SRAM International Corp Mailing Address Business Address 1333 N

SECURITIES AND EXCHANGE COMMISSION

FORM S-1/A General form of registration statement for all companies including face-amount certificate companies [amend]

Filing Date: 2011-06-24 SEC Accession No. 0001193125-11-173100

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FILER SRAM International Corp Mailing Address Business Address 1333 N. KINGSBURY, 4TH 1333 N. KINGSBURY, 4TH CIK:1519622| IRS No.: 000000000 | State of Incorp.:DE | Fiscal Year End: 1231 FLOOR FLOOR Type: S-1/A | Act: 33 | File No.: 333-174140 | Film No.: 11930372 CHICAGO IL 60642 CHICAGO IL 60642 SIC: 3751 Motorcycles, bicycles & parts 312-664-8800

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents As filed with the Securities and Exchange Commission on June 24, 2011 Registration No. 333-174140 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Pre-effective Amendment No. 1 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 SRAM International Corporation (Exact name of registrant as specified in its charter)

Delaware 3751 80-0712932 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number)

1333 N. Kingsbury Street, 4th Floor Chicago, Illinois 60642 (312) 664-8800 (Address, including zip code, and telephone number, including area code, of registrants principal executive offices)

Stanley R. Day, Jr. President and Chief Executive Officer SRAM International Corporation 1333 N. Kingsbury Street, 4th Floor Chicago, Illinois 60642 (312) 664-8800 (Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies To: Christopher D. Lueking Leland E. Hutchinson Mark D. Gerstein Winston & Strawn LLP Latham & Watkins LLP 35 West Wacker Drive 233 South Wacker Drive, Suite 5800 Chicago, Illinois 60601 Chicago, Illinois 60606 (312) 558-5600 (312) 876-7700

Approximate date of commencement of the proposed sale to the public: As soon as practicable after this registration statement becomes effective.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨ If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨ If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer ¨

Non-accelerated filer x Smaller reporting company ¨ CALCULATION OF REGISTRATION FEE

Title of Each Class of Proposed Maximum Aggregate Amount of Securities to be Registered Offering Price(1)(2) Registration Fee(3) Class A common stock, par value $0.01 per share $300,000,000 $34,830.00 (1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. (2) Includes additional shares that the underwriters have the option to purchase. See Underwriting. (3) Previously paid.

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission acting pursuant to said Section 8(a), may determine.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities, and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to completion, dated June 24, 2011. shares

Class A common stock

This is an initial public offering of shares of Class A common stock of SRAM International Corporation.

We are offering shares of our Class A common stock, and the selling stockholders identified in this prospectus are offering an additional shares of our Class A common stock. We will not retain any of the net proceeds from the sale of the shares of Class A common stock by the selling stockholders. The estimated initial public offering price per share is expected to be between $ and $ .

We have applied to have our Class A common stock approved for quotation on the Nasdaq stock market under the symbol SRAM.

We will be a holding company, and our only business will be the operation and control of the business and affairs of SRAM, LLC and its subsidiaries.

Following this offering, we will have two classes of authorized common stock, Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting. The Class A common stock is entitled to one vote per share and the Class B common stock is entitled to ten votes per share. Therefore, immediately following this offering, the holders of Class A common stock will hold % of our total voting power, assuming no exercise of the underwriters option to purchase additional shares. Each share of Class B common stock is convertible at any time into one share of Class A common stock.

Per Share Total Initial public offering price $ $ Underwriting discounts and commissions $ $ Proceeds to SRAM International Corporation, before expenses $ $ Proceeds to the selling stockholders, before expenses $ $

The selling stockholders have granted the underwriters an option for a period of 30 days to purchase additional shares of Class A common stock. We will not receive any proceeds from the sale of these shares by the selling stockholders.

Investing in our Class A common stock involves a high degree of risk. See Risk factors beginning on page 11.

Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. J.P. Morgan BofA Merrill Lynch Morgan Stanley

Baird Lazard Capital Markets

Piper Jaffray Stifel Nicolaus Weisel

Page Prospectus summary 1 The offering 7 Summary consolidated and pro forma financial data 9 Risk factors 11 Special note regarding forward-looking statements 26 The refinancing and reorganization 27 Use of proceeds 32 Dividend policy 33 Capitalization 34 Dilution 36 Unaudited pro forma condensed consolidated financial data 38 Selected consolidated financial data 47 Managements discussion and analysis of financial condition and results of operations 49 Business 73 Management 89 Executive compensation 94 Certain relationships and related person transactions 106 Principal and selling stockholders 110 Description of capital stock 113 Description of new credit facilities 118 Shares eligible for future sale 121 Material U.S. federal income tax consequences to non-U.S. holders of our Class A common stock 123 Underwriting 127 Legal matters 135 Experts 136 Where you can find more information 137 Index to the financial statements F-1

You should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the Securities and Exchange Commission. Neither we nor the underwriters have authorized anyone to provide you with additional information or information different from that contained in this prospectus or in any free writing prospectus filed with the Securities and Exchange Commission. We are offering to sell, and seeking offers to buy, our Class A common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our Class A common stock.

Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States.

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our Class A common stock, you should carefully read this entire prospectus, including our financial statements and the related notes included in this prospectus and the information set forth under the headings Risk factors, Unaudited pro forma condensed consolidated financial data and Managements discussion and analysis of financial condition and results of operations. Unless the context requires otherwise, the words SRAM International Corporation, SRAM, we, company, us and our refer to SRAM International Corporation, a newly formed Delaware corporation, and its subsidiaries, including SRAM Holdings, LLC and SRAM, LLC.

Overview We are a leading global designer, manufacturer and marketer of premium bicycle components. We believe consumers recognize our brands for innovative product design. Our portfolio of premium brands includes SRAM, RockShox, Zipp, Avid and Truvativ. Our products include drivetrain systems, suspension, brakes, internal gear hubs and wheelsets, all of which are essential components used on road bikes, mountain bikes and pavement bikes. Many of the worlds elite cyclists use our components, including the last two Tour de France winners, the 2010 Ironman World Championship winner and the winners of all six 2010 World Cup mountain bike races. We believe the success of elite cyclists using our products at the highest levels of competition creates aspirational demand for our components and drives demand from a broad consumer base of cyclists across all skill levels.

We are the second largest supplier of bicycle components in the world, measured in net sales for 2010, based on publicly- filed information for some of our competitors and management estimates. We focus primarily on the independent bicycle retailer market, which sells mid to high-end bikes, ranging in price from $300 to over $10,000 in the United States, Europe and other developed markets. We believe this is the highest margin segment of the bicycle component market. We believe the consumer in this market is generally the cycling enthusiast. We define the cycling enthusiast as a consumer who seeks higher performance premium branded bikes and components. Our products, which prominently display our brands, are used on all of the major premium brands produced by bicycle companies, including Trek, Specialized, Cannondale, Giant, Raleigh and Schwinn.

To reach the independent bicycle retailer market, we operate through two distribution channels: the OEM channel and the aftermarket channel. In the OEM channel, we market our products to bicycle companies as original equipment components for new bikes that they sell to consumers through independent bicycle retailers. In the aftermarket channel, we sell products through distributors to independent bicycle retailers and sell a limited number of premium aftermarket products directly to independent bicycle retailers in the United States, who in turn sell them to consumers for replacements, upgrades or custom bike builds. For each of the year ended December 31, 2010 and the three months ended March 31, 2011, we generated 67% of our net sales from the sale of components in the OEM channel and 33% of our net sales from the sale of components in the aftermarket channel. Due to our global production footprint, 86.4% of our 2010 net sales were invoiced outside of the United States.

We believe our premium brands, technological innovation and product development have been key drivers of our strong financial performance. We grew our net sales from $283.8 million in 2006 to $524.2 million in 2010, representing a compound annual growth rate, or CAGR, of 16.6%. Our net sales for 2006, 2007, 2008, 2009 and 2010 were $283.8 million, $356.0 million, $478.4 million, $399.6 million and $524.2 million, respectively. Our net income (loss) for the same periods was $11.6 million, $18.0 million, ($48.6 million), $21.5 million and $50.0 million, respectively, representing a CAGR of 44.1%.

Market overview and opportunity Bicycle industry overview

The National Bicycle Dealers Association estimates annual worldwide bike production in 2010 was 130 million units, of which approximately 53 million were sold in developed markets, as reported in its U.S. Bicycle Market 2010 report. Developed markets include Australia, Europe, Japan, New Zealand and North America. There are two primary retail channels for the sale of bikes in developed markets: the independent bicycle retailer market (primarily independent bicycle retailers and to a lesser extent sporting good chains) and mass market retailers (e.g., Wal-Mart and Target). We estimate that in 2010 there were 18 million new bikes sold in the independent bicycle retailer market globally, representing $9.2 billion in retail sales, with an average retail price of approximately $500 per bike. Of these 18 million new bikes sold, we believe approximately 90% were sold in the United States, Europe and Japan.

Bicycle component market

We believe branded bicycle components are key to the performance of mid to high-end bikes and strongly influence the buying decisions of cycling enthusiasts. We estimate the size of the independent bicycle retailer market for bicycle components to be approximately $3.5 billion, as measured in component suppliers sales.

Outlook

We expect the bicycle component market to continue to grow due to a variety of factors that we believe will impact the cycling industry, including:

continuing growth in the number of cycling enthusiasts;

increasing average retail selling prices driven by better-performing product designs and technologies;

growing participation in road racing, mountain bike racing, organized weekend rides and charity cycling events, as well as cycling related sports, such as triathlons and cyclo-cross;

improving cycling infrastructure, such as cycling lanes in urban areas;

increasing consumer focus on healthier lifestyle trends;

growing focus on the environment; and

increasing adoption of mid to high-end bikes in emerging markets.

However, if the popularity of cycling or the number of cycling enthusiasts does not increase, or declines, the bicycle component market may not continue to grow and we may fail to achieve future growth. See Risk factorsRisks related to our businessA reduction or lack of continued growth in the popularity of cycling or the number of cycling enthusiasts could adversely affect our product sales and profits. In addition, we may be unable to capitalize on these trends due to a number of factors, including our substantial leverage. See Risk factorsRisks related to our businessWe may not be able to sustain our past growth or successfully implement our growth strategy, which may have a negative effect on our business, financial condition or results of operations.

Our strengths We believe our success is attributable to the following factors:

Premium brand portfolio. We have five premium brands under the SRAM umbrella: SRAM (drivetrain systems), RockShox (suspension), Zipp (wheelsets), Avid (brakes) and Truvativ (cranks). Our brands are prominently displayed on all of our products and we believe are associated with innovation and performance by our customers, consumers and elite athletes.

Leader in independent bicycle retailer market. We are the second largest supplier of bicycle components in the world, measured in 2010 net sales. We believe, based on publicly filed information for sales of our competitors and management estimates, that we have an estimated 15% share of the approximately $3.5 billion of annual net sales in the independent bicycle retailer market for bicycle components, as measured in component suppliers sales. We estimate that our primary competitor has approximately 47% of this market.

Differentiated business model. Over the past 24 years, we have developed global design, production and distribution capabilities and established longstanding customer relationships that we believe are difficult to replicate. We are one of only two suppliers offering a full-line of mid to high-end components to bicycle companies for use on their bikes. We also offer leading customer service and warranty support to independent bicycle retailers.

Committed management team with deep-rooted corporate culture. Our senior management team has an average tenure with SRAM of approximately 18 years and has transformed SRAM from a single product company in 1987 to a full-line bicycle component supplier with approximately 2,200 employees in nine countries around the world today.

Our strategy Key elements of our growth strategy are:

Extend our technological and product leadership. We intend to continue to develop and market products that incorporate innovative design, advanced features and improved performance that differentiate us in the bicycle component market. These efforts will include enhancing our existing products, introducing next generation technologies and developing new product offerings that leverage our existing product platforms in order to maintain our position as an industry leader.

Continue to increase our share of components on new bikes. We believe we are favorably positioned to increase our share of components on new bikes by building on the strength of our brands, the diversity of our product portfolio and our innovation pipeline. We will focus on key decision-makers who influence component specifications for new bikes, including the bike brand product managers at bicycle companies, independent bicycle retailers, cycling industry media and competitive cyclists, including amateur racers and triathletes.

Increase aftermarket penetration. We intend to increase our sales of aftermarket components by strengthening our relationships with independent bicycle retailers and increasing brand awareness at the consumer level. We also intend to enhance our aftermarket product offerings by increasing differentiation of our aftermarket channel components from our OEM channel components and, where appropriate, expanding into product areas adjacent to our current product lines.

Grow the industry while strengthening our leadership profile. We will continue to focus on a number of initiatives aimed at growing our industry and reinforcing our leadership position within it by continuing product innovation, strengthening our independent retailer network through training and marketing programs and promoting cycling advocacy.

History SRAM International Corporation was incorporated on April 29, 2011 for the purpose of becoming the holding company of SRAM Holdings, LLC and SRAM, LLC immediately prior to the consummation of this offering. SRAM was originally founded in 1987 as SRAM Corporation, an Illinois corporation, to design, manufacture and market bicycle shifters. In 1995, after becoming a market leader in shifters, we began our transformation into a full-line, mid to high-end component supplier. We have grown through internal product development and a series of strategic acquisitions, including the acquisition of the bicycle division of Mannesman Sachs AG (1997), RockShox, Inc. (2002), the bicycle business of Avid, LLC (2004), Truvativ International Co., Ltd. (2004) and Compositech, Inc. (Zipp) (2007). One of our founders, Stanley R. Day, Jr., is our President, Chief Executive Officer and Chairman of the Board. On September 30, 2008, we completed a recapitalization in which Trilantic Capital Partners and certain affiliates and co-investors purchased a $234.8 million equity interest in SRAM. We refer to this investment and recapitalization as the 2008 recapitalization. See Certain relationships and related person transactionsTrilantic 2008 investment and recapitalization for information on the 2008 recapitalization.

The refinancing and reorganization Refinancing

On June 7, 2011, we entered into new credit facilities consisting of a first-lien term and revolving facility and a second-lien term facility. The aggregate proceeds from the new credit facilities were $790.0 million. The proceeds from the new credit facilities were used to repay all outstanding amounts under our prior credit facilities, which as of June 7, 2011, were $194.8 million (including accrued interest), to directly or indirectly acquire all of the equity interests in SRAM Holdings, LLC held by Trilantic and its co-investors for $575.0 million and to pay fees and expenses related to the refinancing. In connection with these transactions, SRAM Holdings, LLC amended and restated its operating agreement to create a single class of common units and eliminate the corporate governance and liquidity rights of Trilantic and its co-investors. We refer to the entering into of our new credit facilities, the use of proceeds therefrom and the related amendment to the SRAM Holdings, LLC operating agreement as the refinancing. Following the refinancing, Trilantic and its co-investors have no remaining ownership of SRAM Holdings, LLC. See The refinancing and reorganization and Description of new credit facilities for additional information.

Reorganization

interests of SRAM Holdings, LLC, either directly or through its wholly-owned subsidiaries, and the equity holders of SRAM Holdings, LLC will exchange their direct or indirect equity interests in SRAM Holdings, LLC for shares of common stock of SRAM International Corporation. The existing equity holders include the Day family, SRAM management and current and former directors and employees. A portion of the shares of common stock issued to the existing equity holders will be sold in the secondary portion of this offering. SRAM Holdings, LLC will continue to hold 100% of the equity interests of our operating company, SRAM, LLC. Immediately prior to this offering, SRAM Holdings, LLC will make $ million of distributions to its existing equity holders with respect to the estimated federal and state income taxes on their allocable shares of SRAM Holdings, LLCs estimated taxable income from January 1, 2011 through the closing date of this offering. We refer to the series of transactions described in this paragraph as the reorganization. See The refinancing and reorganization for additional information.

Corporate information Our principal executive offices are located at 1333 North Kingsbury Street, 4th Floor, Chicago, Illinois 60642. Our telephone number is (312) 664-8800. Our website address is www.sram.com. Information contained on our website is not a part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only.

SRAM®, RockShox®, Zipp®, Avid®, TRUVATIV®, Grip Shift®, DoubleTap®, ZeroLoss and other trademarks or service marks of SRAM appearing in this prospectus are the property of SRAM. Trade names, trademarks and service marks of other companies appearing in this prospectus are the property of the respective holders.

Risk factors Our business is subject to numerous risks and uncertainties, including those highlighted in the section entitled Risk factors immediately following this prospectus summary, that primarily represent challenges we face in connection with the successful implementation of our strategy and the growth of our business. We expect a number of factors may cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance. Such factors include our ability to introduce new products into the market, changes in the competitive landscape for bicycle components, unfavorable economic conditions, a weakening of our brand image, a disruption in the operations of our manufacturing facilities, loss of our senior management, changes in the popularity of cycling or the number of cycling enthusiasts and other risks described under Risk factors.

Industry and market data Market data and industry statistics and forecasts used throughout this prospectus are based on independent industry publications, reports by market research firms and other published independent sources. Some data and other information are also based on our good faith estimates, which are derived from our review of internal surveys and data and independent sources. Although we believe these sources are credible, we have not independently verified the data or information obtained from external sources.

Presentation of financial information SRAM International Corporation was incorporated in Delaware on April 29, 2011. The historical financial information presented in this prospectus is that of SRAM Holdings, LLC, which will become a subsidiary of SRAM International Corporation prior to the consummation of this offering, for the period from October 1, 2008

through March 31, 2011 and SRAM Corporation, the predecessor to SRAM Holdings, LLC, for periods prior to October 1, 2008. For the purposes of the financial statements and information presented in this prospectus, we refer to SRAM Holdings, LLC and SRAM Corporation as our predecessor companies for these respective periods.

Terms used in this prospectus As used in this prospectus, the term Day family means (1) the lineal descendants of Frederick Weyerhaeuser (the grandfather of Stanley R. Day, Jr.) and (2) various trusts for the benefit of the individuals described in clause (1) and the trustees thereof.

As used in this prospectus, the term Trilantic and its co-investors refers to Trilantic Capital Partners (f/k/a Lehman Brothers Merchant Banking) and certain of its affiliates (Trilantic) and GE Capital Equity Holdings Inc., Gleacher Mezzanine Fund II, L.P., GMF SRAM Holdings Corp., Southern Farm Bureau Life Insurance Company and JPM Mezzanine Capital, LLC (its co- investors), which prior to the refinancing collectively owned 100% of the Class A units of SRAM Holdings, LLC.

As used in this prospectus, the term premium when used in reference to our products or brands means bicycle components commanding higher prices than their non-premium counterparts and which are sold primarily through the independent bicycle retailer market (primarily independent bicycle retailers and to a lesser extent sporting good chains), as opposed to mass market retailers (e.g., Wal-Mart and Target).

References in this prospectus to our stock or our common stock mean shares of SRAM International Corporations Class A common stock, shares of SRAM International Corporations Class B common stock, or both, as the context requires.

Common stock offered

Class A common stock being offered by SRAM International shares. Corporation

Class A common stock being shares (or shares if the underwriters exercise in full their option to offered by the selling purchase additional shares). stockholders

Class A common stock to be shares (or shares if the underwriters exercise in full their option to outstanding after this offering purchase additional shares).

Class B common stock to be shares (or shares if the underwriters exercise in full their option to purchase outstanding after this offering additional shares).

Each share of our Class A common stock will entitle its holder to one vote per share on all matters to be voted on by stockholders generally. Each share of our Class B common stock Voting rights will entitle its holder to ten votes per share on all matters to be voted on by stockholders generally. Immediately following this offering, the holders of Class A common Stock will hold % of our total voting power.

We estimate that the net proceeds to us from the sale of shares of our Class A common stock by us in this offering will be approximately $ million after deducting assumed underwriting discounts and commissions payable by us, based on an offering price of Use of proceeds $ per share, the midpoint of the range set forth on the cover page of this prospectus. We intend to use $ million of the proceeds to us to repay $ million of indebtedness under the new credit facilities and $ million of the proceeds to us to pay fees and expenses related to this offering.

We will not receive any proceeds from the sale of shares by the selling stockholders. See Use of proceeds.

See Risk factors beginning on page 11 and the other information included in this Risk factors prospectus for a discussion of factors you should carefully consider before deciding to invest in our Class A common stock.

The underwriters have reserved for sale, at the initial public offering price, up to shares of our Class A common stock being offered for sale to certain of our customers, Directed share program other business associates and employees and their family members. All shares purchased through the directed share program will be

subject to a lock-up agreement. See Underwriting. The number of shares available for sale to the general public in this offering will be reduced to the extent these persons purchase reserved shares. Any reserved shares not purchased will be offered by the underwriters to the general public on the same terms as the other shares.

Proposed Nasdaq symbol SRAM

The number of shares of our common stock outstanding after this offering excludes:

an aggregate of shares of Class A common stock reserved for issuance under the SRAM International Corporation 2011 Incentive Award Plan that we will adopt prior to the consummation of this offering.

Except as otherwise indicated, information in this prospectus reflects or assumes the following:

the reorganization has been consummated, including the filing of our amended and restated certificate of incorporation, which provides for, among other things, the authorization of shares of Class A common stock and shares of Class B common stock; and

no exercise of the underwriters option to purchase up to additional shares of our Class A common stock.

The following summary consolidated and pro forma financial data of our predecessor companies should be read together with The refinancing and reorganization, Use of proceeds, Unaudited pro forma condensed consolidated financial data, Selected consolidated financial data, Managements discussion and analysis of financial condition and results of operations and the historical financial statements and related notes included elsewhere in this prospectus. The consolidated financial statements of our predecessor companies, SRAM Holdings, LLC and SRAM Corporation, will be our historical financial statements following this offering.

We derived the actual summary consolidated financial data as of March 31, 2011 and for the three months ended March 31, 2010 and 2011 from the unaudited consolidated financial statements of SRAM Holdings, LLC, included elsewhere in this prospectus. We derived the actual summary consolidated financial data as of December 31, 2010 and for each of the three years in the period ended December 31, 2010 from the audited consolidated financial statements of SRAM Holdings, LLC, included elsewhere in this prospectus. The interim unaudited consolidated financial data was prepared on a basis consistent with that used in preparing our annual audited consolidated financial statements and includes all adjustments, consisting of normal and recurring items, that we consider necessary for a fair presentation of the financial position and results of operations for the unaudited periods. The interim results of operations are not necessarily indicative of operations for a full fiscal year.

The unaudited pro forma condensed consolidated statement of operations data for the year ended December 31, 2010 and for the three months ended March 31, 2011 presents our consolidated results of operations, and the unaudited pro forma condensed consolidated balance sheet data as of March 31, 2011 presents our consolidated financial position, after giving effect to the refinancing and reorganization described under The refinancing and reorganization, this offering and the use of the estimated net proceeds from this offering described under Use of proceeds, as if such transactions occurred on January 1, 2010 for the unaudited pro forma condensed consolidated statement of operations, and, as if such transactions occurred on March 31, 2011 for the unaudited pro forma condensed consolidated balance sheet.

Predecessor(1) Successor(1) Actual Pro forma as adjusted (in thousands, except per share/ Three months Year ended Three months unit Year ended December 31, ended March 31, December 31, ended March 31, data) 2008 2009 2010 2010 2011 2010 2011

Statement of operations data: Net sales $478,354 $399,581 $524,187 $122,037 $146,460 $ $ Cost of sales 310,725 239,448 312,954 72,145 86,267

Gross profit 167,629 160,133 211,233 49,892 60,193 Operating expenses General and administrative expense 77,846 29,042 33,913 6,999 9,368 Sales and marketing expense 49,480 27,934 40,579 8,684 11,525 Product development expense 46,506 27,799 37,179 8,603 10,296 Recapitalization costs(2) 8,952

182,784 84,775 111,671 24,286 31,189

Income (loss) from operations (15,155 ) 75,358 99,562 25,606 29,004 Other income (expense) Interest expense, net (21,703 ) (36,245 ) (32,634 ) (8,395 ) (3,716 ) Foreign currency exchange gain (loss) 4,072 (3,221 ) 237 3,417 (3,058 )

Other expense, net (17,631 ) (39,466 ) (32,397 ) (4,978 ) (6,774 )

Income (loss) before income taxes (32,786 ) 35,892 67,165 20,628 22,230 Income tax expense 15,838 14,373 17,193 4,348 4,457

Predecessor(1) Successor(1) Actual Pro forma as adjusted Year ended Three months Year ended Three months (in thousands, except per December 31, ended March 31, December 31, ended March 31, share/unit data) 2008 2009 2010 2010 2011 2010 2011

Pro forma as adjusted weighted average common shares outstandingbasic and diluted Pro forma as adjusted earnings per common sharebasic and diluted $ $

Predecessor(1) Successor(1) As of March 31, 2011 Pro forma (in thousands) Actual as adjusted

Balance sheet data:

Cash and cash equivalents $ 15,374 $ Total assets 240,809 Loans and borrowings (including short-term borrowings)(4) 198,753 Total liabilities 344,103 Total members (deficit) equity (103,294 ) Total stockholders (deficit) equity

(1) Prior to this offering, the proceeds from the refinancing were used to directly or indirectly acquire all of the equity interests in SRAM Holdings, LLC held by Trilantic and its co-investors. As a result, SRAM-SP2, Inc. acquired control of SRAM Holdings, LLC and was required to apply acquisition accounting pursuant to ASC 805. Upon SRAM-SP2, Inc. obtaining control and a voting interest greater than 95%, SRAM Holdings, LLC was required to push down the new basis of SRAM-SP2, Inc. in accordance with Staff Accounting Bulletin Topic 5.J. Our historical financial statements for periods prior to the date of this transaction (our predecessor periods) were prepared on the historical cost basis of accounting, which existed prior to the acquisition. Our historical financial statements for periods subsequent to the date of this transaction (our successor periods) and our unaudited pro forma condensed consolidated financial statements will reflect the push down of the new basis of SRAM-SP2, Inc. upon acquisition with the recognition of assets and liabilities at their fair values pursuant to acquisition accounting. As a result, our results for the successor periods are not necessarily comparable to the predecessor periods.

(2) Recapitalization costs relate to the 2008 recapitalization in which Trilantic and its co-investors purchased a $234.8 million equity interest in SRAM. See Certain relationships and related person transactionsTrilantic 2008 investment and recapitalization for a description of the 2008 recapitalization.

(3) Net loss for 2008 includes expenses related to our 2008 recapitalization, including share-based compensation expense of $88.5 million in accordance with Accounting Standards Codification, or ASC, 718, CompensationStock Compensation. This expense was primarily due to the immediate vesting, exercise and repurchase of awards, triggered by the 2008 recapitalization, which was allocated across our cost of sales, general and administrative expense, sales and marketing expense and product development expense for the year. Net income for 2009 and 2010 includes share-based compensation expense of $3.7 million and $12.4 million, respectively, similarly allocated.

(4) Loans and borrowings (including short-term borrowings) are defined as (i) the current portion of long-term debt plus (ii) long-term borrowings.

An investment in our Class A common stock involves a high degree of risk. You should consider carefully the risks described below together with the financial and other information contained in this prospectus, before you decide to buy our Class A common stock. If any of the events contemplated by the following risks should occur, our business, financial condition and results of operations could be negatively affected. As a result, the market price of our Class A common stock could decline and you could lose all or part of your investment in our Class A common stock.

Risks related to our business Successfully managing the frequent introduction of new products that satisfy changing consumer preferences is key to our success.

In order to meet the demands of the marketplace, we are focused on product innovation and continual product evolution. We introduce numerous new products each model year. For example, for our 2011 (to-date), 2010 and 2009 model years, we introduced 49, 30 and 25 new products, respectively. In addition, over 50% of our 2010 model year (July 1 through June 30) net sales were generated from products that were less than three years old. In order for us to continue to successfully introduce new products, we must properly anticipate the preferences of bicycle companies, independent bicycle retailers and consumers and invest in product development to design innovative products that meet those preferences. If we are unable to meet these demands, our products may not win specifications on new bike models or have success in the aftermarket, in which case our sales, margins and brand image could suffer. Furthermore, in order for new products to generate equivalent or greater revenues than their predecessors, they must either maintain the same or higher sales levels with the same or higher pricing, or exceed the performance of their predecessors in one or both of those areas. If our new products are unable to achieve sufficient pricing levels or we are unable to increase our sales volume to compensate, our profitability could decrease.

The bicycle component industry is highly competitive and we are subject to risks relating to competition that may adversely affect our performance.

The bicycle component industry is highly competitive. We compete with a number of other manufacturers that produce and sell bicycle components. We believe our products primarily compete on the basis of product design, innovation, customer service, manufacturing and distribution capabilities, product quality and price. Our continued success depends on our ability to continue to compete effectively against our numerous competitors, at least one of which has significantly greater financial, marketing and other resources than we have. In the future, our competitors may be able to maintain and grow brand strength and market share more effectively or quickly than we do by anticipating the course of market developments more accurately than we do, developing products that are superior to our products, creating manufacturing or distribution capabilities that are superior to ours, producing similar products at a lower cost than we can, or adapting more quickly than we do to new technologies or evolving regulatory, industry or customer requirements, among other things. As a result, our products may not be able to compete successfully with our competitors products, which could negatively affect our business, financial condition or results of operations. For example, one of our competitors has developed and offers an electronic drivetrain system. An electronic drivetrain system is an electronic device that enables bike riders to shift with electronic switches instead of using conventional control levers. We currently do not offer an electronic drivetrain system to our customers. If the electronic drivetrain system gains industry acceptance among cycling enthusiasts, our business, financial condition or results of operations could be negatively affected.

In addition, we may encounter increased competition if our current competitors broaden their product offerings by beginning to produce additional types of components or through consolidation. Currently, we are one of only

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents two suppliers offering bicycle companies a full-line of mid to high-end components used on their bikes, which we believe provides us an advantage with these customers. Our primary competitors generally compete with us in one or two of our product types. Our business, financial condition or results of operations may suffer if additional competitors are able to offer a full-line of components.

Unfavorable economic conditions could have a negative effect on our business, financial condition or results of operations.

Our business depends substantially on global economic and market conditions. For the year ended December 31, 2010, 67% of our net sales was generated from the OEM channel. A high percentage of these sales are recreational in nature and are discretionary purchases for consumers. Consumers are generally more willing to make discretionary purchases during periods of favorable general economic conditions and high consumer confidence. Discretionary spending may also be affected by many other factors, including interest rates, the availability of consumer credit, taxes and consumer confidence in future economic conditions. During periods of unfavorable economic conditions, or periods when other of these factors exist, consumer discretionary spending could be reduced, which in turn could reduce our product sales and have a negative effect on our business, financial condition or results of operations.

In addition, there could also be a number of secondary effects resulting from an economic downturn, such as: insolvency of our suppliers resulting in product delays, an inability of our customers to obtain credit to finance purchases of our products or a desire of our customers to delay payment to us for the purchase of our products. Any of these effects could negatively affect our business, financial condition or results of operations.

If we are unable to maintain our brand image, our business may suffer.

We believe our bicycle components are selected by bike brand product managers at bicycle companies and by consumers in large part because of our brand reputation. Therefore, our success depends on our ability to maintain and build our brand image. We have focused on building our brands through strong relationships with the major bicycle companies and independent bicycle retailers and through marketing programs aimed at cycling enthusiasts in various media and other channels. For example, we currently sponsor over 15 professional teams and over 40 individuals in competitive cycling. In order to continue to enhance our brand image, we will need to continue to invest in sponsorships, marketing and public relations. In addition, maintaining and enhancing our brand image will depend largely on our ability to be a leader in the bicycle component industry and to continue to provide high quality products and services, which may require us to make substantial investments in areas such as product development and employee training.

There can be no assurance, however, that we will be able to maintain or enhance the strength of our brands in the future. Our brands could be adversely impacted by, among other things:

internal product quality control issues with our components;

product quality issues on the bikes on which our components are installed;

product recalls;

high profile component failures (such as a component failure during a race on a bike ridden by an athlete that we sponsor); and

negative publicity regarding our sponsored athletes.

Any adverse impact on our brands could in turn negatively affect our business, financial condition or results of operations.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents A significant disruption in the operations of our manufacturing facilities could have a negative effect on our business, financial condition or results of operations.

We have manufacturing facilities located in the United States, Europe and Asia. Equipment failures, delays in deliveries or catastrophic loss at any of our facilities could lead to production or service disruptions, curtailments or shutdowns. In the event of a stoppage in production, or a slow down in production due to high employee turn-over or a labor dispute at any of our facilities, even if only temporary, or if we experience delays as a result of events that are beyond our control, delivery times to our customers could be severely affected. For example, the products manufactured at our Shen Kang, Taiwan facility accounted for 64% of our net sales in 2010. If there was a manufacturing disruption in our Shen Kang facility, we may be unable to meet product delivery requirements and our business, financial condition or results of operations could be negatively affected, even if the disruption was covered in whole or in part by our business interruption insurance. Any significant delay in deliveries to our customers could lead to increased returns or cancellations, expose us to damage claims from our customers or damage our brand and, in turn, negatively affect our business, financial condition or results of operations.

Our business depends substantially on the continuing efforts of our senior management, and our business may be severely disrupted if we lose their services.

We are heavily dependent upon the contributions, talent and leadership of our senior management team, particularly our President and Chief Executive Officer, Mr. Stanley R. Day, Jr. Our senior management team, which has an average tenure with us of approximately 18 years, is key to establishing our focus and executing our corporate strategies and has extensive experience in our industry and knowledge of our systems and processes.

All of our senior management are at-will employees. Given our senior management teams extensive knowledge of the bicycle component industry and the limited number of direct competitors in the industry, we believe that it could be difficult to find replacements should any of our senior management team leave. Our inability to find suitable replacements for any of the members of our senior management team, even if the loss of service is covered in whole or in part by our key person insurance, could negatively affect our business, financial condition or results of operations.

If we cannot maintain our corporate culture, we could lose the innovation, teamwork and focus that we believe are important to our success.

We believe that an important component of our success is our corporate culture, which we believe fosters innovation, encourages teamwork, cultivates creativity and innovation and promotes focus on execution. We have invested substantial time, energy and resources in building a highly collaborative team that works together effectively in an environment designed to promote openness, honesty, mutual respect and the pursuit of common goals. As we develop the infrastructure of a public company and continue to grow, we may find it difficult to maintain these valuable aspects of our corporate culture. Any failure to preserve our culture could negatively impact our future success, including our ability to attract and retain employees, encourage innovation and teamwork and effectively focus on and pursue our corporate strategy.

We may not be able to sustain our past growth or successfully implement our growth strategy, which may have a negative effect on our business, financial condition or results of operations.

We grew our net sales from $283.8 million in 2006 to $524.2 million in 2010, and we believe that we are well positioned to grow our business in the future. However, our future growth will depend upon various factors, including the strength of our brand image, our ability to continue to produce innovative bicycle components, consumer acceptance of our current and future bicycle components, competitive conditions in the marketplace and the continued growth of the bicycle industry as a whole. If we are unable to sustain our past growth or

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents successfully implement our growth strategy, our business, financial condition or results of operations could be negatively affected.

We are and may become subject to intellectual property suits that could cause us to incur significant costs or pay significant damages or that could prohibit us from selling our products.

As we develop new products, we seek to avoid infringing the valid patents and other intellectual property rights of our competitors. However, from time to time, third parties have claimed, or may claim in the future, that our products infringe upon their proprietary rights. We will evaluate any such claim and, where appropriate, may obtain or seek to obtain licenses or other business arrangements. To date, there have been no significant interruptions in our business as a result of any claims of infringement. We do not currently hold patent infringement insurance. Any claim, regardless of its merit, could be expensive and time consuming to defend. Moreover, if our products are found to infringe third-party intellectual property rights, we may be unable to obtain a license to use such technology, and we could incur substantial costs to redesign our products or to defend legal actions, and such costs could negatively affect our business, financial condition or results of operations.

If we are unable to enforce our intellectual property rights, our reputation and sales could be adversely affected.

Intellectual property is an important component of our business. We currently hold over 550 patents and have obtained an average of over 50 new patents per year since 2002. When appropriate, we assert our rights against those who infringe on our patents, trademarks and trade dress. However, these legal efforts may not be successful in reducing sales of bicycle components by those infringing. Additionally, intellectual property protection may be unavailable or limited in some foreign countries where laws or law enforcement practices may not protect our proprietary rights as fully as in the United States, and it may be more difficult for us to successfully challenge the use of our proprietary rights by other parties in these countries. Furthermore, other bicycle component manufacturers may be able to successfully produce bicycle components which imitate our designs without infringing upon any of our patents, trademarks or trade dress. The failure to prevent or limit infringements and imitations could have a permanent negative impact on the pricing of our products or reduce our product sales, even if we are ultimately successful in limiting the distribution of a product that infringes on us, which in turn may affect our business, financial condition or results of operations.

A reduction or lack of continued growth in the popularity of cycling or the number of cycling enthusiasts could adversely affect our product sales and profits.

We generate all of our revenues from the sale of bicycle components. We attribute our historic growth in part to an increase in the number of cycling enthusiasts purchasing bikes with mid to high-end components. We expect the bicycle component market to continue to grow due to a variety of factors that impact the cycling industry, including continued growth in the number of cycling enthusiasts, increasing average retail selling prices driven by better-performing product designs and technologies, growing participation in cycling events and cycling related sports, improving cycling infrastructure, increasing consumer focus on healthier lifestyle trends, growing focus on the environment and increasing adoption of mid to high-end bicycles in emerging markets. However, if the popularity of cycling or the number of cycling enthusiasts does not increase, or declines, we may fail to achieve future growth and our business, financial condition or results of operations could be negatively affected.

We are a supplier in the bicycle industry supply chain, and our business is dependent in part on the success of our bicycle company customers.

As a supplier in the bicycle industry supply chain, we are dependent in part on the success of the business of our customers, including, in the OEM channel, our bicycle company customers. Therefore, a decline in the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents business of our bicycle company customers could negatively impact our business. For example, if our bicycle company customers reduce bike production, orders from us could in turn be reduced, which could negatively affect our business, financial condition or results of operations. Similar declines in the businesses of our distributor and independent retailer customers in the aftermarket could similarly have a negative impact on our business, results of operations or financial condition.

We have significant international operations, and are therefore exposed to currency exchange rate fluctuations.

We maintain fifteen facilities located in the United States, Australia and seven other European and Asian countries and conduct business in U.S. dollars, Euros, Renminbi (RMB), Australian dollars and New Taiwan dollars. Manufacturing and conducting business in the currencies of foreign countries exposes us to fluctuations in foreign currency exchange rates relative to the U.S. dollar.

Foreign currency fluctuations can also affect the prices at which our products are sold in our international markets. Significant unanticipated changes in foreign currency exchange rates make it more difficult for us to manage pricing in our international markets. If we are unable to adjust our pricing in a timely manner to counteract the effects of foreign currency fluctuations, our pricing may not be competitive in the marketplace.

Our financial results are reported in U.S. dollars. As a result, transactions conducted in foreign currencies must be translated into U.S. dollars for reporting purposes based upon the applicable foreign currency exchange rates. Fluctuations in these foreign currency exchange rates can therefore significantly affect period-over-period comparisons.

Our international operations are exposed to risks associated with doing business globally.

As a result of our international presence, we are exposed to increased risks inherent in conducting business outside of the United States. In addition to foreign currency risks, these risks include:

increased difficulty in protecting our intellectual property rights and trade secrets;

changes in tax laws and the interpretation of those laws;

exposure to local economic conditions;

unexpected government action or changes in legal or regulatory requirements;

geopolitical regional conflicts, terrorist activity, political unrest, civil strife, acts of war, and other political uncertainty;

changes in tariffs, quotas, trade barriers and other similar restrictions on sales;

the effects of any anti-American sentiments on our brands or sales of our products;

increased difficulty in ensuring compliance by employees, agents and contractors with our policies as well as with the laws of multiple jurisdictions, including but not limited to the U.S. Foreign Corrupt Practices Act, local international environmental, health and safety laws, and increasingly complex regulations relating to the conduct of international commerce;

increased difficulty in controlling and monitoring foreign operations from the United States, including increased difficulty in identifying and recruiting qualified personnel for our foreign operations; and

increased difficulty in staffing and managing foreign operations or international sales.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents An adverse change in any of these conditions could have a negative effect upon our business, financial condition or results of operations.

If we inaccurately forecast demand for our products, we may manufacture either insufficient or excess quantities, which, in either case, could adversely affect our business.

We plan our manufacturing capacity based upon the forecasted demand for our products. In the OEM channel, our forecasts are based in large part on the number of our component specifications on new bikes and on projections from the bicycle companies. In the aftermarket channel, our forecasts are based on discussions with our distributors. If actual demand for our products exceeds forecasted demand, we may not be able to produce sufficient quantities of new products in time to fulfill actual demand, which could limit our sales. While we generally manufacture our products upon receipt of customer orders, if actual demand is less than the forecasted demand for our products and we have already manufactured the products, which could result in excess inventories. Either excess or insufficient production could have a negative effect on our business, financial condition or results of operations.

Our new credit facilities place operating restrictions on us and our subsidiaries, reducing operational flexibility and creating default risks.

Prior to this offering, we entered into our new credit facilities, consisting of a $605.0 million first-lien term and $50.0 million revolving credit facility, which was undrawn at the time of the refinancing, and a $185.0 million second-lien term credit facility. The new credit facilities contain covenants that place restrictions on us and our subsidiaries operating activities. These covenants, among other things, limit our ability and the ability of our subsidiaries to:

incur additional debt;

pay dividends, make distributions or repurchase stock;

transfer and sell assets, or issue equity interests of subsidiaries;

make certain investments;

prepay indebtedness;

create liens;

enter into transactions with affiliates;

change the nature of our business;

merge, consolidate or make acquisitions; and

make capital expenditures.

Our new revolving credit facility also requires us to maintain compliance with a consolidated leverage ratio while any borrowings or any letters of credit are outstanding under the facility. Our ability to comply with this financial covenant may be affected by events beyond our control. For additional information regarding our new credit facilities, see Description of new credit facilities.

If we are unable to comply with the covenants contained in our new credit facilities, it could constitute an event of default under our new credit facilities and our lenders could declare all borrowings outstanding, together with accrued and unpaid interest, to be immediately due and payable. If we are unable to repay or otherwise refinance these borrowings when due, our lenders could sell the collateral securing our credit facilities, which constitutes substantially all of our and our subsidiaries assets.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents We have substantial leverage, and despite our substantial leverage, we and our subsidiaries may incur additional indebtedness.

As of March 31, 2011, as adjusted for the refinancing and the use of proceeds from this offering, our total indebtedness would have been approximately $ million. Our substantial level of indebtedness could have material negative consequences to us, including:

making it difficult to satisfy our obligations with respect to our indebtedness, which could ultimately cause our lenders to accelerate all amounts under our new credit facilities;

making it difficult to obtain financing in the future for working capital, capital expenditures, acquisitions or other purposes on commercially reasonable terms or at all;

increasing our vulnerability to general economic downturns and adverse industry conditions;

reducing our ability to further access the credit markets;

placing us at a competitive disadvantage compared to our competitors that have less indebtedness; and

limiting our flexibility in planning for, or reacting to, changes in our business and industry, including our ability to invest in product development.

As of March 31, 2011, as adjusted for the refinancing, our new revolving credit facility would have provided for additional borrowings of $50.0 million. In addition, although our new credit facilities contain restrictions on the incurrence of other additional indebtedness, such restrictions are subject to a number of qualifications and exceptions, and under certain circumstances indebtedness incurred in compliance with such restrictions could be substantial. To the extent new indebtedness is added to our current debt levels, the risks described in the paragraph above would increase.

An increase in interest rates would increase the interest costs on our new credit facilities and any additional variable rate indebtedness we may incur and could adversely impact our ability to refinance our indebtedness.

Borrowings under our new credit facilities are based on floating rates. An increase in interest rates would increase our debt service obligations and therefore reduce cash flow available for other corporate purposes. Further, rising interest rates could limit our ability to refinance our existing indebtedness when it matures and increase interest costs on any indebtedness that is refinanced. We may from time to time enter into agreements such as interest rate swaps or other interest rate hedging contracts. While these agreements may lessen the impact of rising interest rates, there can be no assurance that any hedging transactions will fully protect us from interest rate risk.

We are subject to certain safety and labor risks in our manufacturing facilities.

We employ approximately 2,200 employees worldwide, a large percentage of which work at our manufacturing facilities. Our business involves complex manufacturing processes that can be dangerous to our employees. Although we employ safety procedures in the design and operation of our facilities, there is a risk that an accident or death could occur in one of our facilities. Any accident could result in manufacturing delays, which could negatively affect our business, financial condition or results of operations. Also, the costs to defend any action or the potential liability resulting from any such accident or death, to the extent not covered by insurance, and any negative publicity associated therewith, could have a negative effect on our business, financial condition or results of operations. In addition, we have unionized workers in some of our European locations. Any strike, prolonged work stoppage or failure by us to reach a new agreement upon expiration of other union contracts could also have a negative effect on our business, financial condition or results of operations.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents We are and may in the future be subject to product liability claims, recalls or warranty claims, which could be expensive or damage our reputation and result in a diversion of management resources.

We are and in the future may be subject to product liability claims and other claims relating to bodily injury, property damage or other losses that result, or allegedly result, from the failure of our products to perform as expected. We may incur losses resulting from these claims or the defense of these claims. Currently we maintain product liability coverage, but there is a risk that any claims or liabilities will exceed our insurance coverage or otherwise be limited. We also cannot guarantee that we will be able to maintain product liability coverage in the future.

In the past, some of our products have been subject to recalls and in the future we may be required to or voluntarily participate in recalls involving our bicycle components if any prove to be defective. In addition to the direct costs of any claim or product recall, any such claim or recall could adversely affect our brand image and have a negative effect on our business, financial condition or results of operations.

We rely on increasingly complex information systems for management of our manufacturing, distribution, sales and other functions. If our information systems fail to perform these functions adequately or if we experience an interruption in our operations, our business could suffer.

All of our major operations, including manufacturing, distribution, sales and accounting, are dependent upon our complex information systems. Our information systems are vulnerable to damage or interruption from, among other things:

earthquake, fire, flood, hurricane and other natural disasters;

power loss, computer systems failure, internet and telecommunications or data network failure; and

hackers, computer viruses, software bugs or glitches.

Any damage or significant disruption in the operation of such systems or the failure of our information systems to perform as expected could disrupt our operations, reduce our efficiency, delay our fulfillment of customer orders or require significant unanticipated expenditures to correct, and thereby have a negative effect on our business, financial condition or results of operations.

We depend on a limited number of suppliers for our materials and component parts for some of our products, and the loss of any of these suppliers or an increase in cost of raw materials could harm our business.

Because we dual or multi source most materials and component parts required for our products, we do not believe we are dependent on any single supplier. If, however, our current suppliers, in particular the minority of those which are single-source suppliers, are unable to fulfill orders, or if we are required to transition to other suppliers, we could experience significant production delays or disruption to our business.

In addition, we purchase various raw materials and component parts in order to manufacture our products. The main commodity items purchased for production include steel, aluminum, carbon fiber and plastic. Historically, price fluctuations for these raw materials and component parts have not had a material impact on our business. In the future, however, if we experience material increases in the price of raw materials or component parts and are unable to pass on those increases to our customers, or there are shortages in the availability of such raw materials or component parts, it could negatively affect our business, financial condition or results of operations. In addition, some of our raw materials are sourced from Japan, including a significant portion of our carbon fiber. Although the recent earthquake and tsunami in Japan have not had a negative impact on our business or supply of raw materials, we continue to monitor this matter.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Changes in equipment standards promulgated by major cycling associations could negatively affect us.

We believe that we have products that conform to all equipment standards promulgated by major cycling associations, such as the Union Cycliste Internationale or the USA Triathlon. However, our future products may not satisfy these standards, or existing standards may be altered in ways that adversely affect the sales of our current or future products. If a change in rule were adopted and we did not have, or were unable to manufacture, a conforming product, we may be unable to sponsor athletes in various competitions, and our business, financial condition or results of operations could be negatively affected.

We are subject to environmental laws and regulation and potential exposure for environmental costs and liabilities.

Our operations, facilities and properties are subject to a variety of foreign, federal, state and local laws and regulations relating to health, safety and the protection of the environment. These environmental laws and regulations include those relating to the use, generation, storage, handling, transportation, treatment and disposal of solid and hazardous materials and wastes, emissions to air, discharges to waters and the investigation and remediation of contamination. Failure to comply with such laws and regulations can result in significant fines, penalties, costs, liabilities or restrictions on operations that could negatively affect our business, financial condition or results of operations. From time to time, we have been involved in administrative or legal proceedings relating to environmental, health or safety matters and have in the past incurred expenditures relating to such matters.

We believe that our operations are in substantial compliance with applicable environmental laws and regulations. However, additional environmental issues relating to presently known or unknown matters could give rise to currently unanticipated investigation, assessment or expenditures. Furthermore, through acquisitions over the years, we have acquired a number of facilities, and we could incur material costs and liabilities relating to activities that predate our ownership. Compliance with more stringent laws or regulations as well as different interpretations of existing laws, more vigorous enforcement by regulators or unanticipated events could require additional expenditures that may materially affect our business, financial condition or results of operations.

We may not be able to effectively integrate businesses we acquire or we may not be able to identify or consummate any future acquisitions on favorable terms, or at all.

Since 1995, we have achieved growth due in part to our ability to successfully acquire and integrate complementary businesses. Our acquisitions include the bicycle division of Mannesman Sachs AG (1997), RockShox, Inc. (2002), the bicycle business of Avid, LLC (2004), Truvativ International Co., Ltd. (2004) and Compositech, Inc. (Zipp) (2007). Acquisitions may continue to play a role in our future growth. Any future acquisitions that we might make, however, are subject to various risks and uncertainties and could have a negative impact on our results of operations. These risks include: the inability to integrate effectively the operations, products, technologies and personnel of the acquired companies (some of which may be spread out in different geographic regions) and the inability to achieve anticipated cost savings or operating synergies, or the risk we may not be able to effectively manage our operations at an increased scale of operations resulting from such acquisitions.

