represents
and warrants that (i) it is the legal and beneficial owner of the Assigned
Interest, (ii) the Assigned Interest is free and clear of any lien,
encumbrance or other adverse claim and (iii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and to consummate the transactions contemplated hereby; and (b) assumes
no responsibility with respect to (i) any statements, warranties or
representations made in or in connection with any Credit Document, (ii) the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement or any other instrument or document delivered
pursuant thereto, other than this Assignment (herein collectively the “Credit Documents”), or any collateral
thereunder, (iii) the financial condition of the Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any
Credit Document or (iv) the performance or observance by the Borrower, any
of its Subsidiaries or Affiliates or any other Person of any of their
respective obligations under any Credit Document.

 

1.2           Assignee.  The Assignee (a) represents
and warrants that (i) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it meets all requirements of an Eligible Assignee under
the Credit Agreement, (iii) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement and, to the extent of the
Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it
has received a copy of the Credit Agreement and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and to purchase the Assigned Interest on
the basis of which it has made such analysis and decision, and (v) if it
is a Non-US Lender, attached to the Assignment is any documentation required to
be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it
will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at that time, continue to make its own credit decisions
in taking or not taking action under the Credit Documents, and (ii) it
will perform in accordance with their terms all of the obligations which by the
terms of the Credit Documents are required to be performed by it as a Lender.

 

2.             Payments.  All
payments with respect to the Assigned Interests shall be made on the Effective
Date as follows:

 

2.1           With respect to Assigned Interests for Term Loans, unless notice to the
contrary is delivered to the Lender from the Administrative Agent, payment to
the Assignor by the Assignee in respect of the Assigned Interest shall include
such compensation to the Assignor as may be agreed upon by the Assignor and the
Assignee with respect to all unpaid interest which has accrued on the Assigned
Interest to but excluding the Effective Date. 
On and after the applicable Effective Date, the Assignee shall be
entitled to receive 

 

EXHIBIT E-4

 

all interest paid or payable with respect to
the Assigned Interest, whether such interest accrued before or after the
Effective Date.

 

2.2           With respect to Assigned Interests for Revolving Loans, from and after
the Effective Date, the Administrative Agent shall make all payments in respect
of the Assigned Interest (including payments of principal, interest, fees and
other amounts) to the Assignor for amounts which have accrued to but excluding
the Effective Date and to the Assignee for amounts which have accrued from and
after the Effective Date.(6)

 

3.             General
Provisions.  This Assignment shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns.  This Assignment may be executed
in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a
signature page of this Assignment by telecopy shall be effective as
delivery of a manually executed counterpart of this Assignment.  This Assignment shall be governed by, and
construed in accordance with, the internal laws of the State of New York
without regard to conflict of laws principles thereof.

 

[Remainder of page intentionally left blank]

 

(6) Administrative
Agent should consider whether this method conforms to its systems.  In some circumstances, the following
alternative language may be appropriate: 
“From and after the Effective Date, the Administrative Agent shall make
all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignee whether such
amounts have accrued prior to or on or after the Effective Date.  The Assignor and the Assignee shall make all
appropriate adjustments in payments by the Administrative Agent for periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves.”

 

EXHIBIT E-5

 

EXHIBIT F TO

SENIOR SECURED SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

CERTIFICATE
RE NON-BANK STATUS

 

Reference is hereby made to
that certain Senior Secured Superpriority Debtor in Possession Credit
Agreement, dated as of September 17,
2008 (as it may be amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation, a debtor
and a debtor in possession under chapter 11 of the Bankruptcy Code (“Borrower”), the Lenders party thereto from time to time,
BARCLAYS BANK PLC (“Barclays Bank”),
as Administrative Agent and Collateral Agent. 
Pursuant to Section 2.23(c)(ii) of the Credit Agreement, the
undersigned hereby certifies that it is not a (A) “bank” within the
meaning of section 881(c)(3)(A) of the Internal Revenue Code, (B) a “10
percent shareholder” of the Borrower within the meaning of section 871(h)(3)(B) of
the Internal Revenue Code, or (C) a “controlled foreign corporation”
related to the Borrower as described in section 881(c)(3)(C) of the
Internal Revenue Code.

 

	
  Date:
  [                                  ]

  	
  [NAME
  OF LENDER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

EXHIBIT F-1

 

EXHIBIT G TO

SENIOR SECURED SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

CLOSING
DATE CERTIFICATE

 

THE UNDERSIGNED HEREBY
CERTIFY AS FOLLOWS:

 

1.             I am, respectively, the chief executive
officer and the chief executive officer of LEHMAN BROTHERS INC., a Delaware
corporation, a debtor and a debtor in possession under chapter 11 of the
Bankruptcy Code (“Borrower”).

 

2.             Pursuant to Section 2.2 of that certain
Senior Secured Superpriority Debtor in Possession Credit Agreement, dated as of
September 17, 2008 (as it
may be amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation, a debtor
and a debtor in possession under chapter 11 of the Bankruptcy Code (“Borrower”), the Lenders party thereto from time to time,
BARCLAYS BANK PLC (“Barclays Bank”),
as Administrative Agent and Collateral Agent, Borrower requests that Lenders
make the following Term Loans to Borrower on September [    ],
2008 (the “Closing Date”):

 

Term
Loans:                       [$                  ]

 

3.             I have reviewed the terms of Section 3
of the Credit Agreement and the definitions and provisions contained in the
Credit Agreement relating thereto, and in my opinion I have made, or have
caused to be made under my supervision, such examination or investigation as is
necessary to enable me to express an informed opinion as to the matters
referred to herein.

 

4.             Based upon my review and examination
described in paragraph 3 above, I certify, on behalf of Borrower, that as of
the date hereof:

 

(i)            as of the Closing Date, the representations
and warranties contained in each of the Credit Documents are true and correct
in all respects on and as of the Closing Date to the same extent as though made
on and as of such date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties are true and correct in all respects on and as
of such earlier date;

 

(ii)           as of the Closing Date, no injunction or
other restraining order shall have been issued and no hearing to cause an
injunction or other restraining order to be issued shall be pending or noticed
with respect to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief as a
result of, the borrowing contemplated hereby;

 

(iii)          as of the Closing Date, no event has occurred
and is continuing or would result from the consummation of the applicable
Credit Extension that would constitute an Event of Default or a Default; and

 

(iv)          as of the Closing Date, the condition in Section 3.3(d) is
satisfied.

 

EXHIBIT G-1

 

The foregoing certifications
are made and delivered as of September       ,
2008.

 

	
   

  	
  LEHMAN
  BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LEHMAN
  BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:
  Chief Financial Officer

  

 

EXHIBIT G-2

 

EXHIBIT H TO

SENIOR SECURED SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

PLEDGE
AGREEMENT

 

 

 

EXHIBIT H-1

 

EXHIBIT I TO

SENIOR SECURED SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

U.S.
INTERIM ORDER

 

 

 

EXHIBIT I-1

 

EXHIBIT J TO

SENIOR SECURED SUPERPRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT

 

CASH
FLOW FORECAST

 

 

 

EXHIBIT J-1Exhibit 10.5

 

EXECUTION COPY

 

TRANSITION SERVICES AGREEMENT

 

dated as of September 22, 2008

 

between

 

LEHMAN BROTHERS HOLDINGS INC.

 

and

 

BARCLAYS CAPITAL INC.

 

 

TRANSITION SERVICES AGREEMENT

 

This
Transition Services Agreement, dated September 22, 2008 (this “Agreement”),
is made by and between Barclays Capital Inc., a Connecticut corporation (“BarCap”),
and Lehman Brothers Holdings Inc., a Delaware corporation (“LBHI”).

 

RECITALS

 

WHEREAS, LBHI, Lehman
Brothers Inc., LB 745 LLC and BarCap have entered into that certain Asset
Purchase Agreement, dated as of September 16, 2008 (as amended and
supplemented, the “Purchase Agreement”);

 

WHEREAS, it is
contemplated by the Purchase Agreement that (a) BarCap shall provide, or
cause to be provided, to LBHI (and/or its Affiliates on the date hereof
including the IMD Entities, collectively hereinafter referred to as the “LBHI
Entities”) certain services, use of facilities and other assistance on a
transitional basis and in accordance with the terms and subject to the
conditions set forth herein and (b) LBHI shall provide, or cause to be
provided, to BarCap (and/or its Affiliates on the date hereof, collectively
hereinafter referred to as the “BarCap Entities”) certain services, use
of facilities and other assistance on a transitional basis and in accordance
with the terms and subject to the conditions set forth herein; and

 

WHEREAS, the Purchase
Agreement contemplates execution and delivery of this Agreement by BarCap and
LBHI.