In addition, we may not be able to identify or consummate any future acquisitions on favorable terms, or at all. We may have limited opportunities to acquire businesses that we believe will enhance our product lines or our business.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Changes in our effective tax rate and our provision for income taxes could negatively affect our business, financial condition or results of operations.

Due to the global nature of our operations, we are subject to federal and state income taxes in the United States and various foreign jurisdictions. Our effective tax rate and our provision for income taxes is affected by changes in the mix of earnings and losses in jurisdictions with differing statutory tax rates, certain non-tax deductible expenses, including those arising from the requirement to expense stock options, changes in the valuation of our deferred tax assets and liabilities, and changes in accounting principles. Our tax liabilities are also impacted by the amounts we record in intercompany transactions for services, licenses, funding, and other items, which may be challenged by the tax authorities in the jurisdictions in which we operate. In addition, changes to tax laws in the jurisdictions in which we operate, such as an increase in tax rates or an adverse change in the treatment of an item of income or expense, could result in a material increase in our tax expense.

Currently, our foreign subsidiaries are treated as disregarded or transparent entities for U.S. federal income tax purposes, with the result that income generated by our foreign subsidiaries is subject to U.S. federal income tax on a current basis to the members of SRAM Holdings, LLC, in addition to the taxes imposed by the foreign jurisdictions in which the income is earned. Distributions of earnings and other payments to us from our foreign subsidiaries also may be subject to foreign withholding taxes. Prior to and in connection with the reorganization and this offering, we plan to implement a foreign holding company structure intended to facilitate global cash management strategies and minimize international operational and tax risks and which generally will allow us to defer U.S. income taxation of the income of our foreign subsidiaries until the earnings are repatriated to the United States by cash distributions or, in certain circumstances, deemed distributions under the U.S. tax law. In general, a U.S. taxpayer may claim a foreign tax credit against its U.S. federal income tax liability for foreign income and withholding taxes paid on its foreign-source income. However, the amount of foreign tax credit that we may claim against our U.S. federal income tax liability is subject to many limitations that may significantly restrict our ability to claim a credit for all of the foreign taxes we pay, and we may incur incremental tax costs as a result of these limitations.

Risks related to our corporate structure Control by our principal stockholders could adversely affect our other stockholders.

When this offering is completed, the Day family will beneficially own approximately % of the voting power of our common stock (or % of the voting power if the underwriters exercise in full their option to purchase additional shares), which will be voted in accordance with the Day family voting trust agreement. As a result, the Day family will be able to exert a significant degree of influence or actual control over our management and affairs and over matters requiring stockholder approval, including the election of directors, a merger, consolidation or sale of all or substantially all of our assets and other significant business or corporate transactions. This concentrated control will limit the ability of other stockholders to influence corporate matters and, as a result, we may take actions that our other stockholders do not view as beneficial. For example, this concentration of ownership could have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of SRAM, which in turn could cause the market price of our Class A common stock to decline or prevent our stockholders from realizing a premium over the market price for their Class A common stock. In addition, under the controlled company exemption to the independence requirements of the Nasdaq, we will be exempt from the rules of the Nasdaq that require that our board of directors be comprised of a majority of independent directors, that our compensation committee be comprised solely of independent directors and that our nominating and governance committee be comprised solely of independent directors.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents We are a holding company with no operations of our own, and we will depend on distributions from SRAM Holdings, LLC and its subsidiaries to meet our ongoing obligations and, if applicable, to pay cash dividends on our common stock.

We are a holding company with no operations of our own and we have no independent ability to generate revenue. Consequently, our ability to obtain operating funds depends upon distributions from SRAM Holdings, LLC and its subsidiaries. The distribution of cash and other transfers of funds by SRAM Holdings, LLC and its subsidiaries to us will be subject to restrictions. For example, our new credit facilities limit our ability to distribute cash based upon certain covenants. We will be unable to pay dividends to our stockholders or pay other expenses outside the ordinary course of business if SRAM Holdings, LLC is unable to distribute cash to us.

Following the reorganization, we will hold directly or indirectly, 100% of the equity interests of SRAM Holdings, LLC. Because SRAM Holdings, LLC is treated as a partnership for U.S. federal and state income tax purposes, we and our subsidiaries, as members of SRAM Holdings, LLC, will incur U.S. federal and state income taxes on our proportionate shares of any net taxable income of SRAM Holdings, LLC. To the extent we and our subsidiaries need funds to pay such taxes or for any other purpose, and SRAM Holdings, LLC is unable to provide such funds because of limitations in its new credit facilities or other restrictions, such inability to pay could have a negative effect on our business, financial condition and results of operations.

A significant portion of our business is conducted through foreign subsidiaries and our failure to generate sufficient cash flow from these subsidiaries, or otherwise repatriate or receive cash from these subsidiaries, could result in our inability to repay our indebtedness and other liabilities.

For the year ended December 31, 2010, 86.4% of our net sales were generated outside of the United States. Our ability to meet our debt service and other obligations with cash from foreign subsidiaries will depend upon the results of operations of these subsidiaries and may be subject to legal, contractual or other restrictions and other business considerations. In addition, dividend, interest, royalty and other payments to us from our foreign subsidiaries may be subject to foreign withholding taxes, which could reduce the amount of funds we receive from our foreign subsidiaries. Distributions of earnings and other payments received from our foreign subsidiaries may also be subject to fluctuations in currency exchange rates and legal and other restrictions on repatriation, which could further reduce the amount of funds we receive from our foreign subsidiaries. Therefore, to the extent that we must use cash generated in foreign jurisdictions to make principal or interest payments on our indebtedness or other obligations, there may be a cost associated with repatriating cash to the United States.

Our anti-takeover provisions may delay or prevent a change of control, which could negatively affect our stock price.

Upon the consummation of this offering, our amended and restated certificate of incorporation and amended and restated bylaws will contain provisions that may make it difficult to remove our board of directors and management and may discourage or delay change of control transactions, which could negatively affect the price of our stock. These provisions include, among others:

holders of our Class A common stock vote together with holders of our Class B common stock on all matters, unless otherwise required by law, including the election of directors, and our amended and restated certificate of incorporation prohibits cumulative voting in the election of directors;

immediately following this offering, our board of directors will consist of a single class, with each director serving a one-year term. However, if all shares of our Class B common are converted into Class A common stock or otherwise cease to be outstanding, our board of directors will be divided into three classes, with each class serving for a staggered three-year term;

vacancies on our board of directors, and any newly created director positions created by the expansion of the board of directors, may be filled only by a majority of remaining directors then in office;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents immediately following this offering, our stockholders may act by written consent. However, if all shares of our Class B common stock are converted into Class A common stock or otherwise cease to be outstanding, actions to be taken by our stockholders will only be permitted to be effected at an annual or special meeting of our stockholders and not by written consent;

special meetings of our stockholders may be called by our chairman, president, chief executive officer or a majority of our board of directors. In addition, immediately following this offering, our secretary must also call a special meeting of stockholders upon the written request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast at that meeting. However, if all shares of our Class B common are converted into Class A common stock or otherwise cease to be outstanding, our stockholders will not be permitted to call special meetings of our stockholders;

our amended and restated bylaws establish an advance notice procedure for stockholders to submit proposed nominations of persons for election to our board of directors and other proposals for business to be brought before an annual or special meeting of our stockholders; and

our board of directors may issue up to shares of preferred stock, with designations, rights and preferences as may be determined from time to time by our board of directors.

Risks related to this offering The requirements of being a public company may strain our resources and affect our ability to attract and retain qualified board members.

As a public company, we will incur significant legal, accounting and other expenses that we have not incurred as a private company, including costs associated with public company reporting requirements. We also have incurred and will incur costs associated with the Sarbanes-Oxley Act of 2002 and related rules implemented by the Securities and Exchange Commission (SEC) and the Nasdaq. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing and are difficult to predict. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. These laws and regulations could also make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our Class A common stock, fines, sanctions and other regulatory action and potentially civil litigation. In addition, our senior management has no prior experience managing a publicly traded company or complying with the increasingly complex laws pertaining to public companies described above. These obligations will require substantial attention from our senior management and partially divert their attention away from the day-to-day management of our business, which could negatively impact our business, financial condition or results of operations.

If we fail to maintain adequate internal control over financial reporting in accordance with Section 404 of Sarbanes- Oxley or if we do not remedy our material weaknesses or significant deficiencies in our internal controls it could result in inaccurate financial reporting and have a negative impact on the price of our Class A common stock or our business.

As a public company, we will be required to comply with the standards adopted by the Public Company Accounting Oversight Board in compliance with the requirements of Section 404 of Sarbanes-Oxley regarding

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents internal control over financial reporting. Prior to becoming a public company, we are not required to be compliant with the requirements of Section 404. The process of becoming compliant with Section 404 may divert internal resources and will take a significant amount of time and effort to complete. We may experience higher than anticipated operating expenses, as well as increased independent auditor fees during the implementation of these changes and thereafter. We are required to be compliant under Section 404 with our second Annual Report on Form 10-K after the completion of this offering and at that time our management will be required to deliver a report that assesses the effectiveness of our internal control over financial reporting. We will also be required to deliver an attestation report of our auditors on our managements assessment of our internal controls. Completing documentation of our internal control system and financial processes, remediation of control deficiencies, and management testing of internal controls will require substantial effort by us.

In preparation for this offering and for future compliance with Section 404 of Sarbanes-Oxley, we and our independent auditors identified material weaknesses in our internal controls over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented, or detected and corrected on a timely basis. The material weaknesses were attributed to us not maintaining sufficient: external reporting, technical accounting and tax functions; financial reporting and closing processes with respect to complex transactions; and written policies and procedures, in each case to meet our needs as a public company. Specifically, we do not currently maintain a sufficient complement of personnel with an appropriate level of accounting and financial reporting knowledge, experience and training in the application of U.S. generally accepted accounting principles as will be required of us as a public company. We have begun implementing measures and plan to take additional steps to remediate the underlying causes of our material weaknesses. We are currently in the process of reviewing, documenting and testing our internal control over financial reporting. We are enhancing the technical capability of our staff by adding resources and personnel to the accounting and finance team. Until such time as we are able to retain permanent personnel, we are engaging outside consultants to assist us.

If the steps we intend to take do not remediate these material weaknesses in a timely manner, we will not be able to conclude that we have and maintain effective internal control over financial reporting. In addition, we may identify additional material weaknesses or significant deficiencies in the future. In either case, our independent registered accounting firm may not be able to issue an unqualified report on the effectiveness of our internal control over financial reporting. As a result, our ability to report our financial results on a timely and accurate basis may be adversely affected, we may be subject to sanctions or investigation by regulatory authorities and investors may lose confidence in our financial information, which in turn could adversely affect the market price of our Class A common stock.

The market price of our common stock may be volatile, which could cause the value of an investment in our stock to decline.

The market price of our common stock may fluctuate substantially due to a variety of factors, many of which are beyond our control, including:

announcements concerning our competitors or the bicycle industry;

strategic actions by us or our competitors, such as acquisitions or restructurings;

industry-specific economic conditions;

changes in financial estimates or recommendations by securities analysts or failure to meet analysts or our own performance expectations;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents risks relating to our business and industry, including those described above; and

general market, political and economic conditions.

As a result of these and other factors, investors in our Class A common stock may not be able to resell their shares at or above the initial offering price or may not be able to resell them at all.

The stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of particular companies. These types of broad market fluctuations may adversely affect the trading price of our Class A common stock. Furthermore, price volatility may be greater if the public float and trading volume of our Class A common stock is low.

In addition, in the past, stockholders have sometimes instituted securities class action litigation against companies following periods of volatility in the market price of their securities. Any similar litigation against us could result in substantial costs, divert managements attention and resources, and have a negative effect on our business, financial condition or results of operations.

No public market for our Class A common stock currently exists and an active trading market may not develop or be sustained following this offering.

Before this offering, there has been no public market for our Class A common stock. An active, liquid trading market for our Class A common stock may not develop or be sustained following this offering. We have applied to have our Class A common stock approved for quotation on the Nasdaq, but we cannot assure you that our application will be approved. In addition, we cannot assure you as to the liquidity of any such market that may develop or the price that our stockholders may obtain for their shares of our Class A common stock.

Purchasers in this offering will experience immediate and substantial dilution in the book value of their investment.

The assumed initial public offering price of our Class A common stock is substantially higher than the pro forma net tangible book value per share of our Class A common stock outstanding prior to this offering. Therefore, if you purchase our Class A common stock in this offering, you will incur immediate substantial dilution in pro forma net tangible book value per share from the price you paid. For a further description of the dilution that you will experience immediately after this offering, please see Dilution.

The value of our Class A common stock may be adversely affected by additional issuances of common stock by us or sales by our principal stockholders.

Any future issuances or sales of Class A common stock by us will be dilutive to our existing common stockholders. Upon consummation of this offering, we will have shares of Class A common stock outstanding and shares of Class B common stock outstanding, assuming no exercise of the underwriters option to purchase additional shares. All of the shares of Class A common stock sold in this offering will be freely tradable without restrictions or further registration under the Securities Act. Subject to certain exceptions, the holders of approximately % of the shares of our common stock have signed lock-up agreements with the underwriters of this offering, under which they have agreed not to sell, transfer or dispose of, directly or indirectly, any shares of our Class A common stock or any securities convertible into or exercisable or exchangeable for Class A common stock without the prior written consent of the underwriters for a period of 180 days, subject to a possible extension under certain circumstances, after the date of this prospectus. See Underwriting. After this offering, the holders of approximately shares of our Class B common stock will be entitled to rights with respect to registration of such shares under the Securities Act pursuant to a registration rights agreement. See Certain relationships and related person transactions2011

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents refinancing and reorganizationRegistration rights. Sales of substantial amounts of our common stock in the public or private market, a perception in the market that such sales could occur, or the issuance of securities exercisable or convertible into our common stock, could adversely affect the prevailing price of our Class A common stock.

We do not intend to pay cash dividends for the foreseeable future.

SRAM International Corporation was formed on April 29, 2011 and has never declared or paid cash dividends on its common stock. We currently intend to retain our future earnings, if any, to finance the further development and expansion of our business and do not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, contractual restrictions, capital requirements, business prospects, restrictions contained in current or future financing instruments, including our new credit facilities, and such other factors as our board of directors deems relevant.

Even if we decide in the future to pay any dividends, we are a holding company with no independent operations of our own. As a result, we depend on SRAM Holdings, LLC and its subsidiaries for cash to pay our obligations and make dividend payments. Deterioration in the financial conditions, earnings or cash flow of SRAM Holdings, LLC and its subsidiaries for any reason could limit or impair their ability to pay cash distributions or other distributions to us and thereby limit or impair our ability to pay dividends to our stockholders.

This prospectus includes forward-looking statements. The words believe, may, could, estimate, continue, anticipate, intend, expect, predict, potential and similar expressions, as they relate to our company, our business and our management, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or managements good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

our ability to introduce new products into the market;

changes in the competitive landscape for bicycle components;

unfavorable economic conditions;

a weakening of our brand image;

a disruption in the operations of our manufacturing facilities;

loss of our senior management;

changes in the popularity of cycling or the number of cycling enthusiasts; and

other risks included under Risk factors and risks described in Managements discussion and analysis of financial condition and results of operations in this prospectus.

In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date of this prospectus. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The refinancing and reorganization Current organizational and ownership structure Since the completion of the 2008 recapitalization in which Trilantic and its co-investors acquired a $234.8 million equity interest in SRAM, our business has been conducted through SRAM, LLC, a wholly-owned subsidiary of SRAM Holdings, LLC. For a description of the 2008 transaction, see Certain relationships and related person transactionsTrilantic 2008 investment and recapitalization.

Immediately prior to the completion of the refinancing described below, the ownership of SRAM Holdings, LLC was as follows:

Trilantic and its co-investors owned 3,640,000 Class A units (100% of the Class A units). As Class A unit holders, Trilantic and its co-investors were entitled to a Class A priority interest in the amount of their initial $234.8 million investment plus a 10% annual preferred return, compounded quarterly. On June 7, 2011, the Class A priority interest consisted of the $234.8 million initial investment plus $71.4 million of accrued preferred return. The Class A unit holders were also entitled to participate in distributions after the repayment of their priority interest, which we refer to as the common participation right.

The Day family, SRAM management and current and former directors and employees indirectly owned 5,460,000 Class B units (100% of the Class B units) through two holding corporations: SRAM-SP2, Inc. and SRAM International Holdings, Inc. Class B unit holders were entitled to participate in distributions after the repayment of the Class A priority interest.

SRAM management and current and former directors and employees owned 538,237 incentive units. Incentive unit holders were entitled to participate in distributions after the repayment of the Class A priority interest subject to the distribution thresholds established at the time the incentive units were granted. Distributions payable with respect to unvested incentive units are retained by SRAM until the units vest. The board of SRAM Holdings, LLC will approve the immediate vesting of these units in connection with this offering.

Refinancing On June 7, 2011, SRAM, LLC entered into new credit facilities consisting of a first-lien term and revolving facility and a second- lien term facility. The aggregate proceeds from the new credit facilities were $790.0 million. The proceeds from the new credit facilities were used to (i) repay the entire outstanding amount under our prior credit facilities, which as of June 7, 2011, was $194.8 million (including accrued interest), (ii) acquire all of the 3,640,000 Class A units of SRAM Holdings, LLC held by Trilantic and its co-investors for $575.0 million and (iii) pay all fees and expenses related to the refinancing. The $575.0 million received by Trilantic and its co-investors was in full payment for all of their interests in SRAM Holdings, LLC and consisted of $268.8 million in respect of the common participation right and $306.2 million in respect of the priority interests of the 3,640,000 Class A units held by Trilantic and its co-investors. In connection with these transactions, SRAM Holdings, LLC amended and restated its operating agreement to combine the Class A units and the Class B units into a single class of common units and eliminate the corporate governance and liquidity rights of Trilantic and its co-investors. We refer to the entering into of our new credit facilities, the use of proceeds therefrom and the related amendment to the SRAM Holdings LLC operating agreement as the refinancing. Following the refinancing, Trilantic and its co-investors have no remaining ownership of SRAM Holdings, LLC. For additional information regarding our new credit facilities, see Description of new credit facilities.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The following diagram depicts our organizational structure and economic ownership (which may differ from voting interests) upon consummation of the refinancing and prior to the completion of the reorganization and this offering:

Reorganization On April 29, 2011, SRAM International Corporation, a Delaware corporation, was formed to be the issuer for this offering. Immediately prior to the consummation of this offering, the existing equity holders of SRAM Holdings, LLC will enter into a reorganization pursuant to which SRAM International Corporation will acquire 100% of the equity interests of SRAM Holdings, LLC, either directly or through its wholly-owned subsidiaries, and the equity holders of SRAM Holdings, LLC will exchange their direct or indirect equity interests in SRAM Holdings, LLC for shares of common stock of SRAM International Corporation.

The following steps will be taken to effect the reorganization:

SRAM International Corporation will file an amended and restated certificate of incorporation which will authorize two classes of common stock, Class A common stock and Class B common stock, each having the terms described in Description of capital stock.

SRAM Holdings, LLC will make a $ million distribution to its existing equity holders to cover the estimated federal and state income taxes payable with respect to their allocable shares of the estimated taxable income of SRAM Holdings, LLC from January 1, 2011 through the closing date of this offering.

SRAM International Corporation will indirectly acquire 5,391,839 common units of SRAM Holdings, LLC held by the Day family, SRAM management and current and former directors and employees through SRAM-SP2, Inc. and its subsidiaries. The Day family will receive shares of Class B common stock of SRAM International Corporation in exchange for their shares of stock of SRAM-SP2, Inc. Of these shares, shares will be converted to Class A common stock and will be sold in this offering. The SRAM management and current and former directors and employees will receive shares of Class A common stock of SRAM International Corporation in exchange for their shares of stock of SRAM-SP2, Inc. Of these shares, shares will be sold in this offering.

SRAM International Corporation will indirectly acquire the remaining 68,161 common units of SRAM Holdings, LLC held by foreign employees of SRAM through SRAM International Holdings, Inc. The stockholders of SRAM International Holdings, Inc. will receive shares of Class A common stock of SRAM International Corporation in exchange for their shares of stock of SRAM International Holdings, Inc. Of these shares, shares will be sold in this offering.

All unvested incentive units will immediately vest, and SRAM management and current and former directors and employees holding incentive units of SRAM Holdings, LLC will exchange their incentive units for shares of Class A common stock of SRAM International Corporation. Of these shares, shares will be sold in this offering.

We refer to the series of transactions listed above as the reorganization. In addition, prior to and in connection with the reorganization and this offering, we plan to implement a foreign holding company structure for our foreign subsidiaries intended to facilitate global cash management strategies and minimize international operational and tax risks.

New organizational and capital structure

The following diagram depicts our organizational structure and economic ownership (which may differ from voting interests) immediately after the completion of the reorganization and this offering:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Immediately after the consummation of this offering, the ownership of SRAM International Corporation will be as follows:

The Day family will collectively own shares of our Class B common stock, representing 100% of our Class B common stock and % of the total voting power of SRAM International Corporation (or % of the total voting power if the underwriters exercise in full their option to purchase additional shares).

SRAM management and current and former directors and employees will own shares of our Class A common stock, representing % of our Class A common stock and approximately % of the total voting power of SRAM International Corporation (or % of the total voting power if the underwriters exercise in full their option to purchase additional shares).

The investors in this offering will collectively own shares of our Class A common stock, representing % of our Class A common stock and % of the total voting power of SRAM International Corporation (or % of the total voting power if the underwriters exercise in full their option to purchase additional shares).

In addition, shares of Class A common stock will be issuable under the SRAM International Corporation 2011 Incentive Award Plan that we will adopt prior to the consummation of this offering.

Holding company structure

Upon completion of this offering, SRAM International Corporation will be a holding company that, directly, and indirectly through its subsidiaries SRAM-SP2, Inc., SRAM-SP3, LLC and SRAM-SP4, LLC, controls SRAM Holdings, LLC, which in turn will control our operating company, SRAM, LLC. We will have no business operations or material assets other than our direct and indirect ownership of 100% of the outstanding equity interests in of SRAM Holdings, LLC and SRAM, LLC and its subsidiaries and we will control all of the business and affairs of SRAM Holdings, LLC and SRAM, LLC and its subsidiaries. We will consolidate the financial results of SRAM Holdings, LLC and SRAM, LLC and its subsidiaries into our consolidated financial statements. Our only source of cash flow from operations will be distributions from SRAM Holdings, LLC pursuant to its amended and restated operating agreement. See Risk factorsRisks related to our corporate structureWe are a holding company with no operations of our own, and we will depend on the distributions from SRAM Holdings, LLC and its subsidiaries to meet our ongoing obligations and, if applicable, to pay cash dividends on our common stock.

We estimate that the net proceeds to us from the sale of our Class A common stock in this offering will be approximately $ million, based on an offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, after deducting assumed underwriting discounts and commissions payable by us. We intend to use $ million of the proceeds to us to repay $ million of indebtedness under our new credit facilities and $ million of the proceeds to us to pay fees and expenses related to this offering.

We expect the repayments under our new credit facilities to include $ million under our first-lien term facility, which bears interest at and matures on June 7, 2018, and $ million under our second-lien term facility, which bears interest at and matures on December 7, 2018. The proceeds of the new credit facilities were used to repay all outstanding amounts under our prior credit facilities, which as of June 7, 2011, 2011 were $194.8 million (including accrued interest), and to directly or indirectly acquire all of the equity interests in SRAM Holdings, LLC held by Trilantic and its co-investors. See The refinancing and reorganization and Description of new credit facilities for additional information.

A $1.00 increase or decrease in the assumed initial public offering price of $ per share would increase or decrease, respectively, the net proceeds to us from this offering by approximately $ million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting assumed underwriting discounts and commissions.

We will not receive any proceeds from the sale of shares of our Class A common stock by the selling stockholders.

We have never declared or paid cash dividends on our common stock. We do not anticipate declaring or paying any cash dividends on our common stock. We are a holding company and have no material assets other than our direct and indirect ownership of SRAM Holdings, LLC and SRAM, LLC and its subsidiaries following the reorganization. We depend on SRAM Holdings, LLC and its subsidiaries for cash to pay our obligations and make dividend payments. Our ability to pay dividends in the future is dependent upon our receipt of cash from SRAM Holdings, LLC and its subsidiaries.

In addition, we will need to comply with the restrictions contained in our financing instruments, including our new credit facilities in order to pay cash dividends. Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then existing conditions, including our financial condition, results of operations, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant.

Immediately prior to the consummation of this offering, SRAM Holdings, LLC will make a $ million distribution to its pre- offering equity holders to cover the estimated federal and state income taxes payable with respect to their allocable shares of the estimated taxable income of SRAM Holdings, LLC from January 1, 2011 through the closing date of this offering.

The following table sets forth our cash and capitalization as of March 31, 2011:

on an actual basis;

on a pro forma basis to give effect to the refinancing and reorganization, including (i) the incurrence of $ million of indebtedness under our new credit facilities and the application of the proceeds thereof, (ii) the application of purchase accounting, the allocation of estimated values of assets and liabilities, and the recognition of a related gain as a result of the reorganization, (iii) the vesting of all outstanding incentive units and the granting of new stock options, (iv) the conversion of 5,460,000 common units and 538,237 incentive units into shares of Class A and shares of Class B common stock of SRAM International Corporation and (v) the distribution of approximately $ to the pre-offering equity holders of SRAM Holdings, LLC to cover the estimated federal and state income taxes payable with respect to their allocable shares of the estimated taxable income of SRAM Holdings LLC from January 1, 2011 through the closing date of this offering; and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents You should read this capitalization table together with our historical financial statements and the related notes appearing at the end of this prospectus, The refinancing and reorganization, Use of proceeds, Unaudited pro forma condensed consolidated financial data, Managements discussion and analysis of financial condition and results of operations, Description of new credit facilities and the other financial information included in this prospectus.

Predecessor(1) Successor(1) As of March 31, 2011 Pro forma as (in thousands, except share/unit amounts) Actual Pro forma adjusted Cash and cash equivalents: $ 15,374 $ $ Debt, current and long-term(2): $ 198,753 $ $

Members / stockholders equity Member unitsClass A, 3,640,000 units authorized, issued and outstanding, actual; no units issued and outstanding, pro forma or pro forma as adjusted 60,262 Member unitsClass B, 5,460,000 units authorized, issued and outstanding, actual; no units issued and outstanding, pro forma or pro forma as adjusted Member unitsCommon Units, no units authorized, issued and outstanding; 5,460,000 units authorized, issued and outstanding, pro forma; units authorized, issued and outstanding, pro forma as adjusted Member unitsincentive units, 337,500 units authorized, 276,697 units issued, and 269,118 units outstanding, actual; no units issued and outstanding, pro forma or pro forma as adjusted 3,130 Accumulated deficit (177,581 ) Accumulated other comprehensive income 10,895 Class A common stock; $0.01 par value; no shares authorized, issued and outstanding, actual; shares authorized and shares issued and outstanding, pro forma; shares authorized and shares issued and outstanding, pro forma as adjusted Class B common stock; $0.01 par value; no shares authorized, issued and outstanding, actual; shares authorized and shares issued and outstanding, pro forma; shares authorized and shares issued and outstanding, pro forma as adjusted Additional paid-in capital Total members / stockholders equity (deficit) (103,294 ) Total capitalization $ 95,459 $ $

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (2) Debt, current and long-term is defined as current portion of long-term debt and long-term borrowings.

If you invest in our Class A common stock, you will experience dilution to the extent of the difference between the public offering price per share you pay in this offering and the pro forma net tangible book value (deficit) per share of our common stock immediately after this offering. Dilution results from the fact that the per share offering price of the Class A common stock is substantially in excess of the book value per share attributable to the existing equity holders.

After giving effect to the refinancing and reorganization, our pro forma net tangible book value as of March 31, 2011 was $ million, or $ per share. Pro forma net tangible book value per share represents the amount of our total tangible assets less the amount of our total liabilities, divided by the number of shares of common stock outstanding as of March 31, 2011, prior to the sale of shares of Class A common stock in this offering, but assuming the completion of the refinancing and reorganization. Dilution in pro forma net tangible book value per share represents the difference between the amount per share paid by investors in this offering and the net tangible book value per share of our common stock outstanding immediately after this offering.

After giving effect to the completion of the refinancing, reorganization and the sale of shares of Class A common stock in this offering, based upon an assumed initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated expenses payable by us in connection with this offering, our pro forma as adjusted net tangible book value as of March 31, 2011 would have been $ million, or $ per share of common stock. This represents an immediate increase in pro forma net tangible book value of $ per share to existing stockholders and immediate dilution of $ per share to new investors purchasing shares of common stock in this offering at the initial public offering price.

The following table illustrates this per share dilution:

Assumed initial public offering price per share $ Pro forma net tangible book value (deficit) per share as of March 31, 2011 (which gives effect to the refinancing and reorganization) $ Increase in net tangible book value per share attributable to new investors Pro forma as adjusted net tangible book value (deficit) per share as of March 31, 2011 (which gives effect to the refinancing, reorganization and this offering) Dilution per share to new investors $

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The following table summarizes, as of March 31, 2011, on a pro forma as adjusted basis giving effect to the reorganization, the refinancing and the sale of shares of Class A common stock in this offering, the number of shares of our common stock purchased from us, the aggregate cash consideration paid to us and the average price per share paid to us by existing stockholders and paid by new investors purchasing shares of our common stock from us in this offering. The table assumes an initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us in connection with this offering.

Shares purchased Total consideration Average price Number Percentage Amount Percentage per share Existing stockholders % $ % $ New investors Total 100% $ 100%

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by investors participating in this offering by $ million, or increase (decrease) the percent of total consideration paid by investors participating in this offering by %, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The tables and calculations above are based on shares of common stock outstanding as of March 31, 2011 (after giving effect to the refinancing and reorganization) and exclude an aggregate of shares of Class A common stock reserved for issuance under the SRAM International Corporation 2011 Incentive Award Plan.

The following unaudited pro forma condensed consolidated financial data sets forth our unaudited pro forma and historical condensed consolidated statements of operations for the year ended December 31, 2010 and for the three months ended March 31, 2011 and our unaudited pro forma and historical condensed consolidated balance sheet at March 31, 2011. Historical information is based on the audited and unaudited consolidated financial statements of SRAM Holdings, LLC appearing elsewhere in this prospectus. Prior to the date of the reorganization, SRAM Holdings, LLC and its subsidiaries is considered to be our predecessor company.

The unaudited pro forma condensed consolidated balance sheet at March 31, 2011, and the unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2010 and for the three months ended March 31, 2011, is presented on:

on an actual basis;

on a pro forma basis to give effect to the refinancing and reorganization, including (i) the incurrence of $790.0 million of indebtedness under our new credit facilities and the application of the proceeds thereof, (ii) the application of purchase accounting, and the recognition of a related gain as a result of the reorganization, (iii) the vesting of all outstanding incentive units and the granting of new stock options, (iv) the conversion of 5,460,000 common units and 538,237 incentive units into shares of Class A and shares of Class B common stock of SRAM International Corporation, (v) the distribution of approximately $ to the pre-offering equityholders of SRAM Holdings, LLC to cover the estimated federal and state income taxes payable with respect to their allocable shares of the estimated taxable income of SRAM Holdings, LLC from January 1, 2011 through the closing date of this offering, and (vi) a provision for corporate income taxes on the income attributable to SRAM International Corporation and its subsidiaries at an effective rate of %; and

on a pro forma as adjusted basis, to also give effect to the issuance of shares of Class A common stock in this offering (assuming an estimated public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus) and the use of proceeds from this offering, as if such transactions occurred on March 31, 2011, for the unaudited pro forma condensed consolidated balance sheet, and as if such transactions occurred on January 1, 2010, for the unaudited pro forma condensed consolidated statements of operations.

Our unaudited pro forma adjustments are based on available information and certain assumptions that we believe are reasonable. Presentation of our unaudited pro forma condensed consolidated financial data is prepared in conformity with Article 11 of Regulation S-X.

The unaudited pro forma condensed consolidated financial data should be read in conjunction with The refinancing and reorganization, Use of proceeds, Managements discussion and analysis of financial condition and results of operations and our consolidated financial statements and related notes thereto, included elsewhere in this prospectus. The unaudited pro forma condensed consolidated financial data is included for informational purposes only and does not purport to reflect our results of operations or financial position that would have occurred had we operated as a public company during the periods presented, and it therefore should not be relied upon as being indicative of our results of operations or financial position had the refinancing, the reorganization and this offering occurred on the dates assumed. The unaudited condensed consolidated pro forma financial data is also not a projection of our results of operations, or financial position for any future period or date. The estimates and assumptions used in preparation of the unaudited pro forma condensed consolidated financial data may be materially different from our actual experience in connection with any specific sale by the selling stockholders.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Unaudited pro forma condensed consolidated balance sheet Predecessor(1) Successor(1) As of March 31, 2011 Pro (in thousands, except Adjustments Adjustments Adjustments forma share/unit for the for the Pro for this as amounts) Actual refinancing(2) reorganization(3) forma offering(4) adjusted

Assets Cash and cash equivalents $ 15,374 $ (5,857 )(a) $ $ $ $ Accounts receivable, net 88,843 Inventories 29,425 3,446 (c) Other current assets 8,379

Total current assets 142,021 (2,411 ) Property and equipment, net 34,268 13,131 (c) Intangible assets, net 43,463 1,432,637 (c) Goodwill 15,606 359,642 (c) Deferred financing charges and other assets 5,451 7,649 (c) (9,816 )(c) Total assets $ 240,809 $ 1,800,832 $ $ $ $

Liabilities and members / stockholders (deficit) equity Current portion of long- term debt $ $ $ $ $ $ Accounts payable 67,105 Accrued personnel costs 19,361 Accrued expenses and other current liabilities 14,511 Accrued member unitsincentive units 16,536 675 (c) Income taxes payable 12,784 Total current liabilities 130,297 675 Long-term borrowings 198,753 577,219 (a) Other noncurrent liabilities 15,053 Total liabilities 344,103 577,894

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Predecessor(1) Successor(1) As of March 31, 2011 Pro (in thousands, except Adjustments Adjustments Adjustments forma share/unit for the for the Pro for this as amounts) Actual refinancing(2) reorganization(3) forma offering(4) adjusted

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accumulated other comprehensive income 10,895 (10,895 )(e) Class A common stock; $0.01 par value; no shares authorized, issued and outstanding, actual; shares authorized and shares issued and outstanding, pro forma; shares authorized and shares issued and outstanding, pro forma as adjusted Class B common stock; $0.01 par value; no shares authorized, issued and outstanding, actual; shares authorized and shares issued and outstanding, pro forma; shares authorized and shares issued and outstanding, pro forma as adjusted Additional paid-in capital Total members / stockholders (deficit) equity (103,294 ) 1,222,938 Total liabilities and members / stockholders (deficit) equity $ 240,809 $ 1,800,832 $ $ $

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Unaudited pro forma condensed consolidated statement of operations Predecessor(1) Successor(1) Year ended December 31, 2010 (in thousands, Adjustments Adjustments Adjustments Pro forma except share/ for the for the Pro for the as unit amounts) Actual refinancing(2) reorganization(3) forma offering(4) adjusted Net sales $ 524,187 $ $ $ $ $ Cost of sales 312,954 4,779 (d) Gross profit 211,233 (4,779 )

Operating expenses General and administrative expense 29,922 869 (d) Amortization expense 3,991 78,169 (d) Sales and marketing expense 40,579 124 (d) Product development expense 37,179 434 (d) 111,671 79,596 Income from operations 99,562 (84,375 )

Other income (expense) Interest expense, net (32,634 ) (13,205 )(b) Foreign currency exchange gain 237 Other expense, net (32,397 ) (13,205 ) Income (loss) before income taxes 67,165 (97,580 ) Income tax expense 17,193 Net income $ 49,972 $ (97,580 ) $ $ $ Pro forma as adjusted weighted average common shares outstandingbasic and diluted Pro forma as adjusted earnings per common $

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Unaudited pro forma condensed consolidated statement of operations Predecessor(1) Successor(1) Three months ended March 31, 2011 (in thousands, Adjustments Adjustments Adjustments Pro forma except share/ for the for the Pro for the as unit amounts) Actual refinancing(2) reorganization(3) forma offering(4) adjusted Net sales $ 146,460 $ $ $ $ $ Cost of sales 86,267 1,104 (d) Gross profit 60,193 (1,104 )

Operating expenses General and administrative expense 8,371 201 (d) Amortization expense 997 19,542 (d) Sales and marketing expense 11,525 29 (d) Product development expense 10,296 100 (d) 31,189 19,872 Income from operations 29,004 (20,976 )

Other income (expense) Interest expense, net (3,716 ) (7,497 )(b) Foreign currency exchange gain (3,058 ) Other expense, net (6,774 ) (7,497 ) Income (loss) before income taxes 22,230 (28,473 ) Income tax expense 4,457 Net income $ 17,773 $ (28,473 ) $ $ $ Pro forma as adjusted weighted average common shares outstandingbasic and diluted Pro forma as adjusted earnings per common sharebasic and diluted $

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Notes to unaudited pro forma condensed consolidated financial data (in thousands, except share/unit amounts)

Basis of presentation

1. As further described in The refinancing and reorganization, prior to this offering, the proceeds from the refinancing were used to directly and indirectly acquire all of the equity interests in SRAM Holdings, LLC held by Trilantic and its co-investors. As a result, SRAM-SP2, Inc. acquired control of SRAM Holdings, LLC and was required to apply acquisition accounting pursuant to ASC 805. Upon SRAM-SP2, Inc. obtaining control and a voting interest greater than 95%, SRAM Holdings, LLC was required to push down the new basis of SRAM-SP2, Inc. in accordance with Staff Accounting Bulletin Topic 5.J. Our historical financial statements for the periods prior to the date of this transaction (our predecessor periods) were prepared on the historical cost basis of accounting, which existed prior to the acquisition. Our historical financial statements for periods subsequent to the date of this transaction (our successor periods) and our unaudited pro forma condensed consolidated financial statements will reflect the push down of the new basis of SRAM-SP2, Inc. upon acquisition with the recognition of assets and liabilities at their fair values pursuant to acquisition accounting. As a result, our results for the successor periods are not necessarily comparable to the predecessor periods.

Pro forma adjustments

2. The amounts in this column represent the pro forma adjustments to reflect the refinancing transactions described within The refinancing and reorganization.

a) On June 7, 2011, SRAM Holdings, LLC entered into new credit facilities consisting of a first-lien term facility, a second-lien term facility, and a revolving facility, the proceeds of which were used to acquire approximately 80% of the Class A member units, approximately 10.5% of the Class B member units, and to refinance existing borrowings. The following table reflects the sources and uses of cash attributable to the refinancing and reorganization on a pro forma basis: (in thousands) Sources: First-lien term facility $ 605,000 Second-lien term facility 185,000 Revolving credit facility

Total sources 790,000 Uses: Distribution to certain of Trilantic and its co-investors in redemption of their portion of the Class A interest in SRAM Holdings, LLC 459,850 Distribution to SRAM-SP2, Inc. in redemption of 575,820 Class B units in SRAM Holdings, LLC 115,150 Payoff of existing debt* 206,000 Transaction fees and expenses 14,857

Net cash and cash equivalents $ (5,857 )

* The March 31, 2011 balance sheet reflects $198,753 in Long-term borrowings, which reflects gross borrowings of $206,000 net of unamortized original issue discount of $7,247.

b) The first-lien term facility has a principal amount of $605,000, has a term of 7 years, and bears interest at a variable rate, as further described in Description of new credit facilities. Of the $605,000 borrowed on this term facility, $595,000 is comprised of Adjusted Base Rate (ABR) loans, for which the interest rate used in calculating interest expense on a pro forma basis is 4.75%, and $10,000 is comprised of a Eurodollar loan, for which the interest rate used in calculating interest expense on a pro forma basis was 5.75%.

The second-lien term facility has a principal amount of $185,000, has a term of 7.5 years, and bears interest at a variable rate, as further described in Description of new credit facilities. Borrowings under this term facility are Eurodollar loans, for which the interest rate used in calculating interest expense on a pro forma basis is 8.5%.

Our revolving credit facility provides for $50,000 in maximum borrowings, has a term of 5 years, bears interest based on the same terms as the first-lien term facility and has an annual commitment fee of 0.5% per year on the unused portion of our revolving credit facility.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents As a result of the refinancing, the unaudited pro forma condensed consolidated statements of operations reflect incremental interest expense on a pro forma basis for the year ended December 31, 2010 and for the three months ended March 31, 2011. The following summarizes this incremental interest expense for both periods:

Three months Year ended ended March December 31, (in thousands) 31, 2010 2011 Pro forma interest expense Predecessor interest expense Contractual interest expense $ 25,913 $3,372 Amortization of discount & deferred financing costs 7,821 866 Fair value adjustments on interest rate swaps (1,005 ) (514 ) Interest income (95 ) (8 )

Total predecessor interest expense 32,634 3,716 Successor interest expense Contractual interest expense 44,973 11,244 Amortization of discount 1,966 491 Fair value adjustments on interest rate swaps (1,005 ) (514 ) Interest income (95 ) (8 )

Total successor interest expense 45,839 11,213

Pro forma incremental interest expense $ 13,205 $7,497

A 1/8th% variance in the interest rates that apply to our borrowings would result in a change in pro forma interest expense of $988 and $247 for the year ended December 31, 2010, and the three months ended March 31, 2011, respectively.

c) Using proceeds received from the refinancing, SRAM-SP2, Inc. indirectly acquired the remaining Class A member units and obtained control of SRAM Holdings, LLC resulting in acquisition accounting pursuant to ASC 805. As SRAM-SP2, Inc. acquired greater than 95% of the member voting interest in SRAM Holdings, LLC. SRAM-SP2, Inc.s basis was pushed down to SRAM Holdings, LLCs financial statements in accordance with Staff Accounting Bulletin Topic 5.J. As of the date of this amended registration statement, the valuation of the net assets has not been completed.

The following table summarizes the provisional allocation of fair value to the assets and liabilities, as of March 31, 2011. After giving effect to the (in thousands) Historical refinancing Fair value Adjustment Cash $15,374 $9,517 $9,517 $ Inventory 29,425 29,425 32,871 3,446 Other current assets 97,222 97,222 97,222 Property, plant, and equipment, net 34,268 34,268 47,399 13,131 Intangible assets, net 43,463 43,463 1,476,100 1,432,637 Goodwill 15,606 15,606 375,248 359,642 Deferred finance charges and other assets 5,451 13,100 3,284 (9,816 ) Total current liabilities (130,297) (130,297 ) (130,972 ) (675 ) Long-term borrowings (198,753) (779,311 ) (775,972 ) 3,339 Other non-current liabilities (15,053 ) (15,053 ) (15,053 ) Net assets $(103,294) $(682,060 ) $1,119,644 $1,801,704

d) The unaudited pro forma condensed consolidated statement of operations includes adjustments to reflect incremental depreciation and amortization expense resulting from the application of acquisition accounting, using a weighted average useful life of tangible assets and definite-lived intangible

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document assets of 2.7 and 18.0 years, respectively. Incremental depreciation and amortization expense for the year ended December 31, 2010 and for the three months ended March 31, 2011 was $84,375 and $20,976, respectively. Depreciation has been appropriately allocated amongst Cost of sales, General and administrative expense, Sales and marketing expense, and Product development expense. Amortization expense consists of amortization related to our tradenames, trademarks, patents, and customer relationships. e) Following the purchase of Trilantic and its co-investors interest, SRAM Holdings, LLC amended and restated its operating agreement to combine the Class A units and Class B units into a single class of common units and eliminated the corporate governance and liquidity rights of Trilantic and its co- investors. Trilantic and its co-investors have no remaining ownership interest in SRAM Holdings, LLC following the refinancing.

The unaudited pro forma condensed consolidated balance sheet has been adjusted to eliminate SRAM Holdings, LLCs historical equity pursuant to the push down of SRAM-SP2, Inc.s new basis. Common units and incentive units have been adjusted to reflect their relative shares of SRAM-SP2 Inc.s interest that has been pushed down to SRAM Holdings, LLC, resulting in total members capital of $1,119,644,

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents allocated amongst the Common units and incentive units in accordance with the operating agreement. For the purposes of the allocation of members capital, the Company considered that 50% of incentive units are liability classified and accordingly excluded these units from the allocation.

3. The amounts in this column represent the pro forma adjustments to reflect the reorganization described within The refinancing and reorganization.

a) Pursuant to the reorganization, SRAM International Corporation will acquire control of SRAM Holdings, LLC through SRAM-SP2, Inc. SRAM International Corporation will indirectly acquire 5,460,000 Common units of SRAM Holdings, LLC held by the Day family, SRAM management and current and former directors and employees through SRAM-SP2, Inc. The Day family will receive shares of Class B common stock of SRAM International Corporation in exchange for their shares of stock of SRAM-SP2, Inc. Of these shares, shares will be converted into Class A common stock and will be sold in this offering. SRAM management and current and former directors and employees will receive shares of Class A common stock of SRAM International Corporation in exchange for their shares of stock of SRAM-SP2, Inc. Of these shares, will be sold in this offering. The reorganization will be accounted for as a common control transaction. Our basis of presentation upon the execution of reorganization reflects that of SRAM International Corporation.

b) SRAM-SP2, Inc. will remove its previously recorded equity method investment in SRAM Holdings, LLC which had a carrying value of $0 as of March 31, 2011. SRAM-SP2, Inc. will record a gain for the difference between the carrying value and fair value of this equity method investment. The fair value of SRAM-SP2, Incs previously held equity method investment in SRAM Holdings, LLC was $ , resulting in a gain of $ .

c) Concurrent with the reorganization, SRAM Holdings, LLC will make a $ tax distribution to its existing equity holders to cover the estimated federal and state income taxes payable with respect to their allocable shares of the estimated taxable income of SRAM Holdings, LLC from January 1, 2011 through the closing date of this offering, of which $ relates to Common Unit holders and of which $ relates to Incentive Unit holders.

d) The change in control described in (2)(b) above did not result in a change in the terms of the incentive units. The following events will take place with respect to the incentive units:

Vesting of incentive units: The Board of Directors will elect to vest all outstanding incentive units on a date prior to the reorganization. The vesting of incentive units will result in $ additional compensation expense, of which $ will relate to equity classified awards and $ will relate to liability classified awards.

Exchange of incentive units for Class A common stock in SRAM International Corporation: Concurrent with the reorganization, outstanding incentive units will be exchanged for Class A common stock in SRAM International Corporation. The exchange will result in the remeasurement of our equity classified awards to reflect the fair value of the Class A common shares for which they will be exchanged, resulting in $ additional compensation expense. The accrued liability for our liability classified awards of $ will be closed to additional paid in capital, resulting in a total adjustment to additional paid in capital of $ .

e) Upon completion of this offering, we will establish a stock compensation plan, 2011 Incentive Award Plan, through which we will grant approximately stock options on SRAM International Corporation Class A common stock to our directors and employees. Options granted under the plan will have an exercise price of $ , a term of years, and will cliff vest over years. The assumed grant-date fair value of these awards, determined in accordance with ASC 718, Stock Compensation, is $ per share. The unaudited pro forma condensed consolidated statement of operations reflects additional share based compensation of $ and $ for the year ended December 31, 2010 and the three months ended March 31, 2011, respectively.

f) Prior to this offering, our predecessor company, SRAM Holdings, LLC was a limited liability company, with income and losses flowing directly to the members. Following the reorganization, our successor company, SRAM International Corporation, will incur taxes on its income and losses and will record deferred tax assets and liabilities.

The unaudited pro forma condensed consolidated statements of operations reflect an increase (decrease) in the tax provision for income taxes on a pro forma basis of $ and $ for the year ended December 31, 2010 and for the three months ended March 31, 2011 at an assumed pro forma tax rate of %, representing a combined federal, foreign and state statutory tax rate.

Our deferred tax balances will change as a result of the change in the book value of our assets and liabilities. After giving effect to the aforementioned book purchase accounting adjustments and other book-tax differences, our deferred tax balances will be as follows:

(in thousands) March 31, 2011

Current deferred tax assets/(liabilities) $ Non-current deferred tax assets/(liabilities)

Net deferred tax assets/(liabilities) $

(4)

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document a) Reflects the issuance of shares of Class A common stock in this offering, assuming an estimated public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, after deducting underwriting discounts, commissions, and other offering costs of $ resulting in net proceeds of $ . b) Reflects the use of our equity proceeds of $ to pay down our outstanding borrowings. Our borrowings under our first-lien term facility and our- second lien term facility will decrease by $ and $ , respectively, resulting in a decrease in pro forma interest expense of $ and $ for the year ended December 31, 2010 and the three months ended March 31, 2011, respectively. After giving effect to the offering and the use of proceeds to pay down borrowings, a 1/8th% variance in the interest rates that apply to our

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents borrowings would result in a change in pro forma interest expense of $ and $ for the year ended December 31, 2010, and the three months ended March 31, 2011, respectively.

We will not retain any of the net proceeds of the shares sold in this offering.

c) Reflects the write-off of deferred financing costs and unamortized original issue discount related to the repayment of a portion of our first-lien term facility and all of our second-lien term facility using the offering proceeds.

d) Reflects the tax impact of the adjustments related to the offering at an assumed pro forma tax rate of %, representing a combined federal, foreign and state statutory tax rate.

e) The following table illustrates the calculation of pro forma as adjusted net income per share for the year ended December 31, 2010 and the three months ended March 31, 2011:

Three Year ended months ended December 31,2010 March 31, 2011

Pro forma as adjusted net income $ $

Calculation of weighted average numbers of shares outstanding:

Three Year ended months ended December 31,2010 March 31, 2011 Basic Diluted Basic Diluted

Class A common stock Class B common stock

Year ended Three December months ended 31, 2010 March 31, 2011

Pro forma as adjusted earnings per share, basic and diluted $ $

The participation and liquidation rights of both the Class A and Class B common stock are the same.

Stock options represent the only class of potentially dilutive financial instruments that will be outstanding after the refinancing.

The following selected consolidated financial data of our predecessor companies should be read together with The refinancing and reorganization, Managements discussion and analysis of financial condition and results of operations and the historical financial statements, related notes and other financial information included in this prospectus. The selected consolidated financial data in this section is not intended to replace our historical financial statements and is qualified in its entirety by the historical financial statements and related notes included in this prospectus. Our predecessor companies will be SRAM Holdings, LLC and SRAM Corporation and their consolidated financial statements will be our historical financial statements following this offering.

The statement of operations data for the years ended December 31, 2008, 2009 and 2010 and the balance sheet data as of December 31, 2009 and 2010 are derived from the audited consolidated financial statements of our predecessor companies included in this prospectus. The statement of operations data for the years ended December 31, 2006 and 2007 and the balance sheet data as of December 31, 2006, 2007 and 2008 are derived from the audited consolidated financial statements of our predecessor companies not included in this prospectus. For comparison purposes, certain balances with respect to the financial data for the years ended December 31, 2006 and 2007 have been reclassified in order to conform with the presentation for the years ended December 31, 2008, 2009 and 2010.

The statement of operations data for each of the three months ended March 31, 2010 and 2011 and the balance sheet data as of March 31, 2011 are derived from the unaudited consolidated financial statements of SRAM Holdings, LLC, which are included elsewhere in this prospectus. Historical results are not necessarily indicative of the results to be expected in the future.

Three months ended Year ended December 31, March 31, (in thousands, except per unit data) 2006 2007 2008 2009 2010 2010 2011 Statement of operations data: Net sales $283,806 $356,025 $478,354 $399,581 $524,187 $122,037 $146,460 Cost of sales 206,235 247,013 310,725 239,448 312,954 72,145 86,267 Gross profit 77,571 109,012 167,629 160,133 211,233 49,892 60,193 Operating expenses General and administrative expense 12,444 23,215 77,846 29,042 33,913 6,999 9,368 Sales and marketing expense 19,729 22,621 49,480 27,934 40,579 8,684 11,525 Product development expense 21,702 27,568 46,506 27,799 37,179 8,603 10,296 Recapitalization costs(1) 8,952 53,875 73,404 182,784 84,775 111,671 24,286 31,189 Income (loss) from operations 23,696 35,608 (15,155 ) 75,358 99,562 25,606 29,004 Other income (expense) Interest expense, net (3,205 ) (2,736 ) (21,703 ) (36,245 ) (32,634 ) (8,395 ) (3,716 ) Foreign currency exchange gain (loss) (3,734 ) (3,993 ) 4,072 (3,221 ) 237 3,417 (3,058 ) Total other expense, net (6,939 ) (6,729 ) (17,631 ) (39,466 ) (32,397 ) (4,978 ) (6,774 ) Income (loss) before income taxes 16,757 28,879 (32,786 ) 35,892 67,165 20,628 22,230 Income tax expense 5,169 10,866 15,838 14,373 17,193 4,348 4,457 Net income (loss)(2) $11,588 $18,013 $(48,624 ) $21,519 $49,972 $16,280 $17,773

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents As of December 31, As of March 31, (in thousands, except per unit data) 2006 2007 2008 2009 2010 2011 Balance sheet data: Cash and cash equivalents $13,557 $10,309 $27,100 $33,689 $19,409 $ 15,374 Total assets 151,315 236,703 251,632 238,334 249,275 240,809 Loans and borrowings (including short- term borrowings)(3) 40,000 109,332 339,356 301,428 227,103 198,753 Stockholders loans (156 ) Total liabilities 121,679 216,477 441,193 404,655 373,185 344,103 Total Members equity (deficit) 29,636 20,225 (189,561) (166,321) (123,910) (103,294 )

(1) The recapitalization costs relate to the 2008 recapitalization in which Trilantic and its co-investors purchased a $234.8 million equity interest in SRAM. See Certain relationships and related person transactionsTrilantic 2008 investment and recapitalization for a description of the 2008 recapitalization.

(2) Net loss for 2008 includes expenses related to our 2008 recapitalization, including share-based compensation expense of $88.5 million in accordance with ASC 718, CompensationStock Compensation, which was allocated across our cost of sales, general and administrative expense, sales, and marketing expense and product development expense for the year. This expense was primarily due to the immediate vesting, exercise and repurchase of awards, triggered by the 2008 recapitalization. Net income for the years ended December 31, 2009 and 2010, and for the three months ended March 31, 2011 includes share-based compensation expense of $3.7 million, $12.4 million, and $3.6 million, respectively, similarly allocated.

(3) Loans and borrowings (including short-term borrowings) are defined as (i) the current portion of long-term debt plus (ii) long-term borrowings.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Managements discussion and analysis of financial condition and results of operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Prospectus summarySummary consolidated financial data, Selected consolidated financial data and our historical financial statements included elsewhere in this prospectus. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those discussed in the sections entitled Risk factors and Special note regarding forward-looking statements included elsewhere in this prospectus.

Overview We are a leading global designer, manufacturer and marketer of premium bicycle components. We believe consumers recognize our brands for innovative design. Our products include drivetrain systems, suspension, brakes, internal gear hubs and wheelsets, all of which are essential components used on road bikes, mountain bikes or pavement bikes.

We operate in two distribution channels, the OEM and aftermarket channels, which correspond to our two reportable segments, OEM and aftermarket. In the OEM channel, we market our products to bicycle companies as original equipment components for new bikes that they sell to consumers through independent bicycle retailers. Although our products are specified for use by bicycle companies for their new bike models, we sell our products directly to the bicycle factories that manufacture bike frames and assemble bikes on behalf of bicycle companies in accordance with their specifications. Generally, during the second quarter we receive clarification of these specifications for our coming model year (July 1 through June 30). We then refine our internal forecast for annual production based on this information and historical production levels. However, production does not occur until receipt of customer orders. Given this process, we do not carry significant inventory and we have the flexibility to respond to subsequent changes in demand by adjusting production throughout the year.

We sell aftermarket products through distributors to independent bicycle retailers, who in turn sell them to consumers for replacements, upgrades or custom bike builds. Additionally, we sell a limited number of our premium aftermarket products directly to independent bicycle retailers in the United States. We base our production of aftermarket components on our frequent interaction with the distributors and dealers who sell our aftermarket products. Because we are able to achieve higher prices for our aftermarket components, our aftermarket components have higher margins than their OEM counterparts.

For the three months ended March 31, 2011, OEM and aftermarket sales represented 67% and 33%, respectively, of our total sales, as compared to 67% and 33% of our sales for the year ended December 31, 2010, 67% and 33% of our sales for the year ended December 31, 2009, and 74% and 26% of our sales for the year ended December 31, 2008. We attribute the growth of our aftermarket segment since 2008 to an increased internal focus and external marketing efforts, as well as general economic conditions, as discussed below. We expect the percentage of sales of our two segments in the foreseeable future to remain similar to 2010 and the three months ended March 31, 2011.

We focus on a variety of key indicators to monitor our financial performance, including net sales and operating income. For the three months ended March 31, 2011, our net sales increased from $122.0 million to $146.5 million and our operating income increased from $25.6 million to $29.0 million, as compared to the three months ended March 31, 2010. For the year ended December 31, 2010, our net sales increased from $399.6

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents million to $524.2 million and our operating income increased from $75.4 million to $99.6 million, as compared to 2009. We attribute these increases to increased market penetration due to new product introductions, increased cycling participation leading to growth in our industry and continued specification gains at our OEM customers.

Other significant activities during the year ended December 31, 2010 and the three months ended March 31, 2011 included:

The refinancing of our credit facilities in April 2010, which resulted in a significant decrease in the average interest rate on our indebtedness and lower interest expense.

The implementation of the first phase of a three-phase restructuring plan for our German operations, which reduces our German workforce as we shift manufacturing from Germany to our Taiwan plant. We implemented this restructuring plan in order to take advantage of lower manufacturing costs in Taiwan and to reduce excess capacity at our German facility resulting from a shift of bike production by bicycle companies from Europe to Asia. In the first phase of the plan, 74 employees were released as of December 31, 2010 through a combination of early retirement, voluntary resignations or the acceptance of a severance package that included severance pay, retraining and job search assistance. In the second phase of the plan, we expect to release up to 27 employees as of July 31, 2011 and provide them with a severance package that will include severance pay, retraining and job search assistance. In the third phase of the plan, we expect to release up to 29 employees as of July 31, 2012 and provide them with a severance package that will include severance pay, retraining and job search assistance. The restructuring plan was paid for by our contributions with additional benefits provided by the German government. The training and release of employees in phases two and three will depend upon the successful transfer of production to our Taiwan facility. The German facility will remain a product development center and customer training and service center. In connection with this restructuring plan, we expect to incur total severance expenses of $10.9 million, of which $8.0 million was incurred in 2010. We incurred an additional $0.8 million of expenses in the three months ended March 31, 2011.

Investments in property and equipment of $17.9 million, including the construction of our new Indianapolis manufacturing and product development facility, which provides us with additional production capacity in the U.S. and office space for our expanding product development and sales and marketing functions and replaces our old facility.

Key trends affecting our business In the OEM channel, our business is impacted by global economic conditions. For example, in 2009, in response to the global recession, bicycle companies decreased production of new bikes, which in turn led to a decrease of our component sales in the OEM channel. According to the National Bicycle Dealers Association, the number of bikes sold in the United States decreased to 14.9 million in 2009 from 18.5 million in 2008, as reported in its U.S. Bicycle Market 2009 and 2008 reports. We believe this volume decrease is indicative of the volume change that occurred in the independent bicycle retailer market during this period. In response to these economic conditions, we took a number of steps in 2009 to reduce our expenses in order to mitigate the effect of the recession on our results of operations. The actions we took included a reduction in labor costs in our manufacturing facilities, reductions in bonuses and pay increases, a hiring freeze, reduced travel and outside consulting expenses, a decrease in marketing expenses and a reduction in capital expenditures. We were also able to partially offset our reduced net sales in the OEM channel in 2009 by increased sales of our higher-margin aftermarket products. In 2010, our expenses and capital expenditures increased from the reduced 2009 levels as economic conditions improved and our spending levels increased in response to increasing bike production volumes and to support further growth. According to the National Bicycle Dealers Association, the number of bikes sold in the United States increased to 19.8 million in 2010 from 14.9 million in 2009, as

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents reported in its U.S. Bicycle Market 2010 and 2009 reports. We believe this volume increase is indicative of the volume change that occurred in the independent bicycle center market during this period.

We believe a key driver of our net sales and margins in both the OEM and aftermarket channels has been our ability to continually develop innovative new products, which enables us to increase specifications of our components on new bike models as well as increase aftermarket sales. Our product development lifecycle enables us to maintain a constant innovation pipeline, allowing us to continually capture specifications on new bike models. We expect our ability to continue to develop innovative new products will be key to our future growth. In addition, in recent years we have generally been able to achieve price increases of 2% to 3% on existing products across our product base.

We believe our business in both the OEM and aftermarket channels has also been impacted by other trends affecting the cycling industry generally, such as growth in the number of cycling enthusiasts, growing participation in cycling events and cycling related sports, improving cycling infrastructure, increasing consumer focus on healthier lifestyle trends, growing focus on the environment and increasing purchases of mid to high-end bikes in emerging markets. We expect these positive growth trends to continue in 2011. For additional information on factors that we believe may impact the cycling industry, see BusinessMarket overview and opportunityOutlook.

Financial information and the refinancing and reorganization The financial results presented in this section are those of our predecessors, SRAM Holdings, LLC and SRAM Corporation. See Prospectus summaryPresentation of financial information. Upon consummation of this offering, SRAM International Corporation will acquire 100% of the equity interests of SRAM Holdings, LLC. SRAM International Corporation will be a holding company that directly, and indirectly through its subsidiaries controls SRAM Holdings, LLC, which in turn will control our operating company, SRAM, LLC. We will have no business operations or material assets other than our ownership of 100% of the outstanding equity interests of SRAM Holdings, LLC and its subsidiaries, including SRAM, LLC, and we will control the business and affairs of SRAM Holdings, LLC and SRAM, LLC and its subsidiaries.

On June 7, 2011, SRAM, LLC entered into new credit facilities consisting of a first-lien term and revolving facility and a second- lien term facility. As a result of the refinancing, our results of operations and liquidity will be impacted by: a $2.8 million expense associated with the write-off of unamortized deferred financing costs with respect to our prior credit facilities, the incurrence of $790.0 million in additional debt under our new credit facilities and the payment of $575.0 million to Trilantic and its co-investors to acquire their equity interests in SRAM Holdings, LLC. In addition, as a result of the refinancing, SRAM-SP2, Inc. will recognize a gain of $ million by obtaining control of SRAM Holdings, LLC.

Our results of operations and liquidity will also be affected as a result of the reorganization and this offering in a number of significant ways. In the quarter in which the reorganization is consummated, our historical financial statements will reflect the gain recognized by SRAM-SP2, Inc. resulting from its obtaining control over SRAM Holdings, LLC during the refinancing. Also in this quarter, we expect to incur an expense of approximately $ million related to the immediate accelerated vesting of incentive compensation units of SRAM Holdings, LLC, to incur expenses and fees of approximately $ million related to the reorganization and this offering, and to make a distribution of approximately $ million to SRAM Holdings, LLCs pre- offering equity holders to cover the estimated federal and state income taxes payable with respect to their allocable shares of the estimated taxable income of SRAM Holdings, LLC from January 1, 2011 through the closing date of this offering. In addition, prior to and in connection with the reorganization, we intend to liquidate SRAM Cycling Fund, LLC and donate its assets of $ million to a newly-formed non-profit entity, the purpose of which will be to make grants exclusively to charitable organizations that promote safe cycling and the public

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents health and environmental benefits of cycling as a form of recreation or transportation. This donation represents the remaining undistributed amount from our initial $10.0 million capitalization of SRAM Cycling Advocacy Fund, LLC in 2008. As a result of this donation, we no longer expect to incur significant ongoing monthly or annual expenses for cycling advocacy efforts through SRAM Cycling Advocacy Fund, LLC. For additional information regarding the refinancing and reorganization, see The refinancing and reorganization.

In addition, we expect the following changes will have an ongoing impact on our results of operations and liquidity after the consummation of the refinancing, the reorganization and this offering: we will incur an annual expense in connection with the granting of awards under the new SRAM International Corporation 2011 Incentive Award Plan, depreciation and amortization expense will increase as a result of purchase accounting in connection with the refinancing, income tax expense will increase as a result of our reorganization as a C-corporation and interest expense will increase as a result of increased amounts outstanding under our new credit facilities.

2008 recapitalization

On September 30, 2008, we completed the 2008 recapitalization, pursuant to which Trilantic and its co-investors purchased a $234.8 million equity interest in SRAM. In connection with the 2008 recapitalization, we recorded $88.5 million of compensation expense due to the vesting of outstanding stock options and buyout of certain options, which was allocated across our cost of sales, general and administrative expense, sales and marketing expense and product development expense for the year. In addition, we incurred transaction expenses of $9.0 million, consisting of legal, accounting and investment banking fees in connection with the 2008 recapitalization.

Note about segments We have two reportable segments, OEM and aftermarket. In addition, we report certain corporate costs, consisting of general and administrative costs not allocated to the OEM or aftermarket segments, separately in our segmented results of operations below. Unallocated general and administrative costs include the following: payroll and related benefits, stock option and incentive unit compensation, finance and IT costs, transaction costs, litigation costs and other corporate operating costs.

Results of operations The statement of operations data for the years ended December 31, 2008, 2009, 2010, and for the three months ended March 31, 2010 and 2011 are derived from the consolidated financial statements of our predecessor companies, which, in the opinion of management, include all adjustments necessary for a fair presentation of our financial position and operating results for such periods and as of such dates. See note 13 of our annual financial statements and note 10 of our interim financial statements included elsewhere in this prospectus for additional information regarding our segment reporting.

Three months ended March 31, 2010 compared with three months ended March 31, 2011

2010 2011 Three months ended March 31, As a % of As a % of Period-to-period (in thousands, except percentages) Amount net sales Amount net sales change Net sales $122,037 100.0% $146,460 100.0% $24,423 20.0% Cost of sales 72,145 59.1% 86,267 58.9% 14,122 19.6% Gross profit 49,892 40.9% 60,193 41.1% 10,301 20.6% Operating expenses General and administrative expense 6,999 5.7% 9,368 6.4% 2,369 33.8% Sales and marketing expense 8,684 7.1% 11,525 7.9% 2,841 32.7% Product development expense 8,603 7.0% 10,296 7.0% 1,693 19.7% 24,286 19.9% 31,189 21.3% 6,903 28.4% Income (loss) from operations 25,606 21.0% 29,004 19.8% 3,398 13.3% Other income (expense) Interest expense, net (8,395 ) (6.9)% (3,716 ) (2.5)% 4,679 (55.7)% Foreign currency exchange gain (loss) 3,417 2.8% (3,058 ) (2.1)% (6,475 ) (189.5)% Total other expense, net (4,978 ) (4.1)% (6,774 ) (4.6)% (1,796 ) 36.1% Income before income taxes 20,628 16.9% 22,230 15.2% 1,602 7.8% Income tax expense 4,348 3.6% 4,457 3.0% 109 2.5% Net income $16,280 13.3% $17,773 12.1% 1,493 9.2% Segment data Net sales OEM segment $80,951 66.3% $97,670 66.7% 16,719 20.7% Aftermarket segment 41,086 33.7% 48,790 33.3% 7,704 18.8% Total net sales $122,037 100.0% $146,460 100% 24,423 20.0% Income (loss) from operations OEM segment $20,569 16.9% $24,253 16.6% 3,684 17.9% Aftermarket segment 13,224 10.8% 15,201 10.4% 1,977 15.0% Corporate (8,187 ) (6.7)% (10,450 ) (7.1)% (2,263 ) 27.6% Total income (loss) from operations $25,606 21.0% 29,004 19.8% 3,398 13.3%

Net sales increased $24.4 million, or 20.0%, to $146.5 million for the three months ended March 31, 2011 from $122.0 million in the prior year period. Net sales in the OEM and aftermarket segments as a percentage of total net sales remained steady at 67% and 33%, respectively, in the three months ended March 31, 2011, as compared to 66% and 34%, respectively, in the prior year period. We increased prices on our existing products

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents by 2% to 3% on average, as compared to the prior year period. In the OEM segment, net sales increased $16.7 million, or 20.7%, to $97.7 million for the three months ended March 31, 2011 from $81.0 million in the prior year period. We attribute this increase primarily to specification gains across our bicycle company customers, particularly on mountain and road bikes, which led to volume increases. In the aftermarket segment, net sales increased $7.7 million, or 18.8%, to $48.8 million for the three months ended March 31, 2011 from $41.1 million in the prior year period. This increase was a result of increased volumes, which we attribute to increased consumer preference for custom bike builds and component upgrades to existing bikes, continued momentum of our brands and an increase in cycling participation.

Cost of sales increased $14.1 million, or 19.6%, to $86.3 million for the three months ended March 31, 2011 from $72.1 million in the prior year period. The increase was primarily attributable to higher net sales and volume of products produced during the period, as described above. Cost of sales as a percentage of net sales remained mostly flat, dropping slightly to 58.9% for the three months ended March 31, 2011 from 59.1% in the prior year period. The three components of cost of sales are material costs, labor costs and overhead costs. For the three months ended March 31, 2011, material costs increased as a percentage of net sales to 46.7% from 46.1% in the prior year period, driven by the transfer of certain products produced in our German facility to an outside vendor. Labor costs as a percentage of net sales decreased to 4.0% for the three months ended March 31, 2011 from 4.4% in the prior year period, which was attributable to improved labor efficiency and automation in our production facilities and the reduction in labor costs in our German facility from the restructuring program. Overhead costs as a percentage of net sales decreased to 8.3% for the three months ended March 31, 2011 from 8.6% in the prior year period, primarily as a result of continued factory efficiencies and higher sales volumes covering our fixed cost base. Overhead costs for the three months ended March 31, 2011 included $0.8 million of restructuring costs for our German facility.

Gross profit increased $10.3 million, or 20.6%, to $60.2 million for the three months ended March 31, 2011 from $49.9 million in the prior year period. This increase in gross profit was primarily attributable to the higher volumes and pricing that led to our increase in net sales, as described above. Gross margin increased slightly to 41.1% for the three months ended March 31, 2011 from 40.9% in the prior year period, which reflects cost of sales remaining proportional to our net sales growth and continued growth in our aftermarket sales.

General and administrative expense includes payroll and related benefits, and other general and administrative expense for our corporate, finance and information technology functions. General and administrative expense increased $2.4 million, or 33.8%, to $9.4 million for the three months ended March 31, 2011 from $7.0 million in the prior year period. This increase was attributable to an increase in employee-related expenses of $0.7 million resulting from increased headcount and travel costs, $1.4 million of transaction expenses incurred in connection with this offering and $0.2 million of information technology and insurance costs. As a result of the higher costs, general and administrative expense as a percentage of net sales increased to 6.4% for the three months ended March 31, 2011 from 5.7% in the prior year period.

Sales and marketing expense consists primarily of wages, salaries and other employee costs, as well as advertising, trade show and sponsorship costs. Sales and marketing expense increased $2.8 million, or 32.7%, to $11.5 million for the three months ended March 31, 2011 from $8.7 million in the prior year period. This increase was primarily a result of increased spending of $1.7 million for marketing activities, including advertising costs and team and event sponsorship. Additionally we incurred higher compensation expense of $0.6 million resulting from additional headcount and $0.3 million in increased travel costs. Sales and marketing expense as a percentage of net sales increased to 7.9% for the three months ended March 31, 2011 from 7.1% in the prior year period as a result of our allocation of additional resources to marketing activities aimed at continuing to increase our visibility in the market and supporting top line sales growth.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Product development expense consists primarily of wages, salaries and other employee costs, as well as product testing and prototype costs. Product development expense increased $1.7 million, or 19.7%, to $10.3 million for the three months ended March 31, 2011 from $8.6 million in the prior year period. The increase was primarily a result of higher compensation expense of $1.3 million from increased headcount from hiring of engineers and increased prototype and consulting costs of $0.3 million. Product development expense as a percentage of net sales was 7.0% for the three months ended March 31, 2011 and 2010.

Income (loss) from operations increased $3.4 million, or 13.3%, to $29.0 million for the three months ended March 31, 2011 from $25.6 million in the prior year period. The increase was a result of increased sales, which was partially offset by the increases in cost of goods sold and operating expenses, as described above. Operating margins dropped slightly to 19.8% for the three months ended March 31, 2011 from 21.0% in the prior year period. In the OEM segment, income from operations increased $3.7 million, or 17.9%, to $24.3 million for the three months ended March 31, 2011 from $20.6 million in the prior year period, while operating margins decreased slightly to 24.8% from 25.4%. The decrease in operating margin is primarily attributable to increased product development costs from additional hires and increased marketing costs. In the aftermarket segment, income from operations increased $2.0 million, or 15.0%, to $15.2 million for the three months ended March 31, 2011 from $13.2 million in the prior year period, while operating margins decreased slightly to 31.2% from 32.2%. The decline in operating margin was the result of our increased sales and marketing costs for the aftermarket segment as we continued to increase our focus on growth in this segment.

Interest expense, net decreased $4.7 million, or 55.7%, to $3.7 million for the three months ended March 31, 2011 from $8.4 million in the prior year period. The decrease was a result of lower interest rates on our prior credit facilities as a result of the refinancing of our credit facilities in April 2010, as well as a $29.0 million reduction of the amounts outstanding under our prior credit facilities throughout the three months ended March 31, 2011.

Foreign currency exchange gain (loss) changed by $6.5 million to a loss of $3.1 million for the three months ended March 31, 2011 from a gain of $3.4 million during the prior year period, primarily due to non-cash currency movement on intercompany balances between various subsidiaries, with $2.6 million of Euro-denominated balances being the largest driver of the loss.

Income tax expense increased $0.1 million, or 2.5%, to $4.5 million for the three months ended March 31, 2011 from $4.3 million in the prior year period. The increase was driven by higher foreign pretax income and corresponding tax expense. Our foreign pretax income as a percentage of total pretax income increased to 58.4% for the three months ended March 31, 2011 from 49.9% in the prior year period, and our effective foreign tax rate increased to 18.9% from 17.2% due to decreased income levels in foreign jurisdictions with lower tax rates.

Year ended December 31, 2009 compared with year ended December 31, 2010

2009 2010 Year ended December 31, As a % of As a % of Period-to-period (in thousands, except percentages) Amount net sales Amount net sales change Net sales $399,581 100.0% $524,187 100.0% $124,606 31.2% Cost of sales 239,448 59.9% 312,954 59.7% 73,506 30.7% Gross profit 160,133 40.1% 211,233 40.3% 51,100 31.9% Operating expenses General and administrative expense 29,042 7.3% 33,913 6.5% 4,871 16.8% Sales and marketing expense 27,934 7.0% 40,579 7.7% 12,645 45.3% Product development expense 27,799 7.0% 37,179 7.1% 9,380 33.7% 84,775 21.2% 111,671 21.3% 26,896 31.7% Income (loss) from operations 75,358 18.9% 99,562 19.0% 24,204 32.1% Other income (expense) Interest expense, net (36,245 ) (9.1)% (32,634 ) (6.2)% 3,611 (10.0)% Foreign currency exchange gain (loss) (3,221 ) (0.8)% 237 0.0% 3,458 107.4% Total other expense, net (39,466 ) (9.9)% (32,397 ) (6.2)% 7,069 (17.9)% Income before income taxes 35,892 9.0% 67,165 12.8% 31,273 87.1% Income tax expense 14,373 3.6% 17,193 3.3% 2,820 19.6% Net income $21,519 5.4% $49,972 9.5% $28,453 132.2% Segment data Net sales OEM segment $265,629 66.5% $348,879 66.6% $83,250 31.3% Aftermarket segment 133,952 33.5% 175,308 33.4% 41,356 30.9% Total net sales $399,581 100.0% $524,187 100.0% $124,606 31.2% Income (loss) from operations OEM segment $61,430 15.4% $83,321 15.9% $21,891 35.6% Aftermarket segment 41,286 10.3% 53,440 10.2% 12,154 29.4% Corporate (27,358 ) (6.8)% (37,199 ) (7.1)% (9,841 ) 36.0% Total income (loss) from operations $75,358 18.9% $99,562 19.0% $24,204 32.1%

Net sales increased $124.6 million, or 31.2%, to $524.2 million in 2010 from $399.6 million in 2009. Net sales in the OEM and aftermarket segments as a percentage of total net sales remained steady at 67% and 33%, respectively, in 2010, as compared to 67% and 33%, respectively, in 2009. During 2010, we increased prices of our existing products by 2% to 3% on average. In the OEM segment, net sales increased $83.3 million, or 31.3%, to $348.9 million in 2010 from $265.6 million in 2009. We attribute this increase primarily to specification gains across our bicycle company customers, particularly on mountain and road bikes, as well as volume increases driven by a return to historical bike production levels in the OEM segment after the global recession in 2009 and increased cycling participation. In the aftermarket segment, net sales increased $41.4 million, or 30.9%, to $175.3 million in 2010 from $134.0 million in 2009. This increase was a result of increased volumes, which we attribute to increased consumer preference for custom bike builds and component upgrades to existing bikes, robust retail sales driven by economic recovery and an increase in cycling participation.

Cost of sales increased $73.5 million, or 30.7%, to $313.0 million in 2010 from $239.4 million in 2009. The increase was primarily attributable to higher net sales and volume of products produced during the year, as

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents described above. Cost of sales as a percentage of net sales remained mostly flat, decreasing to 59.7% in 2010 from 59.9% in 2009. During 2010, material costs remained flat as a percentage of net sales at 45.9% as compared to 2009. Labor costs as a percentage of net sales decreased to 4.2% in 2010 from 4.9% in 2009, which was attributable to improved labor efficiency and automation in our production facilities. This decrease was offset by an increase in overhead costs. Overhead costs as a percentage of net sales increased in 2010 to 9.5% from 9.1% in 2009, primarily as a result of an $8.0 million expense related to the restructuring of our German operations.

Gross profit increased $51.1 million, or 31.9%, to $211.2 million in 2010 from $160.1 million in 2009. This increase in gross profit is attributable to the higher volumes and pricing that led to our increased net sales, as described above. Gross margin stayed relatively flat, increasing slightly to 40.3% in 2010 from 40.1% in 2009, which reflects cost of sales remaining proportional to our net sales growth.

General and administrative expense increased $4.9 million, or 16.8%, to $33.9 million in 2010 from $29.0 million in 2009. This increase was attributable to an increase in payroll-related expenses of $2.7 million resulting primarily from increased bonuses, an increase in incentive unit compensation expense of $3.4 million and a writedown of $1.3 million with respect to our old Indianapolis facility, which was partially offset by reduced litigation costs of $3.0 million. General and administrative expense as a percentage of net sales decreased to 6.5% in 2010 from 7.3% in 2009 as a result of our increase in net sales in 2010 coupled with the largely fixed nature of these costs.

Sales and marketing expense increased $12.6 million, or 45.3%, to $40.6 million in 2010 from $27.9 million in 2009. This increase was primarily a result of increased spending of $5.7 million for marketing activities, including advertising costs and team and event sponsorship. Additionally, we incurred an increased commission expense of $1.3 million from expansion of our independent representative program and a higher compensation expense of $2.1 million resulting from additional headcount and increased bonus expense due to our return to our regular bonus plan in 2010 following a reduction in bonuses in 2009 and a $2.1 million increase in incentive unit compensation expense. Sales and marketing expense as a percentage of net sales increased to 7.7% in 2010 from 7.0% in 2009, as a result of our allocation of additional resources to marketing activities aimed at increasing our visibility in the market and supporting top line sales growth after emerging from the recession in 2009.

Product development expense increased $9.4 million, or 33.7%, to $37.2 million in 2010 from $27.8 million in 2009. The increase was primarily a result of higher compensation expense of $4.4 million resulting from additional compensation expense due to higher headcount and bonus, increased incentive unit compensation expense of $2.7 million and increased prototype costs of $1.1 million. Product development expense as a percentage of net sales remained relatively flat from 2009 to 2010.

Income (loss) from operations increased $24.2 million, or 32.1%, to $99.6 million in 2010 from $75.4 million in 2009. The increase was a result of increased sales, which was partially offset by the increases in cost of sales and operating expenses, as described above. Operating margins remained relatively flat, increasing to 19.0% in 2010 from 18.9% in 2009. In the OEM segment, income from operations increased $21.9 million, or 35.6%, to $83.3 million in 2010 from $61.4 million in 2009, while operating margins increased slightly to 23.9% in 2010 from 23.1% in 2009. The increase in operating margin is primarily attributable to our ability to spread our cost basis over higher sales levels. In the aftermarket segment, income from operations increased $12.2 million, or 29.4%, to $53.4 million in 2010 from $41.3 million in 2009, while operating margins decreased slightly to 30.5% in 2010 from 30.8% in 2009. The decline in operating margin was the result of our increased sales and marketing costs for the aftermarket segment as we continued to increase our focus on growth in this segment.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Interest expense, net decreased $3.6 million, or 10.0%, to $32.6 million in 2010 from $36.2 million in 2009. The decrease was a result of lower interest rates on our existing credit facilities as a result of the refinancing of our credit facilities in April 2010, as well as a $75.4 million reduction of the debt outstanding under our prior credit facilities throughout the year.

Foreign currency exchange gain (loss) changed by $3.5 million to a gain of $0.2 million in 2010 from a loss of $3.2 million in 2009, primarily due to non-cash currency movement on intercompany balances between various subsidiaries, with Euro- denominated balances being the largest driver of the gain at $5.0 million.

Income tax expense increased $2.8 million, or 19.6%, to $17.2 million in 2010 from $14.4 million in 2009. The increase was a result of higher foreign tax expense as a result of higher net income in 2010. Our foreign pretax income as a percentage of total pretax income increased slightly to 82.8% in 2010 from 78.9% in 2009. The pretax income increase was partially offset by a decrease in the Taiwanese income tax rate, reducing our foreign effective tax rate from 19.0% in 2009 to 15.7% in 2010.

Year ended December 31, 2008 compared with year ended December 31, 2009

2008 2009 Year ended December 31, As a % of As a % of Period-to-period (in thousands, except percentages) Amount net sales Amount net sales change Net sales $478,354 100.0% $399,581 100.0% $(78,773) (16.5)% Cost of sales 310,725 65.0% 239,448 59.9% (71,277) (22.9)% Gross profit 167,629 35.0% 160,133 40.1% (7,496 ) (4.5)% Operating expenses General and administrative expense 77,846 16.3% 29,042 7.3% (48,804) (62.7)% Sales and marketing expense 49,480 10.3% 27,934 7.0% (21,546) (43.5)% Product development expense 46,506 9.7% 27,799 7.0% (18,707) (40.2)% Recapitalization costs 8,952 1.9% (8,952 ) (100)% 182,784 38.2% 84,775 21.2% (98,009) (53.6)% Income (loss) from operations (15,155 ) (3.2)% 75,358 18.9% 90,513 597.2% Other income (expense) Interest expense, net (21,703 ) (4.5)% (36,245 ) (9.1)% (14,542) 67.0% Foreign currency exchange gain (loss) 4,072 0.9% (3,221 ) (0.8)% (7,293 ) (179.1)% Other expense, net (17,631 ) (3.7)% (39,466 ) (9.9)% (21,835) 123.8% Income (loss) before income taxes (32,786 ) (6.9)% 35,892 9.0% 68,678 209.5% Income tax expense 15,838 3.3% 14,373 3.6% (1,465 ) (9.2)% Net income (loss) $(48,624 ) (10.2)% $21,519 5.4% $70,143 144.3% Segment data Net sales: OEM segment $353,584 73.9% $265,629 66.5% $(87,955) (24.9)% Aftermarket segment 124,770 26.1% 133,952 33.5% 9,182 7.4% Total net sales $478,354 100.0% $399,581 100.0% $(78,773) (16.5)% Income (loss) from operations OEM segment $68,487 14.3% $61,430 15.4% $(7,057 ) (10.3)% Aftermarket segment 34,062 7.1% 41,286 10.3% 7,224 21.2% Corporate (117,704) (24.6)% (27,358 ) (6.8)% 90,346 76.8% Total income (loss) from operations $(15,155 ) (3.2)% $75,358 18.9% $90,513 597.2%

Net sales decreased $78.8 million, or 16.5%, to $399.6 million in 2009 from $478.4 million in 2008. This decrease was primarily the result of a decline in overall bike production due to the global recession, offset in part by increased sales of our aftermarket products, which have slightly higher prices than our OEM products. Net sales in the OEM segment decreased to 67% of total net sales in 2009 compared to 74% in 2008 while net sales in the aftermarket segment increased to 33% of total net sales in 2009 compared to 26% in 2008. Our net sales in 2009 benefitted from increased sales of components for road bikes, for which prices and margins are typically higher, and the introduction of a number of high-end mountain bike components. Additionally we increased prices on average of 2 to 3% during the year. In the OEM segment, net sales decreased $88.0 million, or 24.9%, to $265.6 million in 2009 from $353.6 million in 2008. During 2009, bicycle companies reduced bike production globally in anticipation of slower consumer demand for fully assembled bikes as a result of the recession, which in turn decreased demand for our components and resulted in this decline in net sales. Despite this overall decline in bicycle production, we increased specifications on new bike models, positioning us to take advantage of rebounding volumes after the recession. In the aftermarket segment, net sales increased $9.2 million, or 7.4%, to $134.0 million in 2009 from $124.8 million in 2008. This increase was a result of a shift in retail demand during the recession from new bike purchases to component replacements and upgrades purchased in the aftermarket.

Cost of sales decreased $71.3 million, or 22.9%, to $239.4 million in 2009 from $310.7 million in 2008. This decrease was primarily attributable to lower net sales and volume during the year, as described above. As production volume decreased during the year, we were able to reduce our labor and other manufacturing-related costs by reducing the size of our manufacturing labor force, bringing certain manufacturing processes in-house and ongoing efficiency gains. These efforts reduced our effective cost of sales per unit significantly, resulting in a decrease in cost of sales as a percentage of net sales to 59.9% in 2009 from 65.0% in 2008. Material costs as a percentage of net sales decreased to 45.9% in 2009 from 49.6% in 2008, largely as a result of our ability to bring more manufacturing processes in-house and our continued aftermarket growth. Labor costs as a percentage of net sales decreased to 4.9% in 2009 from 5.3% in 2008, which was a result of ongoing efficiency gains in our factories. Overhead costs as a percentage of net sales decreased to 9.1% in 2009 from 10.1% in 2008 as a result of the consolidation of our two facilities in China, which provided $3.0 million of savings, cost reduction efforts at our factories in response to lower sales volumes and $2.1 million of savings from reduced option compensation expense.

Gross profit decreased $7.5 million, or 4.5%, to $160.1 million in 2009 from $167.6 million in 2008. This decrease in gross profit was attributable to the lower volumes that led to the decrease in our net sales, as described above. Gross margin increased to 40.1% in 2009 from 35.0% in 2008. The increase in gross margin reflected increased net sales of our higher-margin aftermarket products, as well as the labor and other manufacturing-related cost reductions taken in response to decreased demand in our OEM segment resulting from the global recession.

General and administrative expense decreased $48.8 million, or 62.7%, to $29.0 million in 2009 from $77.8 million in 2008. This decrease was primarily a result of a reduction in share-based compensation expense of $50.1 million due to the expense recognized in 2008 of $51.3 million in connection with the 2008 recapitalization, partially offset by a litigation accrual of $3.0 million in 2009 related to a European patent case. In addition, as part of our cost-reduction efforts in 2009, we eliminated bonuses for certain senior employees and we reduced the bonus payout for all other employees, resulting in an expense reduction of $2.8 million. General and administrative expense as a percentage of net sales decreased to 7.3% in 2009 from 16.3% in 2008, which reflects the cost reductions discussed above.

Sales and marketing expense decreased $21.5 million, or 43.5%, to $27.9 million in 2009 from $49.5 million in 2008. This decrease was primarily a result of a reduction in share-based compensation expense of $16.8 million due to the expense of $17.8 million recognized in 2008 in connection with the 2008 recapitalization, a reduction

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents in marketing and advertising spending of $2.2 million, employee-related cost reduction efforts of $0.9 million (which includes the elimination of bonuses for certain senior employees and reduced bonuses for all other employees) and a reduction in travel costs of $0.8 million. Sales and marketing expense as a percentage of net sales decreased to 7.0% in 2009 from 10.3% in 2008, which reflects the cost reductions discussed above.

Product development expense decreased $18.7 million, or 40.2%, to $27.8 million in 2009 from $46.5 million in 2008. The decrease was a result of a reduction in share-based compensation expense of $15.8 million due to the expense of $17.2 million recognized in 2008 in connection with the 2008 recapitalization, cost reduction efforts aimed at streamlining the product development process, including reductions in product development employee costs from decreased bonus payments and reduced hiring in this area of $1.9 million, reductions in product development-related spending on travel of $0.5 million and reductions in outside consulting and prototype costs of $0.4 million. Product development expense as a percentage of net sales decreased to 7.0% in 2009 from 9.7% in 2008, which reflects the cost reductions discussed above.

Income (loss) from operations changed by $90.5 million to $75.4 million in 2009 from a loss of $15.2 million in 2008. The change was primarily a result of the cost reduction measures taken in 2009 in response to the global recession, combined with the fact that our 2008 loss from operations included optionholder compensation expense of $88.5 million and transaction costs of $9.0 million related to the 2008 recapitalization. Operating margin changed to 18.9% in 2009 from (3.2)% in 2008. This change was a result of the expense reductions discussed above, increased sales of higher-margin products in the aftermarket and increased sales of components for road bikes, for which prices and margins are typically higher than mountain or pavement bikes, and the successful introduction of a number of high-end higher-margin mountain bike components. Income from operations in the OEM segment decreased $7.1 million, or 10.3%, to $61.4 million in 2009 from $68.5 million in 2008. The decrease was primarily a result of a decrease in net sales. Despite the decline in OEM sales, operating margin in the OEM segment increased to 23.1% in 2009 from 19.4% in 2008. This increase resulted from increased sales of components for road bikes and the introduction of a number of high-end higher-margin mountain bike components, as discussed above. In addition, operating margins improved as a result of the cost reductions we made in response to the global recession, as discussed above. Income from operations in the aftermarket segment increased $7.2 million, or 21.2%, to $41.3 million in 2009 from $34.1 million in 2008. This increase was the result of increased sales of our aftermarket products resulting from the shift in retail demand during the recession from new bike purchases to component replacements discussed above. Operating margin in the aftermarket increased to 30.8% in 2009 from 27.3% in 2008, primarily as a result of our 2009 cost reduction efforts.

Interest expense, net increased $14.5 million, or 67%, to $36.2 million in 2009 from $21.7 million in 2008. The increase was a result of increased indebtedness and higher average interest rates on the credit facilities entered into in connection with the 2008 recapitalization, which were outstanding for only the last quarter of 2008 and consisted of a $240.0 million term loan accruing interest at a floating rate of approximately 8.0% and a $110.0 million subordinated note accruing interest at 13.0%. Prior to the 2008 recapitalization, we had a $40.0 million term facility accruing interest at 6.6% and a revolving facility with an average outstanding balance of $59.0 million accruing interest at a 5.0% average interest rate.

Foreign currency exchange gain (loss) changed by $7.3 million from a gain of $4.1 million in 2008 to a loss of $3.2 million in 2009, primarily due to non-cash currency movement on intercompany balances between various subsidiaries, with Euro- denominated balances of $5.9 million being the largest driver of the gain.

Income tax expense decreased $1.5 million, or 9.2%, to $14.4 million in 2009 from $15.8 million in 2008. The decrease was a result of lower foreign taxes paid due to lower taxable income for the year. Foreign pretax income decreased to $28.3 million in 2009 from $64.4 million in 2008. During this same period, our effective foreign tax rate decreased to 19.0% from 21.4% as income and activity shifted to lower tax jurisdictions in Asia.

Liquidity and capital resources Our primary uses of cash are to fund working capital, operating expenses, debt service and capital expenditures. Historically, our primary sources of liquidity have been cash flows from operations and the use of our credit facilities. We believe that the cash generated by operations and cash and cash equivalents, together with the borrowing availability under our new credit facilities, will be sufficient to meet our working capital needs for the foreseeable future, including investments made and expenses incurred in connection with our growth strategy.

Upon completion of this offering, we will have $ million outstanding under our new credit facilities, which will accrue interest at variable rates. Therefore, a substantial portion of our cash flows will be used to meet our interest obligations and will not be available for other purposes. Our ability to meet our debt service obligations under our new credit facilities and to reduce our total debt will depend on our future operating performance and on economic, financial, competitive and other factors, as well as future interest rates.

On or about the date of the closing of this offering, SRAM Holdings, LLC will make a $ million distribution to its pre- offering equity holders to cover the estimated federal and state income taxes payable with respect to their allocable shares of the estimated taxable income of SRAM Holdings, LLC from January 1, 2011 through the closing date of this offering. In addition, we expect to incur severance expenses in 2011 and 2012 related to the 2010 restructuring of our German operations. In the first quarter of 2011, we incurred $0.8 million of restructuring expenses, and we expect to incur $0.8 million in the second quarter of 2011 and $0.3 million in each of the third and fourth quarters of 2011 and the first and second quarters of 2012. For additional information regarding the impact of the refinancing and the reorganization on our financial condition, see Financial information and the refinancing and reorganization.

Sources and uses of cash

The following table presents the major components of net cash flows provided by and used in operating, investing and financing activities for the periods indicated. As of March 31, 2011, we had cash and cash equivalents of $15.4 million, compared to $19.4 million as of December 31, 2010, and $33.7 million as of December 31, 2009.

Three months Year ended December 31, ended March 31, (in thousands) 2008 2009 2010 2010 2011 Cash provided by (used in) Operating activities $19,136 $58,548 $88,691 $27,554 $28,423 Investing activities (10,328) (6,095 ) (17,378) (2,544 ) (3,637 ) Financing activities 6,871 (44,979) (88,353) (25,527) (29,000) Effect on exchange rates on cash 1,112 (885 ) 2,760 (76 ) 179 Net change in cash and cash equivalents $16,791 $6,589 $(14,280) $(593 ) $(4,035 )

Cash flows from operating activities

For the three months ended March 31, 2011, cash flows provided by operating activities totaled $28.4 million and consisted of $17.8 million of net income, non-cash items of $9.7 million plus $0.9 million for working capital activities, including sources of cash of $1.3 million from accounts receivable and $5.1 million from inventory, and a use of cash of $7.1 million from accounts payable, driven by increased net sales as compared to the same period in the prior year. Non-cash items for the three months ended included $4.0 million of depreciation and amortization, $3.6 million of incentive unit stock compensation expense resulting from an increase in SRAMs valuation and $0.9 million in amortization of deferred financing fees related to our prior credit facility.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents For the three months ended March 31, 2010, cash flows provided by operating activities totaled $27.6 million and consisted of $16.3 million of net income, non-cash items of $7.8 million plus $3.5 million for working capital activities, including sources of cash of $4.7 million from inventory and uses of cash of $1.0 million from accounts receivable and $4.8 million from accounts payable, driven by increased net sales as compared to the same period in the prior year. Non-cash items for the three months ended included $3.8 million of depreciation and amortization, $3.7 million of incentive unit stock compensation expense resulting from an increase in SRAMs valuation and $0.7 million in amortization of deferred financing fees related to our prior credit facilities.

In 2010, cash flows provided by operating activities totaled $88.7 million and consisted of $50.0 million of net income, non cash items of $35.5 million plus $3.2 million for working capital activities, including uses of cash of $17.4 million from accounts receivables and $5.2 million from inventory, and a source of cash of $15.0 million from accounts payable, driven by increased net sales as compared to the prior year. Non-cash items for 2010 included $15.5 million of depreciation and amortization, $12.4 million of incentive unit stock compensation expense resulting from an increase in SRAMs valuation and $7.8 million in amortization and write off of deferred financing fees related to our prior credit facilities, which we entered into in April 2010.

In 2009, cash flows provided by operating activities totaled $58.5 million and consisted of $21.5 million of net income, $23.2 million of non cash items plus $13.9 million of working capital activities, including sources of cash of $6.5 million from accounts receivable and $8.6 million from inventory, and a use of cash of $1.8 million from accounts payable, driven by decreased sales as compared to the prior year. Non-cash items included $15.2 million of depreciation and amortization, $3.7 million of incentive unit compensation expense, $2.9 million of amortization of deferred financing fees related to the 2008 recapitalization and $2.2 million of paid-in-kind interest on the mezzanine loan we entered into in connection with the 2008 recapitalization.

In 2008, cash flows provided by operating activities totaled $19.1 million and consisted of $(48.6) million of net loss, non cash items of $81.0 million less $13.2 million for working capital activities, including uses of cash of $1.7 million from accounts receivable and $4.6 million from inventory and a use of cash of $9.2 million from accounts payable, driven by increased net sales as compared to the prior year. Non-cash items included $15.8 million of depreciation and amortization, $61.6 million of stock option compensation expense related to accelerated vesting of stock options in connection with the 2008 recapitalization, $1.5 million in amortization and write off of deferred financing fees related to the 2008 recapitalization and $0.6 million of paid-in-kind interest related to the mezzanine loan.

Cash flows from investing activities

Net cash used in investing activities relates almost entirely to capital expenditures. The majority of our capital expenditures are used for machinery, equipment and tooling purchases for our production facilities in order to support our continued growth. For the three months ended March 31, 2011 and 2010, cash flows used in investing activities totaled $3.6 million and $2.5 million, respectively. In 2010, cash flows used in investing activities totaled $17.4 million, which included $6.1 million related to the construction of our new facility in Indianapolis. In 2009, net cash used in investing activities totaled $6.1 million. Our investment expenditures were lower in 2009 than either 2008 or 2010 as we curtailed capital expenditures in response to the global recession. The focus of capital spending in 2009 was on maintaining our existing machinery, equipment and tooling for new product introductions, as opposed to purchases of new equipment. In 2008, cash flows used in investing activities totaled $10.3 million. We expect our total capital expenditures for 2011 to be consistent with 2010, with a focus on machinery, equipment and tooling purchases to support the growth of our business.

Cash flows from financing activities

For the three months ended March 31, 2011 and 2010 cash flows used in financing activities totaled $29.0 million and $25.5 million, respectively, which was attributable to payments on our prior credit facilities.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents In 2010, cash flows used in financing activities totaled $88.4 million. During the year, we reduced the outstanding amounts under our term facilities and prior mezzanine loans by $75.4 million. We also incurred debt issuance costs of $6.0 million related to the refinancing of our credit facilities in 2010. Additionally, we made a distribution of $7.0 million to SRAM Holdings, LLC unitholders for the income tax liability attributable to their earnings. In 2009, cash flows used in financing activities totaled $45.0 million. During 2009, we reduced the debt outstanding under our credit facilities by $42.4 million. Additionally, we made a distribution of $2.6 million to SRAM Holdings, LLC unitholders for the income tax liability attributable to their earnings. In 2008, cash flows provided by financing activities totaled $6.9 million, which was primarily attributable to the 2008 recapitalization and included borrowings under a new credit facility of $338.3 million, borrowings and repayment of debt under prior credit facilities of $86.9 million and $196.2 million, respectively, the payment of a distribution of $240.9 million to SRAM-SP2, Inc. proceeds of $12.2 million in connection with exercised options and a capital contribution for SRAM Cycling Advocacy Fund, LLC of $10.0 million.

Our borrowings New credit facilities

Prior to this offering, SRAM, LLC entered into new credit facilities consisting of a first-lien term and revolving credit facility and a second-lien term facility. The proceeds from the new credit facilities were used to repay amounts outstanding under our prior credit facilities. For additional information regarding our new credit facilities, see Description of new credit facilities.