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

ARTICLE
1

DEFINITIONS

 

Section 1.01           Certain
Defined Terms.  Unless otherwise
defined herein, any capitalized term used herein shall have the same meaning as
in the Purchase Agreement.

 

The
following capitalized terms used in this Agreement shall have the meanings set
forth below:

 

“Affiliate” means, with respect to any
Person, any other Person that, directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such Person, and the term “control” (including the terms “controlled by” and “under
common control with”) 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 ownership of voting securities, control by a general
partner, by contract or otherwise; provided that such other Person shall
no longer be deemed an Affiliate once such control ceases.

 

1

 

“Benchmark
Period” means the twelve-month period prior to the Closing Date.

 

“Force Majeure” means, with respect to a
Person, an event beyond the control of such Person (or any Person acting on its
behalf), including acts of God, storms, floods, riots, fires, sabotage, labor
stoppage, civil commotion or civil unrest, interference by civil or military authorities,
acts of war (declared or undeclared) or armed hostilities or other national or
international calamity or one or more acts of terrorism or failure of energy
sources or of Internet or telecommunications services.

 

“IMD Entities” means (i) the entities
that, on the date hereof, conduct the investment management business of LBHI
and its Affiliates and (ii) in each case solely to the extent permitted
under Section 9.10, their successors and assigns with respect to such
business.

 

“Information
Systems” means computing, telecommunications or other digital operating or
processing systems or environments, including computer programs, data,
databases, computers, computer libraries, communications equipment, networks
and systems.  When referenced in
connection with the Services, Information Systems shall mean the Information
Systems accessed and/or used in connection with the Services.

 

“Prime Rate” means the prime rate published
in the Eastern Edition of The Wall
Street Journal or a comparable newspaper if The Wall Street Journal shall
cease to publish the prime rate.

 

“Provider” means the party hereto or its
subsidiary or Affiliate providing a Service or an Additional Service under this
Agreement.

 

“Recipient” means a party hereto or its
subsidiary or Affiliate to whom a Service or any Additional Service is being
provided under this Agreement.

 

“Representative” of a Person means any
director, officer, employee, agent, consultant, accountant, auditor, attorney
or other representative of such Person.

 

“Termination Charges” shall mean any portion
of any fees or expenses payable to any unaffiliated, third-party provider as a
result of any early termination or reduction of a Service that cannot
reasonably be avoided by the Provider.

 

“Virus”
shall mean any computer instructions (i) that adversely affect the
operation, security or integrity of a computing, telecommunications or other
digital operating or processing system or environment, including without
limitation, other programs, data, databases, computer libraries and computer
and communications equipment, by altering, destroying, disrupting or inhibiting
such operation, security or integrity; (ii) that without functional
purpose, self-replicate without manual intervention; and/or (iii) that
purport to perform a useful function but which actually perform either a
destructive or harmful function, or perform no useful function and utilize
substantial computer, telecommunications or memory resources.

 

2

 

ARTICLE
2

SERVICES AND TERMS

 

Section 2.01           Services;
Scope.

 

(a)           Subject
to the terms and conditions set forth in this Agreement, (i) BarCap shall
provide, or cause to be provided, to the LBHI Entities those services (the “BarCap
Services”) that were being provided (x) by any Subsidiary of LBHI that
is acquired by BarCap or one of its Affiliates pursuant to the Purchase
Agreement or a vendor of such Subsidiary, or (y) by the LBHI Entities or a
vendor thereof through the use of the Purchased Assets or the Transferred
Employees, to the IMD Business and any other businesses of the LBHI Entities
prior to the Closing that were not acquired by BarCap under the Purchase
Agreement (each such business, a “Retained LBHI Business”), and (ii) LBHI
shall provide, or cause to be provided, to the BarCap Entities those services
that were being provided by an LBHI Entity or a vendor thereof prior to the
Closing to the businesses acquired by BarCap under the Purchase Agreement (the “LBHI
Services” and collectively with the BarCap Services, the “Services”).  If, for any reason, BarCap is unable to
provide any BarCap Service to the LBHI Entities pursuant to the terms of this
Agreement, BarCap shall provide to the applicable LBHI Entity a substantially
equivalent service (a “BarCap Substitute Service”) in accordance
with the terms of this Agreement, which such service shall be considered a
BarCap Service for purposes of this Agreement. 
The scope of each BarCap Service shall be substantially the same as the
scope of such services provided by the applicable LBHI Entity to the applicable
Retained LBHI Business in the ordinary course during the Benchmark Period (in
each case, to the extent such BarCap Service was provided using Purchased
Assets or by Transferred Employees), and the use of each BarCap Service by an
LBHI Entity shall include use by such LBHI Entity’s contractors in
substantially the same manner as used by such contractors in the ordinary
course, during the Benchmark Period.  If,
for any reason, an LBHI Entity is unable to provide any LBHI Service to the
BarCap Entities pursuant to the terms of this Agreement, LBHI shall provide to
the applicable BarCap Entity a substantially equivalent service (an “LBHI
Substitute Service”) in accordance with the terms of this Agreement, which
such service shall be considered an LBHI Service for purposes of this
Agreement.  The scope of each LBHI
Service shall be substantially the same as the scope of such service provided
by the applicable Retained LBHI Business to the applicable LBHI Entity in the
ordinary course during the Benchmark Period, and the use of each LBHI Service
by a BarCap Entity shall include use by such BarCap Entity’s contractors in
substantially the same manner as used by such contractors in the ordinary
course, during the Benchmark Period.  All
Services shall be for the sole use and benefit of the respective Recipient,
including any of such Recipient’s customers or clients of the type who received
the use and benefit of the equivalent services in the ordinary course during
the Benchmark Period; provided, however, that the Recipient
agrees that it shall not re-market or act as a service provider with respect to
any of the Services hereunder to a third party.

 

(b)           Each
Service shall include, and the Service Charges reflect charges for, such maintenance,
support, error correction, updates and enhancements normally and customarily
provided by the relevant Provider to its subsidiaries that receive such
service.  Each Service shall include all
functions, responsibilities, activities and tasks, and the materials,
documentation, resources, rights and licenses to be used, granted or provided
by the relevant 

 

3

 

Provider that are not specifically described in this
Agreement as a part of such Service, but are incidental to, and would normally
be considered an inherent part of, or necessary subpart included within, such
Service or are otherwise necessary for such Provider to provide, or the
Recipient to receive, such Service.

 

(c)           Throughout
the term of this Agreement, (i) each Provider and each Recipient of any
Service shall cooperate with one another and use their good faith and
commercially reasonable efforts to effect the efficient, timely and seamless
provision and receipt of such Service and (ii) the Recipient shall use its
good faith and commercially reasonable efforts to transition away and wind down
its use of the Services.

 

(d)           This
Agreement shall not assign any rights to Technology or Intellectual Property
between the parties hereto.

 

(e)           Notwithstanding anything to the
contrary herein, for the avoidance of doubt, Lehman Brothers Holdings plc,
Lehman Brothers Limited, LB UK RE Holdings Limited and Lehman Brothers
International (Europe) shall not be deemed LBHI Entities hereunder.

 

Section 2.02           Conversion
Services.

 

(a)           During
the term of this Agreement, the parties shall provide, or cause to be provided,
the following information and support to the other party, as applicable, which
support shall be included within the Services described herein or in the
Schedules hereto:

 

(i)           current
and reasonably available historical data owned by the Provider and related to
the Services and predecessor services thereto as reasonably required by the
relevant Recipient in connection with the conduct of the Business (in the case
of BarCap) or the Retained LBHI Business (in the case of the LBHI Entities) or
for litigation or regulatory purposes, in a manner and within a time period as
mutually agreed by the parties; and

 

(ii)          on
commercially reasonable terms, which will be added to the Service Charges, the
services of the employees and contractors of the relevant Provider whose
assistance, expertise or presence is necessary to assist the Recipient’s
transition team in establishing a fully functioning stand-alone environment (it
being understood that the services of employees and contractors pursuant to
this clause (ii) are not intended to be a substitute for the services of
its own employees and third party consultants and advisors to be engaged by the
relevant Recipient in connection with such transition or similar services, but
instead to facilitate coordination with such individuals).

 

Section 2.03           Transition
Services Managers.

 

(a)           BarCap
shall appoint an individual, by giving written notice thereof to LBHI within
three Business Days following the date hereof, to act as its initial services
manager (the “BarCap Services Manager”), who will be directly
responsible for coordinating and managing the delivery of the BarCap Services
and have authority to act on BarCap’s behalf with respect to matters relating
to this Agreement.  The BarCap Services
Manager will work with the personnel of BarCap to periodically address issues
and matters raised by LBHI relating to this Agreement.  Notwithstanding the requirements of Section 9.05,
all communications from LBHI 

 

4

 

to BarCap pursuant to this Agreement regarding routine
matters involving the BarCap Services shall be made through the BarCap Services
Manager, or such other individual as specified by the BarCap Services Manager
in writing and delivered to LBHI by email or facsimile transmission with
receipt confirmed.  BarCap shall
reasonably promptly notify LBHI of the appointment of a different BarCap
Services Manager, if necessary, in accordance with Section 9.05.

 

(b)           LBHI
shall appoint an individual, by giving written notice thereof to BarCap within
three Business Days following the date hereof, to act as its initial services
manager (the “LBHI Services Manager”), who will be directly responsible
for coordinating and managing the delivery of the LBHI Services and have
authority to act on LBHI’s behalf with respect to matters relating to this
Agreement.  The LBHI Services Manager
will work with the personnel of LBHI to periodically address issues and matters
raised by BarCap relating to this Agreement. 
Notwithstanding the requirements of Section 9.05, all
communications from BarCap to LBHI pursuant to this Agreement regarding routine
matters involving the Services shall be made through the LBHI Services Manager,
or such other individual as specified by the LBHI Services Manager in writing
and delivered to BarCap by email or facsimile transmission with receipt
confirmed.  LBHI shall reasonably promptly
notify BarCap of the appointment of a different LBHI Services Manager, if
necessary, in accordance with Section 9.05.

 

Section 2.04           Personnel;
Authorized Signatories.  The Provider
will have the right, in its sole discretion, to (i) designate which
personnel or third party service providers it will assign to perform Services,
and (ii) remove and replace such personnel or third party service
providers at any time.

 

Section 2.05           Performance
and Receipt of Services.  The
following provisions shall apply to the Services:

 

(a)           Security
and Privacy.  Each Provider and
Recipient shall at all times comply with its own then in-force security
guidelines and policies applicable to the performance, access and/or use of the
Services and Information Systems.  Where
a Provider or Recipient receives access to the other party’s Information
Systems, then it shall also comply with such other party’s security guidelines
and policies.  The parties acknowledge
that historically the Services governed by this Agreement have been rendered
within a single group of related entities and a shared security environment,
and that in order for Services to be rendered among and between the BarCap
Entities and the LBHI Entities as unrelated entities additional systems,
procedures, guidelines and policies may need to be established to render the
Services in compliance with Law, regulation, and applicable privacy and
security policies.  Each of the LBHI
Entities and the BarCap Entities shall use its reasonable efforts to establish
such additional systems, procedures, guidelines and policies in a manner that
will not disrupt the rendering of Services or the LBHI Retained Businesses or
the Business, respectively.  Recipient
shall bear all of its own costs and expenses in connection with such an effort;
Provider’s costs and expenses in connection with such an effort will be
included in the Service Charges to the extent directly related to providing the
Services.

 

(b)           No
Viruses.  Each of LBHI and BarCap
shall take commercially reasonable measures to ensure that no Viruses or
similar items are coded or introduced into the Services or Information
Systems.  If a Virus is found to have
been introduced into the Services or 

 

5

 

Information Systems, the parties hereto shall use
their commercially reasonable efforts to cooperate and to diligently work
together to eliminate the effects of such Virus.

 

(c)           Reasonable
Care.  Each Provider and Recipient
shall exercise reasonable care in providing and receiving the Services to (i) prevent
access to the Services or Information Systems by unauthorized Persons and (ii) not
damage, disrupt or interrupt the Services or Information Systems.

 

Section 2.06           Termination
Services.  Each Provider shall
reasonably cooperate with the Recipient of each Service, upon request and on
commercially reasonable terms (which will be added to the Service Charges), to
facilitate such Recipient’s transition to provision of such services by a
replacement provider or by its own employees.

 

Section 2.07           Superseding
Provisions.  Notwithstanding anything
to the contrary contained in this Agreement:

 

(a)           no
Provider shall be required hereunder to take any action (including by providing
any Services) that would constitute, or that the Provider reasonably believes
would constitute, (i) a violation of applicable Law, including any
requirement of any Governmental Body, (ii) a breach of such Provider’s
contractual obligations or (iii) any other violation of a third party’s
rights; provided that in each of the foregoing circumstances the Provider shall
use reasonable efforts to work around the impediment and endeavor to provide
Services in a manner that does not violate Law, contractual obligations or
third party rights;

 

(b)           no
Provider shall be required hereunder to fund the Services or otherwise provide
financial support, benefits or other consideration on the Recipient’s behalf to
third parties, or to take custody of, settle, clear or handle securities, in
connection with the Services, and the obligation to perform any Service
involving funds shall be subject to the Recipient having previously made such
funds available to the Provider specifically for such purpose;

 

(c)           any
obligation to provide Services or otherwise undertake activities hereunder
shall be limited to the party’s use of good faith and commercially reasonable
efforts; and

 

(d)           the
Provider shall not be responsible for any failure to provide Services hereunder
to the extent arising from (i) the Recipient’s operations or systems or
otherwise by the acts or omissions of the Recipient or individuals acting on
its behalf or (ii) a third party’s failure to provide such Services or (iii) the
failure of Recipient or its Affiliates to provide Services to Provider.

 

ARTICLE
3

ADDITIONAL AGREEMENTS AND ARRANGEMENTS

 

Section 3.01           Computer-Based
Resources.  Commencing on the Closing
Date, and for ninety (90) days thereafter, each party (the “Accessing Party”)
shall continue to have access to the Information Systems of the other party
(the “Providing Party”), to the extent such access to such Information
Systems was available to the Accessing Party immediately prior to 

 

6

 

the Closing and remains necessary for the Accessing
Party to operate its business; provided, that (a) the BarCap
Entities may take reasonable measures to restrict access by the LBHI Entities
to any systems or data unrelated to the Retained LBHI Business to which the
LBHI Entities are not entitled to access, (b) the LBHI Entities may take
reasonable measures to restrict access by the BarCap Entities, to any systems
or data unrelated to the Business to which the BarCap Entities are not entitled
to access, and (c) such continued access shall be subject to the Accessing
Party complying with all reasonable security measures implemented by the
Providing Party as deemed necessary by such Providing Party to protect its
Information Systems.  Commencing no later
than ten Business Days after the Closing Date, representatives of BarCap and
LBHI with authority in the area of Information Systems (the “IT Committee”)
shall meet at such reasonable time, place and manner as they may agree, to
develop a plan for migrating from the Information System infrastructure as
deployed as of the Closing Date, to a final Information Systems infrastructure
satisfactory to both BarCap and LBHI (the “IT Migration Plan”).  The parties shall use reasonable efforts to
enter into an IT Migration Plan no later than one month after the Closing Date
and shall include, among other provisions, a time line for completing the
migration of Information Services and a final migration deadline after
which  neither BarCap nor any LBHI Entity
shall have access to all or any part of the Information Systems of the other
party, except to the extent reasonably necessary for the receipt of the
Services (subject to the accessing party complying with all reasonable security
measures implemented by the providing party as deemed necessary by such
providing party to protect its Information Systems), or as otherwise agreed in
a separate agreement.  When finalized in
writing and executed by the authorized representatives of BarCap and the LBHI
Entities, the IT Migration Plan shall be deemed to be incorporated into this
Agreement as an amendment and addition hereto.

 

Section 3.02           Termination
of Support.  BarCap shall provide the
IMD Entities with notice a reasonable period in advance of ceasing to support
any material software contained within the Purchased Assets that directly
supports the IMD Business.  Following
receipt of such notice, if the IMD Entities so elect in writing, BarCap shall
use reasonable efforts provide the IMD Entities with a copy of such software in
source code and object code form and any associated documentation for their use
pursuant to Section 8.9 of the Purchase Agreement; provided, however,
that following such receipt, the IMD Entities shall endeavor to support their
own services through the use of such software and if the IMD Entities are
successful in doing so, then BarCap shall no longer be obligated to provide the
Service to the extent previously supported by such software.