Prior credit facilities

Our prior credit facilities consisted of a $25.0 million revolving credit facility and a $290.0 million term loan facility, which would have matured on April 30, 2015. We refer to those credit facilities collectively as our prior credit facilities. The borrower under our prior credit facilities was SRAM, LLC. We entered into our prior credit facilities on April 30, 2010 to refinance the $172.1 outstanding under our then-existing credit facilities and the $113.3 million outstanding under a mezzanine credit facility, each of which we had entered into in connection with Trilantic and its co-investors 2008 equity investment in SRAM.

Revolving credit facility. In April 2010, SRAM, LLC entered into the revolving credit facility. The revolving credit facility included a $10.0 million letter of credit sub-facility and a swingline sub-facility of up to $10.0 million. Outstanding letters of credit were subject to a letter of credit fee equal to the Eurodollar margin on the revolver. The revolving credit facility was subject to an unused line fee of 0.50%. As of December 31, 2010 and March 31, 2011, we had no amounts drawn under the revolving credit facility and no outstanding letters of credit which would reduce the remaining undrawn portion of the revolving credit facility that is available for future borrowing.

Term loan. In April 2010, SRAM, LLC also entered into a $290.0 million term loan facility. The term loan facility was drawn in its entirety at the closing of the facility. As of March 31, 2011, we had $198.8 million outstanding under the term loan facility. Initially, the term loan amortized in quarterly installments of $0.7 million, which commenced on June 30, 2010, with a bullet payment due on the fifth anniversary of the closing date. As of March 31, 2011, no additional quarterly installments were required prior to maturity. In addition to the regularly scheduled amortization payments, an excess cash flow recapture equal to 50% is applied to the term loan for each year, with a step down to 0% based on leverage.

Collateral for prior credit facilities. Collateral for the prior credit facilities included equity interests in our domestic subsidiaries and first priority security interests in substantially all of the existing and after-acquired real and personal property of SRAM Holdings, LLC and each guarantor (including guarantors that are foreign subsidiaries). Collateral also included 100% of the equity interests in the foreign subsidiaries of SRAM Holdings, LLC.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Financial covenants. The financial covenants in our prior credit facilities include minimum fixed charge coverage and maximum total leverage ratios.

Contractual obligations and commitments As of December 31, 2010, our commitments and contractual obligations are as follows:

As of December 31, (in thousands) 2011 2012 2013 2014 2015 After 2015 Total Long term debt(1) GE Capital Corporation senior note $75,000 $80,000 $80,000 $ $ $ $235,000 Interest on long term debt 12,263 6,107 2,075 20,445 Operating leases(2) 4,195 3,641 3,378 2,703 2,381 3,071 19,369 Postretirement obligations 602 634 695 762 1,017 3,679 7,389 Germany restructuring(3) 3,077 1,296 296 4,669 Litigation(4) 308 308 Other long term obligations(5) 384 125 125 125 42 801 Total contractual obligations $95,829 $91,803 $86,569 $3,590 $3,440 $ 6,750 $287,981

(1) Amounts represent expected principal and interest payments consistent with historical principal payments on our prior credit facilities. The total principal amount of $235.0 million was contractually due in full in 2015. 2011 also includes $0.8 million of accrued interest payable at December 31, 2010 due in January 2011. On June 7, 2011, we entered into our new credit facilities and repaid all outstanding amounts due under our prior credit facilities. See The refinancing and reorganization.

(2) After 2015 amount represents certain operating lease obligations for our France, Germany, Ireland and Taiwan locations, converted at Euro rate of 0.7704 and New Taiwan Dollar rate of 30.479.

(3) Germany restructuring amounts represent payments associated with the transfer of manufacturing to Asia.

(4) Litigation amounts represent royalty payments and legal fees related to various legal proceedings. The royalty payments are the result of two settlement agreements entered into in connection with two patent infringement cases.

(5) 2011 other long term obligations represent a commitment fee of 0.50% on the unused portion of our prior revolving credit facility and commissions payable in January 2011. Other long term obligations from 2012 and onward represent only the unused fee owed on our prior revolving credit facility.

Off-balance sheet arrangements We have not created, and are not party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating our business. We do not have any off-balance sheet arrangements or relationships with entities that are not consolidated into our financial statements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, sales, expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical accounting policies The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Critical accounting policies are those that are the most important portrayal of our financial condition and results of operations, and require our most difficult, subjective and complex judgments as a result of the need to make estimates about the effect of matters that are inherently uncertain. In applying such policies, we must use some amounts that are based upon our informed judgments and best estimates. Estimates, by their nature, are based on

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents judgments and available information. The estimates that we make are based upon historical factors, current circumstances and the experience and judgment of management. We evaluate our assumptions and estimates on an ongoing basis.

Goodwill

We review goodwill for impairment at the end of each year, and on an interim basis whenever events or changes in circumstances indicate that the carrying value of our reporting units may not be recoverable. A reporting unit is an operating segment or one level below an operating segment for which discrete financial information is prepared and is regularly reviewed by management. We define our reporting units as OEM and aftermarket, which are equivalent to our operating and reportable segments. The trends that we specifically monitor for each of our reporting units are as follows:

Significant variances in financial performance (e.g. revenues, earnings and cash flows) in relation to expectations and historical performance;

Significant changes in end markets or other economic factors; and

Significant changes in customer relationships and competitive conditions.

The impairment test for goodwill is a two-step process. The first step is to compare the fair value of a reporting unit with its carrying amount. If the carrying value of a reporting unit exceeds its fair value, the second step is performed to measure the amount of the impairment loss, if any. In this second step, if the carrying value of the reporting units goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess, not to exceed the carrying amount of goodwill.

We determine the fair value of our reporting units by combining two valuation methods. A discounted future cash flow analysis (DCF) is used to determine our consolidated enterprise value and market multiples of comparable publicly-traded companies are used to substantiate the fair value of our reporting units. For the DCF method, we prepare annual projections of future cash flows over a period of six years (the discrete projection period), and apply a terminal value assumption to the final year within the discrete projection period to estimate the total value of the cash flows beyond the final year. Projections of future cash flows are based on the estimated net debt-free cash flows. These cash flows are then discounted to their present value as of the valuation date at an estimated cost of capital. The estimated cost of capital is derived by a weighted average cost of capital (WACC) using the capital asset pricing model (CAPM), based in part on guideline publicly-traded companies. The terminal value is estimated using the Gordon Growth model, which is based on the expected cash flows of the last year in the discrete projection period, the expected long-term growth rate, and the WACC.

In the market multiples method, fair value is determined by applying a multiple to EBITDA (earnings before interest, taxes, depreciation and amortization). The EBITDA multiple reflects the risk of cash flows generated by an entity. We use peer groups with similar risk profiles as well as the implied multiple from our DCF analysis to determine the appropriate multiple for our reporting units.

The determination of the reporting unit fair value includes numerous uncertainties, and a material change in assumptions utilized or in the conditions and circumstances influencing fair values could have a significant effect on our goodwill impairment assessment.

No impairment charges to goodwill were recorded during 2008, 2009, 2010 or the three months ended March 31, 2011, and the fair value of our reporting units was substantially in excess of the respective carrying values. While the WACC is only one of several important estimates used in the analysis, we determined that an increase of one percentage point in the WACC used for each respective reporting unit would not have resulted in an impairment indicator for our reporting units at the time of this analysis.

Product warranty costs

Reserves are recorded on the balance sheet to reflect our contractual liabilities relating to warranty commitments to customers. After the original purchase date, two years of warranty coverage is provided to customers for defects in materials and workmanship. An estimate for warranty expense is recorded at the time of sale within cost of sales based on historical warranty return rates and all repair costs to satisfy claims, including labor and materials. Product warranty liabilities are included within accrued expenses and other current liabilities on the consolidated balance sheets. A 10% change in historical warranty rates used to estimate the liability would have affected net income by $0.3 million, $0.3 million and $0.4 million, for the years ended December 31, 2008, 2009 and 2010, respectively.

Stock based compensation

In accordance with the accounting standards for share based payments, all share based payments, including grants of equity- classified incentive units and stock options, are required to be recognized in the consolidated statement of operations as an operating expense, based on their grant date fair values, over the requisite service period.

The liability-classified incentive awards are re-measured at fair value at each reporting date until settlement and the changes in fair value are also recorded in the consolidated statement of operations as an operating expense.

Incentive units

As of each grant date and period end, we performed valuations consistent with the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation (AICPA Practice Aid) to calculate the fair value of our incentive units.

Valuations as of December 31, 2008 and December 31, 2009

We used a Black-Scholes option pricing model to estimate the grant date fair value. Inputs include the fair value of the underlying assets distributable to award holders (based on our enterprise value and the terms of the awards), estimated price volatility, dividend yield and the risk-free interest rate. In determining our enterprise value, we used the DCF method. The expected volatility is based on the historical volatility of publicly-traded companies that are similar in size, industry, growth stage, or business model. The expected dividend yield represents the expected annual dividends to be paid to award holders over the term of the incentive units, and the risk-free interest rate is based on United States Treasury rates with remaining terms similar to the expected term of the incentive units. The 2008 and 2009 valuations utilized the following assumptions:

December 31, 2008 December 31, 2009* Expected volatility 39.6% 47.2% Expected dividend yield 0% 0% Expected term (in years) 6 5 Risk free interest rate 2.1% 2.0%

* There was no material difference between the valuation performed on December 1, 2009 and December 31, 2009

Valuations as of July 23, 2010, December 31, 2010 and March 31, 2011

As we assessed the prospects of an initial public offering, starting in mid-2010 we began using multiple valuation techniques. We established our enterprise value through an equal weighting between (a) the income approach in the form of the DCF method and (b) the market approach in the form of the guideline public company method. For the guideline public company method, we selected a group of publicly-traded companies that are similar in size, industry, growth stage, or business model. The valuation multiples considered for providing indicated values were the ratio of enterprise value to the last twelve months and estimated future EBITDA and the ratio of the market value of equity (MVE) to the last twelve months and estimated future net income. Both enterprise value and MVE of each guideline public company were calculated based on closing stock prices as of the respective valuation dates.

After establishing our enterprise value, we added back cash and cash equivalents and deducted outstanding debt to determine our total equity value. We then allocated the total equity value among the securities that comprise our capital structure using an average of the Black-Scholes method and the probability-weighted expected return method (PWERM), as described in the AICPA Practice Aid.

The Black-Scholes method utilized the following assumptions:

July 23, 2010 December 31, 2010 March 31, 2011 Expected volatility 35.0% 35.0% 35.0% Expected dividend yield 0% 0% 0% Expected term (in years) 1.0 0.5 0.25 Risk free interest rate 0.3% 0.2% 0.1%

We used the PWERM due to:

our improved financial results as demonstrated by strong sales growth and improving profitability;

our favorable growth prospects and expectations for continued improvement in profitability; and

the increasing prospects on an initial public offering or sale/merger.

The PWERM estimates value based upon an analysis of future values of the enterprise assuming various outcomes such as an IPO, merger or sale, dissolution or continued operation as a viable enterprise. Unit value is based upon the probability-weighted present value of expected future investment returns, considering each of the possible future outcomes available to the enterprise, as well as the rights of each unit class.

The PWERM utilized the following assumptions:

July 23, 2010 December 31, 2010 March 31, 2011 IPO scenario 75.0% 75.0% 75.0% M&A scenario 20.0% 20.0% 20.0% No value scenario 5.0% 5.0% 5.0%

Incentive unit fair value under the IPO scenario reflects the equity value by the estimated IPO price, allocated according to (a) the projected Class A liquidation preference at the assumed IPO date, (b) the distribution thresholds associated with the incentive units and (c) the participating distribution ratios of each class of equity. Incentive unit fair value under the M&A scenario reflects the equity value by the estimated sales price allocated in the same manner as the IPO scenario. Under the no value scenario, upon a liquidity event, our distributions would not exceed the specified distribution thresholds, therefore resulting in a $0 value for the incentive units.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The suggested values from the Black-Scholes method and PWERM reflect a fully marketable security that is not burdened by limited marketability; however, our incentive units represent economic interests in a privately held company without a ready market for its units. Therefore, we considered it necessary to incorporate a discount for lack of marketability to reflect the most likely time horizons until an incentive unitholder can achieve liquidity.

The fair value per unit for each of our grants is summarized in the following table:

Grant date Valuation date 12/31/ 12/1/ 12/31/ 7/23/ 12/31/ 3/31/ 2008 2009 2009 2010 2010 2011 12/31/2008 $21.03 N/A $29.04 N/A $104.73 $118.01 12/1/2009 N/A $29.04 29.04 N/A 104.73 118.01 7/23/2010 N/A N/A N/A $81.01 98.16 111.14

Comparison from December 31, 2008 to December 31, 2009

The primary factors that supported these estimates, and which contributed to an increase in the estimated value of the incentive units were:

higher than expected operating results primarily driven by stronger than anticipated profitability;

strong demand for our products in the aftermarket channel;

increased retention of cash; and

improved forecast profitability.

Comparison from December 31, 2009 to July 23, 2010

The primary factors that supported these estimates, and which contributed to an increase in the estimated value of the incentive units were:

continued strong demand for our products in the aftermarket channel and a return to pre-recession demand in the OEM channel;

improved financial results as demonstrated by strong sales growth and profitability;

decreased market risk and uncertainty associated with continuing improvement of economic trends; and

improvement in the capital markets which generally increased business valuations.

Comparison from July 23, 2010 to December 31, 2010

The primary factors that supported these estimates, and which contributed to an increase in the estimated value of the incentive units were:

continued improvement in our financial results;

our favorable growth prospects and expectations for continued improvement in profitability;

improved guideline public company valuations;

continued improvement in the capital markets which generally increased business valuations; and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents efforts undertaken to prepare for and expectations of an initial public offering.

Comparison from December 31, 2010 to March 31, 2011

The primary factors that supported these estimates, and which contributed to an increase in the estimated value of the incentive units were:

strong financial results for the first quarter 2011;

improved leverage levels from debt pay down;

macroeconomic trends favorable for continued growth;

continued efforts in the initial public offering process.

Stock options. We used a Black-Scholes option pricing model to estimate the grant date fair value of our stock options. The inputs we use in estimating the fair value include expected stock price volatility over the term of the awards, dividend yield and the risk-free interest rate. The expected term of stock options granted represents the period of time that stock options granted are expected to be outstanding. The expected volatility is based on the historical volatility of publicly-traded companies that are similar in size, industry, growth stage, or business model. The expected dividend yield represents the expected annual dividends to be paid to stockholders over the term of the stock options, and the risk-free interest rate is based on United States Treasury rates with remaining terms similar to the expected term of the stock options. There were no options granted in 2008, 2009, 2010 or the three months ended March 31, 2011.

Income taxes

For federal income taxation purposes, SRAM Holdings, LLC is taxed as a partnership. Consequently, income and losses flow directly through to the members of SRAM Holdings, LLC. Accordingly, no provision for U.S. federal income taxes has been reflected in the consolidated financial statements of SRAM Holdings, LLC.

Income taxes in foreign jurisdictions and certain U.S. state taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities in the financial statements and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established if it is more likely than not that a deferred tax asset will not be realized. In determining the appropriate valuation allowance, we consider projected realization of tax benefits based on expected levels of future taxable income, available tax planning strategies and the overall deferred tax position. As of December 31, 2010 and March 31, 2011, we believe that it is more likely than not that we will have future taxable income to utilize our deferred tax assets. Therefore, we have not provided a valuation allowance against any of our deferred tax assets.

The amount of income tax that we pay annually is dependent on various factors, including the timing of certain deductions and ongoing audits by foreign and state tax authorities, which may result in proposed adjustments. We perform reviews of our income tax positions on a quarterly basis and accrue for potential uncertain tax positions. Accruals for these uncertain tax positions are recorded based on an expectation as to the timing of when the matter will be resolved. As events change or resolution occurs, these accruals are adjusted, such as in the case of audit settlements with taxing authorities. We believe we have adequately provided for any reasonably foreseeable outcome related to these matters. Our future results may include favorable or

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents unfavorable adjustments to our estimated tax liabilities due to closure of income tax examinations, statute expirations, new regulatory or judicial pronouncements, changes in tax laws, changes in projected levels of taxable income, future tax planning strategies or other relevant events.

Fair value of financial instruments

The fair value guidance establishes a three-level valuation hierarchy for financial instruments. These valuation techniques are based upon the transparency of inputs (observable and unobservable) to the valuation of an asset or liability as of the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1Valuation is based on quoted prices for identical assets or liabilities in active markets;

Level 2Valuation is based on quoted prices for similar assets or liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for the full term of the financial instrument; and

Level 3Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

Our financial instruments consist primarily of cash and cash equivalents, trade receivables, trade payables, and long-term debt. Management considers the carrying values of cash and cash equivalents, trade receivables and trade payables to be representative of their respective fair values because of their short-term maturities or expected settlement dates. We measure the fair value of our long-term borrowings using a DCF technique that incorporates a market interest yield curve with adjustments for our projected payment schedule, duration, optionality and risk profile. In determining the market interest yield curve, the Company considered its corporate ratings from Moodys and S&P, as well as other companies with similarly rated debt securities.

Effects of inflation We do not believe that our sales or operating results have been materially impacted by inflation during the periods presented in our financial statements. There can be no assurance, however, that our sales or operating results will not be impacted by inflation in the future.

Quantitative and qualitative disclosures about market risk Market risk represents the risk of changes in the value of market risk sensitive instruments caused by fluctuations in interest rates and commodity prices. Changes in these factors could cause fluctuations in the results of our operations and cash flows. In the ordinary course of business, we are primarily exposed to interest rate risks and changes in foreign currency exchange rates.

Interest rate risk

Our new credit facilities bear, and our prior credit facilities bore, interest at a variable rate tied to LIBOR or prime rate, at our option, and, therefore, our results of operations and our cash flows will be exposed to changes in interest rates. A one percentage point change in the interest rates applicable to our credit facilities during the year ended December 31, 2010 (for the respective periods for which they were effective) would have caused an increase to interest expense of approximately $2.6 million. As of December 31, 2010, we had one interest rate swap agreement for $75.0 million, effectively converting that portion of debt from variable rate to fixed rate. The swap agreement expires in October 2011. In the future, in an effort to mitigate losses associated with these risks, we may at times enter into additional derivative financial instruments.

Foreign currency risk

For the year ended December 31, 2010, we generated approximately 59% of our net sales in U.S. Dollars, 32% of our net sales in New Taiwan Dollars, 8% of our net sales in Euros and 1% of our net sales in RMB. The reporting currency for our consolidated financial statements is U.S. Dollars. Our results of operations could be adversely impacted by changes in exchange rates. For example, if we recognize international sales in local foreign currencies, as the U.S. Dollar strengthens it would have a negative impact on our international results upon translation of those results into U.S. Dollars upon consolidation. To an extent, there is a natural hedge against foreign currency changes due to the fact that, while certain receipts for international sales may be denominated in a foreign currency, certain production and distribution expenses are also denominated in foreign currencies, mitigating fluctuations to some extent depending on their relative magnitude. As a result, fluctuations of 10% in foreign currency rates would not have a material impact on our results of operations. We historically have not engaged in foreign currency hedging activities and do not intend to do so in the foreseeable future. However, in the future, in an effort to mitigate losses associated with these risks, we may at times enter into derivative financial instruments.

Internal controls over financial reporting As a public company, we will be required to comply with the standards adopted by the Public Company Accounting Oversight Board in compliance with the requirements of Section 404 of Sarbanes-Oxley regarding internal control over financial reporting. Prior to becoming a public company, we are not required to be compliant with the requirements of Section 404.

In preparation for this offering and for future compliance with Section 404, we and our independent auditors identified material weaknesses in our internal controls over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented, or detected and corrected on a timely basis. The material weaknesses were attributed to us not maintaining sufficient: external reporting, technical accounting and tax functions; financial reporting and closing processes with respect to complex transactions; and written policies and procedures, in each case to meet our needs as a public company. We have begun implementing measures and plan to take additional steps to remediate the underlying causes of our material weakness.

We are currently implementing a remediation plan to improve the effectiveness of our internal controls over financial reporting. The plan includes:

Financial Reporting Function

Implementing our recruiting plan to attract additional accounting and finance personnel.

Engaging outside consultants to assist our accounting and finance team until such time as we are able to retain permanent personnel.

Evaluating of skill sets and experience levels of existing financial reporting staff relative to those needed as a public company.

Controls Documentation/Testing Process

Reviewing and evaluating current documentation of internal controls.

Evaluating and documenting overall entity control environment.

Determining and documenting key controls in each functional area of our operations.

Developing and implementing a testing plan.

Implementing additional financial reporting system modules, which will help us assess and monitor segregation of duties.

If the steps we take do not remediate these material weaknesses in a timely manner, we will not be able to conclude that we have and maintain effective internal control over financial reporting. In addition, if we have material weaknesses, our independent registered accounting firm may not be able to issue an unqualified report on the effectiveness of our internal control over financial reporting.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Business Overview We are a leading global designer, manufacturer and marketer of premium bicycle components. We believe consumers recognize our brands for innovative product design. Our products include drivetrain systems, suspension, brakes, internal gear hubs and wheelsets, all of which are essential components used on road bikes, mountain bikes or pavement bikes. Many of the worlds elite cyclists use our components. We believe the success of elite cyclists using our products at the highest levels of competition, including the Tour de France and the Ironman Triathlon, creates aspirational demand for our components and drives demand from a broad consumer base of cyclists across all skill levels.

In 1987, our founders, including our CEO, Stanley R. Day, Jr., started SRAM to manufacture and market Grip Shift, a revolutionary product for shifting gears on bikes. After becoming a market leader in shifters in 1995, we began our transformation from a single product company to a full-line component supplier. We have grown through internal product development and a series of strategic acquisitions, including the acquisition of the bicycle division of Mannesman Sachs AG (1997), RockShox, Inc. (2002), the bicycle business of Avid, LLC (2004), Truvativ International Co., Ltd. (2004) and Compositech, Inc. (Zipp) (2007). We employ over 280 individuals in product development and for our 2011 (to-date), 2010 and 2009 model years, we have introduced 49, 30 and 25 new products, respectively. These new products build upon our portfolio of more than 550 existing patents. We believe we have the broadest product portfolio of any company in the industry.

We are the second largest supplier of bicycle components in the world, measured in 2010 net sales, based on publicly-filed information for some of our competitors and management estimates. We focus primarily on the independent bicycle retailer market, which sells mid to high-end bikes, ranging in price from $300 to over $10,000, in the United States, Europe and other developed markets. Due to our global production footprint, 86.4% of our 2010 net sales were invoiced outside the United States, with 40.2% in Ireland and 33.8% in Taiwan. We believe however, that most of our products end up on bicycles or in retailers in the independent bicycle retailer market throughout the developed markets. Our portfolio of premium bike brands includes SRAM, RockShox, Zipp, Avid and Truvativ. Our brands are prominently displayed on our products. Our products are used on all of the major premium brands, including Trek, Specialized, Cannondale, Giant, Raleigh and Schwinn produced by bicycle companies. SRAM products have been used by the last two Tour de France winners, the 2010 Ironman World Championship winner, the winners of all six 2010 World Cup mountain bike races and the winners of the 2011 editions of Paris-Roubaix, the Tour of Flanders and Giro dItalia.

We employ approximately 2,200 people. To meet the global needs of our customers, we maintain a presence in fifteen locations in nine countries for design, sourcing, manufacturing and distribution. Our principal executive offices are located in Chicago, Illinois.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents We believe our premium brands, technological innovation and product development have been key drivers of our strong financial performance. We grew our net sales from $283.8 million in 2006 to $524.2 million in 2010, representing a compound annual growth rate, or CAGR, of 16.6%. Our net sales for 2006, 2007, 2008, 2009 and 2010 were $283.8 million, $356.0 million, $478.4 million, $399.6 million and $524.2 million, respectively. Our net income (loss) for the same periods was $11.6 million, $18.0 million, ($48.6 million), $21.5 million and $50.0 million, respectively, representing a CAGR of 44.1%.

Market overview and opportunity Bicycle industry overview

The National Bicycle Dealers Association estimates annual worldwide bike production in 2010 to be 130 million units, of which approximately 53 million were sold in developed markets, as reported in the U.S. Bicycle Market 2010 report. Developed markets include Australia, Europe, Japan, New Zealand and North America. There are two primary retail channels for the sale of bikes in developed markets: the independent bicycle retailer market (primarily independent bicycle retailers and to a lesser extent sporting good chains) and mass market retailers (e.g., Wal-Mart and Target). We estimate that in 2010 there were 18 million new bikes sold in the independent bicycle retailer market, representing $9.2 billion in retail sales, with an average retail price of approximately $500 per bike. Of these 18 million new bikes sold, we believe approximately 90% were sold in the United States, Europe and Japan.

There are three primary types of bikes:

Road bikesLightweight, performance oriented bikes, such as those used in the Tour de France.

Mountain bikesPerformance oriented bikes designed to ride off the road.

Pavement bikesBikes used for everyday recreation and commuting.

Independent bicycle retailer market

In developed markets, most mid to high-end bikes (i.e. bikes selling from $300 to over $10,000) are sold in the independent bicycle retailer market, and we estimate represent approximately 79% of the 2010 new bike retail sales in this market. This market also accounts for the vast majority of aftermarket bicycle component sales and almost all after-sale bicycle services. We believe the consumer in this market is generally the cycling enthusiast. We define the cycling enthusiast as a consumer who seeks higher performance, premium branded bikes and components and after-sale services that are not provided in the mass market, and who we believe to be less price-sensitive than the average consumer. Accordingly, we believe the independent bicycle retailer market is the highest margin segment of the market.

Bicycle industry supply chain

The supply chain for mid to high-end bikes sold in the independent bicycle retailer market consists of the participants illustrated below:

Component suppliers are the designers and manufacturers of branded bicycle components (e.g., SRAM and Shimano Inc.). In the OEM channel, component suppliers market their products directly to bicycle companies, who determine the component specifications on new bikes. After receiving these specifications, an OEM bicycle factory assembling a new bike will purchase components directly from a component supplier. In the aftermarket channel, component suppliers generally market components to distributors, who in turn sell to independent bicycle retailers for resale in the aftermarket.

OEM bicycle factories are the factories that manufacture bike frames and assemble bikes (e.g., Giant Bicycle Inc. and Merida Industry Co., Ltd.) in accordance with the specifications of individual bicycle companies and their brands.

Bicycle companies are the companies that engage in the design, specification, branding, marketing and distribution of bikes (e.g., Trek Bicycle Corporation, Specialized Bicycle Components, Giant Bicycle Inc. and Cannondale Bicycle Corporation). Individual bicycle companies may have several brands (e.g., Trek Bicycle Corporation sells bikes under the Trek and Gary Fisher brands). Bicycle companies are responsible for selecting and specifying the components that go onto each new bike model.

Distributors are logistics companies (e.g., Quality Bicycle Products (QBP), Security Bicycle Accessories (SBA) and Fisher Outdoor Leisure) that connect suppliers and independent bicycle retailers by carrying a large variety of bicycle components, accessories and apparel.

Independent bicycle retailers are specialty retail stores (also referred to as dealers or retailers) that sell new fully-assembled bikes, components, accessories and apparel and provide services to consumers.

Bike design and manufacturing process overview

Bicycle companies continuously strive to create new models with improved frame designs and specifications made of increasingly technologically advanced materials. Cycling enthusiasts evaluate bikes in terms of both the bike frame brand and the branded components on the bike. As a result, bicycle companies focus on

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents assembling bikes with components that will be most appealing to consumers. During the bike design process, the bike brand product managers at bicycle companies work with several component suppliers to decide which branded components to specify as standard equipment on a new model. This process includes presentations, test rides and negotiations. Following the completion of the design and specification process, bike brand product managers provide their design and component specifications to OEM bicycle factories. OEM bicycle factories manufacture the bike frame, purchase the specified components from component suppliers and assemble the bikes, which are ultimately distributed to independent bicycle retailers for sale to the end user.

Bicycle component market

We believe branded bicycle components are key to the performance of mid to high-end bikes and strongly influence the buying decisions of cycling enthusiasts. New product introductions and technological innovations in the components space, such as fully adjustable hydraulic braking and suspension systems, help increase rider performance and make cycling more enjoyable. Industry publications, grass roots marketing efforts and sponsorships highlight branded bicycle component performance, which serves to build demand among cycling enthusiasts. On average, we estimate that the aggregate manufacturers sales price of bicycle components in the OEM channel represents 21% to 26% of the overall retail price of a new bike.

We estimate the size of the independent bicycle retailer market (independent bicycle retailers and sporting goods chains) for bicycle components to be approximately $3.5 billion, as measured in component suppliers sales. The following chart displays an overview of the independent bicycle retailer market for bicycle components, based on management estimates:

OEM and aftermarket channels

Bicycle component suppliers sell their products through two major channels: the OEM channel and the aftermarket channel.

OEM channel represents the sale of components to OEM bicycle factories for assembly on new bikes. The decision maker for the components specified on each model is the bike brand product manager at the bicycle company, who is typically an accomplished cyclist and experienced in the dynamics of the industry.

Aftermarket channel represents the sale of components, accessories and apparel to consumers primarily through independent bicycle retailers via distributors and, to a lesser extent, directly through independent

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents bicycle retailers. We believe the most influential person to the consumers purchasing decision for this channel is the salesperson at the independent bicycle retailer. Aftermarket sales primarily include upgrades, replacements, components for custom bike builds and accessories.

Outlook

We expect the bicycle component market to continue to grow due to a variety of factors that we believe will impact the cycling industry, including:

continuing growth in the number of cycling enthusiasts;

increasing average retail selling prices driven by better-performing product designs and technologies;

growing participation in road racing, mountain bike racing, organized weekend rides and charity cycling events, as well as cycling related sports, such as triathlons and cyclo-cross;

improving cycling infrastructure, such as cycling lanes in urban areas;

increasing consumer focus on healthier lifestyle trends;

growing focus on the environment; and

increasing adoption of mid to high-end bikes in emerging markets.

However, if the popularity of cycling or the number of cycling enthusiasts does not increase, or declines, the bicycle component market may not continue to grow and we may fail to achieve future growth. See Risk FactorsRisks related to our businessA reduction or lack of continued growth in the popularity of cycling or the number of cycling enthusiasts could adversely affect our product sales and profits. In addition, we may be unable to capitalize on these trends due to a number of factors, including our substantial leverage. See Risk FactorsRisks related to our businesswe may not be able to sustain as past growth or successfully implement our growth strategy, which may have a negative effect on our business, financial condition or results of operations.

Our strengths We believe our success is attributable to the following factors:

Premium brand portfolio. We have five premium brands under the SRAM umbrella: SRAM, RockShox, Zipp, Avid and Truvativ. Our brands are prominently displayed on all of our products, and we believe our brands are associated with innovation and performance by our customers, consumers and elite athletes.

SRAM is a leading brand in drivetrains and internal gear hubs with strong recognition among cycling enthusiasts for design and engineering.

RockShox introduced the first front suspension system for mountain bikes in 1989 and has become one of the most widely recognized brands in the components industry for its high-performance products.

Zipp is a high-end, race-proven brand name in carbon wheelsets. Its wheelsets are among the lightest, fastest and most aerodynamic in the industry.

Avid is recognized for innovative brake systems, offering leading hydraulic and mechanical braking technology.

Truvativ is a premium brand of high-performing cranksets, bottom brackets, handlebars, stems, seatposts and other accessories.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Our brands are a leading choice in performance products for the cycling industry. We sponsor professional cyclists and teams to build a race-proven image for our products. Our sponsored cyclists have appeared on the podiums at the Tour de France, Giro dItalia and Vuelta a Espana, all major mountain biking world championships and the Ironman World Championship. This success has helped us increase our brand recognition at all skill levels of cyclists.

Cycling enthusiasts typically have strong preferences for both bike and component brands. We believe branded components, such as drivetrains, suspension, wheelsets and brakes, influence consumers buying decisions. We employ a multi-branded portfolio approach to marketing our products, which provides us the flexibility to respond to varying consumer preferences and to leverage the component specific technological strengths of each of our brands. Our multiple brand and product approach differentiates us from most other component suppliers who focus primarily on either a single brand or a single component category.

Innovation and product development. Our ability to develop innovative products has been a key driver of our success and growth as a company. We generated over 50% of our 2010 model year (July 1 through June 30) net sales from products that were less than three years old. Our products, while appearing simple, require a significant breadth and depth of technical knowledge to be designed successfully. For example, a typical suspension design might have over 50 components packaged into five cubic inches and require knowledge of structural mechanics, fluid dynamics and heat transfer, as well as other engineering disciplines. We currently have more than 280 employees dedicated to product development. Our product development teams are knowledgeable in a wide variety of engineering disciplines and have developed, through cumulative experience, the engineering expertise required to successfully design high performance bicycle components. Our product development teams are strategically located in the United States and Western Europe, which are the two largest markets for mid to high-end bikes. Our presence in these markets enables our product development teams to more effectively interpret and integrate market trends in our product design. We also have an intellectual property portfolio of over 550 patents. Recent examples of products developed by our teams that have enjoyed industry-wide success include: SRAM Red road drivetrain systems, RockShox SID front suspension, Zipp 404 wheelsets and Avid Elixir brakes. We continue to launch numerous new products each year. For example, for our 2011 (to-date), 2010 and, 2009 model years, we launched 49, 30 and 25 new products, respectively.

Leader in independent bicycle retailer market. We sell our products as original equipment specifications on new mid to high- end bikes and in the aftermarket primarily to cycling enthusiasts via independent bicycle retailers. Performance and technology are the primary drivers of purchases by cycling enthusiasts, and these consumers are likely to purchase new bikes or replace bicycle components with greater frequency than other consumers. As a result, we believe the independent bicycle retailer market is the highest margin segment of the bicycle component market. We believe, based on publicly-filed information for some of our competitors and management estimates, that we have an estimated 15% share of the approximately $3.5 billion of annual sales in the independent bicycle retailer market for bicycle components, as measured in 2010 component suppliers sales, including an estimated 32% share of suspension products and an estimated 23% share of brakes. We estimate that our primary competitor has approximately 47% of the independent bicycle retailer market. We believe a number of trends will continue to drive growth in the independent bicycle retailer market, including cyclings increasing popularity, movement toward healthier lifestyles, concern for the environment, increased spending on cycling infrastructure and increasing price points for new technologies.

Differentiated business model. Over the past 24 years, we have developed global design, production and distribution capabilities and established longstanding customer relationships that we believe are difficult to replicate. The bicycle component market is dependent on product innovation, which requires scale and ability to spread development costs across multiple customers. In the OEM channel, we work with each major bicycle company and are the only supplier offering a full-line of mid to high-end drivetrain, brakes, suspension

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents components and wheelsets. We believe our in-house product development expertise and collaboration with these customers differentiates us from our competitors. Additionally, our strategically located manufacturing facilities provide advantages, such as flexible operations planning and the ability to offer just in time manufacturing from our largest factories in Asia. In the fragmented aftermarket channel, we have an established presence, with relationships with key distributors and numerous independent bicycle retailers. We also offer leading customer service and warranty support to independent bicycle retailers.

Committed management team with deep-rooted corporate culture. Stanley R. Day Jr., one of our founders and our Chief Executive Officer, and our core senior management team have an average tenure with SRAM of approximately 18 years. Since founding SRAM, Mr. Day has recruited a talented team comprised of cycling enthusiasts and established a culture fostering innovation and creativity. Managements extensive knowledge of the industry and their ability to identify opportunities for profitable growth through both internal product development and strategic acquisitions has transformed SRAM from a single product company in 1987 to a full-line bicycle component supplier with approximately 2,200 employees in nine countries around the world.

Our strategy We intend to continue to increase our sales and profitability by strengthening our position in the bicycle component market. Key elements of our growth strategy are:

Extend our technological and product leadership. We intend to continue to develop and market products that incorporate innovative design, advanced features and improved performance that differentiate us in the bicycle component market. These efforts will include enhancing existing products and developing next generation technologies in order to maintain our position as an industry leader. We also intend to develop new product offerings that leverage our existing product platforms. For example, we currently produce wheels for road and pavement bikes, and plan to utilize our existing platform to introduce wheels for mountain bikes in 2012.

Continue to increase our share of components on new bikes. Although we have relationships with almost all bicycle companies in the OEM channel, we believe there is significant opportunity to increase our share of components on new bikes. We believe we are favorably positioned given the strength of our brands, the diversity of our product portfolio, and our innovation pipeline. We focus on the following key decision-makers who influence component specifications for new bikes:

Bike brand product managers. We work closely with the bike brand product managers of leading bicycle companies through collaborative product development, a dedicated sales force, and events such as ride camps and trade shows.

Independent bicycle retailers. The leading bicycle companies rely on key retailers to provide them market feedback and advice on the components to specify on their bikes. We engage these key retailers through frequent visits to review products, answer their questions, educate them and address their concerns. By turning these retailers into advocates for our products, we believe we can increase our share of components on new bikes.

Cycling industry media. We believe the cycling industry is led by enthusiasts with a passion for high performance products, who rely on a wide variety of cycling media for facts and opinions about the products. We have an experienced public relations team which maintains relationships with cycling media editors. Our objective is to reinforce our position in the market through independent sources and enhance the perception of our brand.

Alpha enthusiasts. We target amateur racers, triathletes and local independent bicycle retailers who are the opinion leaders in their communities through a range of activities including race and athlete sponsorship, grass root event support and advertising.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Increase aftermarket penetration. We intend to increase our sales of aftermarket components by strengthening our relationships with independent bicycle retailers and increasing brand awareness at the consumer level. In February 2011, we established a dedicated aftermarket function led by a 15 year veteran of SRAM to focus solely on the aftermarket channel across all product areas. We will continue to invest in our retailer relationships by educating retailers about our full-line of aftermarket products, through our various dealer excitement programs, and by continuing to provide leading customer service and warranty support. This ongoing effort will help these retailers communicate the benefits of our products to end consumers. At the consumer level, we will continue our marketing efforts aimed at increasing our brand recognition among cycling enthusiasts, which creates additional demand for our aftermarket products. We also intend to expand product development efforts to enhance our aftermarket product offerings, such as increasing differentiation of our aftermarket channel components from our OEM channel components and, where appropriate, expanding into product areas adjacent to our current product lines.

Grow the industry while strengthening our leadership profile. We are focused on a number of initiatives aimed at growing our industry and reinforcing our leadership position within it, including:

Continued innovation. We believe that our future technological advancements can serve to expand our industry by spurring additional demand among cycling enthusiasts and creating new cyclists. New and better products give cyclists a reason to invest more in their sport.

Strengthen independent retailer network. Independent retailers interact directly with end consumers and have a strong influence on the choices of consumers seeking advice and guidance on new bike and aftermarket component purchases. Within their communities, retailers play a vital role in promoting cycling and attracting new enthusiasts. As a result, retailers have the ability to impact the size and improve the health of our industry. We intend to continue to work with independent retailers to facilitate this process through our various dealer excitement and mobile marketing programs and by offering various educational services such as SRAM Technical University, online training and SRAM facility visits.

Promote cycling advocacy. In 2008, we founded SRAM Cycling Advocacy Fund, LLC, a fund dedicated to supporting global advocacy efforts that enhance cycling infrastructure and safety. Through SRAM Cycling Advocacy Fund, LLC, we have been actively involved in, and have contributed to, advocacy groups that promote the use of bikes for environmental, health, recreational and transportation reasons. We believe these programs build a better environment for cycling and will help grow the overall industry and increase our market opportunity. For example, we believe the greatest barrier to increased bike usage in the United States is the lack of cycling infrastructure in major cities. We have been actively involved in the promotion of improved cycling infrastructure in the United States, which we believe will result in an expansion of the United States bike market.

The reorganization For a detailed description of the refinancing and the reorganization, see The refinancing and reorganization.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents (Zipp) (2007). One of our founders, Stanley R. Day, Jr., is our President, Chief Executive Officer and Chairman of the Board. On September 30, 2008, we completed a recapitalization transaction in which Trilantic and its co-investors purchased a $234.8 million equity interest in SRAM.

Our products We produce a number of different types of components for road bikes, mountain bikes and pavement bikes, including drivetrain systems, suspension, brakes, internal gear hubs and wheelsets. The diagram below provides an overview of where our products appear on bikes.

We sell all of our major components in both the OEM and aftermarket channels. In 2010, the road, mountain and pavement product lines represented 26%, 62% and 12% of our net sales, respectively; in 2009, the road, mountain and pavement product lines represented 21%, 64% and 14% of our net sales, respectively; and in 2008, the road, mountain and pavement product lines represented 18%, 62% and 20% of our net sales, respectively. Price points depend on the component and can vary significantly between product line and technology. For example, wheelsets for road bikes can range from $750 (MSRP) for a pair of SRAM S30 Aluminum Clinchers to $2,950 (MSRP) for a pair of Zipp 808 Clinchers, while a SRAM derailleur on a road bike can range between $72 (MSRP) for a SRAM Apex Rear Derailleur to $320 (MSRP) for SRAM Red Rear Derailleur. The various types of components we produce for our three product lines are described below.

Drivetrain systems. Our drivetrain systems for mountain and pavement bikes include front and rear derailleurs, shifters, cassettes, chains, cranksets and bottom brackets. Our drivetrain products are marketed under the SRAM and Truvativ brands.

Derailleurs. We offer a full range of front and rear derailleurs for use on mountain bikes and pavement bikes under the SRAM brand. We believe our SRAM XX derailleur, with its precise shifting technology and light weight, is one of the leading mountain bike derailleurs in the market.

Shifters. We offer a full-line of both trigger and twist shifters for mountain bikes and pavement bikes under the SRAM brand. Our ZeroLoss SRAM XO trigger is the first trigger shifter to offer a fully adjustable pull lever and clamp position.

Cassettes/chains/cranksets/bottom brackets. We offer cassettes and chains under the SRAM brand and we offer cranksets and bottom brackets under the SRAM and Truvativ brands.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Suspension. Our suspension products include front and rear suspension and are marketed under the RockShox brand. We design the majority of our suspension products for mountain bikes given the off-road use of such bikes. We expanded into the suspension market with our acquisition of RockShox in 2002. Our suspension products utilize technology aimed at decreasing weight and increasing rigidity while providing shock absorption on rough terrain.

Brakes. Our brake products include hydraulic disc, mechanical disc and mechanical rim brakes, as well as brake levers and accessories. Our brake products are primarily used on mountain bikes and performance-oriented pavement bikes. We entered the performance brake market with our acquisition of Avid in 2004 and continue to market our brake products under the Avid brand. We have been able to differentiate our product offering and increase sales of our brake products through the use of advanced materials, such as carbon fiber and titanium, which yield increased performance and decreased weight, as well as technological advancements in aesthetic and physical design.

Internal gear. Our internal gear products are used on pavement bikes and are marketed under the SRAM brand. We initially entered the internal gear hub market in 1997 with the acquisition of the bicycle components division of Mannesmann Sachs. Popular in Europe, internal gear hubs are an alternative to the derailleur technology found on most bikes sold in the United States. We believe our i-Motion 3 and Automatix internal gear hubs represent the current technology in internal gear hubs. Additional products related to internal gear hubs include shifters, brakes and dynamos.

Wheelsets. Our wheelsets are used in road and pavement bikes, and we plan to introduce wheelsets for mountain bikes in 2012. We entered the wheelset market in 2007 through our acquisition of Compositech, Inc. (Zipp). We now market our high-end wheelsets under the Zipp brand, which are sold primarily through the aftermarket channel. Since acquiring Zipp in 2007, we have leveraged the acquired expertise in wheelset design and development to introduce SRAM branded wheelsets in both the OEM and aftermarket channels.

Road products. Developed internally and originally introduced in 2006, our road products include drivetrain systems and brake components for racing-style bikes. Our road products have lightweight, efficient designs and utilize advanced materials. The highlight of our road products is the innovative DoubleTap shifting technology. DoubleTaps single-lever design handles up-shifts and downshifts in one short, sweeping motion, providing superior engagement to traditional two-lever shifting systems. We market our road products under the SRAM, Truvativ and Zipp brands. Our SRAM road products include the SRAM Red road system, which is one of the leading premium products in the market and is used by a number of top professional cycling teams.

Product development Our products, while appearing simple, require a significant breadth and depth of technical knowledge to be designed successfully. This technical complexity requires that we hire and train engineers who are competent in a wide variety of engineering disciplines. As of December 31, 2010, we had over 280 employees around the world dedicated to product development. Our product development teams work in seven different locations in three countries with design, testing and communication tools. Our product development teams interact with bike brand product managers throughout the product development process. Our engineers come from a variety of cultures and many are avid cyclists. We believe the size and geographic and cultural diversity of our product development teams differentiates us from our competitors. We currently have approximately 70 ongoing product development projects, which we believe exceeds those of most of our competitors. For our 2011 model year, our product development projects led to the launch of 49 new products (to date) and 30 and 25 new products in the 2010 and 2009 model years, respectively. In the last three years, our product development expenses were $37.2 million in 2010, $27.8 million in 2009 and $46.5 million in 2008. We believe the cumulative knowledge and development

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents expertise built through years of our product development investment gives us an edge over our competitors. Despite the recent economic downturn, we continued to invest in product development consistent with historical levels, and we continue to emphasize product development as a key aspect of our strategy.

Distribution, marketing and sales In the OEM channel, we believe purchasing decisions by bike brand product managers at bicycle companies are influenced by their personal evaluation of component performance, independent bicycle retailer feedback, magazine and web editorial, competing products and price. Our sales force in the OEM channel includes 22 account managers located around the world who interact directly with these bike brand product managers through product consultations, customer ride camps, trade shows, custom products and other direct marketing efforts. We believe this is an important differentiating factor as we believe the bike brand product managers who make product specification decisions respect a sales representative who can test-ride a prospective product with them under demanding and competitive conditions. This is especially important with respect to high-end products where performance is key. Our product development employees also participate in this process.

In the aftermarket channel, our marketing strategy focuses on the independent bicycle retailers who sell our aftermarket products and drive demand at the distributor level. The independent bicycle retailers promote products based on product attributes, brand excitement, availability, retailer or peer recommendations and magazine and web editorials. We have over 30 independent field sales representatives who interact with U.S. independent bicycle retailers. These representatives market the entire range of our products and provide a direct interface with the independent bicycle retailers. We also have various dealer excitement programs and other training programs, such as SRAM Technical University, aimed at educating, engaging and inspiring retailers. In addition, we maintain relationships with key distributors around the world who distribute our products to retailers.

Beyond the product managers at bicycle companies and retailers, we market directly to alpha enthusiasts, including amateur racers and triathletes. Alpha enthusiasts conduct their own research prior to going to the independent bicycle retailers and typically purchase the highest performance components. As opinion leaders in their cycling communities, alpha enthusiasts also influence the purchasing decisions of others. We reach the alpha enthusiast through media editorial support, race team and individual cyclist sponsorships, participation at cycling events and the endorsement of the leading bicycle retailers. We currently sponsor over 15 professional teams and over 40 individuals in competitive cycling, which creates an affiliation with grass roots, expert and professional cyclists.

Intellectual property Intellectual property is an important aspect of our business. We have been issued over 550 patents and have obtained an average of over 50 new patents per year since 2002. Our principal intellectual property also includes our trademarks. We have over 350 registered trademarks, including U.S. and international protection for our five core brands: SRAM, RockShox, Zipp, Avid and Truvativ. Our practice is to seek protection for our intellectual property as appropriate, including by means of patent, trademark and trade secret protection. Although our intellectual property is important to our business operations and in the aggregate constitutes a valuable asset, we do not believe that any single patent, trademark or trade secret is critical to the success of our business as a whole.

Raw materials and suppliers Our primary raw materials are steel, aluminum, carbon fiber and plastic. We dual or multi source the majority of our raw materials and we leverage our dual or multi source relationships to help manage these raw material costs. We may experience temporary shortages of certain materials due to weather, natural disasters or other factors, including disruptions in supply caused by material transportation, labor disputes or production delays. Such shortages have not previously had, and are not expected in the future to have, a material adverse effect on our operations.

Our community commitment We are also focused on social responsibility and are actively involved in several bike-related organizations. We believe our efforts in this area strengthen consumers views of our brands. In 2008, we established SRAM Cycling Advocacy Fund, LLC, which we capitalized with $10 million. This fund has supported advocacy in the United States, Europe and Asia on issues affecting cycling infrastructure and the bicycle industry. Leading industry associations, such as Bikes Belong, have received support from the fund for industry-related programs. Since inception, approximately $3.0 million has been distributed to not-for-profit organizations from this fund. Prior to and in connection with this offering, we intend to liquidate SRAM Cycling Advocacy Fund, LLC and donate its assets to a newly-formed non-profit entity, SRAM Cycling Foundation, NFP. While we intend to continue to support non- charitable advocacy organizations that have received grants from the fund, SRAM Cycling Foundation, NFP will be dedicated to making grants exclusively to charitable organizations that promote safe cycling and the public health and environmental benefits of cycling.

Competition We operate in highly competitive markets. Based on publicly-filed information for some of our competitors and management estimates, we are the second largest supplier of bicycle components, measured in net sales, with Shimano Inc. being the largest. Competition in the independent bicycle retailer market is principally based on product design, innovation, customer service, manufacturing and distribution capabilities, product quality and price. In the OEM and aftermarket channels, we compete primarily against branded components. Branded components are recognized by consumers and come with service support and warranty support that extend throughout the OEM and aftermarket channels. Alternatively, low-cost components typically enter the market several years behind branded component manufactures for a particular technology. In addition, we believe that we successfully compete by offering superior technology and customer service to consumers and by offering large scale manufacturing and distribution capabilities and a full-line of mid to high-end components to bicycle companies.

Our principal branded competitors include Shimano Inc. (the only other mid to high-end full-line component supplier) and Campagnolo S.r.l, Compass Group Diversified Holdings LLC (Fox brand), DT Swiss AG and Amer Sports Corporation (Mavic brand), each of which is a primary competitor of one or two of our product types. Due to the patent landscape, product scale issues and product development cycle requirements, most component suppliers concentrate on a limited number of components. Therefore, we have different primary competitors for our different types of products and there is limited competition by individual competitors for our full-line of mid to high-end components.

Customers In the OEM channel, we consider our customers to be the bicycle companies who select our products for use on specific bikes, although the actual purchases of our components are made by OEM bicycle factories who assemble bikes in accordance with the specifications of the bicycle companies. Many bicycle companies have

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents several bike brands. Our revenue is diversified among our customers, with no bicycle company representing 10% or more of our total net sales for the year ended December 31, 2010. We have relationships with almost all major bicycle companies.

In the aftermarket channel, we sell the majority of our products to bicycle distributors who then sell our products to independent bicycle retailers. We also sell some products directly to independent bicycle retailers in the United States. We focus most of our marketing efforts on the retailers, since the retailers drive demand at the distributor level. Our revenue is diversified among our bicycle distributors and independent bicycle retailers, with no distributor or retailer representing more than 4.5% of our total net sales for the year ended December 31, 2010. We have relationships with over 90 bicycle distributors.

Insurance and risk management We purchase insurance to cover standard risks in our industry, including policies to cover general and products liability, workers compensation, and other casualty and property risks. Our insurance rates are based on our safety record as well as trends in the insurance industry.

We face an inherent risk of exposure to product liability claims in the event that, among other things, the use of our products results in injury. With respect to product liability coverage, we carry insurance coverage typical of our industry and product lines. We believe we have obtained a prudent amount of insurance for the insurable risks associated with our business. We do not currently hold patent infringement insurance.

Employees We have approximately 2,200 full-time employees. We do not have unionized employees in any of our facilities, other than our European facilities, with unionized employees representing less than 10% of our total employees. We have never experienced a material company-related work stoppage or a material disruption to our business for employee matters. We consider our relationships with our employees to be good.

Properties We maintain fifteen facilities located around the world, seven of which have manufacturing capabilities. The following table lists our fifteen facilities:

Leased/ Facility Location Function Owned Chicago, Illinois, United States Global headquarters and product development Leased (OEM and aftermarket) Colorado Springs, Colorado, United States Product development (OEM and aftermarket) Leased Coimbra, Portugal Manufacturing (OEM and aftermarket) Owned Dali City, Taichung County, Taiwan Manufacturing (OEM and aftermarket) Leased(1) Francin, France Sales and customer service (OEM and aftermarket) Leased Melbourne, Australia Sales and customer service (OEM and aftermarket) Leased Shunde, China Manufacturing (OEM and aftermarket) Leased Nijkerk, Netherlands European sales and marketing (OEM and Leased aftermarket) San Luis Obispo, California, United States Product development (OEM and aftermarket) Leased Schweinfurt, Germany Manufacturing, product development and customer Leased(2) service (OEM and aftermarket) Shen Kang, Taichung County Taiwan Manufacturing, sales, finance and administration Leased(3) (OEM and aftermarket) Spearfish, South Dakota, United States Manufacturing and product development Leased (aftermarket) Indianapolis, Indiana, United States Manufacturing, product development, sales and Owned customer service (OEM and aftermarket) Taichung, Taiwan Product development (OEM and aftermarket) Leased Waterford, Ireland Finance and administration (OEM and aftermarket) Leased

(1) Facility is comprised of nine separate lease agreements.

(2) Facility is comprised of 3 separate lease agreements.

(3) Facility is comprised of 24 separate lease agreements.

Manufacturing and backlog We manufacture and complete the final assembly on approximately 85% of the products we sell. The remaining 15% of our products are manufactured and assembled by seven different vendors located in Taiwan and China. We have no material or long-term agreements with any of these suppliers. By manufacturing our own products, we are able to significantly improve quality control, quickly respond to feedback on our designs and maintain strong relationships with the bicycle companies. Many of our manufacturing facilities are located in close proximity to bicycle factories, which enables us to provide short lead times from those facilities.

If necessary, we are able to increase capacity by increasing the number of shifts at our manufacturing facilities, expanding existing facilities, or sourcing additional components from suppliers. As an example, we recently

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents expanded capabilities at our Taiwan manufacturing facility by adding a new in-house anodizing line and adding extensive CNC machining capability.

Our production forecast is based on estimated future demand, but production generally does not occur until the receipt of customer orders. As a result, we do not carry significant inventory and we have flexibility to respond to subsequent changes in demand by adjusting production throughout the year. In addition, since orders generally do not extend beyond 30 days and we generally meet all order requirements, backlog volume is not significant to our business.

Seasonality Generally, our net sales and operating results have not been particularly seasonal due, in part, to the expansion of our product offering and aftermarket presence in recent years. However, our third and fourth quarter sales are slightly higher than our first and second quarter sales. We believe this is a result of sales of bicycle components generally following production of bike models, and the fact that bicycle companies typically transition their model year during the second quarter. Therefore, bike production is slightly lower during first and second quarters.

Environmental Our operations, facilities and properties are subject to a variety of foreign, federal, state and local laws and regulations relating to health, safety and the protection of the environment. Failure to comply with such laws and regulations can result in significant fines, penalties, costs, liabilities or restrictions on operations that could negatively affect our operations or financial condition. From time to time we have been involved in administrative or legal proceedings relating to environmental, health or safety matters and have in the past incurred expenditures relating to such matters.

We believe that our operations are in substantial compliance with applicable environmental laws and regulations. Our compliance with such laws and regulations has not had, nor is it expected to have, a material impact on our capital expenditures, earnings or competitive position. Additional environmental issues relating to presently known or unknown matters could give rise to currently unanticipated investigation, assessment or expenditures. In addition, future events, such as changes in existing laws and regulations or their interpretation could give rise to additional compliance costs, capital expenditures or liabilities. Compliance with more stringent laws or regulations as well as different interpretations of existing laws, more vigorous enforcement by regulators or unanticipated events could require additional expenditures that may materially affect our business, financial condition or results of operations.

Our manufacturing operations involve the handling of materials and wastes, some of which are or may be regulated as hazardous substances. We could be subject to requirements related to the remediation of, or the liability for, substances that have been or are released to the environment at properties currently or formerly owned or operated by us, at or from adjacent properties, or at properties to which we send substances for treatment or disposal. Such remediation requirements and liability may be imposed without regard to fault and damage from releases can be substantial.

Government regulation We are subject to numerous federal, foreign, state and local government laws and regulations, including laws governing our relationships with employees, including minimum wage requirements, overtime, working conditions, hiring and firing, non- discrimination for disabilities and other individual characteristics, work

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents permits and benefit offerings. We believe that our business is conducted in substantial compliance with applicable laws and regulations.

Legal proceedings We are currently and in the future may continue to be subject to litigation incidental to our business, including patent infringement litigation and product liability claims, as well as other litigation of a non-material nature in the ordinary course of business. We believe that the outcome of any existing litigation, either individually or in the aggregate, will not have a material impact on our business, or financial condition.

The following table provides information regarding our executive officers and directors as of April 29, 2011. Each director and executive officer became a director or executive officer of SRAM International Corporation on April 29, 2011. Up until the consummation of this offering, each executive officer and director listed below will also be an executive officer and/or director of SRAM Holdings, LLC.

Name Age Position(s) Stanley R. Day, Jr. 52 President, Chief Executive Officer and Chairman of the Board Michael R. Herr 42 Chief Financial Officer Jeffrey M. Shupe 47 Chief Operating Officer Frederick K. W. Day 51 Executive Vice President and Director Gidon Cohen 53 Director Jack Smith 62 Director Charles C. Moore 44 Director Thomas E. Bergmann* 45 Director Michael A. Smith* 56 Director * Expected to be appointed to the Board upon completion of this offering.

Executive officers and directors Stanley R. Day, Jr. is our founder. He has served as our Chief Executive Officer since February 2007 and as Chairman of our board of directors and President since 1987. Prior to founding SRAM, Mr. Day was a marketing manager at Molex Company for the Personal Computer and Telecom industries. At the time, Molex was a leading supplier of electrical connectors to the Automotive, White Goods, and Data Products industries. In addition, Mr. Day currently serves on the board of World Bicycle Relief, a not-for-profit organization. Mr. Day holds a B.S. in Management from Tulane University and a Masters in Management from the Kellogg Graduate School of Management of Northwestern University. Mr. Day is a brother of Mr. Frederick K. W. Day, who is our Executive Vice President and a member of our board of directors.

We believe Mr. Days qualifications to serve on our board of directors include his extensive knowledge of our company and the bicycle component industry and the accumulated experience from his years of leadership at our company.

Michael R. Herr has served as our Chief Financial Officer since 1999. Prior to becoming Chief Financial Officer, Mr. Herr held a variety of accounting positions at SRAM since joining us in 1994. Prior to joining us, Mr. Herr worked as an accountant at GE Capital and in public accounting for Crowe Chizek and Company. Mr. Herr, a C.P.A., holds a B.S. in Accounting from the University of Dayton and an M.B.A. from DePaul University.

Jeffrey M. Shupe has served as our Chief Operating Officer since 2007. Mr. Shupe is one of our co-founders. Prior to serving as Chief Operating Officer, Mr. Shupe was our Vice President of Asian Operations from 2001 to 2007 and our Vice President of Manufacturing from 1997 to 2001. From 1987 to 1997, Mr. Shupe was our Director of Manufacturing. As our Director of Manufacturing, Mr. Shupes responsibilities included establishing our factories in Chicago, Ireland and Mexico. Mr. Shupe holds a B.S. in Electrical Engineering from Notre Dame University.

Frederick K. W. Day has served as our Executive Vice President since 2006 and has been a member of our board of directors since 1987. Mr. Day has worked at SRAM since 1987, during which time he has served in various roles, including Director of Aftermarket Sales, Director of European Operations, Research and Development, Vice President of Product Management and Vice President of Product Development. Mr. Day is

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents also the President of World Bicycle Relief. In addition, Mr. Day currently serves on the Board of Trustees of South Kent School and Rock Island Company. Mr. Frederick K. W. Day is a brother of Mr. Stanley R. Day Jr., who is our President and Chief Executive Officer, and Chairman of the Board.

We believe Mr. Days qualifications to serve on our board of directors include his knowledge of our company, his executive management experience and his extensive knowledge of the bicycle component industry.

Gidon Cohen has been a member of our board of directors since 2003. Mr. Cohen is President and Chief Executive Officer of Highland Capital LLC, a private equity company he founded in 2000. Prior to forming Highland Capital, Mr. Cohen was an investment banker for 18 years. In addition, Mr. Cohen served on the Board of Pharmedium Healthcare Corporation from 2003 to 2007 and currently serves on the Board of Blue Star Lubrication Technology, LLC. Mr. Cohen holds a Master of Management from Northwestern Universitys J.L. Kellogg Graduate School of Management and a Bachelor of Commerce degree from the University of the Witwatersrand in Johannesburg, South Africa.

We believe Mr. Cohens qualifications to serve on our board of directors include his mergers and acquisitions, restructuring, and general corporate finance experience and his experience with private and public offerings of equity and debt.

Jack Smith has been a member of our board of directors since 2004. Mr. Smith is Chairman, Director and co-owner of Silversmith Inc., a producer of natural gas well metering and automated data reporting systems. Mr. Smith co-founded Silversmith Inc. in 2003. Prior to Silversmith, Mr. Smith was President and Chief Executive Officer of Holland Neway International, a producer of commercial vehicle suspensions and brake systems. Mr. Smith serves on the Board of Beacon Power Corp, Bissell Corporation and Weasler Engineering. He is a Trustee of Grand Valley State University Foundation. Mr. Smith is also a member of the Executive Council of American Securities. Mr. Smith received a Bachelor of Science and Masters Degree in Mechanical Engineering and a Masters Degree in Business Administration from the University of Michigan.

We believe Mr. Smiths qualifications to serve on our board of directors include his entrepreneurial background, manufacturing and engineering experience and leadership.

Charles C. Moore has been a member of our board of directors since 2008. Mr. Moore is a Partner of Trilantic Capital Partners, a middle market private equity firm. Prior to joining Trilantic Capital Partners in 2008, Mr. Moore worked at The Carlyle Group from 2005 to 2008, where he was a Managing Director in the firms middle market buyout and growth equity fund. Prior to joining Carlyle, Mr. Moore was a Managing Director of Perseus LLC, a private equity firm. Earlier in his career, Mr. Moore practiced law at Williams & Connolly LLP, clerked at the U.S. Supreme Court, and worked in strategy consulting at McKinsey & Co. and Mercer Management Consulting. Mr. Moore serves on the Board of Fortitech, Inc. and is a member of the Board of Visitors of Stanford Law School. Mr. Moore previously served on the Board of RMI, Inc., Apollo Global, Inc., Command Information, Inc., Comark Building Systems, Inc., Workflow Management, Inc. and Acirca, Inc. Mr. Moore holds an A.B. from Princeton University, an M.St. from Oxford University, and a J.D. from Stanford Law School.

We believe Mr. Moores qualifications to serve on our board of directors include his expertise in the consumer sector, his knowledge of our company and his prior board experiences.

Thomas E. Bergmann is expected to become a member of our board of directors upon completion of this offering. Mr. Bergmann has been the Chief Financial Officer of Amsted Industries Incorporated, a diversified manufacturer of industrial components primarily serving the railroad, vehicular and construction and building markets, since 2009. Prior to joining Amsted, Mr. Bergmann was the Chief Financial Officer of Harley-Davidson, Inc. from 2006 through 2009. Mr. Bergmann served as Chief Financial Officer and Interim Chief Executive

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Officer for USF Corporation during 2004 and 2005. Mr. Bergmann holds a Bachelor of Arts from the University of St. Thomas and a Masters in Management from the Kellogg Graduate School of Management of Northwestern University.

We believe Mr. Bergmanns qualifications to serve on our board of directors include his extensive financial expertise and leadership skills gained from serving as the Chief Financial Officer of large and complex public companies, as well as his experience in the manufacturing and component industries.

Michael A. Smith is expected to become a member of our board of directors upon completion of this offering. Mr. Smith has been the Chairman and Chief Executive Officer of FireVision LLC, a private investment firm, since 2000. Prior to joining FireVision, Mr. Smith was the Senior Managing Director and Manager, Investment Banking, M&A, at the BA Partners unit of Bank of America (and its successor entities). Mr. Smith also currently serves on the boards of Zebra Technologies Corporation, a public company and Blue Star Lubrication Technologies, LLC, a private company. He is also a member of the audit, compensation and nominating committees of Zebra Technologies. Mr. Smith holds a Bachelor of Arts from the University of Wisconsin (Madison) and an M.B.A. (finance) from the University of Chicago Booth School of Business.

We believe Mr. Smiths qualifications to serve on our board of directors include his leadership skills, over 25 years of service on other public boards and his financial expertise, which includes extensive experience with debt and equity securities issuances, restructurings, company valuations and mergers and acquisitions.

Other than the relationship of Mr. Stanley R. Day Jr. and Mr. Frederick K. W. Day as described above, there are no family relationships among any of our directors or executive officers. Each executive officer is elected or appointed by, and serves at the discretion of, our board of directors.

Board composition following this offering Effective upon the consummation of this offering, our board of directors will be authorized to have seven members. Upon the consummation of this offering, our board of directors will consist of Messrs. S. Day, Jr., F. Day, Bergmann, Cohen, Moore, J. Smith and M. Smith.

The Day family as a group, owns more than 50% of our outstanding voting securities and we are therefore considered a controlled company within the meaning of the Nasdaq rules. Following the consummation of this offering, we expect to remain a controlled company and we intend to rely upon the controlled company exception to the board of directors and committee independence requirements under the Nasdaq rules. Pursuant to this exception, we will be exempt from the rules that would otherwise require that our board of directors be comprised of a majority of independent directors and that our compensation committee and nominating and corporate governance committee be composed entirely of independent directors. The controlled company exception does not modify the independence requirements for the audit committee. Our board of directors will undertake a review of the independence of each director and consider whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities.

Leadership structure Our board of directors believes that Mr. Stanley R. Day Jr.s service as both Chairman of the Board and Chief Executive Officer is in the best interests of our company and our stockholders. Mr. Day possesses detailed and in-depth knowledge of the issues, opportunities and challenges we face, and we believe he is the person best positioned to develop agendas that ensure that our board of directors time and attention is focused on the most critical matters. While we do not currently intend to separate these positions, a change in leadership structure would be made if our board of directors determines it is in the best long-term interests of our stockholders.

Board committees Our board of directors will have the following committees: an audit committee, a compensation committee and a nominating and corporate governance committee. The composition and responsibilities of each committee are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors.

Audit committee

Our audit committee will oversee our corporate accounting, financial reporting and internal controls process. Among other matters, the audit committee will evaluate the independent auditors qualifications, independence and performance, determine the engagement of the independent auditors, review and approve the scope of our annual audit and audit fee, discuss with management and the independent auditors the results of our annual audit and the review of our quarterly consolidated financial statements, approve the retention of the independent auditors to perform any proposed permissible non-audit services, monitor the rotation of partners of the independent auditors on the engagement team as required by law, review our critical accounting policies and estimates, oversee our internal audit function and annually review the audit committee charter and the committees performance. The members of our audit committee will be Messrs. Bergmann, Cohen and Moore, with Mr. Bergmann serving as the chair of the committee. Messrs. Bergmann, Cohen and Moore meet the requirements for financial literacy under the applicable rules and regulations of the SEC and the Nasdaq. Our board has determined that Mr. Bergmann is an audit committee financial expert as defined under the applicable rules of the SEC and has the requisite financial sophistication as defined under the applicable rules and regulations of the Nasdaq. Our audit committee will consist of at least one member that is independent upon the effectiveness of our registration statement of which this prospectus forms a part, a majority of members that are independent within ninety days thereafter and all members that are independent within one year thereafter. Our board of directors has affirmatively determined that each of and meets the definition of independent director as defined under the applicable rules and regulations of the SEC and the Nasdaq listing rules. The audit committee will operate under a written charter that satisfies the applicable standards of the SEC and the Nasdaq.

In 2010, the members of the audit committee of SRAM Holdings, LLC were Stanley R. Day, Jr., Charles C. Moore and Gidon Cohen.

Compensation committee

Our compensation committee will review and recommend policies relating to compensation and benefits of our officers and employees. The compensation committee will review and set the compensation of our Chief Executive Officer and other executive officers relative to their execution of the corporate plan and achievement of targeted financial results. The compensation committee will also consider recommendations of our Chief Executive Officer with respect to the compensation of other executive officers. Our Chief Executive Officer will evaluate each other executive officers overall performance and contributions to us at the end of each year and report to the compensation committee his recommendations as to the other executive officers compensation. The compensation committee will also administer the issuance of stock options and other awards under our stock plans. The compensation committee will review and evaluate, at least annually, the performance of the compensation committee and its members, including compliance of the compensation committee with its charter. The members of our compensation committee will be Messrs. S. Day, Jr., J. Smith and M. Smith, with Mr. J. Smith serving as the chair of the committee.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Notwithstanding our intended reliance on the controlled company exemption, our board of directors has affirmatively determined that each of and meets the definition of independent director for purposes of the Nasdaq listing rules.

In 2010, the members of the compensation committee of SRAM Holdings, LLC were Stanley R. Day, Jr., Charles C. Moore and Charles Walker.

Nominating and corporate governance committee

The nominating and corporate governance committee will be responsible for making recommendations regarding candidates for directorships and the size and composition of our board. In addition, the nominating and corporate governance committee will be responsible for overseeing our corporate governance guidelines and reporting and making recommendations concerning governance matters. The nominating and corporate governance committee will be comprised of Messrs. F. Day, J. Smith and M. Smith, with Mr. M. Smith serving as the chair of the committee. Potential candidates for nomination to the board of directors will be discussed by the committee.

As a controlled company, we will qualify for, and intend to rely on, exemptions from the Nasdaq corporate governance requirements that require such committee to be composed entirely of independent directors. Notwithstanding our intended reliance on the controlled company exemption, our board of directors has affirmatively determined that each of and meets the definition of independent director for purposes of the Nasdaq listing rules.

SRAM Holdings, LLC did not have a nominating and governance committee in 2010.

Code of business conduct and ethics

Prior to the consummation of this offering, our board of directors will adopt a Code of Ethics and Business Conduct. The Code of Ethics and Business Conduct will apply to all members of the board, executive officers and employees, including our Chief Executive Officer, Chief Financial Officer and principal accounting officer. The Code of Ethics and Business Conduct will be available on our website at under Code of Ethics. The Code of Ethics and Business Conduct will address, among other things, issues relating to conflicts of interests, including internal reporting of violations and disclosures, and compliance with applicable laws, rules and regulations. The purpose of the Code of Ethics and Business Conduct is to deter wrongdoing and to promote, among other things, honest and ethical conduct and to ensure to the greatest possible extent that our business is conducted in a legal and ethical manner. We intend to promptly disclose (1) the nature of any amendment to our code of ethics that applies to our directors, executive officers or other principal financial officers and (2) the nature of any waiver, including an implicit waiver, from a provision of our code of ethics that is granted to a director, executive officer or other principal financial officer, the name of such person who is granted the waiver and the date of the waiver on our website in the future.

Compensation committee interlocks and insider participation

Mr. Stanley R. Day Jr. will serve on our compensation committee and served on the compensation committee of SRAM Holdings, LLC during the last completed fiscal year. No executive officer currently serves, or has served during the last completed year, on the compensation committee or board of directors of any other entity that has one or more executive officers serving as a member of our board of directors or compensation committee.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Executive compensation Compensation discussion and analysis The following discussion and analysis of compensation arrangements of our named executive officers for 2010 should be read together with the compensation tables and related disclosures set forth below. This discussion is based on our current plans, considerations and expectations regarding our compensation programs. Compensation policies that we adopt in the future may differ materially from the policies summarized in this discussion.

The following individuals were our named executive officers for 2010:

Stanley R. Day Jr., Chief Executive Officer, or CEO;

Michael R. Herr, Chief Financial Officer, or CFO;

Jeffrey M. Shupe, Chief Operating Officer, or COO;

Frederick K. W. Day, Executive Vice President.

Overview of compensation objectives

We recognize that our success is in large part dependent on our ability to attract and retain talented employees. We endeavor to create and maintain compensation programs based on performance, teamwork, rapid progress, democratic principles and to align the interests of our employees and equity holders. As such, we have designed our compensation program to achieve the following objectives:

attract and retain highly-talented, experienced employees in our industry;

motivate and reward employees whose knowledge, skills and performance contribute to our success;

align compensation with our business and financial objectives; and

offer total compensation that is competitive and fair.

To meet these objectives, the principle components of compensation in 2010 consisted of base salary and annual cash incentive awards for all employees. Additionally, each of our named executive officers holds equity, either as a founder or through equity incentive units granted at the time of the 2008 recapitalization, or both. Other than the equity compensation, our compensation programs are applied equally to each employee of the company, varying only in the amount of compensation received. Each component of compensation is designed to have a role in meeting the objectives above by rewarding and motivating for both short-term (annual salary and incentives) and long-term performance (equity ownership). We intend to continue to set our compensation policies with the goal of achieving the same compensation objectives identified above and to ensure that total compensation reflects our overall success.

Compensation setting process

Historically, the compensation of our named executive officers has been largely determined on an individual basis and was principally based on paying them a total compensation package that was both competitive at the time they were hired and competitive based on the salaries paid to other executives in the manufacturing sector per our analysis of general salary surveys and market data. Each year our CEO reviews with the compensation committee the performance of each named executive officer (other than himself) and, based on this review and our CEOs and compensation committees understanding of current market conditions, sets the executive

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents compensation package for the named executive officers for the coming year. Our compensation committee reviews our CEOs compensation each year and sets his compensation package based on its understanding of current market conditions and his performance.

We have not historically engaged compensation consultants to assist our compensation committee with compensation policies, nor have we benchmarked our compensation policies against a peer group. For determining competitive salaries and compensation for 2010, the Company obtained from Salary.com a general survey of salaries and total cash compensation for executive positions at companies with revenues between $200-500 million in the manufacturing sector. For each position, the compensation committee reviewed the 25th, 50th and 75th percentile for base and total cash compensation from the survey data, and how the named executive officers salary compared. For example, the materials presented to the compensation committee showed that the base salaries for each of our named executive officers was within the 50th percentile range (with Mr. Frederick K. W. Days being at the upper end of the range and Messrs. Herr and Stanley Days being at the lower end of the range). The survey showed that the total cash compensation for our NEOs, other than Frederick K. W. Day, for 2010 was solidly within the middle of the 25th percentile range. Mr. Days total cash compensation was between the 50th and 75th percentiles. Based on this information, the compensation committee determined in its discretion whether the executives compensation was at or below what it considered to be market for the position. Based on this information, the individuals past performance and any increases in responsibilities and duties, the compensation committee made adjustments as it deemed appropriate, resulting in the 2010 base salaries listed on the chart on page 96 of this prospectus. The compensation committee did not benchmark to any particular percentile level or against any particular company. In addition, management and the compensation committee engaged Towers Watson in 2011 to perform due diligence with respect to certain aspects of our executive compensation program in anticipation of this offering.

Elements of compensation

For 2010, the principal components of executive compensation consisted of base salary and annual cash incentive awards. Each component of compensation has a role in meeting the compensation objectives described above. The following summarizes our objectives for each of the principal components of executive compensation for 2010:

Base Salaries

Reward individuals current contributions to the company; and

Compensate individuals for their expected day-to-day performance.

Annual cash incentive compensation

Align executive compensation with annual performance;

Enable us to attract, retain and reward individuals who contribute to our success; and

Motivate individuals to enhance the value of our company.

If our corporate objectives are not achieved, a portion of the compensation for our named executive officers is not earned. In this way, our executive compensation program is directly aligned with the interests of our equity holders.

Each component of our executive compensation is discussed in more detail below.

Base salary

Base salaries are reviewed annually and are initially based on arms length negotiations at the time of hire and are later adjusted based on individual performance, competitiveness versus the external market, and internal merit increases. Factors that are taken into account to increase or decrease compensation include significant changes in individual job responsibilities, individual performance and/or our growth. Base salaries of our named executive officers are annually reviewed by the compensation committee, with significant input from our CEO for our other named executive officers, to determine whether an adjustment is warranted.

In early 2010, the compensation committee reviewed the base salaries of our named executive officers. The compensation committee, in consultation with our CEO (with respect to the salaries of our other named executive officers), determined that internal merit based increases were warranted for each of our named executive officers. Accordingly, Messrs. Stanley R. Day Jr., Jeffrey M. Shupe and Frederick K. W. Day received a 4% increase in base salary and Mr. Michael R. Herr received an 8% increase due to his strong individual performance and our comparison of his salary, using the general surveys and market data described previously, to the salaries of other individuals in similar positions in the manufacturing sector. By reviewing general salary surveys, the compensation committee determined that these increases were necessary in order for us to remain competitive. The actual salaries of our named executive officers as of December 31, 2009 and 2010 are set forth in the table below.

Name 2009 Base Salary 2010 Base Salary Stanley R. Day, Jr. 426,000 443,040 Michael R. Herr 242,000 261,360 Jeffrey M. Shupe 305,000 317,200 Frederick K. W. Day 203,000 211,120

Annual Bonus

We have an Annual SRAM Bonus Pool, which is based on the achievement of pre-established company objectives for the year. Its purpose is to fund bonuses to our employees when the company achieves or exceeds its annual financial targets. For model year 2010, the two performance measures that were used for determining the amount of the Annual SRAM Bonus Pool were bonus operating income margin and bonus operating income growth. The maximum funding for the Annual SRAM Bonus Pool is a total of four months of the aggregate salaries of all employees determined based on the following matrix:

The Annual SRAM Bonus Pool is determined by the intersection of our bonus operating income margin and our bonus operating income growth financial metrics, as shown above. For 2010, a bonus operating income margin

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents of 23.7% was used and a bonus operating income growth of 40.0% was used, resulting in a full four month funding of the Annual SRAM Bonus Pool of approximately $9.5 million. Bonus operating income is an internal metric we use to evaluate our performance which is calculated by adding back to operating income (as it appears on our financial statements) certain expenses we believe are not indicative of our operating performance. The bonus operating income for 2010 was $111.4 million. The chart below shows the add-backs that were used in calculating the bonus operating income.

Model Year 2010 Operating Income $ 101,800 (in thousands) Adjustments: Incentive Unit Comp Expense 3,684 (Gain)/Loss on Disposal of Assets 1,267 Royalty Income (3 ) Litigation Accrual 3,350 Severance 1,476 Other (151 ) 9,623

Bonus Operating Income $ 111,423

Once the amount of the Annual SRAM Bonus Pool is established, then the pool is allocated to individual participants in a discretionary manner (which may result in participants receiving less or more than the exact funding level). There is no formula for setting any individuals bonus amount or guarantee that an individual will receive a bonus just because the Annual SRAM Bonus Pool is funded. Rather, our CEO determines in his discretion the amount of bonus the other named executive officers receive based on his subjective assessment of their performance and contributions during the year. The CEOs bonus is determined by the compensation committee based on their subjective discretionary assessment of his performance and contribution for the year. During 2010, Messrs. S. Day, Jr., Herr, Shupe and F. Day earned bonuses equal to 18.4%, 40.1%, 32.7%, and 18.4% of their salaries as of year end. Messrs. S. and F. Day both received the average bonus equal to four months salary for 2010. Mr. Shupe received a higher bonus amount based on his leadership abilities and contributions to our achieving our overall corporate results. Mr. Herr also received a higher bonus due to his strong performance in connection with the completion of our debt refinancing in April 2010 and preparing our accounting group for a possible initial public offering of our shares. We believe that the ability to reward individuals in a discretionary manner, not locked into specific goals and targets, allows our executives to better respond to the fluid nature of our business. We also believe that making the funding of the Annual SRAM Bonus Pool subject to the achievement of company performance goals, motivates employees to increase their efforts on behalf of the company.

Benefits and perquisites

In line with our general democratic principles, the named executive officers are not eligible for special perquisites or other benefits that are not available to all of our employees. We offer a 401(k) plan, basic group health, disability and life insurance. In addition, all employees are entitled to a discount on purchases of our products.

The compensation committee has not found it necessary for the attraction or retention of our named executive officers to provide them with perquisites or other personal benefits except for those described above. In the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents future, the compensation committee, in its discretion, may revise, amend or add to any executive officers benefits and perquisites as it deems appropriate.

Equity compensation

Each of our named executive officers holds equity in the company in the form of Class B units, and in the case of Messrs. Herr and Shupe, through incentive units that were granted at the time of the 2008 recapitalization. The incentive units vest over a five year period beginning in model year 2009. Provided that Messrs. Herr and Shupe have not terminated their services with our company, or one of our affiliates, their incentive units will vest each year that we meet our model year EBITDA target, as defined in each incentive unit agreement. If the model year EBITDA target is not met for a particular year and the incentive units for that model year do not vest, such incentive units will be forfeited and cancelled. The model year EBITDA target for 2010 was $118 million. Because the 2010 model year actual EBITDA was approximately $123 million, both Messrs. Herr and Shupe vested in a portion of their incentive units for that model year. In addition, the vesting of any incentive units held by Messrs. Herr and Shupe may be accelerated, at the boards discretion, upon the sale of the company or the consummation of an IPO. The board has determined that the vesting of all incentive units held by employees, including Messrs. Herr and Shupe, will accelerate upon the completion of this offering.

The incentive units are intended to provide Messrs. Herr and Shupe with long-term incentives tied to financial performance and to align their interests with our equity holders.

Due to their existing ownership positions in the Company Messrs. S. Day, Jr. and F. Day did not receive incentive units.

Change in control and severance agreements

Again, in line with our democratic principles, each of our named executive officers is an employee-at-will, meaning that his employment may be terminated at any time and for any reason. None of our named executive officers are parties to any employment, change in control or severance agreements (other than with respect to potential vesting of incentive units upon a sale of the Company) and we do not have any obligations to pay severance in the event their employment were to be terminated.

Summary compensation table

The following table summarizes the total compensation earned by each of our named executive officers for the year ended December 31, 2010.

All Other Name Year Salary Bonus Compensation(1) Total Stanley R. Day Jr. 2010 $434,520 $79,875 $ 27 $514,422 Chief Executive Officer Michael R. Herr 2010 $251,680 $100,833 $ 27 $352,540 Chief Financial Officer Jeffrey M. Shupe 2010 $311,100 $101,667 $ 27 $412,794 Chief Operating Officer Frederick K. W. Day 2010 $207,060 $38,063 $ 27 $245,150 Executive Vice President

(1) Reflects premiums paid on $25,000 of group term life insurance, which is available to all salaried employees.

Outstanding equity awards at December 31, 2010

The following table sets forth certain information regarding outstanding equity awards for each of our named executive officers as of December 31, 2010. We did not grant any incentive units to our named executive officers in 2010.

Incentive Unit Awards Number of Units of That Market Value of Units That Name Have Not Vested Have Not Vested(1) Stanley R. Day, Jr. Michael R. Herr(2) 18,652.8 $ 1,953,507.74 Jeffrey M. Shupe(3) 34,197.0 $ 3,581,451.81 Frederick K. W. Day

(1) Determined based on a value of the incentive units equal to $104.73 per unit as of December 31, 2010.

(2) On December 31, 2008 Mr. Herr was granted 31,088 incentive units, which vest in five installments of 6,217.6 incentive units for each model year, for model years 2009-2013; provided, that no termination event has occurred and we achieve our model year EBITDA for such model year. All unvested incentive units will fully vest upon the completion of this offering.

(3) On December 31, 2008 Mr. Shupe was granted 56,995 incentive units, which vest in five installments of 11,399 incentive units for each model year, for model years 2009-2013; provided, that no termination event has occurred and we achieve our model year EBITDA for such model year. All unvested incentive units will fully vest upon the completion of this offering.

Equity awards vested in 2010

The following table sets forth information regarding the equity awards that vested during the year ended December 31, 2010.

Incentive Unit Awards Number of Units of Value Realized on Name Acquired on Vesting Vesting(1) Stanley R. Day, Jr. Michael R. Herr 6,217.6 $ 651,169.25 Jeffrey M. Shupe 11,399.0 $ 1,193,817.27 Frederick K. W. Day

(1) Determined based on a value of the incentive units equal to $104.73 per unit as of December 31, 2010.

Change in Control The board, in its discretion, may cause all incentive units to become fully vested upon a sale of the company. Assuming such a sale on December 31, 2010, and that the board exercised its discretion to vest the units, and using a value of the Company of $104.73 per unit the value of the acceleration of Messrs. Herrs and Shupes incentive units would have been $1,953,508 and $3,581,452 respectively. None of our named executive officers is party to any employment or severance agreement and we do not have any obligations to pay severance in the event their employment is terminated.

Compensation of directors Beginning in 2011, management and the compensation committee engaged Towers Watson to assist the compensation committee in benchmarking outside director compensation against a peer group. We expect that the compensation committee will continue to review relevant market peer group data in connection with setting the compensation we offer our outside directors to help ensure that our compensation programs are competitive and fair.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Only three of the directors of SRAM Holdings, LLC, Messrs. Walker, Cohen and Smith, have received any compensation in connection with their service on our board of directors. In 2010, Messrs. Walker and Moore were the non-employee directors on the compensation committee of SRAM Holdings, LLC; and Messrs. Cohen and Moore were the non-employee directors on the audit committee of SRAM Holdings, LLC.

In general, Messrs. Walker, Cohen and Smith are paid a quarterly director fee of $2,500; a quarterly committee fee of $750; $2,000 for attending regular board meetings of SRAM Holdings, LLC and $250 for participating in telephonic board meetings of SRAM Holdings, LLC. Only non-employee directors and those directors who are not affiliated with Trilantic are paid fees in connection with their service on the board of SRAM Holdings, LLC. Messrs. Moore and James are affiliated with Trilantic and, therefore, received no fees in 2010 for their service on the board of SRAM Holdings, LLC. The following table sets forth the compensation paid to the non-employee directors of SRAM Holdings, LLC with respect to their services as such during the year ended December 31, 2010.

Fees paid Name in cash ($) Charles R. Walker 21,000 Gidon Cohen 21,000 Jack Smith 21,000 Charles C. Moore 0 E. Daniel James 0

2011 Incentive Award Plan We intend to adopt the 2011 Incentive Award Plan, or the 2011 Plan, which will be effective on the date of adoption. The principal purpose of the 2011 Plan is to attract, retain and engage selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards. The principal features of the 2011 Plan are summarized below. This summary is qualified in its entirety by reference to the text of the 2011 Plan, which is filed as an exhibit to the registration statement.

Share Reserve

Under the 2011 Plan, shares of our common stock will be initially reserved for issuance pursuant to a variety of stock- based compensation awards, including stock options, stock appreciation rights, or SARs, restricted stock awards, restricted stock unit awards, deferred stock awards, dividend equivalent awards, stock payment awards and performance awards and other stock-based awards.

The following counting provisions will be in effect for the share reserve under the 2011 Plan:

to the extent that an award terminates, expires or lapses for any reason or an award is settled in cash without the delivery of shares, any shares subject to the award at such time will be available for future grants under the 2011 Plan;

to the extent shares are (i) tendered or withheld to satisfy the grant, exercise price or tax withholding obligation with respect to any award under the 2011 Plan; (ii) subject to a SAR and are not issued in connection with the stock settlement of the SAR on the exercise thereof; and (iii) purchased on the open market with cash proceeds from the exercise of options, such shares will not be available for future grants under the 2011 Plan;

to the extent that shares of our common stock that are subject to restricted stock awards are repurchased by us at the same price paid by the holder so that such shares are returned to us, such shares will be available for future grants under the 2011 Plan;

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents the payment of dividend equivalents in cash in conjunction with any outstanding awards will not be counted against the shares available for issuance under the 2011 Plan; and

to the extent permitted by applicable law or any exchange rule, shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by us or any of our subsidiaries will not be counted against the shares available for issuance under the 2011 Plan.

Administration

The compensation committee of our board of directors will administer the 2011 Plan unless our board of directors assumes authority for administration. The compensation committee must consist of at least two members of our board of directors, each of whom is intended to qualify as an outside director, within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, a non-employee director for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act. The 2011 Plan provides that the compensation committee may delegate its authority to grant awards to employees other than executive officers and certain senior executives of the company to a committee consisting of one or more members of our board of directors or one or more of our officers.

Subject to the terms and conditions of the 2011 Plan, the administrator has the authority to select the persons to whom awards are to be made, to determine the number of shares to be subject to awards and the terms and conditions of awards, and to make all other determinations and to take all other actions necessary or advisable for the administration of the 2011 Plan. The administrator is also authorized to establish, adopt, or revise rules relating to administration of the 2011 Plan.

Our board of directors may at any time remove the compensation committee as the administrator and revest in itself the authority to administer the 2011 Plan. The full board of directors will administer the 2011 Plan with respect to awards to non-employee directors.

Eligibility

Options, SARs, restricted stock and all other stock-based and cash-based awards under the 2011 Plan may be granted to individuals who are then our officers, employees or consultants. Such awards also may be granted to our directors. Only employees of our company may be granted incentive stock options, or ISOs.

Awards

The 2011 Plan provides that the administrator may grant or issue stock options, SARs, restricted stock, restricted stock units, deferred stock, dividend equivalents, performance awards, stock payments and other stock-based and cash-based awards, or any combination thereof. Each award will be set forth in a separate agreement with the person receiving the award and will indicate the type, terms and conditions of the award.

Nonqualified Stock Options, or NQSOs, will provide for the right to purchase shares of our common stock at a specified price, which may not be less than fair market value on the date of grant, and usually will become exercisable (at the discretion of the administrator) in one or more installments after the grant date, subject to the participants continued employment or service with us and/or subject to the satisfaction of corporate performance targets and individual performance targets established by the administrator. NQSOs may be granted for any term specified by the administrator that does not exceed ten years.

Incentive Stock Options, or ISOs, will be designed in a manner intended to comply with the provisions of Section 422 of the Code and will be subject to specified restrictions contained in the Code. Among such restrictions, ISOs must have an exercise price of not less than the fair market value of a share of common

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents stock on the date of grant, may only be granted to employees, and must not be exercisable after a period of ten years measured from the date of grant. In the case of an ISO granted to an individual who owns (or is deemed to own) at least 10% of the total combined voting power of all classes of our capital stock, the 2011 Plan provides that the exercise price must be at least 110% of the fair market value of a share of common stock on the date of grant and the ISO must not be exercisable after a period of five years measured from the date of grant.

Restricted Stock may be granted to any eligible individual and made subject to such restrictions as may be determined by the administrator. Restricted stock, typically, may be forfeited for no consideration or repurchased by us at the original purchase price if the conditions or restrictions on vesting are not met. In general, restricted stock may not be sold or otherwise transferred until restrictions are removed or expire. Purchasers of restricted stock, unlike recipients of options, will have voting rights and will have the right to receive dividends, if any, prior to the time when the restrictions lapse, however, extraordinary dividends will generally be placed in escrow, and will not be released until restrictions are removed or expire. With respect to restricted stock with performance based vesting, dividends or dividend equivalents which are paid prior to vesting will only be paid to the extent that the performance based vesting conditions are satisfied and the share of restricted stock vests.

Restricted Stock Units may be awarded to any eligible individual, typically without payment of consideration, but subject to vesting conditions based on continued employment or service or on performance criteria established by the administrator. Like restricted stock, restricted stock units may not be sold, or otherwise transferred or hypothecated, until vesting conditions are removed or expire. Unlike restricted stock, stock underlying restricted stock units will not be issued until the restricted stock units have vested, and recipients of restricted stock units generally will have no voting or dividend rights prior to the time when vesting conditions are satisfied.

Deferred Stock Awards represent the right to receive shares of our common stock on a future date. Deferred stock may not be sold or otherwise hypothecated or transferred until issued. Deferred stock will not be issued until the deferred stock award has vested, and recipients of deferred stock generally will have no voting or dividend rights prior to the time when the vesting conditions are satisfied and the shares are issued. Deferred stock awards generally will be forfeited, and the underlying shares of deferred stock will not be issued, if the applicable vesting conditions and other restrictions are not met.

Stock Appreciation Rights, or SARs, may be granted in connection with stock options or other awards, or separately. SARs granted in connection with stock options or other awards typically will provide for payments to the holder based upon increases in the price of our common stock over a set exercise price. The exercise price of any SAR granted under the 2011 Plan must be at least 100% of the fair market value of a share of our common stock on the date of grant. Except as required by Section 162(m) of the Code with respect to a SAR intended to qualify as performance-based compensation as described in Section 162(m) of the Code, there are no restrictions specified in the 2011 Plan on the exercise of SARs or the amount of gain realizable therefrom, although restrictions may be imposed by the administrator in the SAR agreements. SARs under the 2011 Plan will be settled in cash or shares of our common stock, or in a combination of both, at the election of the administrator.

Dividend Equivalents represent the value of the dividends, if any, per share paid by us, calculated with reference to the number of shares covered by the award. Dividend equivalents may be settled in cash or shares and at such times as determined by the compensation committee or board of directors, as applicable. Dividend equivalents with respect to awards with performance based vesting that are based on dividends paid prior to the vesting of such award will be paid once the performance based vesting conditions are satisfied and the award vests.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Performance Awards may be granted by the administrator on an individual or group basis. Generally, these awards will be based upon specific performance targets and may be paid in cash or in common stock or in a combination of both. Performance awards may include phantom stock awards that provide for payments based upon the value of our common stock. Performance awards may also include bonuses that may be granted by the administrator on an individual or group basis and which may be payable in cash or in common stock or in a combination of both.

Stock Payments may be authorized by the administrator in the form of common stock or an option or other right to purchase common stock as part of a deferred compensation or other arrangement in lieu of all or any part of compensation, including bonuses, that would otherwise be payable in cash to the employee, consultant or non-employee director.

Change in Control

In the event of a change in control where the acquirer does not assume or replace awards granted under the 2011 Plan, the administrator may cause any or all of such awards to become fully exercisable immediately prior to the consummation of such transaction and all forfeiture restrictions on any or all such awards to lapse. If the acquirer does assume or replace the awards granted under the 2011 Plan and the individuals service with us or the acquiring entity is subsequently terminated without cause within twelve months following the change in control event, all such awards will become fully vested, exercisable and payable.

Under the 2011 Plan, a change in control is generally defined as:

the transfer or exchange in a single or series of related transactions by our stockholders of more than 50% of our voting stock to a person or group;

a change in the composition of our board of directors over a two-year period such that 50% or more of the members of our board of directors were elected through one or more contested elections;

a merger, consolidation, reorganization or business combination in which we are involved, directly or indirectly, other than a merger, consolidation, reorganization or business combination, which results in our outstanding voting securities immediately before the transaction continuing to represent a majority of the voting power of the acquiring companys outstanding voting securities and after which no person or group beneficially owns 50% or more of the outstanding voting securities of the surviving entity immediately after the transaction;

the sale, exchange, or transfer of all or substantially all of our assets; or

our liquidation or dissolution.

Adjustments of Awards

In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation, spin-off, recapitalization, distribution of our assets to stockholders (other than normal cash dividends) or any other corporate event affecting the number of outstanding shares of our common stock or the share price of our common stock that would require adjustments to the 2011 Plan or any awards under the 2011 Plan in order to prevent the dilution or enlargement of the potential benefits intended to be made available thereunder, the administrator will make appropriate, proportionate adjustments to:

the aggregate number and type of shares subject to the 2011 Plan;

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the grant or exercise price per share of any outstanding awards under the 2011 Plan.

Option Repricing

The 2011 Plan contains a general prohibition on repricing pursuant to which shareholder approval is required to:

reduce the exercise price per share of any option or SAR granted under the 2011 Plan and

cancel any option or SAR in exchange for cash or other awards with an exercise price per share that is less than the exercise price per share of the original option or SAR price per share.

Notwithstanding the foregoing, any outstanding award may be amended to increase the price per share or to cancel and replace an award with the grant of an award that has a price per share that is greater than or equal to the price per share of the original award without receiving additional stockholder approval.

Amendment and Termination

Our board of directors or the committee (with board of director approval) may terminate, amend, suspend or modify the 2011 Plan at any time and from time to time. However, we must generally obtain stockholder approval to increase the number of shares available under the 2011 Plan (other than in connection with certain corporate events, as described above).

Expiration Date

The 2011 Plan will expire on, and no option or other award may be granted pursuant to the 2011 Plan after, the tenth anniversary of the effective date of the 2011 Plan. Any award that is outstanding on the expiration date of the 2011 Plan will remain in force according to the terms of the 2011 Plan and the applicable award agreement.

Securities Laws and U.S. Federal Income Taxes

The 2011 Plan is designed to comply with various securities and U.S. federal tax laws as follows:

Securities Laws

The 2011 Plan is intended to conform to all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the SEC thereunder, including without limitation, Rule 16b-3. The 2011 Plan will be administered, and options will be granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations.

Section 409A of the Code

Certain awards under the 2011 Plan may be considered nonqualified deferred compensation for purposes of Section 409A of the Code, which imposes certain additional requirements regarding the payment of deferred compensation. Generally, if at any time during a taxable year a nonqualified deferred compensation plan fails to meet the requirements of Section 409A, or is not operated in accordance with those requirements, all

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents amounts deferred under the 2011 Plan and all other equity incentive plans for the taxable year and all preceding taxable years by any participant with respect to whom the failure relates are includible in gross income for the taxable year to the extent not subject to a substantial risk of forfeiture and not previously included in gross income. If a deferred amount is required to be included in income under Section 409A, the amount also is subject to interest and an additional income tax. The interest imposed is equal to the interest at the underpayment rate plus one percentage point, imposed on the underpayments that would have occurred had the compensation been includible in income for the taxable year when first deferred, or if later, when not subject to a substantial risk of forfeiture. The additional U.S. federal income tax is equal to 20% of the compensation required to be included in gross income. In addition, certain states, including California, have laws similar to Section 409A, which impose additional state penalty taxes on such compensation.

Section 162(m) of the Code

In general, under Section 162(m) of the Code, income tax deductions of publicly held corporations may be limited to the extent total compensation (including, but not limited to, base salary, annual bonus, and income attributable to stock option exercises and other non-qualified benefits) for certain executive officers exceeds $1,000,000 (less the amount of any excess parachute payments as defined in Section 280G of the Code) in any taxable year of the corporation. However, under Section 162(m), the deduction limit does not apply to certain performance-based compensation established by an independent compensation committee that is adequately disclosed to and approved by stockholders. In particular, stock options and SARs will satisfy the performance-based compensation exception if the awards are made by a qualifying compensation committee, the 2011 Plan sets the maximum number of shares that can be granted to any person within a specified period and the compensation is based solely on an increase in the stock price after the grant date. Specifically, the option exercise price must be equal to or greater than the fair market value of the stock subject to the award on the grant date. Under a Section 162(m) transition rule for compensation plans of corporations that are privately held and that become publicly held in an initial public offering, the 2011 Plan will not be subject to Section 162(m) until a specified transition date, which is the earlier of:

the material modification of the 2011 Plan;

the issuance of all of the shares of our common stock reserved for issuance under the 2011 Plan;

the expiration of the 2011 Plan; or

the first meeting of our stockholders at which members of our board of directors are to be elected that occurs after the close of the third calendar year following the calendar year in which our initial public offering occurs.

After the transition date, rights or awards granted under the 2011 Plan, other than options and SARs, will not qualify as performance-based compensation for purposes of Section 162(m) unless such rights or awards are granted or vest upon pre- established objective performance goals, the material terms of which are disclosed to and approved by our stockholders. Thus, after the transition date, we expect that such other rights or awards under the plan will not constitute performance-based compensation for purposes of Section 162(m).

We intend to file with the SEC a registration statement on Form S-8 covering the shares of our common stock issuable under the 2011 Plan.