 

Section 3.03           Point
System.  Until the earlier of the
first anniversary of the Closing Date and the date on which BarCap and the
relevant IMD Entity enter into an arms length agreement on mutually agreeable
terms, the IMD Entities will have the option to become “enterprise level”
clients at prevailing market rates of the Point System application/service.

 

Section 3.04           Access.  BarCap or LBHI, as the case may be, will
allow the relevant Provider and its Representatives reasonable access to the
facilities and personnel of the relevant Recipient, and shall provide such
other reasonable cooperation and assistance, at the Recipient’s cost, necessary
for the performance of the Services for the Provider to fulfill its obligations
under this Agreement.

 

7

 

Section 3.05                                Schedules.  The parties
acknowledge and agree that the Services contemplated to be provided hereunder
are not enumerated, defined or described in detail.  For purposes of illustration, the Services
may include (or include aspects of) operational, financial, corporate, human
resources, information technology and other services.  The parties shall cooperate in good faith to
create Schedules to this Agreement, within thirty days following the Closing
Date, that will contain a specific list of certain of the Services to be
provided pursuant hereto, including, with respect to the IMD Business,
potential additional specificity on the pricing model.  For the avoidance of doubt,
but subject to Section 3.07, none of the Services shall require the relevant
Provider to provide the legal services of any attorney to the Recipient in
connection with any such Service (unless otherwise agreed in writing by the
parties hereto).

 

Section 3.06                                Assignment of Shared Purchased Contracts. With respect to Purchased Contracts
that relate both to (i) the business acquired by BarCap under the Purchase
Agreement and (ii) Retained LBHI Businesses (“Shared Purchased
Contracts”):

 

(a)                                  where BarCap has the contractual right to
assign the portion of its rights under such agreements that relate to any of
the Retained LBHI Businesses (while retaining the portion of such rights that
relate to the Business), with no additional payment to the counterparty
thereof, it shall exercise such right. If BarCap has the contractual right to make
such partial assignment but only upon payment to the counterparty thereof, it
shall notify LBHI of the amount of the required payment and shall exercise such
right upon receipt of payment by LBHI of the amount required to be paid to the
counterparty; and

 

(b)                                 where BarCap does not have the
contractual right to assign the portion of its rights under such agreements,
BarCap shall cooperate in good faith with LBHI in LBHI’s efforts to enter into
a replacement agreement on comparable terms; provided that BarCap shall
have no obligation to pay anything of value 
with respect to such cooperation; and

 

(c)                                  the recipient of such partial assignment
or counterparty to such replacement agreement shall be, as applicable, LBHI or
the assignee of the relevant Retained LBHI Business.

 

Section 3.07                                Further Access.

 

(a)                                  For a period of two years after the
Closing Date, the BarCap Entities shall provide, or use reasonable efforts to
cause to be provided to, the LBHI Entities at no charge (other than BarCap’s
out-of-pocket costs and expenses including contractor fees) with reasonable
access to all individuals who were employees or contractors of the LBHI
Entities prior to the Closing Date (and are employees or contractors of the
BarCap Entities at the time of requested access), and who have material
knowledge about the Retained LBHI Businesses or the Excluded Liabilities, and
BarCap shall use reasonable efforts to provide such individuals’ cooperation
therewith. As part of the foregoing, for a period of ninety (90) days after the
Closing, (i) such employees shall provide reasonably necessary assistance
to the LBHI Entities in the unwinding of the Retained LBHI Business and (ii) such
employees that are attorneys shall provide reasonably necessary legal services
in the unwinding of the Retained LBHI Business, provided that such assistance
in (i) and (ii) shall be deemed Services as to which the Service
Charges 

 

8

 

apply and in all instances shall be subject to any
confidentiality, professional or ethical obligations or restrictions (including
without limitation any potential conflicts).

 

(b)                                 For a period of two years after the
Closing Date, the LBHI Entities shall provide, or use reasonable efforts to
cause to be provided to, the BarCap Entities at no charge (other than LBHI’s
out-of-pocket costs and expenses including contractor fees) with reasonable
access to all individuals who were employees or contractors of the LBHI
Entities prior to the Closing Date (and are employees or contractors of the
LBHI Entities at the time of requested access), and who have material knowledge
about the Business or the Services to be provided by the BarCap Entities, and
LBHI shall use reasonable efforts to provide such individuals’ cooperation
therewith.

 

(c)                                  The parties recognize and understand that
there will be substantial efforts in the period following the Closing Date in
the integration of the Transferred Employees and the Purchased Assets into
BarCap’s operations and the operation of the Business, and the continuing
efforts of LBHI to divest the remaining assets and wind down the Retained LBHI
Business while maintaining the continuity thereof.  As such, the parties will work together to
reasonably accommodate each other in such efforts while balancing BarCap’s
needs for integration and operation with LBHI’s needs for information and
support.

 

Section 3.08                                Data Centers.  To the extent
BarCap is assuming material data center contracts as part of the Purchased
Assets, the parties will negotiate in good faith a post-Closing data center
strategy to reasonably address such issues as part of this Agreement.

 

Section 3.09                                IMD Employees.  During the
thirty-day period following the Closing Date, the parties shall cooperate in
good faith to develop a reasonable procedure (a) pursuant to which BarCap
will endeavor to provide notice to LBHI prior to terminating the employment of
any Transferred Employees during the six months following the Closing Date who
are dedicated (or primarily dedicated) to the IMD Business, to the extent
permitted under applicable confidentiality and privacy obligations and (b) to
identify any Transferred Employees whose functions prior to the Closing Date
were unrelated to the Business (if any).

 

Section 3.10                                Notices.  If any of the
LBHI Entities receive any notices related to the Business it shall promptly
forward them to BarCap and if any of the BarCap Entities receive any notices
related to the Retained LBHI Businesses it shall promptly forward them to LBHI.

 

Section 3.11                                Software.  For a period of ninety days following the
Closing Date, upon the request of LBHI, the parties will cooperate in good
faith to identify any software included in the Purchased Assets for which there
is no third party vendor or service provider that can reasonably provide
comparable software and the absence of which would cause a material adverse
effect on the value of the relevant underlying business operations or assets of
the Retained LBHI Businesses.  The BarCap
Entities will use reasonable efforts to provide a copy of such software to LBHI
(in source code and object form and associated documents, to the extent in
their reasonable possession); provided that such software shall be governed by
the scope of the license in Section 8.9(b) of the Purchase Agreement.

 

9

 

Section 3.12.                             Access to Books and Records.  (a) The
BarCap Entities shall provide the LBHI Entities reasonable access to books and
records acquired as part of the Purchased Assets that are related and material
to the Retained LBHI Business (to the extent such books and records are in a
BarCap Entity’s possession at the time of requested access); and (b) the
LBHI Entities shall provide  the BarCap
Entities reasonable access to books and records that are related and material
to the Business (to the extent such books and records are in an LBHI Entity’s
possession at the time of requested access).

 

ARTICLE 4

COSTS AND DISBURSEMENTS; PAYMENTS

 

Section 4.01                                Costs and Disbursements; Payments.

 

(a)                                  Any Service to be provided by any
Provider hereunder shall be charged to the Recipient thereof as follows (such
charges, the “Service Charges”):

 

(i)                                     until the date that is nine (9) months
after the Closing Date, at a cost equal to the Provider’s fully-loaded costs
and expenses for providing such Service (including in such fully-loaded costs
and expenses (x) an allocation for overhead costs to the extent directly
related to providing the Services, (y) the amount of the actual payments
made by the Provider to third-party providers for providing Services, and (z) associated
overhead costs relating to the Services provided by such third-party providers)
(“Provider’s Cost”), but without any markup for profit margin; and

 

(ii)                                  on and after the date that is nine (9) months
after the Closing Date (including during any extension of the term of this
Agreement), at a cost equal to Provider’s Cost plus 15% of Provider’s Cost.