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We describe below transactions and series of similar transactions, during our last three years, to which we were a participant or will be a participant, in which:

the amounts involved exceeded or will exceed $120,000; and

any of our directors, executive officers, holders of more than 5% of our common stock or any member of their immediate family had or will have a direct or indirect material interest.

Trilantic 2008 investment and recapitalization On September 30, 2008, we effected a recapitalization in connection with the acquisition by Trilantic and its co-investors of a $234.8 million equity interest in us. Pursuant to the recapitalization, the stockholders of SRAM Corporation contributed their shares to newly formed SRAM-SP2, Inc. in exchange for shares of SRAM-SP2, Inc., and SRAM Corporation thereafter merged into SRAM, LLC, a wholly-owned subsidiary of SRAM Holdings, LLC. As part of this financing and reorganization;

Trilantic and its co-investors purchased 3,640,000 Class A units (100% of the Class A units) of SRAM Holdings, LLC from SRAM-SP2, Inc. As of the completion of the refinancing, Trilantic and its co-investors have no remaining ownership of SRAM Holdings, LLC. As Class A unitholders, Trilantic and its co-investors were entitled to a Class A priority interest in the amount of their initial $234.8 million investment plus a 10% annual preferred return, compounded quarterly (increasing to 15% on September 30, 2014). As of June 7, 2011, the Class A priority interest consisted of their $234.8 million initial investment plus $71.4 million of accrued preferred return. The Class A holders were also entitled to participate in all distributions after the repayment of their priority interest. Additionally, the Class A holders appointed two of the seven managers of SRAM Holdings, LLC and were entitled to certain other governance rights, as described below;

SRAM-SP2, Inc. used $224.8 million of the proceeds of the sale of Class A units to Trilantic and its co-investors to fund a repurchase of SRAM-SP2, Inc. shares held by the pre-transaction holders of the capital stock of SRAM Corporation; and

We entered into a $240.0 million term loan credit facility, of which $236.4 million was used to fund a special distribution to pre- transaction stockholders of SRAM-SP2, Inc.

We refer to the transactions above collectively as the 2008 recapitalization.

Credit Facilities

In connection with the 2008 recapitalization, in September 2008, we entered into a $240.0 million term loan credit facility, of which $236.4 million was used to fund a special distribution to SRAM-SP2, Inc. SRAM-SP2, Inc. distributed these funds as a special dividend of approximately $32.00 per share to its stockholders. Of the $240.0 million term loan credit facility, $1.6 million of the term loan was funded by Stanley R. Day, Jr., our President and Chief Executive Officer and $1.4 million was funded by Frederick K. W. Day, our Executive Vice President. The interest rate on the loan was 8.07%, 7.35% and 7.57% in 2008, 2009 and 2010, respectively. In 2008, 2009 and 2010, Stanley R. Day, Jr. received interest and principal payments of approximately $22,844, $356,902 and $133,315, respectively, and Frederick K. W. Day received payments of approximately $19,988, $312,290 and $116,650, respectively, for interest and principal on these loans to SRAM Holdings, LLC. In March 2010, a member of the lending syndicate purchased their portions of the loan. Certain holders of the Class A units of SRAM Holdings, LLC, including certain affiliates of our selling stockholders, were lenders in this term loan credit facility, including General Electric Capital Corporation and JP Morgan Chase Bank, N.A. Simultaneous with the term loan facility, we entered into a $110.0 million mezzanine credit facility. Certain holders of Class A

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents units of SRAM Holdings, LLC, including certain affiliates of our selling stockholders, were lenders in the mezzanine credit facility, including JPM Mezzanine Capital, LLC, Gleacher Mezzanine Fund II, L.P. and Southern Farm Bureau Life Insurance Company.

Option Exercise and Distribution

Pursuant to the 2008 recapitalization, each U.S. resident, including Gidon Cohen, one of our directors, Frederick K. W. Day, Stanley R. Day, Jr., John W. Stroh, III, brother-in-law to Stanley R. and Frederick K. W. Day, Michael R. Herr, our Chief Financial Officer, Jeffrey M. Shupe, our Chief Operating Officer, Jack Smith, one of our directors, Charles R. Walker, a director of SRAM Holdings, LLC, Robert Perkowitz, a former director of SRAM Holdings, LLC and Jack Smith, a former director of SRAM Holdings, LLC, who held stock options to purchase shares of SRAM Corporation having a value in excess of $100,000 in the aggregate exercised such options and received shares of SRAM-SP2, Inc., and each U.S. resident who held stock options to purchase shares of SRAM Corporation having a value of less than $100,000 in the aggregate and each non-U.S. resident who held stock options to purchase shares of SRAM Corporation cancelled their options in exchange for a cash payment. Non-U.S. residents who received proceeds in excess of $100,000 were required to invest at least 25% of their net proceeds in SRAM International, Inc., a newly-formed corporation. SRAM-SP2, Inc. sold 68,161 of its Class B units in SRAM Holdings, LLC to SRAM International, Inc. for approximately $4.4 million. SRAM-SP2, Inc. distributed the proceeds of this sale as a special dividend of approximately $0.95 per share to its stockholders.

Trilantic Investment and repurchase

As described above, in the 2008 recapitalization, SRAM-SP2, Inc. sold 100% of the Class A units (3,640,000 Class A units) in SRAM Holdings, LLC to Trilantic and its co-investors for $234.8 million, which constituted a 40% minority interest in SRAM Holdings, LLC. SRAM-SP2, Inc. used $224.8 million of the sale proceeds to redeem 40% of its outstanding shares (less the number of options purchased by SRAM Corporation as described above) from certain electing stockholders. In connection with this repurchase, each of the non-Day family stockholders of SRAM-SP2, Inc. were offered the opportunity to sell up to 75% of their shares in SRAM-SP2, Inc., and the Day family stockholders agreed to sell the portion of their shares of SRAM-SP2, Inc., necessary to cause the total number of shares repurchased to equal 40% of the outstanding SRAM-SP2, Inc. shares. The repurchase price per share of SRAM-SP2, Inc. was approximately $80.79, payable in two separate installments in 2008 and 2009. Repurchase proceeds paid to Stanley R. Day, Jr. and a trust for his benefit, Frederick K. W. Day and a trust for his benefit, Lincoln W. Day (brother to Stanley R. and Frederick K. W. Day), Vivian W. Day (sister to Stanley and Frederick Day), John W. Stroh, III, Gidon Cohen and a trust for his benefit, Michael R. Herr, Jeffrey M. Shupe, Jack Smith and Charles R. Walker in 2008 and 2009 were as follows: $50,615,584 and $8,667,379, respectively; $45,604,728 and $7,809,323, respectively; $23,347,894 and $3,998,078, respectively; $13,463,466 and $2,305,476, respectively; $811,975 and $139,042, respectively; $2,050,686 and $350,494, respectively; $3,919,297 and $670,437, respectively; $8,133,573 and $1,390,657, respectively; $1,681,585 and $287,500, respectively; and $4,507,467 and $770,395, respectively.

Operating Agreement

In connection with the 2008 recapitalization, the holders of the Class A Units of SRAM Holdings, LLC were granted certain governance rights, which were set forth in the amended and restated limited liability company operating agreement of SRAM Holdings, LLC and included the following:

The holders of the Class A units were entitled to designate two of the seven managers of SRAM Holdings, LLC, and also had various approval rights with respect to certain extraordinary transactions or activities of SRAM Holdings, LLC and its subsidiaries, as well as certain liquidity rights and customary registration rights commencing between September 30, 2012 and September 30, 2013. At the time of the 2008 recapitalization, we entered into an indemnification agreement with Mr. Moore.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The holders of the Class A units received a 10% cumulative preferred return, compounded quarterly, payable on their $234.8 million initial capital contribution and on any accrued but unpaid preferred return (with the preferred return increasing to 15% on September 30, 2014).

The holders of the Class A units were entitled to a return of their entire $234.8 million initial capital contribution and any accrued but unpaid preferred return thereon, as compounded at the preferred return rate, before any distributions (other than mandatory tax distributions) were made to the holders of the Class B units or to the holders of any incentive units. Once the holders of the Class A units would have received a distribution equal to their entire $234.8 million initial capital contribution and any accrued but unpaid preferred return thereon, as compounded at the preferred return rate, they were also entitled to share in further distributions by SRAM Holdings, LLC.

2011 refinancing and reorganization Refinancing

On June 7, 2011, SRAM, LLC entered into new credit facilities consisting of a first-lien term facility, a second-lien term facility and a revolving facility. The aggregate proceeds from the new credit facilities were approximately $790.0 million. The proceeds from the new credit facilities were used to repay all outstanding amounts under our prior credit facilities, which as of June 7, 2011, were $194.8 million (including accrued interest), to directly or indirectly acquire all of the equity interests in SRAM Holdings, LLC held by Trilantic and its co-investors for $575.0 million and to pay fees and expenses related to the refinancing. In connection with these transactions, SRAM Holdings, LLC amended and restated its operating agreement to combine the Class A units and the Class B units to create a single class of common units and eliminate the corporate governance and liquidity rights of the Class A unit holders. Following the refinancing, Trilantic and its co-investors have no remaining ownership of SRAM Holdings, LLC. See The refinancing and reorganization for additional information.

Reorganization

Immediately prior to the consummation of this offering, the existing equity holders of SRAM Holdings, LLC will enter into a reorganization pursuant to which SRAM International Corporation will acquire 100% of the equity interests of SRAM Holdings, LLC, either directly or through its wholly-owned subsidiaries, and the equity holders of SRAM Holdings, LLC will exchange their direct or indirect equity interests in SRAM Holdings, LLC for shares of common stock of SRAM International Corporation. The existing equity holders will include the Day family, SRAM management and current and former directors and employees. A portion of the shares of common stock issued to the existing equity holders will be sold in the secondary portion of this offering. SRAM Holdings, LLC will continue to hold 100% of the equity interests of our operating company, SRAM, LLC. Immediately prior to this offering, SRAM Holdings, LLC will make a $ million distribution to its existing equity holders to cover the estimated federal and state income taxes payable on their allocable shares of estimated taxable income of SRAM Holdings, LLC from January 1, 2011 through the closing date of this offering. See The refinancing and reorganization for additional information.

Registration rights In connection with this offering, we intend to enter into a registration rights agreement with each member of the Day family holding shares of our common stock. The registration rights agreement will grant registration rights with respect to the shares of our Class A common stock issuable or issued upon conversion of shares of our Class B common stock. Holders of our Class A common stock who hold more than 1% of our total outstanding stock prior to the completion of this offering may also become parties to the registration rights agreement with respect to such shares. We refer to the shares covered by the registration rights agreement as registrable securities.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The registration rights agreement will provide the holders of registrable securities with customary piggyback and demand registration rights, commencing days after the closing of this offering. Pursuant to the piggyback rights, if we register shares of our common stock, either for our own account or for the account of other securityholders, these holders will be entitled to include their shares of common stock in the registration, subject to certain exceptions and limitations. Pursuant to the demand registration rights, holders of % of the registrable securities may demand that we file a registration statement registering their shares, including on a shelf registration statement, and that their sales of such shares be sold in an underwritten offering, subject to certain exceptions and limitations. All fees, costs and expenses of any registration covered by the registration rights agreement will be paid by us, other than underwriting discounts and commissions and certain other selling expenses, which, if applicable, will be paid by the holders of the securities being registered. The registration rights agreement will also contain customary indemnification provisions. The registration rights agreement will remain in effect for so long as there are outstanding registrable securities.

Voting trust agreement We expect that each Day family member holding shares of our Class B common stock at the time of the closing of this offering will deposit his or her or its shares of Class B common stock into a voting trust, which shall govern the voting and transfer of the Class B common stock.

Voting trust Pursuant to the trust agreement, each member of the Day family will agree to deposit his, her or its shares of Class B common stock with a trustee, and the shares will thereafter be voted by the trustee in accordance with the trust agreement. Pursuant to the trust agreement, the trustee will vote all shares held in trust on all matters presented for vote to our stockholders in accordance with the direction of the holders of a majority of such shares. The trustee will hold office until he or she resigns, dies, becomes incapacitated, or refuses to act or is removed by the beneficiaries pursuant to the terms of the trust agreement. The initial trustee under the trust agreement will be Stanley R. Day, Jr.

Interests in the voting trust are transferable only on the books of the trustee and to permitted transferees of Class B common stock under our amended and restated certificate of incorporation. If a holder wishes to sell or otherwise transfer or dispose of any or all of his, her or its shares deposited in the trust, or whenever such holder ceases to be eligible to be a party to the trust, the trust will have the right to purchase such shares from the withdrawing holder, subject to the terms and procedures set forth in the trust agreement. If the trust does not purchase any or all of the shares, the holder may withdraw the shares that were not purchased for transfer or disposal. Pursuant to the terms of our amended and restated certificate of incorporation, such a withdrawal would cause the automatic conversion of the withdrawn shares.

The trust agreement will remain in effect for 30 years, and will automatically renew for additional 30 year renewal periods thereafter, unless earlier terminated pursuant to its terms.

Policies and Procedures for related person transactions Our board of directors intends to adopt a written related person policy to set forth the policies and procedures for the review and approval or ratification of related person transactions. This policy will cover any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we are to be a participant, the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person.

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The following table sets forth information regarding beneficial ownership of SRAM International Corporations capital stock immediately prior to the consummation of this offering, giving effect to the refinancing and the reorganization, including the filing of our amended and restated certificate of incorporation, and immediately after this offering for the following:

each person, or group of affiliated persons, known by us to beneficially own more than 5% of our voting securities;

each of our directors;

each of our named executive officers;

each of the selling stockholders; and

all of our executive officers and directors as a group.

Beneficial ownership is determined according to the rules of the SEC and generally means that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power of that security, including options and warrants that are currently exercisable or exercisable within 60 days. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown that they beneficially own, subject to community property laws where applicable.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Unless otherwise noted below, the address for each of the stockholders in the table below is c/o SRAM, 1333 North Kingsbury Street, 4th Floor, Chicago, Illinois 60622.

See Certain relationships and related person transactions and Management for information with respect to certain selling stockholders and their relationship with us.

Beneficial ownership prior to Beneficial ownership after the offering(1) the offering Class A Class B Class A Class B common common common common stock stock stock stock Class Percentage Percent of A of total total voting shares voting Name and address of power prior being power after beneficial owner Shares % Shares % to offering offered Shares % Shares % the offering

5% stockholders: Lincoln W. Day(2) Vivian W. Day(3) Executive officers and directors: Stanley R. Day, Jr.(4) Michael R. Herr(5) Jeffrey M. Shupe(6) Frederick K. W. Day(7) Gidon Cohen(8) Jack Smith(9) Charles C. Moore(10) Other selling stockholders: Charles Becker John Cheever John Dixon Ted Homewood Dennis Kelleher Mike Mercuri Michelle Miller John Nedeau John Stroh III(11) Christopher Stroh Trust(12) Elizabeth Stroh Trust(13)

* Represents beneficial ownership of less than one percent (1%) of our outstanding common stock.

(1) Gives effect to the refinancing and the reorganization. Shares shown in the table above include shares held in the beneficial owners name or jointly with others, or in the name of a bank, nominee or trustee for the beneficial owners account.

(2) Lincoln W. Day has sole investment and voting power as to these shares. The address of Mr. Day is 30 E. 7th Street, Suite 2000, St. Paul, Minnesota 55101. These shares will be subject to and voted in accordance with the Day family voting trust agreement we intend to enter into in connection with this offering. The trustee for the voting trust agreement will be Mr. Stanley R. Day, Jr. and his address is c/o SRAM International Corporation, 1333 N. Kingsbury Street, 4th floor, Chicago, Illinois 60642. See Certain relationships and related person transactionsVoting trust agreement.

(3) Represents (i) shares of Class A common stock beneficially owned by Vivian W. Day and (ii) shares of Class A common stock held by Vivian W. Days spouse. Vivian W. Day has sole investment and voting power as to shares listed in (i). Ms. Day disclaims beneficial ownership of the shares listed in (ii), except to the extent of her pecuniary interest therein. The address of Ms. Day is 300 River Place, Suite 5000, Detroit, Michigan 48207. These shares will be subject to and voted in accordance with the Day family voting trust agreement we intend to enter into in connection with this offering. The trustee for the voting trust agreement will be Mr. Stanley R. Day, Jr. and his address is c/o SRAM International Corporation, 1333 N. Kingsbury Street, 4th floor, Chicago, Illinois 60642. See Certain relationships and related person transactionsVoting trust agreement.

(4) Represents (i) shares of Class A common stock beneficially owned by the Stanley R. Day Jr. Trustee U/A, dated 10/22/04 with Stanley R. Day Jr.; (ii) shares of Class A common stock held of record by S.R. Day Jr. and C.P. Stroh Trustees U/A dated 2/28/01 with Vivian W. Day and John W. Stroh III f/b/o Christopher R.W.D. Stroh Trust and (iii) shares of Class A common stock held of

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents record by S.R. Day Jr. and C.P. Stroh Trustees U/A dated 5/15/96 with Vivian W. Day and John W. Stroh III f/b/o Elizabeth R.W.D. Stroh Trust. Stanley R. Day, Jr. is the sole trustee of the Stanley R. Day Jr., Trustee U/A dated 10/22/04 with Stanley R. Day Jr. and as such, has investment and voting power as to these shares. Mr. Day is co-trustee of S.R. Day Jr. and C.P. Stroh Trustees U/A dated 2/28/01 with Vivian W. Day and John W. Stroh III f/b/o Christopher R.W.D. Stroh and S.R. Day Jr. and C.P. Stroh Trustees U/A dated 5/15/96 with Vivian W. Day and John W. Stroh III f/b/o Elizabeth R.W.D. Stroh Trusts and, as such, has shared investment and voting power as to these shares. Mr. Day disclaims beneficial ownership of these shares listed in (ii) and (iii), except to the extent of his pecuniary interest therein, if any. These shares will be subject to and voted in accordance with the Day family voting trust agreement we intend to enter into in connection with this offering. The trustee for the voting trust agreement will be Mr. Stanley R. Day, Jr. and his address is c/o SRAM International Corporation, 1333 N. Kingsbury Street, 4th floor, Chicago, Illinois 60642. See Certain relationships and related person transactionsVoting trust agreement.

(5) Represents (i) shares of Class A common stock beneficially owned by Michael R. Herr and (ii) shares of Class A common stock beneficially owned by the Michael R. Herr Trust, dated 10/26/00, as amended. Mr. Herr is the sole trustee of the Michael R. Herr Trust. Mr. Herr has sole investment and voting power as to all of these shares.

(6) Jeffrey M. Shupe has sole investment and voting power as to these shares.

(7) Frederick K. W. Day is the sole trustee of the F.K.W. Day Trust U/A dated 6/9/04 and as such, has investment and voting power as to these shares. These shares will be subject to and voted in accordance with the Day family voting trust agreement we intend to enter into in connection with this offering. The trustee for the voting trust agreement will be Mr. Stanley R. Day, Jr. and his address is c/o SRAM International Corporation, 1333 N. Kingsbury Street, 4th floor, Chicago, Illinois 60642. See Certain relationships and related person transactionsVoting trust agreement.

(8) Gidon Cohen is sole trustee of the Gidon Cohen Revocable Trust dated 5/8/90 and, as such, has investment and voting power as to these shares.

(9) Jack Smith has sole investment and voting power as to these shares.

(10) Charles C. Moore is a partner of Trilantic Capital Partners. Mr. Moore was elected to our Board of Directors as a Trilantic Capital Partners designee in 2008 as part of the 2008 recapitalization. See Certain relationships and related person transactionsTrilantic 2008 investment and recapitalization. Following the refinancing, Mr. Moore is no longer a Trilantic designee; however, he remains a member of our Board of Directors.

(11) John Stroh III has sole investment and voting power as to these shares. These shares will be subject to and will be voted in accordance with the Day family voting trust agreement we intend to enter into in connection with this offering. The trustee for the voting trust agreement will be Mr. Stanley R. Day, Jr. and his address is c/o SRAM International Corporation, 1333 N. Kingsbury Street, 4th floor, Chicago, Illinois 60642. See Certain relationships and related person transactionsVoting trust agreement.

(12) S.R. Day Jr. and C.P. Stroh are co-trustees of the U/A dated 5/15/96 with Vivian W. Day and John W. Stroh III f/b/o Elizabeth R.W.D Stroh Trust and, as such Mr. Day and Mr. Stroh share Investment and voting power as to these shares. These shares will be subject to and will be voted in accordance with the Day family voting trust agreement we intend to enter into in connection with this offering. The trustee for the voting trust agreement will be Mr. Stanley R. Day, Jr. and his address is c/o SRAM International Corporation, 1333 N. Kingsbury Street, 4th floor, Chicago, Illinois 60642. See Certain relationships and related person transactionsVoting trust agreement.

(13) S.R. Day Jr. and C.P. Stroh are co-trustees of U/A dated 2/28/01 with Vivian W. Day and John W. Stroh III f/b/o Christopher R.W.D Stroh Trust and, as such Mr. Day and Mr. Stroh share Investment and voting power as to these shares. These shares will be subject to and voted in accordance with the Day family voting trust agreement we intend to enter into in connection with this offering. The trustee for the voting trust agreement will be Mr. Stanley R. Day, Jr. and his address is c/o SRAM International Corporation, 1333 N. Kingsbury Street, 4th floor, Chicago, Illinois 60642. See Certain relationships and related person transactionsVoting trust agreement.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Description of capital stock General The following is a summary of the material rights of our capital stock and related provisions of our amended and restated certificate of incorporation and amended and restated bylaws, as they will be in effect upon the completion of this offering. The following description of our capital stock does not purport to be complete and is subject to, and qualified in its entirety by, our amended and restated certificate of incorporation, amended and restated bylaws, the Day family voting trust agreement and the Day family registration rights agreement, which we have included as exhibits to the registration statement of which this prospectus is a part.

Our amended and restated certificate of incorporation provides that, upon the closing of this offering, we will have two classes of common stock: Class A common stock, which will have one vote per share, and Class B common stock, which will have ten votes per share. Any holder of Class B common stock may convert his or her shares at any time into shares of Class A common stock on a share-for-share basis and, under certain circumstances, the shares of Class B common stock will be automatically converted into shares of Class A common stock on a share-for-share basis. Otherwise the rights of the two classes of our common stock will be identical. The rights of these classes of our common stock are discussed in greater detail below.

After completion of this offering, our authorized capital stock will consist of shares, each with a par value of $0.01 per share, of which:

shares will be designated as Class A common stock;

shares will be designated as Class B common stock; and

shares will be designated as preferred stock.

Our Class A common stock is the class of stock we are proposing to sell in our initial public offering and will be the only class of stock which is publicly traded. After completion of this offering, there will be shares of Class A common stock outstanding and shares of Class B common stock outstanding (assuming the underwriters do not exercise their right to purchase additional shares).

Common stock Voting rights

Holders of our Class A common stock are entitled to one vote per share and holders of our Class B common stock are entitled to ten votes per share. Holders of shares of Class A common stock and Class B common stock will vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders, unless otherwise required by law. Delaware law could require either our Class A common stock or our Class B common stock to vote separately as a single class in the following circumstances:

If we were to seek to amend our amended and restated certificate of incorporation to increase the authorized number of shares of a class of stock, or to increase or decrease the par value of a class of stock, then that class would be required to vote separately to approve the proposed amendment; and

If we were to seek to amend our amended and restated certificate of incorporation in a manner that altered or changed the powers, preferences or special rights of a class of stock in a manner that affected its holders adversely, then that class would be required to vote separately to approve the proposed amendment.

We have not provided for cumulative voting for the election of directors in our amended and restated certificate of incorporation.

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Dividend rights

Subject to preferences that may apply to any outstanding shares of preferred stock, holders of Class A common stock and Class B common stock will be entitled to share equally in any dividends that our board of directors may declare from time to time. In the event a dividend is paid in the form of shares of common stock or rights to acquire shares of common stock, holders of Class A common stock will receive Class A common stock, or rights to acquire Class A common stock, as the case may be, and holders of Class B common stock will receive Class B common stock, or rights to acquire Class B common stock, as the case may be.

Liquidation

Upon any voluntary or involuntary liquidation, dissolution, distribution of assets or winding up of our corporation, holders of our Class A common stock and Class B common stock are entitled to share equally, on a per share basis, in all our assets available for distribution, after payment to creditors and subject to any prior distribution rights granted to holders of any outstanding shares of preferred stock.

Conversion

Our Class A common stock is not convertible into any other shares of our capital stock.

Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, whether or not for value, except for certain transfers described in our amended and restated certificate of incorporation, including the following:

transfers between members of the Day family;

transfers for tax and estate planning purposes, including to trusts, corporations and partnerships controlled by a holder of Class B common stock, or transfers to certain qualified charitable foundations; and

transfers approved in advance by our board of directors or a majority of the independent directors on our board of directors after making a determination that the transfer is consistent with the purposes of the other types of transfers that are permitted.

All shares of Class B common stock will convert automatically into shares of Class A common stock if, on any record date for determining the stockholders entitled to vote at an annual or special meeting of stockholders, the aggregate number of shares of our Class A common stock and Class B common stock owned, directly or indirectly, by the holders of our Class B common stock is less than % of the aggregate number of shares of our Class A common stock and Class B common stock then outstanding.

Once converted into Class A common stock, the Class B common stock shall not be reissued. No class of common stock may be subdivided or combined unless the other class of common stock concurrently is subdivided or combined in the same proportion and in the same manner.

Other than in connection with dividends and distributions, subdivisions or combinations, or mergers, consolidations, reorganizations or other business combinations involving stock consideration as provided for in our amended and restated certificate of incorporation, we are not authorized to issue additional shares of Class B common stock.

Preferred stock Following this offering, our board of directors will be authorized, without any further action by our stockholders, but subject to the limitations imposed by Delaware law, to issue up to shares of preferred stock in one or more series. Our board of directors may fix the designations, powers, preferences and rights of the

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents preferred stock, along with any qualifications, limitations or restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of each series of preferred stock. The preferred stock could have voting or conversion rights that could adversely affect the voting power or other rights of holders of our common stock. The issuance of preferred stock, or rights to acquire preferred stock, could also have the effect, under certain circumstances, of delaying, deferring or preventing a change of control of our company.

The registration rights agreement will provide the holders of registrable securities with customary piggyback and demand registration rights, commencing days after the closing of this offering. Pursuant to the piggyback rights, if we register shares of our common stock, either for our own account or for the account of other securityholders, these holders will be entitled to include their shares of common stock in the registration, subject to certain exceptions and limitations. Pursuant to the demand registration rights, these holders may, from time to time, demand that we file a registration statement registering their shares, including on a shelf registration statement, and that their sales of such shares be sold in an underwritten offering, subject to certain exceptions and limitations. All fees, costs and expenses of any registration covered by the registration rights agreement will be paid by us, other than underwriting discounts and commissions and certain other selling expenses, which, if applicable, will be paid by the holders of the securities being registered. The registration rights agreement will also contain customary indemnification provisions. The registration rights agreement will remain in effect for so long as there are outstanding registrable securities.

Anti-takeover provisions Certain provisions of Delaware law and our amended and restated certificate of incorporation and bylaws that will become effective upon completion of this offering could have the effect of delaying, deferring or discouraging another party from acquiring control of us. In particular, our dual class common stock structure will concentrate ownership of our voting stock in the hands of the Day family. These provisions, which are summarized below, are expected to discourage certain types of coercive takeover practices and inadequate takeover bids. These provisions are also designed in part to allow management to continue making decisions for the long-term best interest of SRAM International Corporation and all of our stockholders and encourage anyone seeking to acquire control of us to first negotiate with our board of directors. We believe that the advantages gained by protecting our ability to negotiate with any unsolicited and potentially unfriendly acquirer outweigh the disadvantages of discouraging such proposals, including those priced above the then-current market value of our common stock, because, among other reasons, the negotiation of such proposals could improve their terms.

Dual class structure

Our Class B common stock is entitled to ten votes per share, while our Class A common stock is entitled to one vote per share. Our Class A common stock is the class of stock we are proposing to sell in our initial public offering and will be the only class of stock which is publicly traded. Following this offering, the Day family will

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents beneficially own, in the aggregate, all of our Class B common stock, representing % of the total voting power of our outstanding common stock (or % of the total voting power of our outstanding common stock if the underwriters exercise in full their option to purchase additional shares). As a result, the Day family will be able to exert a significant degree of influence or actual control over our management and affairs and over matters requiring stockholder approval, including the election of directors, a merger, consolidation or sale of all or substantially all of our assets and any other significant transaction. Because of our dual class common stock structure, holders of our Class B common stock will continue to exert a significant degree of influence or actual control over matters requiring stockholder approval, even if they own less than 50% of the outstanding shares of our common stock. This concentrated control could discourage others from initiating any potential merger, takeover or other change of control transaction that other stockholders may view as beneficial.

Certificate of incorporation and bylaws

Our amended and restated certificate of incorporation and amended and restated bylaws, which will become effective upon completion of this offering will include the following provisions, among others:

immediately following this offering, our board of directors will consist of a single class, with each director serving a one-year term. However, if all shares of our Class B common stock are converted into Class A common stock or otherwise cease to be outstanding, our board of directors will be divided into three classes, with each class serving for a staggered three-year term;

immediately following this offering, our stockholders may act by written consent. However, if all shares of our Class B common stock are converted into Class A common stock or otherwise cease to be outstanding, actions to be taken by our stockholders will only be permitted to be effected at an annual or special meeting of our stockholders and not by written consent;

special meetings of our stockholders may be called by our chairman, president, chief executive officer or a majority of our board of directors. In addition, immediately following this offering, our secretary must also call a special meeting of stockholders upon the written request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast at that meeting. However, if all shares of our Class B common stock are converted into Class A common stock or otherwise cease to be outstanding, our stockholders will not be permitted to call special meetings of our stockholders;

our board of directors may issue up to shares of preferred stock, with designations, rights and preferences as may be determined from time to time by our board of directors.

Section 203 of the Delaware General Corporation Law

Immediately following this offering, we will not be governed by Section 203 of the Delaware general corporation law. However, our amended and restated certificate of incorporation provides that we will be governed by Section 203 if all shares of our Class B common are converted into Class A common stock or

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents otherwise cease to be outstanding. In general, Section 203 prohibits a public Delaware corporation from engaging in a business combination with an interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A business combination includes mergers, asset sales or other transactions resulting in a financial benefit to the stockholder. An interested stockholder is a person who, together with affiliates and associates, owns, or within the prior three years did own, 15% or more of the corporations outstanding voting stock.

The provisions of Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

Pursuant to the trust agreement, each member of the Day family will agree to deposit his, her or its shares of Class B common stock with a trustee, and the shares will thereafter be voted by the voting trustee in accordance with the trust agreement. Pursuant to the voting trust agreement, the trustee will vote all shares held in trust on all matters presented for vote to our stockholders in accordance with the direction of the holders of a majority of such shares. The trustee will hold office until he or she resigns, dies, becomes incapacitated, or refuses to act or is removed by the beneficiaries pursuant to the terms of the trust agreement. The initial trustee under the trust agreement will be Stanley R. Day, Jr.

Interests in the voting trust are transferable only on the books of the trustee and to permitted transferees of Class B common stock under our amended and restated certificate of incorporation. If a holder wishes to sell or otherwise transfer or dispose of any or all of his, her or its shares deposited in the trust, or whenever such holder ceases to be eligible to be a party to the trust, the trust will have the right to purchase such shares from the holder, subject to the terms and procedures set forth in the trust agreement. If the trust does not purchase any or all of the shares, the holder may withdraw the shares that were not purchased for transfer or disposal. Pursuant to the terms of our amended and restated certificate of incorporation, such withdrawal would cause the automatic conversion of the withdrawn shares.

The trust agreement will remain in effect for 30 years, and will automatically renew for additional 30 year renewal periods thereafter, unless earlier terminated pursuant to its terms.

Nasdaq Stock Market listing

We have applied to have our Class A common stock approved for quotation on the Nasdaq stock market under the symbol SRAM.

Transfer agent and registrar The transfer agent and registrar for our Class A common stock is . The transfer agents address is and its telephone number is .

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On June 7, 2011, our wholly-owned subsidiary SRAM, LLC entered into new credit facilities consisting of (i) a first-lien loan facility comprised of a term loan facility in the principal amount of $605.0 million and a revolving credit facility (which includes a letter of credit facility) in the principal amount of up to $50.0 million, which we collectively refer to as the first-lien credit facility, and (ii) a second-lien term loan facility in the principal amount of $185.0 million, which we refer to as the second-lien credit facility. We refer to our first-lien credit facility and second-lien credit facility collectively as our new credit facilities. The aggregate proceeds from the new credit facilities were $790.0 million. As of , 2011, we had no amounts drawn under our revolving credit facility.

First-lien credit facility Interest and fees. Interest on our borrowings under the first-lien credit facility accrues at a per annum rate equal to: (1) the Eurodollar rate (LIBOR for the applicable interest period adjusted for reserve requirements, subject to a floor of 1.25%) plus a margin which is initially 3.50% but which may be adjusted to 3.25% or 3.00% in future periods based on our consolidated leverage ratio, or (2) the ABR (defined as the greatest of (a) the prime rate, (b) the federal funds rate plus 0.50%, and (c) one- month LIBOR plus 1.00%) plus a margin which is initially 2.50% but which may be adjusted to 2.25% or 2.00% in future periods based on our consolidated leverage ratio. With some exceptions, we may elect from between these two rates. For borrowings which bear interest at the rate based on the Eurodollar rate, with some exceptions we can select interest periods of one, two, three, or six months. The first-lien credit facility requires the payment of certain fees, including letter of credit fees, commitment fees for our revolving credit facility based on the unutilized portion of the available commitment, and other fees payable to the administrative agent.

Maturity and Payments. The term loan facility matures on June 7, 2018 and the revolving credit facility matures on June 7, 2016. The term loan facility requires quarterly principal payments of $1.5 million. With some exceptions, interest is payable quarterly. We are also required to use a portion of our excess cash flow (50%, 25%, or 0% depending on our consolidated leverage ratio), the net proceeds of certain asset sales, and the net proceeds of certain debt issuances, to make mandatory prepayments. Voluntary prepayments before June 7, 2012 with the primary purpose of refinancing our term loan facility at a lower interest rate are subject to a prepayment fee of 1.00%.

Guarantees and security. All obligations under the first-lien credit facility are unconditionally guaranteed by our domestic wholly- owned subsidiary, Compositech, Inc., and by SRAM Holdings, LLC. SRAM International Corporation, SRAM-SP2, Inc., SRAM SP3, LLC, and SRAM-SP4, LLC will be required to guaranty the obligations after the completion of this offering. All of SRAM, LLCs obligations under the first-lien credit facility, and all of the obligations of the guarantors with respect to their guarantees under the first-lien credit facility, are secured by substantially all of SRAM, LLCs and the guarantors assets, subject to certain exceptions. In addition, SRAM Holdings, LLC has pledged all of the outstanding membership interests of SRAM, LLC, and SRAM, LLC has pledged all of the outstanding capital stock and membership interests of each of its direct and indirect domestic subsidiaries and 65% of the outstanding capital stock and membership interests of each of SRAM, LLCs first-tier foreign subsidiaries.

Covenants. The first-lien credit facility contains a number of customary affirmative and negative covenants which, among other things, restrict our ability to do the following, subject to exceptions:

incur additional debt;

create liens;

make certain investments;

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents transfer and sell assets, or issue equity interests of subsidiaries;

pay dividends, make distributions, or repurchase stock;

prepay indebtedness;

merge, consolidate, or make acquisitions;

change the nature of our business;

enter into transactions with affiliates; and

make capital expenditures.

In addition, while any borrowing under the revolving credit facility or any letter of credit remains outstanding, we are subject to a financial covenant which prohibits us from having a consolidated leverage ratio in excess of specified levels.

Events of Default. The first-lien credit facility provides for customary events of default. In the case of an event of default arising from specified events of bankruptcy or insolvency, all outstanding obligations under the first-lien credit facility will automatically become due and payable immediately without further notice. If any other event of default under the first-lien credit facility occurs, the administrative agent may, and at the request of the lenders holding a majority of the first-lien credit facility commitments shall, among other things, declare all outstanding amounts under the first-lien credit facility due and payable.

Second-lien credit facility Interest and fees. Interest on our borrowings under the second-lien credit facility accrues at a per annum rate equal to: (1) the Eurodollar rate (LIBOR for the applicable interest period adjusted for reserve requirements, subject to a LIBOR floor of 1.50%) plus 7.00%, or (2) the ABR (defined as the greatest of (a) the prime rate, (b) the federal funds rate plus 0.50%, and (c) one-month LIBOR plus 1.00%) plus 6.00%. With some exceptions, we may elect from between these two rates. For borrowings which bear interest at the rate based on the Eurodollar rate, with some exceptions we can select interest periods of one, two, three, or six months. The second-lien credit facility requires the payment of certain fees to the administrative agent.

Maturity and Payments. The second-lien credit facility matures on December 7, 2018. With some exceptions, interest is payable quarterly. We are required to use a portion of our excess cash flow (50%, 25%, or 0% depending on our consolidated leverage ratio), the net proceeds of certain asset sales, and the net proceeds of certain debt issuances, to make mandatory prepayments, with such mandatory prepayment amounts being reduced by the amounts prepaid under the corresponding provisions of the first-lien credit facility. We are also required to use the net proceeds of this offering to prepay the second-lien credit facility. Voluntary prepayments are subject to a prepayment fee of 3.00% during the first eighteen months following the closing date of the second-lien credit facility, 2.00% during the next succeeding twelve months, and 1.00% during the next succeeding twelve months.

Guarantees and Security. All obligations under the second-lien credit facility are unconditionally guaranteed by the same guarantors which guarantee the first-lien credit facility. All of our obligations under the second-lien credit facility are secured by substantially all of the same collateral which secures the first-lien credit facility.

Covenants. The second-lien credit facility contains affirmative and negative covenants which are substantially the same as those contained in the first-lien credit facility, but with quantitative limitations and exceptions generally being slightly less restrictive. The second-lien credit facility does not contain any financial covenants.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Events of Default. The second-lien credit facility contains customary events of default which are substantially the same as those contained in the first-lien credit facility (except that the provisions in the second-lien credit facility relating to cross-default to other indebtedness exclude indebtedness under the first-lien credit facility except in cases of payment default or acceleration), but with quantitative limitations and exceptions generally being slightly less restrictive.

Intercreditor agreement The administrative agents under each of the first-lien credit facility and second-lien credit facility are party to an intercreditor agreement which governs the relative rights of the lenders under the first-lien credit facility and the lenders under the second-lien credit facility with respect to the collateral. The liens on the collateral which secure the first-lien credit facility have priority over the liens on the same collateral which secure the second-lien credit facility. The intercreditor agreement contains other customary provisions, including provisions which limit the right of the administrative agent under the second-lien credit facility to take any enforcement action against the collateral while the obligations under the first-lien credit facility are outstanding until, among other limitations, the expiration of a 180 day standstill period.

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Prior to this offering, there has been no public market for our common stock. Future sales of our Class A common stock in the public market, or the availability of such shares for sale in the public market, could adversely affect market prices prevailing from time to time. As described below, only a limited number of shares will be available for sale shortly after this offering due to contractual and legal restrictions on resale. Nevertheless, sales of our common stock in the public market after such restrictions lapse, or the perception that those sales may occur, could adversely affect the prevailing market price at such time and our ability to raise equity capital in the future.

The number of shares outstanding on a pro forma as adjusted basis, after giving effect to the reorganization, including the filing of our amended and restated certificate of incorporation, and this offering, will be shares of Class A common stock and shares of Class B common stock. Of the outstanding shares, all of the shares sold in this offering will be freely tradable, except that any shares held by our affiliates, as that term is defined in Rule 144 under the Securities Act, may only be sold in compliance with the limitations described below.

The remaining shares of Class A common stock outstanding after this offering and the shares of Class A common stock issuable upon conversion of Class B common stock will be restricted securities under the securities laws and of these shares will be subject to lock-up agreements as described below. Prior to the expiration of the lock-up period, these shares may only be resold if they are eligible for resale under the securities laws and are not subject to a lock-up agreement. Following the expiration of the lock-up period, all shares of Class A common stock will be eligible for resale in compliance with Rule 144, Rule 144(k). Restricted securities as defined under Rule 144 were issued and sold by us in reliance on exemptions from the registration requirements of the Securities Act. These shares may be sold in the public market only if registered or pursuant to an exemption from registration, such as Rule 144 under the Securities Act.

Rule 144 In general, a person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the 90 days preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Persons who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of, or any time during the 90 days preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following:

1% of the number of shares of our Class A common stock then outstanding, which will equal approximately shares immediately after this offering, based on the number of shares of Class A common stock outstanding as of the completion of this offering; or

the average weekly trading volume of our Class A common stock on the Nasdaq during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Provided, in each case, that we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Such sales, if applicable, must also comply with the manner of sale, current public information and notice provisions of Rule 144.

Lock-up agreements Our directors, executive officers and certain of our stockholders have entered or will enter into lock-up agreements with the underwriters pursuant to which they have agreed, with limited exceptions, not to sell,

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents transfer or dispose of, directly or indirectly, any shares of our Class A common stock or any securities convertible into or exercisable or exchangeable for shares of our Class A common stock without the prior written consent of J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. Incorporated for a period of 180 days after the date of this prospectus, subject to a possible extension under certain circumstances, after the date of this prospectus. The holders of approximately % of our outstanding shares of common stock have executed lock-up agreements. These agreements are described under Underwriting.

Registration rights On the date beginning days after the date of this prospectus, the holders of approximately shares of our Class B common stock, or their transferees, will be entitled to certain rights with respect to the registration of those shares under the Securities Act. For a description of these registration rights, see Description of capital stockRegistration rights. After these shares are registered, they will be freely tradable without restriction under the Securities Act.

Registration statements As soon as practicable after the consummation of this offering, we intend to file a Form S-8 registration statement under the Securities Act to register shares of our Class A common stock reserved for issuance under our SRAM International Corporation 2011 Incentive Award Plan. This registration statement will become effective immediately upon filing, and shares covered by this registration statement will thereupon be eligible for sale in the public markets, subject to vesting restrictions, the lock-up agreements described above and Rule 144 limitations applicable to affiliates.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Material U.S. federal income tax consequences to non-U.S. holders of our Class A common stock

The following discussion describes the material U.S. federal income tax consequences to non-U.S. holders (as defined below) of the acquisition, ownership and disposition of our Class A common stock issued pursuant to this offering. This discussion is not a complete analysis of all potential U.S. federal income tax consequences and does not address any tax consequences arising under any state, local or foreign tax laws, any income tax treaties, or any other U.S. federal tax laws, including U.S. federal estate and gift tax laws. This discussion is based on the Internal Revenue Code of 1986, as amended (the Code), U.S. Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the Internal Revenue Service (the IRS), all as in effect on the date of this offering. These authorities may change, possibly retroactively, resulting in tax consequences different from those discussed below. No rulings have been or will be sought from the IRS with respect to the matters discussed below, and there can be no assurance that the IRS will not take a different position regarding the tax consequences of a non-U.S. holders acquisition, ownership or disposition of our Class A common stock or that any such position would not be sustained by a court.

This discussion is limited to non-U.S. holders who purchase our Class A common stock pursuant to this offering and who hold our Class A common stock as capital assets within the meaning of Code Section 1221 (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences that may be relevant to a non-U.S. holder in light of the holders particular circumstances. It also does not consider any specific facts or circumstances that may be relevant to non-U.S. holders subject to special rules under the U.S. federal income tax laws, including, without limitation, U.S. expatriates, banks, financial institutions, insurance companies, regulated investment companies, real estate investment trusts, controlled foreign corporations, passive foreign investment companies, corporations that accumulate earnings to avoid U.S. federal income tax, brokers, dealers or traders in securities, commodities or currencies, partnerships or other pass- through entities (or investors in such entities), tax-exempt organizations, tax-qualified retirement plans, persons subject to the alternative minimum tax, and persons holding our Class A common stock as part of a straddle, hedge or other risk reduction strategy or as part of a conversion transaction or other integrated investment.

WE RECOMMEND THAT PROSPECTIVE INVESTORS CONSULT THEIR TAX ADVISORS REGARDING THE PARTICULAR U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR CLASS A COMMON STOCK, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL OR FOREIGN TAX LAWS, ANY APPLICABLE INCOME TAX TREATIES, OR ANY OTHER U.S. FEDERAL TAX LAWS (INCLUDING ESTATE AND GIFT TAX LAWS).

Definition of Non-U.S. Holder As used in this discussion, a non-U.S. holder is any beneficial owner of our Class A common stock who is not treated as a partnership for U.S. federal income tax purposes and is not:

an individual citizen or resident of the United States;

a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof or the District of Columbia;

an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

a trust if (i) a U.S. court is able to exercise primary supervision over its administration and one or more U.S. persons have authority to control all its substantial decisions or (ii) the trust was in existence on August 20, 1996, was treated as a U.S. person prior to that date, and validly elected to continue to be so treated.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents If any entity treated as a partnership for U.S. federal income tax purposes holds our Class A common stock, the tax treatment of a partner generally will depend on the status of the partner and the activities of the partnership. Partnerships and their partners should consult their tax advisors as to the tax consequences to them of the acquisition, ownership and disposition of our Class A common stock.

Distributions on our Class A common stock As described in the section entitled, Dividend policy, we do not anticipate paying dividends on our Class A common stock in the foreseeable future. If we do make a distribution of cash or other property with respect to our Class A common stock, the distribution generally will constitute a dividend for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and will first be applied against and reduce a holders adjusted tax basis in its Class A common stock, but not below zero. Any remaining excess will be treated as capital gain from the sale of property.

Dividends paid to a non-U.S. holder of our Class A common stock that are not effectively connected to the holders conduct of a U.S. trade or business generally will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends, or a lower rate specified by an applicable tax treaty. To receive the benefit of a reduced treaty rate, a non-U.S. holder must furnish to us or our paying agent a valid IRS Form W-8BEN (or applicable successor form) certifying the holders qualification for the reduced rate. A non-U.S. holder may be required to obtain a U.S. taxpayer identification number to claim treaty benefits. This certification must be provided to us or our paying agent prior to the payment of dividends and may be required to be updated periodically. Non-U.S. holders that do not timely provide us or our paying agent with the required certification, but which qualify for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. holders should consult their tax advisors regarding their entitlement to benefits under a relevant income tax treaty.

If a non-U.S. holder holds our Class A common stock in connection with the conduct of a trade or business in the United States, and dividends paid on the Class A common stock are effectively connected with the holders U.S. trade or business, the non- U.S. holder will be exempt from U.S. federal withholding tax. To claim the exemption, the non-U.S. holder must furnish to us or our paying agent a properly executed IRS Form W-8ECI (or applicable successor form) prior to the payment of the dividends. Any dividends paid on our Class A common stock that are effectively connected with a non-U.S. holders U.S. trade or business generally will be subject to U.S. federal income tax on a net income basis at the regular graduated U.S. federal income tax rates in the same manner as if the holder were a resident of the United States, unless the holder is entitled to the benefits of a tax treaty that provides otherwise. A non-U.S. holder that is a foreign corporation also may be subject to a branch profits tax equal to 30% (or a lower rate specified by an applicable tax treaty) of its effectively connected earnings and profits for the taxable year that are attributable to such dividends. Non-U.S. holders should consult any applicable tax treaties that may provide for different rules.

Gain on disposition of our Class A common stock Subject to the discussions below regarding backup withholding and foreign accounts, a non-U.S. holder generally will not be subject to U.S. federal income tax on any gain realized upon the sale or other disposition of our Class A common stock unless:

the gain is effectively connected with the non-U.S. holders conduct of a trade or business in the United States;

the non-U.S. holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met; or

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents our Class A common stock constitutes a U.S. real property interest by reason of our status as a U.S. real property holding corporation (USRPHC) at any time within the shorter of the five-year period preceding the disposition or the non- U.S. holders holding period for our Class A common stock, and certain other requirements are met.

Unless an applicable tax treaty provides otherwise, gain described in the first bullet point above will be subject to U.S. federal income tax on a net income basis at the regular graduated U.S. federal income tax rates in the same manner as if the holder were a resident of the United States. Non-U.S. holders that are foreign corporations also may be subject to a branch profits tax equal to 30% (or a lower rate specified by an applicable tax treaty) of its effectively connected earnings and profits for the taxable year that are attributable to such gain. Non-U.S. holders should consult any applicable tax treaties that may provide for different rules.

Gain described in the second bullet point above will be subject to U.S. federal income tax at a flat 30% rate (or a lower rate specified by an applicable income tax treaty), but may be offset by U.S. source capital losses.

With respect to the third bullet point above, we believe we currently are not and will not become a USRPHC. However, because the determination of whether we are a USRPHC generally depends on whether the fair market value of our U.S. real property interests equals or exceeds 50% of the sum of the fair market value of our other trade or business assets and our worldwide real property interests, there can be no assurance that we will not become a USRPHC in the future. In the event we do become a USRPHC, as long as our Class A common stock is regularly traded on an established securities market, our Class A common stock will constitute a U.S. real property interest only with respect to a non-U.S. holder that actually or constructively holds more than five percent of our Class A common stock at some time during the shorter of the five-year period preceding the disposition or the non-U.S. holders holding period for our Class A common stock. Any taxable gain generally will be taxed in the same manner as gain that is effectively connected with the conduct of a U.S. trade or business, except that the branch profits tax will not apply.

Information reporting and backup withholding We must report annually to the IRS and to each non-U.S. holder the amount of dividends on our Class A common stock paid to the holder and the amount of any tax withheld with respect to those dividends. These information reporting requirements apply even if no withholding was required because the dividends were effectively connected with the holders conduct of a U.S. trade or business, or withholding was reduced or eliminated by an applicable tax treaty. This information also may be made available under a specific treaty or agreement with the tax authorities in the country in which the non-U.S. holder resides or is established.

Backup withholding, currently at a rate of 28%, generally will not apply to payments of dividends to a non-U.S. holder of our Class A common stock provided the non-U.S. holder furnishes to us or our paying agent the required certification as to its non- U.S. status (typically, by providing a valid IRS Form W-8BEN or W-8ECI) or an exemption is otherwise established.

Payment of the proceeds from a non-U.S. holders disposition of our Class A common stock made by or through a foreign office of a broker will not be subject to information reporting or backup withholding, except that information reporting (but generally not backup withholding) may apply to those payments if the broker does not have documentary evidence that the beneficial owner is a non-U.S. holder, an exemption is not otherwise established, and the broker is:

a U.S. person, as defined in the Code;

a controlled foreign corporation for U.S. federal income tax purposes;

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents a foreign person 50% or more of whose gross income is effectively connected with a U.S. trade or business for a specified three-year period; or

a foreign partnership if at any time during its tax year (1) one or more of its partners are U.S. persons who hold in the aggregate more than 50% of the income or capital interest in the partnership or (2) it is engaged in the conduct of a U.S. trade or business.

Payment of the proceeds from a non-U.S. holders disposition of our Class A common stock made by or through the U.S. office of a broker generally will be subject to information reporting and backup withholding unless the non-U.S. holder certifies as to its non-U.S. status (such as by providing a valid IRS Form W-8BEN or W-8ECI) or otherwise establishes an exemption from information reporting and backup withholding.

Backup withholding is not an additional tax. Taxpayers may use amounts withheld as a credit against their U.S. federal income tax liability or may claim a refund if they timely provide certain information to the IRS.

Additional withholding tax relating to foreign accounts A 30% withholding tax will apply to dividends on, or gross proceeds from the sale or other disposition of, our Class A common stock paid to a foreign financial institution (whether holding stock for its own account or on behalf of its account holders/investors) after December 31, 2012, unless the foreign financial institution enters into an agreement with the U.S. Treasury to, among other things, undertake to identify accounts held by certain U.S. persons or U.S.-owned foreign entities, annually report certain information about such accounts, and withhold 30% on payments to account holders whose actions prevent it from complying with these reporting and other requirements. The 30% withholding tax also will apply to the same types of payments made to a foreign non-financial entity after December 31, 2012, unless the entity certifies that it does not have any substantial U.S. owners or furnishes identifying information regarding each substantial U.S. owner and satisfies certain other requirements. Prospective investors should consult their tax advisors regarding these rules.

WE RECOMMEND THAT PROSPECTIVE INVESTORS CONSULT THEIR TAX ADVISORS REGARDING THE PARTICULAR U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR CLASS A COMMON STOCK, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL OR FOREIGN TAX LAWS, ANY APPLICABLE INCOME TAX TREATIES, OR ANY OTHER U.S. FEDERAL TAX LAWS (INCLUDING ESTATE AND GIFT TAX LAWS).

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We and the selling stockholders are offering the shares of Class A common stock described in this prospectus through a number of underwriters. J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. Incorporated are acting as joint book-running managers of the offering and as representatives of the underwriters. We and the selling stockholders have entered into an underwriting agreement with the underwriters. Subject to the terms and conditions of the underwriting agreement, we and the selling stockholders have agreed to sell to the underwriters, and each underwriter has severally agreed to purchase, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of shares of Class A common stock listed next to its name in the following table:

Number of Name Shares J.P. Morgan Securities LLC Merrill Lynch, Pierce, Fenner & Smith Incorporated Morgan Stanley & Co. LLC Robert W. Baird & Co. Incorporated Lazard Capital Markets LLC Piper Jaffray & Co. Stifel, Nicolaus & Company, Incorporated Total

The underwriters are committed to purchase all of the Class A common stock offered by us if they purchase any shares. The selling stockholders may be deemed to be underwriters within the meaning of Section 2(a)(11) of the Securities Act in this offering. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may also be increased or the offering may be terminated.

The underwriters propose to offer the Class A common stock directly to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $ per share. Any such dealers may resell shares to certain other brokers or dealers at a discount of up to $ per share from the initial public offering price. After the initial public offering of the shares, the offering price and other selling terms may be changed by the underwriters. Sales of shares made outside of the United States may be made by affiliates of the underwriters. The representatives have advised us that the underwriters do not intend to confirm discretionary sales in excess of 5% of the Class A common stock offered in this offering.

The underwriters have an option to purchase up to additional shares of Class A common stock from the selling stockholders to cover sales of shares by the underwriters which exceed the number of shares specified in the table above. The underwriters have 30 days from the date of this prospectus to exercise this over-allotment option. If any shares are purchased with this over-allotment option, the underwriters will purchase shares in approximately the same proportion as shown in the table above. If any additional shares of Class A common stock are purchased, the underwriters will offer the additional shares on the same terms as those on which the shares are being offered.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The underwriting fee is equal to the public offering price per share of Class A common stock less the amount paid by the underwriters to us per share of Class A common stock. The underwriting fee is $ per share. The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters assuming both no exercise and full exercise of the underwriters option to purchase additional shares.

Paid by the Selling Paid by Us Stockholders Without With full Without With full over- over- over- over- allotment allotment allotment allotment exercise exercise exercise exercise Per Share $ $ $ $ Total $ $ $ $

We estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately $ .

A prospectus in electronic format may be made available on the web sites maintained by one or more underwriters, or selling group members, if any, participating in this offering. The underwriters may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives to underwriters and selling group members that may make Internet distributions on the same basis as other allocations.

We and the selling stockholders have agreed that we will not (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act relating to, any shares of our Class A common stock or securities convertible into or exchangeable or exercisable for any shares of our Class A common stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, or (ii) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any shares of Class A common stock or any such other securities (regardless of whether any of these transactions are to be settled by the delivery of shares of Class A common stock or such other securities, in cash or otherwise), in each case without the prior written consent of J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. Incorporated for a period of 180 days after the date of this prospectus, other than the shares of our Class A common stock to be sold hereunder and any shares of our Class A common stock issued upon the exercise of options granted under our stock incentive plans. Notwithstanding the foregoing, if (1) during the last 17 days of the 180-day restricted period, we issue an earnings release or material news or a material event relating to our company occurs; or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

Our directors, executive officers, and certain of our significant stockholders have entered into or will enter into lock-up agreements with the underwriters pursuant to which each of these persons or entities, with limited exceptions, for a period of 180 days after the date of this prospectus, may not, without the prior written consent of J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents indirectly, any shares of our Class A common stock or any securities convertible into or exercisable or exchangeable for our Class A common stock (including, without limitation, Class B common stock or such other securities which may be deemed to be beneficially owned by such directors, executive officers, and shareholders in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant) or publicly disclose the intention to make any offer, sale, pledge or disposition, (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Class A common stock or such other securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Class A common stock or such other securities, in cash or otherwise, or (3) make any demand for or exercise any right with respect to the registration of any shares of our Class A common stock or any security convertible into or exercisable or exchangeable for our Class A common stock. Our directors and executive officers have further agreed that the foregoing restrictions will apply to any shares of Class A common stock purchased by them through the directed share program described below. Notwithstanding the foregoing, if (1) during the last 17 days of the 180-day restricted period, we issue an earnings release or material news or a material event relating to our company occurs; or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

We and the selling stockholders have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933.

We have applied to have our Class A common stock approved for quotation on the Nasdaq under the symbol SRAM.

In connection with this offering, the underwriters may engage in stabilizing transactions, which involves making bids for, purchasing and selling shares of Class A common stock in the open market for the purpose of preventing or retarding a decline in the market price of the Class A common stock while this offering is in progress. These stabilizing transactions may include making short sales of the Class A common stock, which involves the sale by the underwriters of a greater number of shares of Class A common stock than they are required to purchase in this offering, and purchasing shares of Class A common stock on the open market to cover positions created by short sales. Short sales may be covered shorts, which are short positions in an amount not greater than the underwriters over-allotment option referred to above, or may be naked shorts, which are short positions in excess of that amount. The underwriters may close out any covered short position either by exercising their over- allotment option, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market compared to the price at which the underwriters may purchase shares through the over-allotment option. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the Class A common stock in the open market that could adversely affect investors who purchase in this offering. To the extent that the underwriters create a naked short position, they will purchase shares in the open market to cover the position.

The underwriters have advised us that, pursuant to Regulation M of the Securities Act of 1933, they may also engage in other activities that stabilize, maintain or otherwise affect the price of the Class A common stock, including the imposition of penalty bids. This means that if the representatives of the underwriters purchase Class A common stock in the open market in stabilizing transactions or to cover short sales, the representatives can require the underwriters that sold those shares as part of this offering to repay the underwriting discount received by them.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents These activities may have the effect of raising or maintaining the market price of the Class A common stock or preventing or retarding a decline in the market price of the Class A common stock, and, as a result, the price of the Class A common stock may be higher than the price that otherwise might exist in the open market. If the underwriters commence these activities, they may discontinue them at any time. The underwriters may carry out these transactions on the New York Stock Exchange or Nasdaq Stock Market in the over-the-counter market or otherwise.

Prior to this offering, there has been no public market for our Class A common stock. The initial public offering price will be determined by negotiations between us and the representatives of the underwriters. In determining the initial public offering price, we and the representatives of the underwriters expect to consider a number of factors including:

the information set forth in this prospectus and otherwise available to the representatives;

our prospects and the history and prospects for the industry in which we compete;

an assessment of our management;

our prospects for future earnings;

the general condition of the securities markets at the time of this offering;

the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

other factors deemed relevant by the underwriters and us.

Neither we nor the underwriters can assure investors that an active trading market will develop for our Class A common stock, or that the shares will trade in the public market at or above the initial public offering price.

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

Notice to prospective investors in United Kingdom

This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling with Article 49(2)(a) to (d) of the Order (all such persons together being referred to as relevant persons). The securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

Notice to prospective investors in European Union

In relation to each Member State of the European Economic Area (the EU plus Iceland, Norway and Liechtenstein) which has implemented the Prospectus Directive (each, a Relevant Member State), from and

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents including the date on which the European Union Prospectus Directive (the EU Prospectus Directive) is implemented in that Relevant Member State (the Relevant Implementation Date) an offer of securities described in this prospectus may not be made to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the EU Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of shares to the public in that Relevant Member State at any time:

to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than 43,000,000 and (3) an annual net turnover of more than 50,000,000, as shown in its last annual or consolidated accounts;

to fewer than 100 natural or legal persons (other than qualified investors as defined in the EU Prospectus Directive) subject to obtaining the prior consent of the book-running managers for any such offer; or

in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an offer of securities to the public in relation to any securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe for the securities, as the same may be varied in that Member State by any measure implementing the EU Prospectus Directive in that Member State and the expression EU Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

Notice to prospective investors in Hong Kong

This prospectus has not been approved by or registered with the Securities and Futures Commission of Hong Kong or the Registrar of Companies of Hong Kong. The securities will not be offered or sold in Hong Kong other than (a) to professional investors as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a prospectus as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance. No advertisement, invitation or document relating to the securities which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) has been issued or will be issued in Hong Kong or elsewhere other than with respect to securities which are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors as defined in the Securities and Futures Ordinance and any rules made under that Ordinance.

Notice to prospective investors in Singapore

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the securities may not be circulated or distributed, nor may the securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents and Futures Act (Chapter 289) (the SFA), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Where the securities are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, then securities, debentures and units of securities and debentures of that corporation or the beneficiaries rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the securities under Section 275 except: (i) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (ii) where no consideration is given for the transfer; or (iii) by operation of law.

Notice to prospective investors in Japan

The securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) and, accordingly, will not be offered or sold, directly or indirectly, in Japan, or for the benefit of any Japanese Person or to others for re-offering or resale, directly or indirectly, in Japan or to any Japanese Person, except in compliance with all applicable laws, regulations and ministerial guidelines promulgated by relevant Japanese governmental or regulatory authorities in effect at the relevant time. For the purposes of this paragraph, Japanese Person shall mean any person resident in Japan, including any corporation or other entity organized under the laws of Japan.

Notice to prospective investors in Australia

No prospectus, disclosure document, offering material or advertisement in relation to the common shares has been lodged with the Australian Securities and Investments Commission or the Australian Stock Exchange Limited. Accordingly, a person may not (a) make, offer or invite applications for the issue, sale or purchase of common shares within, to or from Australia (including an offer or invitation which is received by a person in Australia) or (b) distribute or publish this prospectus or any other prospectus, disclosure document, offering material or advertisement relating to the common shares in Australia, unless (i) the minimum aggregate consideration payable by each offeree is the U.S. dollar equivalent of at least A$500,000 (disregarding moneys lent by the offeror or its associates) or the offer otherwise does not require disclosure to investors in accordance with Part 6D.2 of the Corporations Act 2001 (CWLTH) of Australia; and (ii) such action complies with all applicable laws and regulations.

Notice to prospective investors in Korea

This prospectus should not be construed in any way as our (or any of our affiliates or agents) soliciting investment or offering to sell our securities in the Republic of Korea (Korea). We are not making any representation with respect to the eligibility of any recipients of this prospectus to acquire the securities under the laws of Korea, including, without limitation, the Financial Investment Services and Capital Markets Act (the FSCMA), the Foreign Exchange Transaction Act (the FETA), and any regulations thereunder. The securities have not been registered with the Financial Services Commission of Korea (the FSC) in any way pursuant to the FSCMA, and the securities may not be offered, sold or delivered, or offered or sold to any person for reoffering or resale, directly or indirectly, in Korea or to any resident of Korea except pursuant to applicable laws and regulations of Korea. Furthermore, the securities may not be resold to any Korean resident unless such Korean

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents resident as the purchaser of the resold securities complies with all applicable regulatory requirements (including, without limitation, reporting or approval requirements under the FETA and regulations thereunder) relating to the purchase of the resold securities.

Notice to prospective investors in Switzerland

We have not and will not register with the Swiss Financial Market Supervisory Authority (FINMA) as a foreign collective investment scheme pursuant to Article 119 of the Federal Act on Collective Investment Scheme of 23 June 2006, as amended (CISA), and accordingly the securities being offered pursuant to this prospectus have not and will not be approved, and may not be licenseable, with FINMA. Therefore, the securities have not been authorized for distribution by FINMA as a foreign collective investment scheme pursuant to Article 119 CISA and the securities offered hereby may not be offered to the public (as this term is defined in Article 3 CISA) in or from Switzerland. The securities may solely be offered to qualified investors, as this term is defined in Article 10 CISA, and in the circumstances set out in Article 3 of the Ordinance on Collective Investment Scheme of 22 November 2006, as amended (CISO), such that there is no public offer. Investors, however, do not benefit from protection under CISA or CISO or supervision by FINMA. This prospectus and any other materials relating to the securities are strictly personal and confidential to each offeree and do not constitute an offer to any other person. This prospectus may only be used by those qualified investors to whom it has been handed out in connection with the offer described herein and may neither directly or indirectly be distributed or made available to any person or entity other than its recipients. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in Switzerland or from Switzerland. This prospectus does not constitute an issue prospectus as that term is understood pursuant to Article 652a and/or 1156 of the Swiss Federal Code of Obligations. We have not applied for a listing of the securities on the SIX Swiss Exchange or any other regulated securities market in Switzerland, and consequently, the information presented in this prospectus does not necessarily comply with the information standards set out in the listing rules of the SIX Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SIX Swiss Exchange.

Other relationships

Certain of the underwriters and their affiliates have provided in the past to us and our affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for us and such affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. In addition, from time to time, certain of the underwriters and their affiliates may effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future. Affiliates of each of J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated were lenders under our prior credit facilities and received fees from us in such capacities. In connection with the refinancing, we used proceeds from our new credit facilities to repay, among other things, outstanding amounts under our prior credit facilities, including all amounts, if any, outstanding to affiliates of J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated. An affiliate of J.P. Morgan Securities LLC is the administrative agent and a lender under our revolving facility and has received and will receive fees from us in the future. In addition, prior to the refinancing, JPM Mezzanine Capital, LLC, an affiliate of J.P. Morgan Securities, LLC, held Class A units in SRAM Holdings, LLC that we acquired in connection with the refinancing. See The refinancing and reorganization.

At our request, the underwriters have reserved up to of the shares of Class A common stock being sold in this offering for sale to certain of our customers, other business associates and employees and their family members at the initial public offering price through a directed share program. The number of shares available

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents for sale to the general public in this offering will be reduced to the extent that these reserved shares are purchased by these persons. Any reserved shares not purchased by these persons will be offered by the underwriters to the general public on the same basis as the other shares in this offering. We have agreed to indemnify the underwriters against certain liabilities and expenses, including liabilities under the Securities Act, in connection with the sales of the directed shares. All shares purchased through the directed share program will be subject to a lock-up agreement with terms substantially similar to the lock-up agreement being entered into by our directors, executive officers and certain significant stockholders as described above.

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Certain legal matters with respect to the legality of the issuance of the shares of Class A common stock offered by us and the selling stockholders by this prospectus will be passed upon for us and the selling stockholders by Latham & Watkins LLP, Chicago, Illinois. The underwriters are being represented by Winston & Strawn LLP, Chicago, Illinois, in connection with this offering.

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The consolidated financial statements of SRAM Holdings, LLC as of December 31, 2009 and 2010 and for each of the three years in the period ended December 31, 2010 and the financial statement of SRAM International Corporation as of April 29, 2011, all included in this prospectus have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

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We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to this offering of our Class A common stock. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement, some items of which are contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and our Class A common stock, we refer you to the registration statement, including the exhibits and the historical financial statements and notes filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement is this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The exhibits to the registration statement should be referenced for the complete contents of these contracts and documents. You may obtain copies of this information by mail from the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates. You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.

As a result of this offering, we will become subject to the information and reporting requirements of the Securities Exchange Act and, in accordance with this law, will file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information will be available for inspection and copying at the SECs public reference facilities and the website of the SEC referred to above.

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Page SRAM International Corporation Report of independent registered public accounting firm F-2 Balance sheet as of April 29, 2011 F-3 Notes to financial statements F-4

SRAM Holdings, LLC and subsidiaries Unaudited condensed consolidated interim financial statements: Unaudited condensed consolidated balance sheet as of March 31, 2011 F-5 Unaudited condensed consolidated statements of operations for the three months ended March 31, 2010 and 2011 F-6 Unaudited condensed consolidated statement of members deficit for the three months ended March 31, 2011 F-7 Unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2010 and 2011 F-8 Notes to condensed consolidated financial statements F-9 Audited financial statements: Report of independent registered public accounting firm F-16 Consolidated balance sheets as of December 31, 2009 and 2010 F-17 Consolidated statements of operations for the years ended December 31, 2008, 2009, 2010 F-18 Consolidated statements of members deficit for the years ended December 31, 2008, 2009, and 2010 F-19 Consolidated statements of cash flows for the years ended December 31, 2008, 2009, and 2010 F-20 Notes to consolidated financial statements F-21

F-1

To the Board of Directors and Shareholders of SRAM International Corporation:

In our opinion, the accompanying balance sheet presents fairly, in all material respects, the financial position of SRAM International Corporation at April 29, 2011 in conformity with accounting principles generally accepted in the United States of America. This financial statement is the responsibility of the Companys management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit of this statement in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet, assessing the accounting principles used and significant estimates made by management, and evaluating the overall balance sheet presentation. We believe that our audit of the balance sheet provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Chicago, Illinois June 23, 2011

F-2

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM International Corporation Balance Sheet As of April 29, 2011

(in dollars, except share / unit data) April 29, 2011 Assets Total assets $ Liabilities and stockholders equity Total liabilities $ Stockholders equity Preferred Stock ($.01 par value: 3,000 shares authorized; none issued or outstanding at April 29, 2011) Common stock ($.01 par value: 7,000 shares authorized; 100 shares issued and outstanding at April 29, 2011) 1 Additional paid-in capital 9 Loan receivable from stockholder (10 ) Total stockholders equity Total liabilities and stockholders equity $

The accompanying notes are an integral part of these financial statements.

F-3

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM International Corporation Notes to Financial Statements As of April 29, 2011 (In thousands of dollars, except share/unit data)

1. Organization and Nature of Operations

SRAM International Corporation (the Corporation) was incorporated in Delaware on April 29, 2011 in anticipation of an initial public offering. In connection with the initial public offering, the Corporation is expected to acquire 100% of the equity interests of SRAM Holdings, LLC.

2. Basis of Presentation

The accompanying financial statements of the corporation are prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP).

3. Stockholders Equity

The Corporation has the authority to issue two classes of stock designated, respectively, as Common Stock and Preferred Stock. The total number of shares which the Corporation is authorized to issue is 10,000 shares, of which 7,000 shares shall be Common Stock, each having a par value of $.01 per share, and 3,000 shares shall be preferred Stock, each having a par value of $0.01 per share. SRAM-SP2, Inc. is the owner of one hundred non-assessable shares of Common Stock of SRAM International Corporation. The Corporation maintains a loan receivable from stockholder balance related to the issuance of its shares to SRAM-SP2, Inc.

F-4

Pro Forma (note 12) (in thousands of dollars, except share/unit data) 2011 2011 Assets Cash and cash equivalents $15,374 $15,374 Accounts receivable, net 88,843 88,843 Inventories 29,425 29,425 Other current assets 8,379 8,379 Total current assets 142,021 142,021 Property and equipment, net 34,268 34,268 Intangible assets, net 43,463 43,463 Goodwill 15,606 15,606 Deferred financing charges and other assets 5,451 5,451 Total assets $240,809 $240,809 Liabilities and members/shareholders deficit Current portion of long-term debt $ $ Accounts payable 67,105 67,105 Accrued personnel costs 19,361 19,361 Accrued expenses and other current liabilities 14,511 14,511 Accrued member unitsincentive units 16,536 16,536 Income taxes payable 12,784 12,784 Accrued distribution Total current liabilities 130,297 Long-term borrowings 198,753 198,753 Other noncurrent liabilities 15,053 15,053 Total liabilities 344,103 Commitments and contingencies Members/stockholders deficit Member unitsClass A, 3,640,000 units authorized, issued, and outstanding, actual; no units issued and outstanding, proforma 60,262 Member unitsClass B, 5,460,000 units authorized, issued, and outstanding, actual; no units issued and outstanding, proforma Member unitsIncentive units, 337,500 units authorized, 276,697 units issued, and 269,118 units outstanding, no units issued and outstanding proforma 3,130 Accumulated deficit (177,581) Accumulated other comprehensive income 10,895 10,895 Class A common stock; $0.01 par value; no shares authorized, issued and outstanding, actual; shares authorized shares issued and outstanding, pro forma Class B common stock; $0.01 par value; no shares authorized, issued and outstanding, actual; shares authorized shares issued and outstanding, pro forma Additional paid-in capital Total Members/stockholders deficit (103,294) Total liabilities and Members/stockholders deficit $240,809 $

F-5

Pro Forma (note 12) (in thousands of dollars, except share/unit data) 2010 2011 2011 Net sales $122,037 $146,460 Cost of sales 72,145 86,267 Gross profit 49,892 60,193 Operating expenses General and administrative expense 6,999 9,368 Sales and marketing expense 8,684 11,525 Product development expense 8,603 10,296 24,286 31,189 Income from operations 25,606 29,004 Other income (expense) Interest expense, net (8,395 ) (3,716 ) Foreign currency exchange gain (loss) 3,417 (3,058 ) Other expense, net (4,978 ) (6,774 ) Income before income taxes 20,628 22,230 Income tax expense 4,348 4,457 Net income (loss) $16,280 $17,773 Unaudited proforma earnings per common share (Note 12) Net income, as reported $ 17,773 Pro forma tax provision Pro forma net income $ Pro forma weighted average common shares outstandingbasic and diluted Pro forma earnings per common sharebasic and diluted $ The accompanying notes are an integral part of these financial statements.

F-6

Member Units - Member Units - Member Units - Accumulated Total Common Stock Additional Class A Class B Icus Retained Other Members (in thousands, except share/ Paid In Earnings Comprehensive Equity unit data) Shares Amount Capital Units Amount Units Amount Units Amount (deficit) income (deficit)

Balance at December 31, 2010 $ $ 3,640,000 $52,930 5,460,000 $ 100,440 $ 2,800 $(188,022) $ 8,382 $(123,910 ) Incentive units compensation expense (259 ) 330 330 Preferred Dividends 7,332 (7,332 ) Other dividends Comprehensive income Net income 17,773 17,773 Currency translation adjustment and other 2,513 2,513

Total comprehensive income 20,286 Balance at March 31, 2011 $ $ 3,640,000 $60,262 5,460,000 $ 100,181 $ 3,130 $(177,581) $ 10,895 $(103,294 )

The accompanying notes are an integral part of these financial statements.

F-7

(in thousands of dollars) 2010 2011 Cash flows from operating activities Net income $16,280 $17,773 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 3,824 3,983 Unrealized exchange (gain) loss (882 ) 1,806 Loss on sales of property and equipment (42 ) (3 ) Incentive unit compensation expense 3,732 3,552 Unrealized (gain) on interest rate swap (74 ) (514 ) Amortization of deferred financing fees 678 866 Paid in kind interest expense 564 Increase (decrease) in cash from changes in operating assets and liabilities, net of acquisitions Accounts receivable, net (953 ) 1,274 Inventories 4,746 5,078 Other current assets (242 ) (1,035 ) Other assets (41 ) 42 Accounts payable (4,758 ) (7,078 ) Accrued personnel costs (364 ) (183 ) Accrued expenses and other current liabilities 2,084 1,466 Income taxes payable 3,065 1,419 Other current liabilities (148 ) Other noncurrent liabilities (63 ) 125 Net cash provided by operating activities 27,554 28,423 Cash flows from investing activities Purchase of property and equipment (2,544 ) (3,641 ) Proceeds from the sale of property and equipment 4 Net cash used in investing activities (2,544 ) (3,637 ) Cash flows from financing activities Long-term debt repayments (25,500) (29,000) Dividends paid (27 ) Net cash provided by (used in) financing activities (25,527) (29,000) Effect of exchange rates on cash (76 ) 179 Net decrease in cash (593 ) (4,035 ) Cash and cash equivalents Beginning of period 33,689 19,409 End of period $33,096 $15,374

The accompanying notes are an integral part of these financial statements.

F-8

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Unaudited notes to condensed consolidated financial statements As of March 31, 2011 and For the three months ended March 31, 2010 and 2011 (In thousands of dollars, except share/unit data) 1. Basis of presentation The unaudited condensed consolidated financial statements of SRAM Holdings, LLC (formerly SRAM Corporation) and its subsidiaries (the Company or Holdings) are prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP). In accordance with US GAAP, these interim consolidated financial statements do not include certain information and note disclosures that are normally included in annual financial statements prepared in conformity with US GAAP. Accordingly, these consolidated financial statements should be read in conjunction with the consolidated financial statements as of December 31, 2009 and 2010, and for each of the three years in the period ended December 31, 2010. In the Companys opinion, the consolidated financial statements contain all adjustments (which are of a normal, recurring nature) necessary to present fairly in all material respects, the financial position as of March 31, 2011, and the results of operations and cash flows for the three months ended March 31, 2010 and 2011, in conformity with US GAAP. Interim results for the three months ended March 31, 2011, may not be indicative of results that will be realized for the full year ending December 31, 2011.

Recent accounting pronouncements

In May 2011, the FASB issued an accounting standard update, Fair Value Measurement, which amends the Fair Value Measurements and Disclosure topic of the FASB ASC. This update provides amendments to achieve common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards. This standard will be effective for interim and annual periods beginning after December 15, 2011. The Company does not expect the adoption of this standard to have a material impact on its financial statements or related disclosures.

2. Allowance for doubtful accounts As of March 31, 2011, the Company had an allowance for doubtful accounts of $1,309.

3. Inventories Inventories consist of the following at March 31, 2011:

Raw materials $13,447 Work in process 3,288 Finished Goods 12,690 Total inventories $29,425

4. Intangible assets Amortization expense totaled $997 for each of the three months ended March 31, 2010 and 2011 respectively.

F-9

5. Product warranty The following table presents a summary of changes in the product warranty accrual activity for the three months ended March 31, 2011:

Balance at beginning of the period $3,537 Additional warranty accrual 944 Settlements made during the period (639 ) Balance at end of the period $3,842

6. SRAM-restructuring Effective in June 2010, a plan was approved that will reduce the workforce at its German plant pursuant to a shift in manufacturing from Germany to Taiwan. The scheduled plan includes three phases for the reduction in force, with the first phase taking effect on December 31, 2010 and the last phase on July 1, 2012. In connection with these actions the Company accrued termination benefits and other restructuring costs which were earned as of March 31, 2011 within accrued personnel costs and charged the expense to cost of sales.

Activity in accrued personnel costs related to the restructuring in Germany in the three months ended March 31, 2011 consists of the following:

Employee Other charges charges Total Beginning of the Period Balance $ 4,324 $ 345 $4,669 Expense 831 9 840 Payments (473 ) (118 ) (591 ) Foreign exchange impact 291 18 309 End of the Period Balance $ 4,973 $ 254 $5,227

Restructuring costs incurred as of March 31, 2011 and are expected to be incurred over the course of the plan are as follows:

Original Equipment Aftermarket Total Beginning of period balance $ 6,427 $ 1,607 $8,034 Expense during period 671 169 840 Total cost of restructuring plan $ 7,098 $ 1,776 $8,874

Additional costs expected to be incurred in connection with this restructuring total $2,026, of which $1,616 relate to the Original Equipment Segment and $410 relate to the Aftermarket Segment.

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7. Commitments and contingencies In November 2001, a patent infringement lawsuit was filed against the Company, in the Munich District Court in Germany. In July 2007, the trail court ruled in favor of the Company. However, in October 2009, a German Appellate Court reversed the ruling and indicated that the Company infringed the utility model in suit. In November 2009, the Company appealed the decision to the German Court of Justice (Supreme Court). After consultation with legal counsel, management has assessed the probability of an unfavorable outcome as probable and in 2009 recorded a $3,000 liability within accrued expenses and other current liabilities on the consolidated balance sheet as of December 31, 2009. As of March 31, 2011, an unfavorable outcome remains probable and the recorded liability remains on the consolidated balance sheet.

The Company is involved in other various legal matters from time to time which management considers to be ordinary, routine and incidental to the Companys business. Although the final outcome of these matters cannot presently be determined, in the opinion of management, disposition of these matters will not have a material adverse effect on the financial position or results of operations of the Company.

8. Long-term borrowings Long-term borrowings consist of the following at March 31, 2011:

GE Capital Corporation Senior note, due April 30, 2015 with a weighted average interest rate of 5.20% at March 31, 2011. 206,000

Less: Debt discount (7,247 ) $198,753

The carrying amount reported in the consolidated balance sheet as of March 31, 2011 for long-term debt is $206,000. Using a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration, optionality, and risk profile, the Company has determined the fair value of its debt to be $204,000 at March 31, 2011. In determining the market interest yield curve, the Company considered its corporate ratings from Moodys and S&P.

Scheduled maturities of long-term borrowings are as follows:

2011 2012 2013 2014 2015 $206,000

On June 7, 2011, the Company refinanced all of its outstanding borrowings, as described in footnote 13.

F-11

9. Income taxes The Companys income tax provision reflects its partnership tax classification and is comprised of various foreign and U.S. state income tax provisions. The components of income before the provision for income taxes for the three months ended March 31, 2010 and 2011 are as follows:

2010 2011 United States $10,342 $9,246 Foreign 10,286 12,984 Total $20,628 $22,230

The provision for income taxes for the three months ended March 31, 2010 and 2011 consists of the following:

2010 2011 Current Tax Expense State and local income taxes $(3 ) $7 Foreign 1,768 2,458 Withholding tax-foreign jurisdictions 2,583 1,992 $4,348 $4,457 Foreign Deferred Tax Expense/(Benefit) Total Income Tax Expense $4,348 $4,457

10. Segment information Operating segment data for the periods indicated are as follows (in thousands):

Original Equipment Aftermarket Corp Consolidated Three Months Ended March 31, 2010 Net sales $ 80,951 $ 41,086 $ $ 122,037 Income from operations 20,569 13,224 (8,187 )(1) 25,606 Three Months Ended March 31, 2011 Net sales $ 97,670 $ 48,790 $ $ 146,460 Income from operations 24,253 15,201 $(10,450)(1) 29,004 (1) General and administrative expense not allocated to the segments consists of the following: In the three months ended March 31, 2010, unallocated general and administrative expense primarily includes incentive unit compensation $3,584, finance and IT expense $3,163 and other corporate expenses. In the three months ended March 31, 2011, unallocated general and administrative expense primarily includes incentive unit compensation $3,411, finance and IT expense $3,359, transaction costs of $1,364 and other corporate expenses.

F-12

11. Share-based compensation Incentive Units

The company recognizes compensation expense on its incentive units in accordance with ASC 718, Stock compensation. As of March 31, 2011, 675,000 and 538,237 incentive units were authorized and outstanding, respectively. 50% of the Companys outstanding incentive units are equity classified and 50% are liability classified. During the three months ended March 31, 2010 and 2011, compensation expense arising from equity classified awards was $271 and $330 respectively, and compensation expense arising from liability classified awards was $3,460 and $3,222, respectively.

The summary of the unvested Incentive Units activity as of March 31, 2011 is as follows:

Weighted- Average Grant Date Units Fair Value Unvested at beginning of the period 338,654 $ 27.53 Granted Vested Forfeited (779 ) $ 21.03 Unvested at end of the period 337,875 $ 27.53

12. Pro forma information Pro forma consolidated balance sheet

The pro forma consolidated balance sheet presented in the accompanying consolidated financial statements reflects the conversion at March 31, 2011 of all outstanding Class A member units, Class B member units and Incentive Unit member units into shares of Class A common stock and shares of Class B common stock of SRAM International Corporation upon the initial public offering, all based upon an assumed share price of $ per share (the midpoint of the range set forth on the cover of Companys prospectus, after deducting underwriting discounts and commissions and estimated expenses payable by the Company in connection with the offering). The conversion of Member Units to common stock is contractually required upon the reorganization to a C-corporation as contemplated in the offering.

F-13

Additionally, the pro forma consolidated balance sheet reflects an accrual for the accumulated Class A preferred return as of March 31, 2011. The Company will distribute $ to Class A member units, representing their accumulated preferred return of $ as of the settlement date, which will be settled in cash.

Pro forma earnings per common share

The pro forma basic and diluted earnings per common share for the three months ended March 31, 2011 have been computed to give effect to: (a) the contractually required conversion of Class A, Class B and Incentive Unit member units into common stock, described above, and (b) the tax effect of the conversion from a limited liability corporation to a C-corporation; as though all of the conversions occurred on January 1, 2011.

In connection with the offering and related reorganization the Company became taxed as a corporation. The Company was previously treated as a limited liability corporation for tax purposes and therefore generally not subject to federal income tax in the United States. The pro forma net income for three months ended March 31, 2011 includes an adjustment for income tax expense as if the Company had been a corporation from January 1, 2011, at an assumed combined federal, state, and local income tax rate of %.

Pro forma weighted average common shares outstanding are computed as follows:

Class A Class A Class B Class B Member Common Member Common Incentive Units Shares Units Shares Units Total Weighed average member unitsbasic and diluted 3,640,000 5,460,000 269,118 Contractual conversion of member units to common stock (3,640,000) (5,460,000) (269,118) Weighted average common sharesbasic and diluted

13. Subsequent events On May 4, 2011, the Company acquired certain assets and certain liabilities of Quarq Technology, Inc., who is engaged in the business of designing, manufacturing, supplying and selling bicycle power meters, measurement devices and related products. The purchase price was $4,900, plus an earn-out clause that could result in an additional maximum purchase price of $6,000. The acquisition was funded through cash on hand of $4,500 and contingent consideration of $400. The future earn-out is based on a two year period and is based on the net sales of Quarq Technology, Inc. products.

On June 7, 2011, we executed an agreement to enter into new credit facilities consisting of a first-lien term facility, a second-lien term facility and a revolving facility. The aggregate availability from the new credit facilities are $840,000. The loan package includes a $50,000 revolving credit facility, a $605,000 first-lien

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Unaudited notes to condensed consolidated financial statements As of March 31, 2011 and For the three months ended March 31, 2010 and 2011 (In thousands of dollars, except share/unit data) term facility, and a $185,000 second-lien term facility. The proceeds of $790,000 from the new credit facilities will be used to repay all outstanding amounts under our existing credit facilities, which as of June 7, 2011 was $194,799, to directly or indirectly acquire all of the equity interests in SRAM Holdings, LLC held by Trilantic and its co-investors for $575,000 and to pay fees and expenses totaling $14,857 related to the refinancing and retained $5,344 for operating cash flow purposes. There were no amounts borrowed on the revolving credit facility. In connection with these transactions, SRAM Holdings, LLC amended and restated its operating agreement to create a single class of common units and eliminate the corporate governance and liquidity rights of the Class A unit holders. We refer to the entering into of our new credit facilities, the use of proceeds there from and the related amendment to the SRAM Holdings LLC operating agreement as the refinancing. Subsequent to the refinancing, Trilantic and its co-investors have no remaining ownership of SRAM Holdings, LLC.

F-15

To the Board of Directors and Members of SRAM Holdings, LLC and subsidiaries

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, members deficit and cash flows present fairly, in all material respects, the financial position of SRAM Holdings, LLC and subsidiaries at December 31, 2009 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Chicago, Illinois May 11, 2011

F-16

Pro forma (Note 17) (in thousands, except share/unit data) 2009 2010 2010 (unaudited) Assets Cash and cash equivalents $33,689 $19,409 $ 19,409 Accounts receivable, net 71,317 89,502 89,502 Inventories 28,246 34,133 34,133 Other current assets 6,421 7,280 7,280 Total current assets 139,673 150,324 150,324 Property and equipment, net 28,081 33,333 33,333 Intangible assets, net 48,452 44,461 44,461 Goodwill 15,606 15,606 15,606 Deferred financing charges and other assets 6,522 5,551 5,551 Total assets $238,334 $249,275 $ 249,275 Liabilities and members/stockholders deficit Current portion of long-term debt $10,855 $ $ Accounts payable 54,560 74,275 74,275 Accrued personnel costs 12,451 18,954 18,954 Accrued expenses and other current liabilities 12,677 13,515 13,515 Accrued member unitsincentive units 2,151 13,315 13,315 Income taxes payable 6,837 11,593 11,593 Accrued distribution Total current liabilities 99,531 131,652 Long-term borrowings 290,573 227,103 227,103 Other noncurrent liabilities 14,551 14,430 14,430 Total liabilities 404,655 373,185 Commitments and contingencies Members/stockholders deficit Member unitsClass A, 3,640,000 units authorized, issued, and outstanding, actual; no units issued and outstanding, proforma 28,342 52,930 Member unitsClass B, 5,460,000 units authorized, issued, and outstanding, actual; no units issued and outstanding, proforma Member unitsIncentive units, 337,500 and 337,500 units authorized, 259,197 and 276,697 units issued, and 253,303 and 269,767 units outstanding, 2009 and 2010, respectively; no units issued and outstanding proforma 1,533 2,800 Accumulated deficit (206,444) (188,022) Accumulated other comprehensive income 10,248 8,382 8,382 Class A common stock; $0.01 par value; no shares authorized, issued and outstanding, actual; shares authorized shares issued and outstanding, pro forma

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Class B common stock; $0.01 par value; no shares authorized, issued and outstanding, actual; shares authorized shares issued and outstanding, pro forma Additional paid-in capital Total Members/stockholders deficit (166,321) (123,910) Total liabilities and members/stockholders deficit $238,334 $249,275 $

The accompanying notes are an integral part of these financial statements.

F-17

Pro Forma (Note 17) (in thousands, except share/unit data) 2008 2009 2010 2010 (unaudited) Net sales $478,354 $399,581 $524,187 Cost of sales 310,725 239,448 312,954 Gross profit 167,629 160,133 211,233 Operating expenses General and administrative expense 77,846 29,042 33,913 Sales and marketing expense 49,480 27,934 40,579 Product development expense 46,506 27,799 37,179 Recapitalization costs 8,952 182,784 84,775 111,671 Income (loss) from operations (15,155 ) 75,358 99,562 Other income (expense) Interest expense, net (21,703 ) (36,245 ) (32,634 ) Foreign currency exchange gain (loss) 4,072 (3,221 ) 237 Other expense, net (17,631 ) (39,466 ) (32,397 ) Income (loss) before income taxes (32,786 ) 35,892 67,165 Income tax expense 15,838 14,373 17,193 Net income (loss) $(48,624 ) $21,519 $49,972 Unaudited proforma earnings per common share (Note 17) Net income, as reported $ 49,972 Pro forma tax provision Pro forma net income $ Pro forma weighted average common shares outstandingbasic and diluted Pro forma earnings per common sharebasic and diluted $

The accompanying notes are an integral part of these financial statements.

F-18

Member Units - Member Units - Member Units - Common Stock Class A Class B Incentive Units Accumulated Total (in thousands, Additional Retained Other Members except share/unit Paid In Earnings Comprehensive Equity data) Shares Amount Capital Units Amount Units Amount Units Amount (Deficit) Income (Deficit) Balance at December 31, 2007 6,681 $2,639 $ $ $ $ $6,258 $ 11,328 $ 20,225 Stock option exercise 710 12,206 61,550 73,756 Reorganization to LLC (7,391 ) (14,845 ) (61,550 ) 3,640,000 30,558 5,460,000 45,837 Contributions from Class B member 10,000 10,000 Dividends to members (30,558 ) (55,837 ) (154,493 ) (240,888 ) Preferred Dividends 5,870 (5,870 )

Comprehensive income Net loss (48,624 ) (48,624 ) Currency translation adjustment and other (4,030 ) (4,030 )

Total comprehensive loss (52,654 )

Balance at December 31, 2008 3,640,000 5,870 5,460,000 (202,729 ) 7,298 (189,561 ) Incentive units compensation expense 49,831 1,533 1,533 Preferred dividends 24,985 (24,985 ) Other dividends (2,513 ) (249 ) (2,762 )

Comprehensive income Net income 21,519 21,519 Currency translation adjustment and other 2,950 2,950

Total comprehensive income 24,469

Balance at December 31, 2009 3,640,000 28,342 5,460,000 49,831 1,533 (206,444 ) 10,248 (166,321 ) Incentive units compensation expense 50,609 1,267 1,267 Preferred Dividends 27,578 (27,578 ) Other dividends (2,990 ) (3,972 ) (6,962 )

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Comprehensive income Net income 49,972 49,972 Currency translation adjustment and other (1,866 ) (1,866 )

Total comprehensive income 48,106

Balance at December 31, 2010 $ $ 3,640,000 $52,930 5,460,000 $ 100,440 $ 2,800 $(188,022 ) $ 8,382 $ (123,910 )

The accompanying notes are an integral part of these financial statements.

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(in thousands) 2008 2009 2010 Cash flows from operating activities Net income (loss) $(48,624 ) $21,519 $49,972 Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation and amortization 15,799 15,172 15,463 Unrealized exchange (gain) loss (2,122 ) 363 (937 ) (Gain) loss on sales of property and equipment (28 ) 102 1,175 Stock option compensation expense 61,550 Incentive unit compensation expense 3,684 12,430 Deferred income taxes 305 (614 ) 530 Unrealized (gain) loss on interest rate swap 3,454 (640 ) (1,005 ) Amortization and write-off of deferred financing fees 1,471 2,883 7,821 Paid in kind interest expense 550 2,228 Increase (decrease) in cash from changes in operating assets and liabilities, net of acquisitions Accounts receivable, net (1,669 ) 6,457 (17,396 ) Inventories (4,626 ) 8,624 (5,166 ) Other current assets 501 418 (1,015 ) Other assets (35 ) 45 (62 ) Accounts payable (9,167 ) (1,807 ) 14,975 Accrued personnel costs 297 (731 ) 6,062 Accrued expenses and other current liabilities 615 1,383 343 Income taxes payable 993 (216 ) 3,916 Other noncurrent liabilities (128 ) (321 ) 1,585 Net cash provided by operating activities 19,136 58,548 88,691 Cash flows from investing activities Purchase of property and equipment (10,790 ) (6,300 ) (17,893 ) Proceeds from the sale of property and equipment 462 205 515 Net cash used in investing activities (10,328 ) (6,095 ) (17,378 ) Cash flows from financing activities Short-term debt borrowings 86,915 Short-term debt repayments (156,247) Long-term debt borrowings 338,333 290,000 Long-term debt repayments (40,000 ) (42,400) (365,377) Payment of debt issuance costs (3,448 ) (6,014 ) Dividends paid (240,888) (2,579 ) (6,962 ) Proceeds from capital contribution 10,000 Proceeds from option exercise 12,206 Net cash provided by (used in) financing activities 6,871 (44,979) (88,353 ) Effect of exchange rates on cash 1,112 (885 ) 2,760 Net increase (decrease) in cash 16,791 6,589 (14,280 ) Cash and cash equivalents Beginning of year 10,309 27,100 33,689

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document End of year $27,100 $33,689 $19,409 Cash paid for: Interest $12,515 $31,639 $25,725 Income taxes 12,438 11,196 13,589

The accompanying notes are an integral part of these financial statements.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data) 1. Description of business SRAM Holdings, LLC (formerly SRAM Corporation) together with its wholly owned subsidiaries (collectively the Company or Holdings), a limited liability company, was formed on September 22, 1987 and is engaged in the design, manufacturing and marketing of bicycle components. The Companys principal markets are the original equipment manufacturing channel and the aftermarket channel throughout North America, Asia and Europe.

2. Recapitalization On September 30, 2008, SRAM Corporation, TCP SRAM Holdings (TCP SRAM) and SRAM-SP2, Inc., (SRAM-SP2) came to an agreement whereby TCP SRAM would acquire a 40% interest in Holdings. The parties entered into a series of integrated transactions (the Recapitalization) whereby TCP SRAM acquired the Class A preferred interest in Holdings from SRAM SP-2.

On September 30, 2008, SRAM Corporation was converted from an S-Corporation to a limited liability corporation and contributed their shares to newly formed SRAM-SP2 in exchange for shares of SRAM-SP2, and SRAM Corporation thereafter merged into SRAM Holdings, LLC. The results from operations through September 30, 2008 include the operations of SRAM Corporation for the nine month period then ended and the results from operations from September 30, 2008 through December 31, 2008 include the results of operations of SRAM Holdings, LLC.

The Recapitalization transaction closed and became effective on September 30, 2008. Under the terms of the Recapitalization:

The shareholders of SRAM Corporation created SRAM-SP2 and contributed 100% of the ownership interest in SRAM Corporation to SRAM-SP2 for a 100% interest in SRAM-SP2. This transaction qualified as a common control transaction because the ownership interest in SRAM Corporation was the same before and after the transaction.

SRAM-SP2 created Holdings and contributed 100% of its ownership interest in SRAM Corporation in exchange for all the outstanding equity interest in Holdings (3,640,000 Class A Preferred Units and 5,460,000 Class B Units). This transaction qualified as a common control transaction because the ownership interest in SRAM Holdings, LLC was the same before and after the transaction. The Company used the total estimated enterprise value to allocate the equity interest as of the reorganization date based on the arms length negotiations between SRAM-SP2 and TCP SRAM.

The Company entered into a $240,000 senior note payable and a $110,000 subordinated note payable, the proceeds of which were used to pay $236,400 in special dividends and repay $53,800 in existing revolving credit facilities and $37,600 in existing senior note payable commitments. The remaining proceeds were used to pay $8,952 in transaction fees and $13,248 in debt fees. The Recapitalization triggered certain performance conditions which immediately vested all outstanding options and allowed the holders to exercise their outstanding options. US option holders, to the extent options were exercised, participated in the special distribution and non-US option holders sold their options back to the Company.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

SRAM-SP2 sold their Class A interest in Holdings to TCP SRAM for $234,800. This transaction did not trigger a change in control as TCP SRAM did not obtain unilateral control over Holdings.

As part of the Recapitalization, shareholders of SRAM-SP2 received a special distribution (the Distribution). The Distribution was recorded as a dividend in the statement of members deficit. The special distribution of approximately $240,888 was paid in October 2008 and December 2008 in the amounts of $232,888 and $8,000, respectively. In addition to discretionary dividend distributions, the Company distributes periodic dividends in amounts approximating the tax liabilities of its Members resulting from the profits of the Company.

After the Recapitalization, SRAM Holdings, LLC created SRAM Cycling Advocacy, LLC and contributed $10,000 in cash to obtain 100% ownership of this Subsidiary, which consolidates into SRAM Holdings, LLC. The mission of the SRAM Cycling Advocacy, LLC is to support committed national advocacy efforts that enhance cycling infrastructure, safety and access.

3. Significant Accounting Policies Principles of Consolidation

The consolidated financial statements include the accounts of the Company and all its subsidiaries. All intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers investments readily convertible into cash and with an original maturity of 90 days or less to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable consists of trade receivables recorded net of customer credits and allowances for doubtful receivables, discounts and returns. The Company maintains allowances for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of the Companys customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company evaluates the adequacy of the allowance on a periodic basis. The evaluation includes analyzing historical loss experience, the aging of the receivable balances, adverse situations that may affect the

F-22

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data) customers ability to pay the receivable, and prevailing economic conditions. If the evaluation of the reserve requirements differs from the actual aggregate allowance, adjustments are made to the allowance. This evaluation is inherently subjective, as it requires estimates that are susceptible to revision as more information becomes available.

Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. The cost of inventories includes raw materials, direct labor and manufacturing overhead costs. The Company establishes a new cost basis for write-downs due to obsolescence and therefore does not present a reserve for obsolete inventory. Normal facility, freight and handling costs are those expected to be incurred over a number of periods or seasons under normal circumstances, taking into account market- driven adjustments to costs. Costs associated with idle facilities and/or those as a result of significantly reduced demand, labor and materials shortages, and unplanned facility or equipment downtime would generally be characterized as abnormal and treated as period charges rather than a portion of inventory cost.