 

Service
Charges shall include value-added taxes and all other taxes payable in respect
of the provision of the Services other than taxes imposed on the net income of
the Provider.  If LBHI or BarCap (as
applicable) is required, by Law or to otherwise avoid legal penalties under
Law, to pay, directly or indirectly, to an Affiliate any transfer pricing
markup or equivalent cost in order to deliver a Service, then such transfer
pricing markup or cost shall be included in the relevant Service Charges,
unless such mark-up or cost is subsequently recoverable by LBHI or BarCap (as
applicable).

 

For
the avoidance of doubt, Service Charges shall not include any amounts owed by a
party (whether to third parties or Affiliates) prior to the Closing Date.

 

For
the avoidance of doubt, Service Charges may increase or decrease, including, as
a result of (i) an increase or decrease in the amount of such Services
being provided to the Recipient (as compared to the amount of the Services
underlying the determination of a Service Charge), (ii) an increase or
decrease in the rates or charges imposed by any third-party provider that is
providing goods or services used by the Provider in providing the Services (as
compared to the rates or charges underlying a Service Charge), (iii) an
increase or decrease in the payroll or benefits for any employees used by the
Provider in providing the Services, or (iv) any increase or decrease in
costs relating to any changes requested by the Recipient in the nature of the
Services 

 

10

 

provided (including relating to newly installed
products or equipment or any upgrades to existing products or equipment).

 

(b)                                 The Provider shall deliver an invoice to
the Recipient on a monthly basis (or, at the option of the Provider, at such
other frequency as is consistent with the basis on which the Service Charges
are determined and, if applicable, charged to Affiliates of the Provider) in
arrears for the Service Charges due to the Provider under this Agreement.  The Recipient shall pay the amount of such
invoice by wire transfer or check to the Provider within thirty (30) days of
the date of such invoice as instructed by the Provider; provided that to
the extent consistent with past practice with respect to Services rendered
outside the United States, payments may be made in local currency.  If the Recipient fails to pay such amount by
such date, the Recipient shall be obligated to pay to the Provider, in addition
to the amount due, interest at an interest rate of 1-1/2% per month over the Prime Rate,
compounded monthly, accruing from  the date the payment was due through the
date of actual payment.  As soon as
practicable after receipt of any reasonable written request by the Recipient,
the Provider shall provide the Recipient with data and documentation reasonably
satisfactory to the Recipient supporting the calculation of a particular
Service Charge for the purpose of verifying the accuracy of such
calculation.  If, after reviewing such
data and documentation, the Recipient disputes the Provider’s calculation of
any amount due to the Provider, then the dispute shall be resolved pursuant to Section 7.01.

 

Section 4.02                                No Right to Set-Off.  The Recipient
shall pay the full amount of costs and disbursements incurred under this
Agreement, and shall not set-off, counterclaim or otherwise withhold any other
amount owed to the Provider on account of any obligation owed by the Provider
to the Recipient.

 

ARTICLE 5

STANDARD FOR SERVICE; COMPLIANCE WITH LAWS

 

Section 5.01                                Standard for Service.  Subject to
the terms and conditions of this Agreement, the Provider agrees to perform the
Services such that the nature, quality, standard of care and the service levels
at which such Services are performed are no less than the nature, quality,
standard of care and service levels at which the substantially same services
were performed by or on behalf of the Provider prior to the Closing Date in the
ordinary course of business during the Benchmark Period; provided, however,
that notwithstanding the foregoing, the Provider shall have no liability
hereunder for any Losses incurred by the Recipient except to the extent arising
from Provider’s gross negligence or willful misconduct (and in any case subject
to the limitations set forth in Article 6).

 

Section 5.02                                Disclaimer of Warranties. 
Except as expressly set forth herein, the parties hereto acknowledge and
agree that the Services are provided as-is, that the applicable Recipient
assumes all risks and liabilities arising from or relating to its use of and
reliance upon the Services and each Provider makes no representation or
warranty with respect thereto.  EXCEPT AS
EXPRESSLY SET FORTH HEREIN, THE PROVIDERS HEREBY EXPRESSLY DISCLAIM ALL
REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICES, WHETHER EXPRESS OR
IMPLIED, INCLUDING ANY REPRESENTATION OR WARRANTY IN REGARD TO QUALITY,
PERFORMANCE, 

 

11

 

NONINFRINGEMENT, COMMERCIAL UTILITY, MERCHANTABILITY
OR FITNESS OF THE SERVICES FOR A PARTICULAR PURPOSE.

 

ARTICLE 6

INDEMNIFICATION; LIMITATION ON LIABILITY

 

Section 6.01                                Indemnification of Each Provider by the Relevant
Recipient.  Subject to the limitations set forth in this Article VI,
each Recipient shall indemnify and hold harmless each relevant Provider and its
Affiliates and Representatives (each, a “Provider Indemnified Party”)
from and against any and all loss, liability, claim, damage or expense
(including legal fees and expenses) (“Losses”) to the extent owed to
third parties, and reimburse each relevant Provider Indemnified Party for all
expenses as they are incurred, whether or not in connection with pending
litigation and whether or not any Provider Indemnified Party is a party,
arising out of any claim by a third party to the extent caused by, resulting
from or in connection with any of the Services rendered or to be rendered by or
on behalf of such Provider pursuant to this Agreement, the transactions
contemplated by this Agreement or such Provider’s actions or inactions in
connection with any such Services or transactions; provided that such
Recipient shall not be responsible for any Losses of such Provider Indemnified
Party to the extent that such Loss is caused by, results from, or arises out of
or in connection with a Provider Indemnified Party’s gross negligence or
willful misconduct in connection with any such Services or transactions, actions
or inactions related thereto.

 

Section 6.02                                Limited Liability of a Provider. 
Notwithstanding Article V or anything else to the contrary
contained herein, no Provider Indemnified Party shall have any liability in
contract, tort or otherwise, for or in connection with any Services rendered or
to be rendered by any Provider Indemnified Party pursuant to this Agreement,
the transactions contemplated by this Agreement or any Provider Indemnified
Party’s actions or inactions in connection with any such Services or
transactions, to any Recipient Indemnified Party, except  to the extent that any such Recipient
Indemnified Party suffers a Loss that results from such Provider Indemnified
Party’s gross negligence or willful misconduct in connection with any such
Services or transactions, actions or inactions related thereto.

 

Section 6.03                                Limited Liability of a Recipient. 
Notwithstanding Article V or anything else to the contrary
contained herein, no Recipient shall have any liability in contract, tort or
otherwise, for or in connection with the transactions contemplated by this
Agreement or such Recipient’s actions or inactions in connection with any
Services or transactions, to any Provider, except (a) to the extent that
any such Provider suffers a Loss that results from such Recipient’s gross
negligence or willful misconduct in connection with any such transactions,
actions or inactions related thereto or (b) to the extent owed pursuant to
Recipient’s indemnification obligations in Section 6.01.

 

Section 6.04                                Additional Limitation on Liability.

 

(a)                                  Notwithstanding any other provision
contained in this Agreement, no Provider Indemnified Party shall be liable for
any exemplary, special, indirect, punitive, 

 

12

 

incidental or consequential losses, damages or
expenses, including any damages due to business interruption or loss of
profits.

 

(b)                                 Except for the indemnification
obligations set forth in Section 6.01, the aggregate liability and
indemnification of each of BarCap and LBHI (or their respective assignees in
accordance with Section 9.10) with respect to this Agreement shall
not exceed, in the aggregate, the aggregate amount of Service Charges paid
hereunder to BarCap or LBHI (or such respective assignees), as the case may be.

 

Section 6.05                                Liability for Payment Obligations. 
Nothing in this Article VI shall be deemed to eliminate or
limit, in any respect, a party’s express obligation in this Agreement to pay or
reimburse, as applicable, for (i) Termination Charges, (ii) Service
Charges for Services rendered in accordance with this Agreement, (iii) amounts
in respect of conversion services provided pursuant to Section 2.02,
or (iv) other costs and expenses to the extent expressly provided herein.

 

Section 6.06                                Obligations Several and Not Joint. 
As between a Recipient and a permitted third-party assignee of the
Recipient, the obligations of each such party under this Agreement shall be
several and not joint.

 

Section 6.07                                THE DISCLAIMER OF WARRANTY, LIMITATION OF LIABILITY
AND OVERALL ALLOCATION OF RISK BETWEEN THE PARTIES ARE FUNDAMENTAL ELEMENTS OF
THE BASIS OF THE BARGAIN BETWEEN THE PARTIES. 
THE PROVIDER WOULD NOT BE ABLE OR WILLING TO PROVIDE THE SERVICES
WITHOUT THE PROTECTIONS PROVIDED TO PROVIDER PURSUANT TO SUCH PROVISIONS.  IF ANY APPLICABLE COURT HOLDS ANY DISCLAIMER,
LIMITATION OF LIABILITY OR ALLOCATION OF RISK CONTAINED IN THIS SECTION TO
BE UNENFORCEABLE, THEN A PARTY’S LABILITY WILL BE LIMITED TO THE FULLEST
POSSIBLE EXTENT PERMITTED BY APPLICABLE LAW.

 

ARTICLE 7

DISPUTE RESOLUTION

 

Section 7.01                                Dispute Resolution.

 

(a)                                  In the event of any dispute, controversy
or claim arising out of or relating to the transactions contemplated by this
Agreement, or the validity, interpretation, breach or termination of any
provision of this Agreement, or calculation or allocation of the costs of any
Service, including claims seeking redress or asserting rights under any Law
(each, a “Dispute”), the parties hereto agree that the BarCap Services
Manager and LBHI Services Manager (or such other Persons as BarCap and LBHI may
designate) shall negotiate in good faith in an attempt to resolve such Dispute
amicably.  If such Dispute has not been
resolved to the mutual satisfaction of BarCap and LBHI within sixty (60) days
after the initial notice of the Dispute (or such longer period as such parties
may agree), then, a senior executive on behalf of BarCap and a senior executive
on behalf of LBHI shall negotiate in good faith in an attempt to resolve such
Dispute amicably for an additional twenty (20) days (or such longer period as
such parties may agree).  If 

 

13

 

such Dispute has not been finally resolved at the end
of such twenty-day period, then either party may pursue remedies in accordance
with Section 9.11. 
Notwithstanding the foregoing, a Provider shall have no obligation to
comply with this Section 7.01(a) before exercising any rights
or remedies it may have under this Agreement.

 

(b)                                 In any Dispute regarding the amount of a
Service Charge, if after such Dispute is finally adjudicated pursuant to the
dispute resolution and/or judicial process set forth in Section 7.01(a) or
Section 9.11, it is determined that the Service Charge that the
Provider has invoiced the Recipient, and that the Recipient has paid to the
Provider, is greater or less than the amount that the Service Charge should
have been, then (i) if it is determined that the Recipient has overpaid
the Service Charge, the Provider shall within five (5) Business Days after
such determination reimburse the Recipient an amount of cash equal to such
overpayment, plus 1-1/2% per month over the Prime Rate, compounded monthly,
accruing from the date of payment by the Recipient to the time of reimbursement
by the Provider and (ii) if it is determined that the Recipient has
underpaid the Service Charge, the Recipient shall within five (5) Business
Days after such determination reimburse the Provider an amount of cash equal to
such underpayment, plus 1-1/2% per month over the Prime Rate, compounded
monthly, accruing from the date such payment originally should have been made
by the Recipient to the time of reimbursement by the Recipient.

 

ARTICLE 8

TERMINATION

 

Section 8.01                                Termination.

 

(a)                                  This Agreement shall commence immediately
upon the Closing Date and shall terminate as to any particular Service upon the
earliest to occur of (i) the first date on which the applicable party has
no further need to have such Service provided by the applicable Provider or (ii) the
mutual written agreement of the parties to terminate this Agreement in its
entirety or (iii) as further set out below.  All Services shall terminate no later than
the earliest of (x) eighteen (18) months following the Closing Date and (y) twelve
(12) months from the closing date of the sale of the Retained LBHI Business or
portion of the Business, as applicable, to which such Service relates or from
which the Service is provided and (z) such date as Recipient has developed
an alternative source of such Services; provided, that if there is no
third party vendor or service provider that can reasonably provide a comparable
Service, and the absence of such Service would cause a material adverse effect
on the value of the relevant underlying business operations or assets, then,
upon written notice from Recipient at least sixty (60) days prior to the twelve
month anniversary of the Closing Date, such services shall be extended until
the earliest of: (1) thirty (30) months following the Closing Date; (2) twenty-four
(24) months from the closing date of the sale of the Retained LBHI Business or
portion of the Business, as applicable, to which such Service relates or from
which the Service is provided and (3) such date as Recipient has developed
an alternative source of such Services. 
This Agreement shall terminate once the provision of Services hereunder
has terminated, and, for the avoidance of doubt, this Agreement shall terminate
at the end of the time periods set forth above.

 

14

 

(b)                                 The Retained LBHI Businesses will use
reasonable efforts to alter their operations to minimize or eliminate the need
for BarCap Services (including by obtaining replacement services from a third
party provider) as promptly as reasonably practicable as they wind down their
operations or dispose of them to a third party. In addition, (i) a
Recipient may from time to time terminate this Agreement with respect to any
particular Service, in whole but not in part (1) for any reason or no
reason upon providing at least thirty (30) days prior written notice to the
Provider of such termination, subject to the obligation to pay Termination
Charges, as provided for under Section 8.02, (2) if the
Provider of such Service has failed to perform any of its material obligations
under this Agreement with respect to such Service, and such failure shall
continue to exist thirty (30) days after receipt by the Provider of written
notice of such failure from the Recipient, or (3) immediately upon mutual
written agreement of the parties hereto, and (ii) a Provider may terminate
this Agreement with respect to one or more Services, in whole but not in part,
at any time upon prior written notice to the Recipient if the Recipient has
failed to perform any of its material obligations under this Agreement relating
to such Service or Services, and such failure shall be continued uncured for a
period of thirty (30) days after receipt by the Recipient of a written notice
of such failure from the Provider.  In
the event that the effective date of the termination of any particular Service
is a day other than at the end of a billing period, the Service Charge
associated with such Service shall be pro-rated appropriately.

 

(c)                                  A Recipient may from time to time request
a reduction in part of the scope or amount of any particular Service.  If requested to do so by Recipient, the
Provider agrees to discuss in good faith appropriate reductions to the relevant
Service Charges in light of all relevant factors including the costs and
benefits to the Provider of any such reductions.  In the event that any particular Service is
reduced other than at the end of a billing period, the Service Charge
associated with such Service for the billing period in which such Service is
reduced shall be pro-rated appropriately. Without limiting Section 8.01(a),
the IMD Entities may request termination of any particular Service with respect
to them upon six (6) months’ prior written notice in which case such
Service will be terminated and charges for such Service will cease accruing at
the end of such six (6) month period.

 

(d)                                 The Recipient may terminate this
Agreement upon the occurrence of a Force Majeure event pursuant to Section 8.04
below that materially disrupts the provision of Services, and Provider’s failure
to fully restore such Services within 90 days, and the Provider’s further
failure to fully restore such Services 30 days after its receipt of written
notice of Recipient’s intention to so terminate pursuant to this Section 8.01(c) sent
after the expiration of the initial 90-day period.

 

(e)                                  The parties agree to discuss in good
faith implementing reasonable measures to address situations that may arise
after the date of this Agreement in which Recipient requires an extension of
the provision of one or more Services beyond the term provided for herein or
Provider requires relief from the provision of one or more Services because
such Services are unduly burdensome or inconsistent with the strategic and
operational objectives of Provider.

 

(f)                                    The BarCap Entities may suspend the
Services to an LBHI Entity (but no other LBHI Entity) that materially defaults
in its obligation to perform or provide Services to any BarCap Entity
hereunder, for so long as such default continues.  Without limiting the forgoing, 

 

15

 

such a default shall be deemed to exist where, had
such Services been provided by or been obligated to be provided by LBHI to the
BarCap Entities, the failure to perform or provide such Services would constitute
a default by LBHI.

 

Section 8.02                                Effect of Termination.  Upon
termination of any particular Service pursuant to this Agreement, the Provider
of the terminated Service will have no further obligation to provide the
terminated Service, and the relevant Recipient will have no obligation to pay
any future Service Charges relating to any such Service; provided, however,
that the Recipient shall remain obligated to the relevant Provider for (i) the
Service Charges owed and payable in respect of Services provided prior to the
effective date of termination and (ii) any Termination Charges.  Upon termination of any particular Service
pursuant to this Agreement, the relevant Provider shall reduce for the next
billing period the amount of the Service Charge for the category of Services in
which the terminated Service was included (such reduction to reflect the
elimination of all costs incurred in connection with the terminated service to
the extent the same are not required to provide other Services to the Recipient),
and, upon request of the Recipient, the Provider shall provide the Recipient
with documentation and/or information regarding the calculation of the amount
of the reduction.

 

Section 8.03                                Survival.  In connection
with termination of any Service, the provisions of this Agreement not relating
solely to such terminated Service shall survive any such termination, and in
connection with a termination of this Agreement, Article I, Article VI
(including liability in respect of any indemnifiable Losses under this
Agreement arising or occurring on or prior to the date of termination), Article VII,
Article VIII, Article IX, all confidentiality
obligations under this Agreement and liability for all due and unpaid Service
Charges and Termination Charges shall continue to survive indefinitely.

 

Section 8.04                                Force Majeure.  No party
hereto (nor any Person acting on its behalf) shall have any liability or
responsibility for failure to fulfill any obligation (other than a payment
obligation) under this Agreement so long as and to the extent to which the
fulfillment of such obligation is prevented, frustrated, hindered or delayed as
a consequence of circumstances of Force Majeure; provided that (i) such
party (or such Person) shall have exercised commercially reasonable efforts to
minimize the effect of Force Majeure on its obligations and (ii) the
nature, quality and standard of care that the Provider shall provide in
delivering a Service after a Force Majeure shall be substantially the same  as the nature, quality and standard of care
that the Provider provides to its Affiliates and its other business components
with respect to such Service.  In the
event of an occurrence of a Force Majeure, the party hereto whose performance
is affected thereby shall give notice of suspension as soon as reasonably
practicable to the other stating the date and extent of such suspension and the
cause thereof, and such party shall resume the performance of such obligations
as soon as reasonably practicable after the removal of the cause.

 

ARTICLE 9

GENERAL PROVISIONS

 

Section 9.01                                Independent Contractors.  In providing
the Services hereunder, the Provider shall act solely as independent contractor
and nothing in this Agreement shall constitute

 

16

 

or be construed to be or
create a partnership, joint venture, or principal/agent relationship between
the Provider, on the one hand, and the Recipient, on the other. All Persons
employed by the Provider in the performance of its obligations under this Agreement
shall be the sole responsibility of the Provider.

 

Section 9.02           Subcontractors. Any
Provider may hire or engage one or more subcontractors to perform any or all of
its obligations under this Agreement; provided that such Provider shall
in all cases remain responsible for all its obligations under this Agreement. Under
no circumstances shall any Recipient be responsible for making any payments
directly to any subcontractor engaged by a Provider.

 

Section 9.03           Books and Records.
All books, records and data maintained by a Provider for a Recipient with
respect to the provision of a Service to such Recipient shall be the exclusive
property of such Recipient. The Recipient, at its sole cost and expense, shall
have the right to inspect, and make copies of, any such books, records and data
during regular business hours upon reasonable advance notice to the Provider. At
the sole cost and expense of the Recipient, upon termination of the provision
of any Service, the relevant books, records and data relating to such
terminated Service shall be delivered by the Provider to the Recipient in a
mutually agreed upon format to the address of the Recipient set forth in Section 9.05
or any other mutually agreed upon location; provided, however,
that the Provider shall be entitled to retain one copy of all such books,
records and data relating to such terminated Service for archival purposes and
for purposes of responding to any dispute that may arise with respect thereto.

 

Section 9.04           Treatment of
Confidential Information.

 

(a)           The parties hereto
shall not, and shall cause all other Persons providing Services or having
access to information of the other party that is known to such Person as
confidential or proprietary (“Confidential Information”) not to,
disclose to any other Person or use, except for purposes of this Agreement, any
Confidential Information of the other party; provided, however,
that each party may disclose Confidential Information of the other party, to
the extent permitted by applicable Law (i) to its Representatives on a
need-to-know basis in connection with the performance of such party’s
obligations under this Agreement, (ii) in any report, statement, testimony
or other submission required to be made to any Governmental Body having
jurisdiction over the disclosing party, or (iii) in order to comply with
applicable Law, or in response to any summons, subpoena or other legal process
or formal or informal investigative demand issued to the disclosing party in
the course of any litigation, investigation or administrative proceeding. In
the event that a party hereto becomes legally compelled (based on advice of
counsel) by deposition, interrogatory, request for documents subpoena, civil
investigative demand or similar judicial or administrative process to disclose
any Confidential Information of the other party, such disclosing party shall
provide the other party with prompt prior written notice of such requirement,
and, to the extent reasonably practicable, cooperate with the other party (at
such other party’s expense) to obtain a protective order or similar remedy to
cause such Confidential Information not to be disclosed, including interposing
all available objections thereto, such as objections based on settlement
privilege. In the event that such protective order or other similar remedy is
not obtained, the disclosing party shall furnish only that portion of the
Confidential Information that has been legally compelled, and shall exercise

 

17

 

its reasonable best
efforts (at such other party’s expense) to obtain assurance that confidential
treatment will be accorded such Confidential Information.

 

(b)           Each party hereto
shall, and shall cause its Representatives to protect the Confidential
Information of the other parties by using the same degree of care to prevent
the unauthorized disclosure of such as the party uses to protect its own
confidential information of a like nature.

 

(c)           Each party shall comply
with all applicable state, federal and foreign privacy and data protection Laws
that are or that may in the future be applicable to the provision of the
Services hereunder.

 

Section 9.05           Notices. Except
with respect to routine communications by the BarCap Services Manager and LBHI
Services Manager under Section 2.03, all notices, requests, claims,
demands and other communications under this Agreement shall be in writing and
shall be given or made (and shall be deemed to have been duly given or made
upon receipt) by delivery in person, by overnight courier service, by facsimile
with receipt confirmed (followed by delivery of an original via overnight
courier service) or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 9.05):

 

(a)                                  if
to BarCap:

 

Barclays Capital Inc.

200 Park Avenue

New York, NY 10166

Attention: 
Jonathan Hughes, Esq.

Facsimile: 
(212) 412-7519

 

with a
copy to:

 

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

Attention: Duane McLaughlin

Facsimile: 
(212) 225-3999

 

(b)                                 if
to LBHI:

 

Lehman
Brothers Holdings Inc.

745
Seventh Avenue

New
York, NY 10019

Attention:  Steven Berkenfeld, Esq.

Facsimile:  (646) 758-4226

 

18

 

with a
copy to:

 

Weil,
Gotshal & Manges LLP

767
Fifth Avenue

New
York, NY 10153

Attention:  Jeffrey Osterman

Facsimile:  (212) 310-8007

 

Section 9.06           Regulatory Approval
and Compliance. Each party hereto shall be responsible for its own
compliance with any and all Laws applicable to its performance under this
Agreement; provided, however, that each of BarCap and LBHI shall,
subject to reimbursement of out-of-pocket expenses by the requesting party,
cooperate and provide one another with all reasonably requested assistance
(including the execution of documents and the provision of relevant
information) required by the requesting party to ensure compliance with all
applicable Laws in connection with any regulatory action, requirement, inquiry
or examination related to this Agreement or the Services.

 

Section 9.07           Further Assurances.
Each party hereto covenants and agrees that, without any additional
consideration, it shall execute and deliver any further legal instruments and
perform any acts that are or may become reasonably necessary to effectuate this
Agreement.

 

Section 9.08           Severability. If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced under any Law or as a matter of public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated by this Agreement is not affected in any manner materially adverse
to any party hereto. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of such parties as closely as possible in a mutually acceptable manner
in order that the transactions contemplated by this Agreement can be
consummated as originally contemplated to the greatest extent possible.

 

Section 9.09           Entire Agreement.
Except as otherwise expressly provided in this Agreement, the Purchase
Agreement and this Agreement constitute the entire agreement of the parties
hereto with respect to the subject matter of this Agreement and supersede all
prior agreements and undertakings, both written and oral, between or on behalf
of the parties hereto with respect to the subject matter of this Agreement.

 

Section 9.10           Assignment;
Third-Party Beneficiaries.

 

(a)           This Agreement shall
not be assigned or sublicensed by operation of Law or otherwise without the
prior written consent of the parties hereto; provided, however,
that, subject to Section 9.10(b):

 

(i)            the LBHI Entities
shall have a right to assign their rights and obligations hereunder, in whole
or in part, (A) with respect to the IMD Entities (as of the date hereof)
to one or more related purchasers (in a single transaction or a series of
related

 

19

 

transactions) of (x) any
or all of the IMD Business or (y) any or all of the assets of, or entities
that conduct, the IMD Business, and (B) with respect to any other
acquirors of the Retained LBHI Business, if the absence of such Service would
cause a material adverse effect on the value of the underlying business operations
or assets, and

 

(ii)           the BarCap Entities may
assign their rights and obligations hereunder, in whole or in part, (A) with
respect to any acquirors of the Business, if the absence of such Service would
cause a material adverse effect on the value of the underlying business
operations or assets, and (B) to a single purchaser (in a single
transaction or a series of related transactions) of (x) any or all of the
Business or (y) any or all of the assets of, or entities that conduct, the
Business.

 

(b)           Notwithstanding
anything to the contrary, the total number of parties to which each of the LBHI
Entities, on one hand, and the BarCap Entities, on the other hand, may assign
their rights and obligations pursuant to Section 9.10(a) shall
not exceed six (i.e., up to six separate assignments for each party to this
Agreement); provided that the LBHI Entities shall have the right to assign
their rights and obligations hereunder up to two additional parties provided
that, notwithstanding Section 8.01(a), in the case of such two additional
parties, the Services pursuant to those assigned rights shall terminate one (1) year
after the Closing Date. With respect to the sale of the following businesses –
the IMD Business; the LBHI Entity private equity business; and the businesses
conducted by the LBHI Entities in each of India, Asia and Europe - if there is
an assignment hereunder to a single buyer of more than one of the foregoing
businesses, then, solely for the purposes of this Section 9.10(b), such
assignment shall count as separate assignment for each of such businesses. For
illustrative purposes, if there is an assignment hereunder to a single buyer
for the India and Asian businesses, then it shall count as two assignments
towards the total of 6. The parties agree to negotiate in good faith if either
party requests the right to make additional assignments hereunder to a buyer of
a part of such party’s business to which this Agreement relates if the absence
of such Service would cause a material adverse effect to the underlying
business operations or asset being sold.

 

(c)           Any permitted assignee
in accordance with this Section 9.10 shall be required to execute a
counterpart to this Agreement, agreeing to be bound by the terms and conditions
set forth herein. Further, permitted assignees hereunder shall not themselves
be permitted to assign any part of the rights or obligations assigned to them
without the prior written consent of the non-assigning party. Each party shall
require any assignee or purchaser of any business or asset that had been
providing (or had been used to provide) Services hereunder, the absence of
which would cause a material adverse effect to the Recipient, to continue to
provide Services to the Recipient pursuant to the terms and conditions of this
Agreement as a condition to such assignment or purchase. For the avoidance of
doubt, a change of control of an entity shall be deemed an assignment
hereunder.

 

(d)           Except as provided in Article 6
with respect to Provider Indemnified Parties, this Agreement is for the sole
benefit of the parties hereto and their permitted successors and assigns and
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other Person any legal or equitable right, benefit or remedy of any
nature whatsoever, including any rights of employment for any specified period,
under or by reason of this Agreement.

 

20

 

Section 9.11           Governing Law;
Submission to Jurisdiction. (a) This Agreement (and any claims or
disputes arising out of or related hereto or to the transactions contemplated
hereby or to the inducement of any party to enter herein, whether for breach of
contract, tortious conduct or otherwise, and whether predicated on common law,
statute or otherwise) shall in all respects be governed by, and construed in
accordance with, the Laws of the State of New York, including all matters of
construction, validity and performance, in each case without reference to any
conflict of Law principles that might lead to the application of the Laws of
any other jurisdiction.

 

(b)           Without limiting any
party’s right to appeal any order of the Bankruptcy Court, (i) the
Bankruptcy Court shall retain exclusive jurisdiction to enforce the terms of
this Agreement and to decide any claims or disputes which may arise or result
from, or be connected with, this Agreement, any breach or default hereunder, or
the transactions contemplated hereby, and (ii) any and all proceedings
related to the foregoing shall be filed and maintained only in the Bankruptcy
Court, and the parties hereby consent to and submit to the jurisdiction and
venue of the Bankruptcy Court and shall receive notices at such locations as
indicated in Section 9.05 hereof; provided, however,
that if the Bankruptcy Case has closed, the parties agree to unconditionally
and irrevocably submit to the exclusive jurisdiction of the United States
District Court for the Southern District of New York sitting in New York County
or the Commercial Division, Civil Branch of the Supreme Court of the State of
New York sitting in New York County and any appellate court from any thereof,
for the resolution of any such claim or dispute. The parties hereby irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of venue of any such dispute
brought in such court or any defense of inconvenient forum for the maintenance
of such dispute. Each of the parties hereto agrees that a judgment in any such
dispute may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law.

 

(c)           Each of the parties
hereto hereby consents to process being served by any party to this Agreement
in any suit, action or proceeding by delivery of a copy thereof in accordance
with the provisions of Section 9.05.

 

Section 9.12           Amendment. No
provision of this Agreement, including any Schedule hereto, may be amended,
supplemented or modified except by a written instrument making specific
reference hereto or thereto signed by all the parties to this Agreement. No
waiver by any party of any provision hereof shall be effective unless
explicitly set forth in writing and executed by the party so waiving. The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any other subsequent breach.

 

Section 9.13           Rules of
Construction. Interpretation of this Agreement shall be governed by the
following rules of construction (a) words in the singular shall be
held to include the plural and vice versa and words of one gender shall be held
to include the other gender as the context requires, (b) references to the
terms Article, Section, paragraph and Schedule are references to the Articles,
Sections, paragraphs and Schedules of this Agreement unless otherwise
specified, (c) the terms “hereof,” “herein,” “hereby,” “hereto,” “hereunder”
and derivative or similar words refer to this entire Agreement, including the
Schedules hereto, (d) references to “$” shall mean U.S. dollars, (e) the
word “including” and words of similar

 

21

 

import when used in this
Agreement shall mean “including, without limitation,” unless otherwise
specified, (f) the word “or” shall not be exclusive, (g) references
to “written” or “in writing” include in electronic form, (h) provisions
shall apply, when appropriate, to successive events and transactions, (i) the
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement, (j) BarCap
and LBHI have each participated in the negotiation and drafting of this
Agreement and if an ambiguity or question of interpretation should arise, this
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or burdening any such party
by virtue of the authorship of any of the provisions in any of this Agreement, (k) a
reference to any Person includes such Person’s successors and permitted
assigns, (l) any reference to “days” means calendar days unless Business
Days are expressly specified, and (m) when calculating the period of time
before which, within which or following which any act is to be done or step taken
pursuant to this Agreement, the date that is the reference date in calculating
such period shall be excluded, if the last day of such period is not a Business
Day, the period shall end on the next succeeding Business Day.

 

Section 9.14           Counterparts. This
Agreement may be executed in two or more counterparts, and by each party in
separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile shall be as effective as delivery of a manually executed
counterpart of this Agreement.

 

Section 9.15           Waiver of Jury Trial.
EACH PARTY HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT. EACH SUCH PARTY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTIES WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION
AGREEMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.15.

 

Section 9.16           Enforcement. The
parties agree that irreparable damage may result, and that the parties may not
have any adequate remedy at Law, if any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached or threatened to be breached. It is accordingly agreed that,
notwithstanding the penultimate sentence of Section 7.01(a), if either
party breaches its obligation to consummate the transactions contemplated by
this Agreement, the non-breaching party shall be entitled to seek equitable
relief, in addition to all other remedies available to the parties at Law or in
equity as a remedy for any such breach or threatened breach. Such equitable
remedies may be sought in any court referred to in Section 9.11(b).

 

Section 9.17           Non-Recourse. No
past, present or future director, officer, employee, incorporator, member,
partner, stockholder, Affiliate, agent, attorney or representative

 

22

 

of either BarCap or LBHI
or their respective Affiliates shall have any liability for any obligations or
liabilities of BarCap or LBHI, respectively, under this Agreement of or for any
claim based on, in respect of, or by reason of, the transactions contemplated
hereby.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY
LEFT BLANK.]

 

23

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed on the
date first written above by their respective duly authorized officers.

 

	
   

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
      /s/ Steven Berkenfeld

  
	
   

  	
   

  	
  Name: Steven Berkenfeld

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BARCLAYS CAPITAL
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
      /s/
  Gerard LaRocca

  
	
   

  	
   

  	
  Name: Gerard
  LaRocca

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer

  

 

1

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