Property and equipment

Property and equipment are recorded at cost. Betterments are capitalized while repairs and maintenance are expensed as incurred. The cost and accumulated depreciation of property and equipment sold, retired or otherwise disposed are eliminated from the accounts, and the resulting gains and losses are reflected within general and administrative expense on the consolidated statements of operations.

Depreciation is computed using the straight-line method over the estimated useful lives of the related assets as follows:

Buildings 37 years Machinery and equipment 5 to 7 years Computers and software 3 to 5 years Capital improvements Shorter of the lease term or useful life

Long-lived assets

On an ongoing basis, property and equipment and definite lived intangible assets are reviewed for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. If such events or changes in circumstances occur, an impairment loss will be recognized if the undiscounted future cash flows expected to be generated by the asset are less than the carrying value of the related asset. The impairment loss would adjust the asset to its fair value. The Company concluded that there were no facts or circumstances that required an evaluation in 2008, 2009 or 2010.

F-23

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

Deferred financing charges

Deferred financing costs include debt discount and issuance costs which consist of amounts paid to lenders and third parties, respectively, in connection with obtaining debt financing. The costs attributed to a revolving credit facility are being amortized and included in interest expense using the straight-line method over the term of the related debt agreements. The costs attributed to long-term borrowings are being amortized and included in interest expense using the effective interest method, over the term of the related debt agreements. On the consolidated balance sheets, the debt issuance costs are classified within deferred charges and other assets and the debt discount is classified as a reduction of long-term borrowings. Amortization expense incurred during the years ended December 31, 2008, 2009 and 2010 was approximately $1,471, $2,798, and $2,914, respectively. The estimated amount of amortization expense for the debt issuance costs and debt discount costs for each of the next 5 years is approximately:

2011 $5,029 2012 3,313 2013 1,459 2014 316 2015 105

Goodwill

The Company does not amortize goodwill but is required to test goodwill at least annually for impairment. The Company reviews goodwill for impairment at year end. The goodwill impairment assessment is made on a reporting unit basis. A reporting unit is an operating segment or one level below an operating segment for which discrete financial information is prepared and is regularly reviewed by management. The impairment test for goodwill is a two-step process. The first step is to compare the fair value of a reporting unit with its carrying amount. If the carrying value of a reporting unit exceeds its fair value, the second step is performed to measure the amount of the impairment loss, if any. In this second step, if the carrying value of the reporting units goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess, not to exceed the carrying amount of goodwill.

The Company determines the fair value of its reporting units based upon a combined weighting of the fair values determined using (a) discounted future cash flow analysis and (b) market multiples of comparable publicly-traded companies. The principal assumptions used in the future cash flow analysis relate to forecasting future operating results, including revenue, weighted- average cost of capital and terminal values, which are all considered Level 3 or unobservable inputs under the relevant authoritative guidance. The determination of the reporting unit fair value includes numerous uncertainties. A material change in assumptions utilized or in the conditions or circumstances influencing fair values, could have a significant effect on the Companys goodwill impairment assessment. No impairment charges have ever been recorded to goodwill.

Goodwill allocated to the Original Equipment and Aftermarket reporting segments (Note 13) were $14,086 and $1,520, respectively, at December 31, 2008, December 31, 2009, and December 31, 2010.

F-24

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

Product warranty costs

Reserves are recorded on the balance sheet to reflect the Companys contractual liabilities relating to warranty commitments to customers. Warranty coverage of two years is provided to customers. An estimate for warranty expense is recorded at the time of sale within cost of sales based on historical warranty return rates and repair costs. Product warranty liabilities are included within accrued expenses and other current liabilities on the consolidated balance sheets at December 31, 2009 and 2010.

Advertising costs

The Company expenses all advertising costs as they are incurred. Advertising costs were $2,784, $1,943, and $2,948 for the years ended December 31, 2008, 2009 and 2010.

Revenue recognition

The Company recognizes revenue at the time of shipment of products to customers as at that time title has transferred, the price is fixed or determinable and collection is deemed probable. Billings for shipping and handling costs are included in revenues, for which the costs are included in cost of sales. Upon recognition of revenue, the Company also provides reserves for product returns, discounts, volume rebates and other allowances, all of which are recorded as reductions in net sales. The Company assesses sales and reserves data on an ongoing basis to determine whether customers will meet the requirements of specific programs.

Stock based compensation

In accordance with the accounting standards for share-based payments, all share based payments, including grants of stock options and incentive units, are required to be recognized in the consolidated statement of operations as an operating expense, based on their grant date fair values, over the requisite service period.

Incentive units

The Incentive Units are accounted for using the fair value method. Based on the terms and conditions of the awards, a portion is classified as equity awards and a portion is classified as liability awards. The liability awards are remeasured at fair value at each reporting period until settlement and the changes in fair value are recorded in the consolidated statement of operations.

For 2008 and 2009 the Company used a Black-Scholes option pricing model to estimate the grant-date fair-value of its incentive units. Inputs to the Black-Scholes option pricing model include the fair value of the underlying assets distributable to award holders (based on the enterprise value of the Company and the terms of the awards), estimated price volatility of the underlying assets distributable to award holders, the term of the awards, dividend yield, and the risk-free interest rate. In determining the enterprise value of the Company, the valuation incorporates discounted cash flow modeling techniques, which require estimates regarding the amount and timing of expected cash flows and discount rate assumptions commensurate with the risk involved.

F-25

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

Starting in 2010 the Company began estimating the grant date fair value using a weighted average between the Black-Scholes option pricing model and the probability-weighted expected return method. The probability-weighted expected return method estimates value based upon an analysis of future values of the enterprise assuming various outcomes such as an IPO, merger or sale, dissolution, or continued operation as a viable enterprise. Unit value is based upon the probability-weighted present value of expected future investment returns, considering each of the possible future outcomes available to the enterprise, as well as the rights of each unit class.

Stock options

The Company uses a Black-Scholes option pricing model in order to estimate the grant-date fair value of its stock options. Inputs used by the Company in estimating the fair include expected stock price volatility over the expected term of the awards, the expected dividend yield and the risk free interest rate. The expected term of stock options granted represents the period of time that stock options granted are expected to be outstanding. The expected volatility is based on the historical volatility of competitors that are similar except for having publicly traded securities. The expected dividend yield represents the expected annual dividends to be paid to stockholders over the term of the stock options. The risk free interest rate used in the option valuation model is based on United States Treasury rates with remaining terms similar to the expected term of the stock options.

Income taxes

The Company is a limited liability company classified as a partnership for federal income tax purposes. Consequently, income and losses flow directly through to the members of the Company. Accordingly, no provision for U.S. federal income taxes has been reflected in the consolidated financial statements.

Income taxes in foreign jurisdictions and certain U.S. state taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities in the financial statements and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established if it is more likely than not that a deferred tax asset will not be realized. In determining the appropriate valuation allowance, the Company considers projected realization of tax benefits based on expected levels of future taxable income, available tax planning strategies and its overall deferred tax position.

Withholding tax is required to be remitted on certain types of payments made by foreign jurisdictions, including but not limited to royalty charges and sales and marketing charges. The withholding tax rules vary by jurisdiction and by entity classification. The Company accrues withholding tax as incurred throughout the year.

Effective January 1, 2008, the Company adopted the new accounting standard for uncertainty in income tax positions, which prescribes a comprehensive model for recognizing, measuring, presenting, and disclosing in the financial statements tax positions taken by the Company on its tax returns. This standard requires that the

F-26

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data) tax effects of a position be recognized only if it is more-likely-than-not to be sustained based solely on its technical merits as of the reporting date. The more-likely-than-not threshold represents a positive assertion by management that a company is entitled to the economic benefits of a tax position. If a tax position is not considered more-likely-than-not, no benefits of the tax position are to be recognized. If deemed necessary, the Company will record accrued interest and penalties as a component of the provision for income taxes in the consolidated statements of operations. The adoption of this accounting standard did not have a significant effect on the Companys financial statements. Prior to January 1, 2008, the Company recorded a liability when such uncertainties were probable and reasonably estimable.

Fair value of financial instruments

The Companys financial instruments consist primarily of cash and cash equivalents, trade receivables, trade payables, and long-term debt. Management considers the carrying values of cash and cash equivalents, trade receivables and trade payables to be representative of their respective fair values because of their short-term maturities or expected settlement dates. The estimated fair value of the outstanding amounts under the long-term borrowings is further discussed in Footnote 11. This guidance establishes a three-level valuation hierarchy for fair value measurements. These valuation techniques are based upon the transparency of inputs (observable and unobservable) to the valuation of an asset or liability as of the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Companys market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1Valuation is based on quoted prices for identical assets or liabilities in active markets;

Level 3Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

Foreign currency

The financial statements of the Companys foreign subsidiaries and branches are maintained in local currency, except for its Asian trading company, whose functional currency is the U.S. dollar. For financial reporting purposes, the non-U.S. dollar functional currency entities translate their balance sheets at exchange rates in effect at the balance sheet date and their statements of operations at weighted average rates prevailing during the year. The cumulative effect of translation adjustments for the balance sheet is reflected as a separate component of members deficit.

Gains and losses resulting from foreign exchange transactions are recorded in the results of operations in the period that they occur. Such transaction gains and losses are a result of the Company conducting its business in various foreign currencies and translation of intercompany receivables and payables that are not deemed to be permanent in nature.

F-27

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

New accounting pronouncements

In September 2006, the FASB issued Fair Value Measurements (ASC Topic 820). ASC Topic 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurement. This statement applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The Company adopted ASC Topic 820 as of January 1, 2008 except for nonfinancial assets and liabilities recognized or disclosed at fair value on a nonrecurring basis, for which the effective date was fiscal years beginning after November 15, 2008.

In May 2009, the FASB issued Guidance that establishes general standards of accounting for and disclosures of subsequent events that occurred after the balance sheet date but prior to the issuance of financial statements. This Guidance is effective for financial statements issued for interim or fiscal years ending after September 15, 2009. The adoption of this Guidance, effective September 30, 2009, did not affect the consolidated financial position, results of operations or cash flows of the Company.

In June 2009, the Financial Accounting Standards Board (FASB) issued The FASB Accounting Standards Codification (ASC or Codification) and the Hierarchy of Generally Accepted Accounting Principles (GAAP). This statement was adopted by the Company in 2009. The Codification became the single source of authoritative U.S. GAAP recognized by the FASB and the Companys notes to the consolidated financial statements will no longer make reference to Statements of Financial Accounting Standards (SFAS) or other U.S. GAAP pronouncements.

In August 2009, we adopted Accounting Standards Update, or ASU, 2009-05, Fair Value Measurements (Topic 820) Measuring Liabilities at Fair Value. ASU 2009-05 amends ASC topic 820 by providing additional guidance clarifying the measurement of liabilities at fair value. When a quoted price in an active market for the identical liability is not available, the amendments require that the fair value of a liability be measured using one or more of the listed valuation techniques that should maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The adoption did not have a material impact on our financial position or results from operations.

4. Allowance for doubtful accounts

2008 2009 2010 Accounts receivableallowance for doubtful accounts Balance at beginning of period $2,083 $1,920 $1,640 Provision (recovery) charged to expense 376 203 (53 ) Translation adjustments (44 ) 4 (39 ) Write-offs (495 ) (487 ) (248 ) Balance at end of period $1,920 $1,640 $1,301

F-28

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

5. Inventories Inventories consist of the following at December 31:

2009 2010 Raw materials $13,295 $13,673 Work in process 3,381 3,732 Finished goods 11,570 16,728 Total inventories $28,246 $34,133

6. Property and equipment Property and equipment consist of the following at December 31:

2009 2010 Land $260 $479 Buildings 4,139 9,617 Machinery and equipment 64,433 65,770 Computers and software 10,773 11,268 Capital improvements 8,228 8,494 87,833 95,628 Accumulated depreciation (59,753) (62,295) $28,081 $33,333

Depreciation expense totaled $11,808, $11,181, and $11,472 for the years ended December 31, 2008, 2009, and 2010, respectively.

7. Intangible assets Intangible assets represent the value of the registered tradenames and trademarks, customer relationships, patents, and noncompete agreements acquired in purchase business combinations. These assets are being amortized over periods ranging from five to twenty-five years using the straight-line method. Amortization expense totaled $3,991 for each of the years ended December 31, 2008, 2009 and 2010, respectively. The estimated amount of amortization expense for the identifiable intangible assets are summarized as follows for the next five years ended December 31:

2011 $3,990 2012 3,980 2013 3,928 2014 3,328 2015 2,507

F-29

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

Refer to the table below for a summary of the gross carrying amount and accumulated amortization of intangible assets at December 31, 2009 and 2010, respectively:

2009 Amortization Gross Carrying Accumulated Net Carrying Period Amount Amortization Amount Tradenames 5 - 25 years $ 34,068 $ 12,679 $ 21,389 Patents 15 years 7,230 1,064 6,166 Customer relationships 10 - 20 years 23,700 2,979 20,721 Noncompete agreements 5 years 310 134 176 $ 65,308 $ 16,856 $ 48,452

2010 Amortization Gross Carrying Accumulated Net Carrying Period Amount Amortization Amount Tradenames 5 - 25 years $ 34,068 $ 14,752 $ 19,316 Patents 15 years 7,230 1,545 5,685 Customer relationships 10 - 20 years 23,700 4,354 19,346 Noncompete agreements 5 years 310 196 114 $ 65,308 $ 20,847 $ 44,461

8. Product warranty The following table presents a summary of changes in the product warranty accrual activity for the years ended December 31, 2008, 2009 and 2010:

2008 2009 2010 Balance at beginning of year $2,184 $2,998 $3,348 Additional warranty accrual 3,694 3,344 3,043 Settlements made during the year (2,880) (2,994) (2,854) Balance at end of year $2,998 $3,348 $3,537

9. SRAM-restructuring Effective in June 2010, a plan was approved that will reduce the workforce at its German plant pursuant to a shift in manufacturing from Germany to Taiwan. The scheduled plan includes three phases for the reduction in force, with the first phase taking effect on December 31, 2010 and the last phase on July 1, 2012. In connection with these actions the Company accrued termination benefits and other restructuring costs which were earned as of December 31, 2010 within accrued personnel costs and charged the expense to cost of sales.

F-30

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

Activity in accrued personnel costs related to this restructuring in 2010 consists of the following:

2010 Employee Other Charges Charges Total Beginning Balance $ $ $ Expense 7,697 337 8,034 Payments (3,408 ) (3,408) Foreign exchange impact 35 8 43 Year End Balance $ 4,324 $ 345 $4,669

Restructuring costs incurred as of December 31, 2010 and are expected to be incurred over the course of the plan are as follows:

2010 Original Equipment Aftermarket Total Beginning balance $ $ $ Expense 6,427 1,607 8,034 Total cost of restructuring plan $ 6,427 $ 1,607 $8,034

Additional costs expected to be incurred in connection with this restructuring total $2,870, of which $2,291 relate to the Original Equipment Segment and $579 relate to the Aftermarket Segment.

10. Commitments and contingencies Legal matters

In November 2001, a patent infringement lawsuit was filed against the Company, in the Munich District Court in Germany. In July 2007, the trail court ruled in favor of the Company. However, in October 2009, a German Appellate Court reversed the ruling and indicated that the Company infringed the utility model in suit. In November 2009, the Company appealed the decision to the German Court of Justice (Supreme Court). After consultation with legal counsel, management has assessed the probability of an unfavorable outcome as probable and in 2009 recorded a $3,000 liability within accrued expenses and other current liabilities on the consolidated balance sheet as of December 31, 2009 and December 31, 2010.

F-31

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

The Company currently leases office, manufacturing and warehouse space under the terms of operating leases expiring on various dates through 2017. The aggregate future minimum lease commitments under these operating leases for the next five years are summarized as follows for the years ended December 31:

2011 $4,195 2012 3,641 2013 3,378 2014 2,703 2015 2,381

Total rent expense for the years ended December 31, 2008, 2009 and 2010 under operating leases approximated $4,462, $4,577 and $4,373, respectively.

11. Long-term borrowings Long-term borrowings consist of the following at December 31, 2009 and 2010:

2009 2010 GE Capital Corporation Senior note, due September 30, 2014 with a weighted average interest rate $ $ of 7.35% at December 31, 2009. 197,600 GE Capital Corporation Senior note, due April 30, 2015 with a weighted average interest rate of 5.09% at December 31, 2010. 235,000 GE Capital Corporation revolving credit facility Senior subordinated loan agreement due September 30, 2015 with payment due in full at maturity and an interest rate of 13% 110,000 Long-term borrowings 307,600 235,000 Less: Debt discount (8,950 ) (7,897 ) Add: Paid-in-kind interest expense 2,778 301,428 227,103 Less: Current portion of long-term debt 10,855 $290,573 $227,103

On April 30, 2010 the Company entered into a new credit agreement. This agreement is a senior secured credit facility with various financial institutions and GE Capital as the administrative agent which matures in April 2015. Proceeds from this facility were used to repay in full all obligations of the previous short term revolving credit facility and previous long term senior note borrowing arrangements and all obligations from the subordinated notes outstanding. The Company incurred costs of $6,309 in connection with the refinancing, of which third party fees of $295 were accounted for as to a debt modification and were expensed as incurred within interest expense. Additionally, previously capitalized deferred financing costs of $2,396 were expensed in connection with the refinancing. Of these previously capitalized deferred financing costs, $1,869 represented

F-32

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data) creditor costs that were accounted for as a debt extinguishment and expensed and $527 represented third party costs that were accounted for as a debt modification and expensed in connection with the refinancing. This agreement includes a $25,000 revolving credit facility borrowing arrangement and term note of $290,000. The revolver matures April 2015 and provides for revolving credit borrowings, denominated in U.S. dollars. The Company is also required to pay a commitment fee of 0.5% on the unused portion of the facility. Borrowings against the revolving credit facility and the term note bear interest at a rate of prime plus 2.3% or LIBOR plus 3.5%.

The new credit agreement requires the Company to maintain ongoing compliance with certain financial covenants, including compliance with a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. At December 31, 2010, the Company was in compliance with all its financial covenants. Additionally, the agreement requires the Company to make a mandatory prepayment within five business days after the last business day the annual financial statements are required to be delivered, equal to the Excess Cash Flow for such fiscal year as defined in the credit agreement, if the companies maximum consolidated leverage ratio is above certain levels. At December 31, 2010, the companies maximum consolidated leverage ratio was below the required limit, therefore no mandatory prepayment was required. Substantially all of the Companys assets serve as collateral for borrowings under the agreements.

On September 30, 2008, the Company entered into two credit agreements. The first agreement was a senior secured credit facility with various financial institutions and GE Capital as the administrative agent. Proceeds from this facility were used to repay in full all obligations of the previous short term revolving credit facility and previous long term senior note borrowing arrangements. The remaining amounts of these proceeds were used to pay the special dividend payment to shareholders. This agreement included a $25,000 revolving credit facility borrowing arrangement and term note of $240,000. The revolver was to mature on September 2014 and provided for revolving credit borrowings, denominated in U.S. dollars. The Company was required to pay a commitment fee of 0.5% on the unused portion of the facility. The senior term note was to mature on September 2014 and was payable in equal quarterly installments totaling $2,400 per annum beginning January 1, 2009. Borrowings against the revolving credit facility and the term note beared interest at a rate of prime plus 3.8% or LIBOR plus 5%. This debt was paid off in full on April 30, 2010.

The second agreement was a $110,000 senior subordinated note with various financial institutions. Proceeds from this agreement were applied to the special dividend payment and costs associated with the Recapitalization. The subordinated note was to mature in September 2015 and was payable in full on the maturity date. Interest on the subordinated note was calculated on the unpaid principal balance at 13%. 11% of the annual interest expense was payable quarterly in arrears and 2% of the annual interest expense was paid-in-kind interest that was capitalized and due upon the maturity of the note. This debt was paid off in full on April 30, 2010.

Both agreements required the Company to maintain ongoing compliance with certain financial covenants, including compliance with a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. At December 31, 2009, the Company was in compliance with all its financial covenants. Additionally, the first agreement required the Company to make a mandatory prepayment within five business

F-33

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data) days after the last business day the annual financial statements are required to be delivered, equal to the Excess Cash Flow for such fiscal year as defined in the credit agreement. At December 31, 2009, the mandatory prepayment was $10,855 which is classified as a current liability on the consolidated balance sheet. Substantially all of the Companys assets served as collateral for borrowings under the agreements.

The carrying amount reported in the consolidated balance sheet as of December 31, 2009 and 2010 for long-term debt is $307,600 and $235,000, respectively. Using a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration, optionality, and risk profile, the Company has determined the fair value of its debt to be $337,300 and $232,800 at December 31, 2009 and 2010, respectively. In determining the market interest yield curve, the Company considered its corporate ratings from Moodys and S&P.

Scheduled maturities of long-term borrowings are as follows:

2011 $ 2012 2013 2014 2015 235,000

12. Income taxes The Companys income tax provision reflects its partnership (and previous S-Corporation) tax classification and is comprised of various foreign and U.S. state income tax provisions. The components of income (loss) before the provision for income taxes for the years ended December 31, 2008, 2009 and 2010 are as follows:

2008 2009 2010 United States $(97,197) $7,566 $11,521 Foreign 64,411 28,326 55,644 Total $(32,786) $35,892 $67,165

The provision for income taxes for the years ended December 31, 2008, 2009, and 2010 consists of the following:

2008 2009 2010 Current tax expense State and local income taxes $34 $23 $21 Foreign 13,472 5,994 9,280 Withholding tax-foreign jurisdictions 2,027 8,969 8,422 15,533 14,986 17,723 Foreign deferred tax expense/(benefit) 305 (614 ) (530 ) Total income tax expense $15,838 $14,373 $17,193

F-34

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

Deferred income tax assets are included in deferred charges and other assets on the consolidated balance sheets and consist of the following at December 31:

2009 2010 Other noncurrent liabilities $775 $1,139 Depreciation 566 620 Other 273 498 Total $1,614 $2,257

The difference between the effective tax rate and the federal statutory rate of 35% is primarily due to the following:

2008 2009 2010 World-wide income tax expense based on U.S. federal statutory rate $(11,475) $12,562 $23,508 Less: US (income) loss taxed at the member level for U.S. federal tax purposes 34,019 (2,648 ) (4,032 ) Foreign income taxed at U.S. federal statutory rate 22,544 9,914 19,476 U.S. state and local income taxes 34 24 21 Differences in income tax on foreign earnings (8,767 ) (4,651 ) (11,000) Foreign losses for which no benefit has been provided 117 274 Withholding tax-foreign jurisdictions 2,027 8,969 8,422 Total provision for income taxes $15,838 $14,373 $17,193

There are no interest and penalty amounts included in the unrecognized tax benefits as of December 31, 2009 and December 31, 2010, respectively. The Company does not expect that changes in the liability for unrecognized tax benefits during the next 12 months will have a significant impact on the Companys financial position or results of operations.

The Company is subject to taxation in the various U.S., state and foreign jurisdictions. The U.S. federal income tax returns have open statute of limitations for the 2007 and subsequent tax years as of December 31, 2010. Generally, the state tax returns have open statute of limitations for tax years 2007 and subsequent as of December 31, 2010. The German income tax returns for 2000 through 2005 have been audited. The remaining open years are for the 2006 and subsequent tax years as of December 31, 2010. The Irish and Chinese income tax returns have open statute of limitations for the 2006 and subsequent tax years as of December 31, 2010. The Taiwan income tax returns are examined each year. The remaining open years are for the 2009 and subsequent tax years as of December 31, 2010.

The Company does not provide for foreign withholding taxes on undistributed earnings of foreign operations that are intended to be permanently reinvested. At December 31, 2010, these earnings amounted to approximately $44,065. If these earnings were repatriated to the US, the Company may be required to accrue

F-35

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data) and pay taxes on the earnings based on each jurisdictions rules and the current foreign withholding tax rates in effect. The amount of the potential tax liability could range from $1,000 to $7,000 as of December 31, 2010.

13. Segment information The Company has two reportable segments, differentiated by the method used to distribute products to customers: Original Equipment and Aftermarket. The Original Equipment Segment revenue is generated through the sale of bicycle components that are assembled onto new bikes by the bicycle manufacturers. The Aftermarket Segment represents upgrades, accessories, specialty, and replacement components marketed primarily through field sales employees and independent distributors.

Where applicable, the Company reports information about operating segments and related disclosures about products and services, geographic areas and major customers. SRAM Holdings, LLCs chief operating decision maker (CODM) assesses segment performance and makes resource allocation decisions based on segment operating income. The Company does not generate information about assets for its operating segments, and accordingly no asset information is presented in the table below. Our selling, marketing, and product development, expenses are allocated to the segments based on what the Company considers to be a reasonable reflection of the utilization of services provided. Our general and administrative expense, interest expense (net), and foreign currency gain (loss) are evaluated on a consolidated basis and not allocated to the Companys segments.

Operating segment data for the periods indicated are as follows:

Original Equipment Aftermarket Corp Consolidated Year ended December 31, 2008 Net sales $ 353,584 $ 124,770 $ $ 478,354 Income (loss) from operations 68,487 34,062 (117,704)(1) (15,155 ) Year ended December 31, 2009 Net sales 265,629 133,952 399,581 Income (loss) from operations 61,430 41,286 (27,358 )(1) 75,358 Year ended December 31, 2010 Net sales 348,879 175,308 524,187 Income (loss) from operations 83,321 53,440 (37,199 )(1) 99,562 (1) General and administrative expense not allocated to the segments consists of the following: In 2008, unallocated general and administrative expense primarily includes stock compensation of $86,200, Finance and IT costs of $14,100, transaction costs of $8,900 and other corporate operating costs. In 2009, unallocated general and administrative expense primarily includes Finance and IT costs of $11,800, incentive unit compensation of $3,500, litigation costs of $3,400 and other corporate operating costs. In 2010, unallocated general and administrative expense primarily includes Finance and IT costs of $13,600, incentive unit compensation of $11,900, and other corporate operating costs.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

The following table summarizes net sales by product line:

2008 2009 2010 Net % of Net % of Net % of Sales Net Sales Sales Net Sales Sales Net Sales Mountain $298,065 62% $256,758 64% $326,682 62% Road 83,942 18% 85,149 21% 136,088 26% Pavement 96,347 20% 57,674 14% 61,417 12% Total net sales $478,354 100% $399,581 100% $524,187 100%

The tables below presents information related to geographic areas in which the Company operated. Net revenue is primarily classified based on the country where the Companys customer is located:

Net sales by customer location were as follows:

2008 2009 2010 U.S. $56,487 $55,395 $80,037 Taiwan 171,681 131,809 180,618 Germany 64,300 61,457 65,277 Other 185,886 150,920 198,255 $478,354 $399,581 $524,187

Total long lived assets by location were as follows:

2008 2009 2010 U.S. $81,689 $74,822 $75,866 Taiwan 12,143 12,317 12,923 Other 13,858 11,522 10,162 $107,690 $98,661 $98,951

There are two customers that represent greater than 10% of total revenues for 2008, 2009, and 2010. The first customer represented 12%, 11%, and 12% of total revenues for the years 2008, 2009, and 2010, respectively, and the second customer represented 8%, 8%, and 11% of total revenues for the years 2008, 2009, and 2010, respectively. The revenues from both of these customers are included within the revenues of the OEM reportable segment.

14. Members capital Class A Units

As of December 31, 2010, there were 3,640,000 Class A Member Units authorized, issued, and outstanding. Class A units entitle holders to the rights and privileges specified in the SRAM Holdings, LLC Operating

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

Agreement, as described below. Class A units maintain preemptive rights against the issuance of additional voting and/or participating units, carry one vote per unit, are nontransferable absent specific approval by the Board of Directors, and maintain the right to initiate a sale of the Company through a majority vote of Class A members. Under the Operating Agreement, no distributions other than tax distributions shall be made to any other members until Class A members have received a complete return of contributed capital, the Class A preferred return (10% of contributed capital per annum, compounded quarterly, beginning September 30, 2008), and any Class A stepped-up preferred return (15% of the sum of contributed capital and any undistributed preferred return, compounded quarterly, beginning September 30, 2014). Tax distributions are made to Class A members based on the estimated member tax liability accruing to the member unit holder as a result of the allocation of taxable gain and loss to the Class A units. Upon a sale of the Company, all Class A members will be granted equity interests such that their rights, preferences, and privileges are the same after such a sale as they were before, unless otherwise agreed upon by the Class A members.

Class B units

As of December 31, 2010, there were 5,460,000 Class B Member Units authorized, issued, and outstanding. Class B units entitle holders to the rights and privileges specified in the SRAM Holdings, LLC Operating Agreement. Class B units maintain preemptive rights against the issuance of additional voting and/or participating units, carry one vote per unit, and are nontransferable absent specific approval by the Board of Directors. Tax distributions are made to Class B members based on the estimated member tax liability accruing to the member unit holder as a result of the allocation of taxable gain and loss to the Class B units. Other than tax distributions, Class B units share in distributions based on a participation ratio specified in the Operating Agreement once Class A units have received a complete return of contributed capital, the Class A preferred return, and any Class A stepped-up preferred return. Upon a sale of the Company, all Class B members will be granted equity interests such that their rights, preferences, and privileges are the same after such a sale as they were before, unless otherwise agreed upon by Class B members.

Incentive units

The Company is authorized to issue 675,000 Incentive Units. As of December 31, 2010, there were 553,394 issued Incentive Units, of which 539,533 were outstanding. Upon vesting, Incentive Units entitle the holders thereof to the rights and privileges specified in the SRAM Holdings, LLC Operating Agreement and the individual grantee Incentive Unit Agreement(s). As discussed in Note 16, the Company issues Incentive Units to key management, employees, and directors as a means for allowing participation in member distributions. Incentive Units do not maintain any preemptive rights, are nonvoting, and are nontransferable absent specific approval by the Board of Directors. Tax distributions are made to Incentive Unit holders (both vested and unvested) based on the estimated member tax liability accruing to the member unit holder as a result of the allocation of taxable gain and loss incentive units. Other than tax distributions, Incentive Units participate in distributions once Class A units have received a complete return of contributed capital, the Class A Preferred Return, any Class A Stepped-up Preferred Return, and once distributions to Class A and Class B members

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data) exceed the distribution threshold defined in the grantee Incentive Unit Agreement. Distributions are made to vested Incentive Unit holders if and when the aforementioned criteria are met, with remittance to the grantee of any distributions accruing during the vesting period upon vesting in the award. As described in Note 16, Incentive Units are forfeited, in whole or in part, upon a termination event, death, or disability.

16. Stock option plans In 2008, prior to the Recapitalization, the Company had six stock option plans (the Plans) in effect under which grants have been issued. The Plans, on a combined basis, provided for the granting of options to purchase, in aggregate, a maximum of 1,597,016 shares of the Companys common stock. The exercise price for the stock options was equal to the fair value on the date of grant as determined in accordance with the Plans. The vesting requirements were determined by the Board of Directors, with most outstanding options vesting 100% in three years. The options expire on the earlier of termination of employment, ten years from the respective plans inception, or ten years after the grant date, as defined by the respective plan. A summary of the Companys Plans as of December 31, 2008, and the changes during the year then ended, are as follows:

2008 Weighted- Average Exercise Shares Price Outstanding at beginning of year 1,016,290 $ 16.17 Granted Vested (709,534 ) 16.90 Forfeited (306,756 ) 13.05 Outstanding at end of year $ Exercisable at year end

The range in exercise prices falls between $2.57 and $38.00. There were no options outstanding at December 31, 2008.

All stock option awards issued under this Plan had certain performance conditions, including a requirement that the Company changes its incorporation to a C corporation status in order for the options to become exercisable. The Company considered such performance condition as not probable and as such no compensation expense was recognized in the statement of operations prior to recapitalization. The Recapitalization triggered certain performance conditions which immediately vested all outstanding options and allowed the holders to exercise their outstanding options. The majority of US option holders chose to exercise their options which resulted in compensation expense of $62,106. All options held by non-US option holders were cancelled and repurchased by the Company for an agreed upon price which resulted in $26,415 of compensation expense.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

Incentive units

In connection with the Recapitalization, SRAM Holdings, LLC has authorized 675,000 of nonvoting Incentive Units to be issued to certain members of management of the Company in accordance with the Amended and Restated Limited Liability Company Operating Agreement of the Company. At the time of the issuance, the Incentive Units are issued for no consideration. Each Incentive Unit has a Distribution Threshold set forth in the Incentive Members Incentive Unit Agreement of $467,600 for 2008 and 2009 grants and $525,415 for 2010 grants. Incentive Units vest 20% per year, provided that no Termination Event has occurred, based upon the achieved Model Year EBITDA as compared to the Model Year EBITDA Target for such model year in accordance with the Members Incentive Unit Agreement.

In accordance with the forfeiture and buy out section of the Incentive Unit Agreement, if the Incentive Unit Member terminates their employment with the Company, 50% of the then vested Incentive Units and 100% of the unvested Incentive Units are immediately forfeited and cancelled for no consideration. SRAM Holdings, LLC has the option of purchasing vested units at the terminating date fair value or can permit the Incentive Member to retain the vested Incentive Units.

The summary of the Incentive Units activity as of December 31, 2009 and 2010, which represent 50% liability awards and 50% equity awards at the SRAM Holdings, LLC level, are as follows:

The summary of the Incentive Units activity as of December 31, 2009 and 2010 for all awards are as follows:

2009 2010 Weighted- Weighted- Average Average Grant Date Grant Date Units Fair Value Units Fair Value Outstanding at beginning of year 502,850 $ 21.03 506,606 $ 21.28 Granted 15,544 29.04 35,000 81.01 Exercised Forfeited (11,788 ) 21.03 (2,073 ) 21.03 Outstanding at end of year 506,606 $ 21.28 539,533 $ 25.15 Units vested at year end 99,662 $ 21.03 200,880 $ 21.16

Total compensation expense for equity classified awards was $0, $1,533, and $1,267 in 2008, 2009 and 2010, respectively. The compensation expense for liability classified awards was $0, $2,151 and $11,164 in 2008, 2009 and 2010, respectively.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

The summary of the unvested Incentive Units activity as of December 31, 2009 and 2010 is as follows:

2009 2010 Weighted- Weighted- Average Average Grant Date Grant Date Units Fair Value Units Fair Value Unvested at beginning of year 502,850 $ 21.03 406,944 $ 21.34 Granted 15,544 29.04 35,000 81.01 Vested (99,662 ) 21.03 (101,217) 21.28 Forfeited (11,788 ) 21.03 (2,073 ) 21.03 Unvested at end of year 406,944 $ 21.34 338,654 $ 27.53

The assumptions used in the Black-Scholes option valuation model to calculate the fair value of the Incentive Units granted on December 1, 2009 and July 23, 2010, are as follows:

2009 2010 Expected volatility 47.19% 35.00% Expected dividend yield 0% 0% Expected term (in years) 5.0 1.0 Risk free interest rate 2.03% 0.30%

Expected volatility of the units is based on historical equity volatility from other public companys trading data within the bicycle, sporting equipment, and consumer products growth sector over the stated period. The risk-free interest rate is based upon the U.S. Treasury yield curve at the date of grant with maturity dates corresponding to the incentive units expected average life. The Company estimated expected terms of the units using the simplified method based on the expected term over which the units are likely to vest.

17. Pro forma information (unaudited) Pro forma consolidated balance sheet

The pro forma consolidated balance sheet presented in the accompanying consolidated financial statements reflects the conversion as of December 31, 2010 of all outstanding Class A member units, Class B member units and Incentive Unit member units into shares of Class A common stock and shares of Class B common stock of SRAM International Corporation upon the initial public offering, all based upon an assumed share price of $ per share (the midpoint of the range set forth on the cover of Companys prospectus, after deducting underwriting discounts and commissions and estimated expenses payable by the Company in connection with the offering). The conversion of Member Units to common stock is contractually required upon the reorganization to a C-corporation as contemplated in the offering.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents SRAM Holdings, LLC and subsidiaries Notes to consolidated financial statements As of December 31, 2009 and 2010 and for the years ended December 31, 2008, 2009, and 2010 (In thousands, except share/unit data)

Additionally, the pro forma consolidated balance sheet reflects an accrual for the accumulated Class A preferred return as of December 31, 2010. The Company will distribute $ to Class A member units, representing their accumulated preferred return of $ as of the settlement date, which will be settled in cash.

Pro forma earnings per common share

The pro forma basic and diluted earnings per common share for the year ended December 31, 2010 have been computed to give effect to: (a) the contractually required conversion of Class A, Class B and Incentive Unit member units into common stock, described above, and (b) the tax effect of the conversion from a limited liability corporation to a C-corporation; as though all of the conversions occurred on January 1, 2010.

In connection with the offering and related reorganization the Company became taxed as a corporation. The Company was previously treated as a limited liability corporation for tax purposes and therefore generally not subject to federal income tax in the United States. The pro forma net income for the year ended December 31, 2010 includes an adjustment for income tax expense as if the Company had been a corporation from January 1, 2010, at an assumed combined federal, state, and local income tax rate of %.

Pro forma weighted average common shares outstanding are computed as follows:

Class A Class A Class B Class B member common member common Incentive units shares units shares units Total Weighed average member unitsbasic and diluted 3,640,000 5,460,000 269,767 Contractual conversion of member units to common stock (3,640,000) (5,460,000) (269,767) Weighted average common sharesbasic and diluted

18. Subsequent events On May 4, 2011, the Company acquired certain assets and certain liabilities of Quarq Technology, Inc., who is engaged in the business of designing, manufacturing, supplying and selling bicycle power meters, measurement devices and related products. The purchase price was $4,500, plus an earn-out clause that could result in an additional maximum purchase price of $6,000. The acquisition was funded through cash on hand. The future earn-out is based on a two year period and is based on the net sales of Quarq Technology, Inc. products.

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Class A common stock

Prospectus

J.P. Morgan BofA Merrill Lynch Morgan Stanley Baird Lazard Capital Markets Piper Jaffray Stifel Nicolaus Weisel

Through and including , 2011 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealers obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Part II Item 13. Other expenses of issuance and distribution The following table sets forth the costs and expenses, other than underwriting discounts and commissions, payable in connection with the sale and distribution of the securities being registered. All amounts are estimated except for the SEC registration fee and the FINRA filing fee. All the expenses below will be paid by SRAM.

Item Amount SEC Registration fee $34,830.00 FINRA filing fee 30,500.00 Initial listing fee * Legal fees and expenses * Accounting fees and expenses * Printing and engraving expenses * Transfer Agent and Registrar fees * Blue Sky fees and expenses * Miscellaneous Fees and expenses * Total $*

* To be provided by amendment.

Item 14. Indemnification of directors and officers SRAM International Corporation is a Delaware corporation. Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporations board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities, including reimbursement for expenses incurred, arising under the Securities Act of 1933, as amended. Our amended and restated certificate of incorporation to be in effect upon the consummation of this offering provides for indemnification of our directors and officers to the maximum extent permitted by the Delaware General Corporation Law, and our amended and restated bylaws to be in effect upon the consummation of this offering provide for indemnification of our directors and officers to the maximum extent permitted by the Delaware General Corporation Law. Reference is also made to the underwriting agreement to be filed as Exhibit 1.1 hereto, which provides for indemnification by the underwriters of the registrant and its officers and directors against certain liabilities.

Item 15. Recent sales of unregistered securities On April 29, 2011, SRAM International Corporation, a Delaware corporation, was formed. SRAM-SP2, Inc. purchased 100 shares for $10.00 in a transaction exempt from registration pursuant to Section 4(2) of the Securities Act, as it was a transaction by an issuer that did not involve a public offering of securities.

In connection with the reorganization described in the section entitled The refinancing and reorganization in the accompanying prospectus, we will issue shares of our Class B common stock to the Day family and shares of our Class A common stock to SRAM management and current and former directors and employees in exchange for their direct or indirect interests in SRAM Holdings, LLC. The shares will be issued in reliance on Section 4(2) of the Securities Act, on the basis that the issuance will not involve a public offering.

There were no underwriters employed in connection with the transactions set forth in Item 15.

II-1

Item 16. Exhibits and consolidated financial statements See the Exhibit Index beginning on page II-5, which follows the signature pages hereof and is incorporated herein by reference.

Item 17. Undertakings The undersigned registrant hereby undertakes that:

(1) for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective;

(2) for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and

(3) the undersigned will provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-2

Pursuant to the requirements of the Securities Act of 1933, as amended, we have duly caused this registration statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on the 24th day of June, 2011.

SRAM International Corporation

By: /s/ Stanley R. Day, Jr. Stanley R. Day, Jr. President and Chief Executive Officer

Signature Title Date

/s/ Stanley R. Day, Jr. President, Chief Executive Officer and June 24, 2011 Stanley R. Day, Jr. Director (principal executive officer)

* Chief Financial Officer (principal financial June 24, 2011 Michael R. Herr and accounting officer)

* Director June 24, 2011 Frederick K. W. Day

* Director June 24, 2011 Gidon Cohen

* Director June 24, 2011 Jack Smith

* Director June 24, 2011 Charles C. Moore

*By: /s/ Stanley R. Day, Jr. Stanley R. Day, Jr. Attorney-in-fact

II-3

Exhibit index

Exhibit No. Description of Exhibit 1.1 * Form of Underwriting Agreement 3.1 * Amended and Restated Certificate of Incorporation of SRAM International Corporation, to be in effect upon completion of this offering 3.2 * Amended and Restated Bylaws of SRAM International Corporation, to be in effect upon completion of this offering 4.1 * Specimen Class A Common Stock Certificate 4.2 * Registration Rights Agreement between SRAM International Corporation, the Day family members and the other parties thereto 5.1 Form of Opinion of Latham & Watkins LLP 10.1 * Third Amended and Restated Limited Liability Company Agreement of SRAM Holdings, LLC 10.2 Amended and Restated Limited Liability Company Agreement of SRAM, LLC 10.3 SRAM, LLC First Lien Credit Facility 10.4 SRAM, LLC Second Lien Credit Facility 10.5 Intercreditor Agreement 10.6 Master Transaction Agreement 10.7 * Voting Trust Agreement by and among the Day family members 10.8 * SRAM International Corporation 2011 Incentive Award Plan 14.1 Code of Business Conduct and Ethics 21.1 * List of subsidiaries 23.1 Form of Consent of Latham & Watkins LLP (included in Exhibit 5.1) 23.2 Consent of Pricewaterhouse Coopers LLP, independent registered public accounting firm 23.3 Director Consent of Michael A. Smith 23.4 Director Consent of Thomas E. Bergmann 24.1 ** Power of Attorney (included on signature page to initial filing)

* To be filed by Amendment

** Previously filed

Management contract

II-4

233 S. Wacker Drive, Suite 5800 Chicago, Illinois 60606 Tel: +1.312.876.7700 Fax: +1.312.993.9767 www.lw.com

FIRM / AFFILIATE OFFICES Abu Dhabi Moscow Barcelona Munich Beijing New Jersey Boston New York Brussels Orange County Form of Opinion of Latham & Watkins, LLP Chicago Paris Doha Riyadh , 2011 Dubai Rome Frankfurt San Diego Hamburg San Francisco Hong Kong Shanghai Houston Silicon Valley London Singapore SRAM International Corporation Los Angeles Tokyo 1333 N. Kingsbury Street, 4th Floor Madrid Washington, D.C. Chicago, Illinois 60642 Milan

Re: Registration Statement No. 333-174140; shares of Class A Common Stock, par value $0.01 per share

Ladies and Gentlemen: We have acted as counsel to SRAM International Corporation, a Delaware corporation (the Company), in connection with the proposed issuance and sale of up to shares of Class A common stock, par value $0.01 per share, of the Company (the Shares). The Shares are included in a registration statement on Form S-1 under the Securities Act of 1933, as amended (the Act), filed with the Securities and Exchange Commission (the Commission) on May 12, 2011 (Registration No. 333174140) (as amended, the Registration Statement). The Shares include (i) up to Shares being offered by the Company (the Company Shares), (ii) up to Shares being offered by certain stockholders (the Selling Stockholders) of the Company (the Selling Stockholder Shares) and (iii) up to Shares which may be purchased by the underwriters from the Company pursuant to an option to purchase additional shares granted by the Company (the Option Shares). The terms Company Shares, Selling Stockholder Shares and Option Shares shall also include any additional such shares registered by the Company pursuant to Rule 462(b) under the Act in connection with the offering contemplated by the Registration Statement. This opinion is being furnished in connection with the requirements of Item 601(b)(5) of Regulation S-K under the Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or related prospectus (Prospectus), other than as expressly stated herein with respect to the issue of the Shares.

As such counsel, we have examined such matters of fact and questions of law as we have considered appropriate for purposes of this letter. With your consent, we have relied upon certificates and other assurances of officers of the Company and others as to factual matters without having independently verified such factual matters. We are opining herein as to the

General Corporation Law of the State of Delaware (the DGCL), and we express no opinion with respect to any other laws.

Subject to the foregoing and the other matters set forth herein, it is our opinion that, as of the date hereof:

1. When the Amended and Restated Certificate of Incorporation of the Company in the form most recently filed as an exhibit to the Registration Statement has been filed with the Secretary of State of the State of Delaware and becomes effective, and when the Selling Stockholder Shares shall have been duly registered on the books of the transfer agent and registrar therefor in the name or on behalf of the Selling Stockholders, and have been issued by the Company against payment therefore (not less than par value) in the circumstance contemplated by the reorganization (as defined in the Registration Statement), the Selling Stockholder Shares will have been duly authorized by all necessary corporate action of the Company and will be validly issued, fully paid and nonassessable.

2. When the Amended and Restated Certificate of Incorporation of the Company in the form most recently filed as an exhibit to the Registration Statement has been filed with the Secretary of State of the State of Delaware and becomes effective and when the Company Shares and Option Shares shall have been duly registered on the books of the transfer agent and registrar therefor in the name or on behalf of the purchasers, and have been issued by the Company against payment therefor (not less than par value) in the circumstances contemplated by the form of underwriting agreement most recently filed as an exhibit to the Registration Statement, the issue and sale of the Company Shares and Option Shares will have been duly authorized by all necessary corporate action of the Company, and the Company Shares and Option Shares will be validly issued, fully paid and nonassessable.

This opinion is for your benefit in connection with the Registration Statement and may be relied upon by you and by persons entitled to rely upon it pursuant to the applicable provisions of the Act. We consent to your filing this opinion as an exhibit to the Registration Statement and to the reference to our firm in the Prospectus under the heading Legal Matters. We further consent to the incorporation by reference of this letter and consent into any registration statement filed pursuant to Rule 462(b) with respect to the Shares. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.

Very truly yours,

LIMITED LIABILITY COMPANY AGREEMENT (SRAM, LLC)

This Limited Liability Company Agreement is adopted this 22nd day of September, 2008 by SRAM Holdings, LLC, a Delaware limited liability company (Original Member).

RECITALS

A. Original Member has formed a limited liability company under the laws of the State of Delaware.

B. Original Member wishes to adopt this Operating Agreement to govern the conduct of the business and affairs of such limited liability company and the relative rights and obligations of its Members in relation thereto, all as set forth herein.

AGREEMENT

In consideration of the foregoing, Original Member hereby adopts the following Agreement.

1. Definitions; Construction. 1.1 Definitions. For purposes of this Agreement, the following capitalized terms have the following meanings.

Act means the Delaware Limited Liability Company Act.

Agent has the meaning set forth in Section 7.1.

Agreement means this Limited Liability Company Agreement, including all Schedules hereto.

Bankruptcy has the meaning ascribed to such term in the Act.

Certificate of Formation means the certificate of formation filed with the Delaware Secretary of States office pursuant to the Act and as herein provided for the purpose of forming the Company.

Code means the Internal Revenue Code of 1986.

Company has the meaning set forth in Section 2.1.

Contribution means, with respect to a Member, the total amount of cash and the agreed fair market value of other property, the use of property, services rendered, a promissory note or other binding obligation to contribute cash or property or perform services or any other valuable consideration, if any, transferred or agreed to be transferred to the Company by such Member in accordance with Section 3.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Event of Withdrawal means with respect to any Member: (i) the assignment of the Members entire Interest; (ii) the complete termination, liquidation or dissolution of the Member; or (iii) the Bankruptcy of the Member.

Interest means the share of a Member in the Profits, Losses, deductions and credits of, and the right to receive distributions from, the Company, in addition to the right to exercise all approval and other rights of a Member, in each case as set forth herein.

Member means Original Member and all other persons who become members in the Company as provided herein, in each such persons capacity as a member in the Company.

Profits or Losses means, with respect to any fiscal year, an amount equal to the Companys taxable income or loss for such year determined pursuant to the Code.

Treasury Regulation means those regulations promulgated by the U.S. Department of the Treasury pursuant to authority of the Code or any other revenue law of the United States of America.

1.2 Construction. Unless the context of this Agreement clearly requires otherwise: (i) references to the plural include the singular and vice versa; (ii) references to any person include such persons successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement; (iii) references to one gender include all genders; (iv) including is not limiting; (v) or has the inclusive meaning represented by the phrase and/or; (vi) the words hereof, herein, hereby, hereunder and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement; (vii) section, clause and Schedule references are to this Agreement unless otherwise specified; (viii) reference to any agreement (including this Agreement), document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof; and (ix) specific or general references to any law mean such law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time.

2. Formation. 2.1 Formation of the Company. Original Member hereby forms a limited liability company pursuant to the provisions of the Act and this Agreement (the Company), effective upon the filing of the Articles of Organization.

2.2 Name of the Company. The name of the Company is SRAM, LLC. The business of the Company may be conducted under any other name deemed necessary or desirable by Original Member.

2.3 Purpose of the Company. The purpose of the Company is to conduct or promote any lawful businesses or purposes within Delaware or any other jurisdiction.

2.4 Registered Office. The address of the registered office of the Company in the State of Delaware is 615 South DuPont Highway, City of Dover, County of Kent, Zip Code 19901.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 2.5 Registered Agent. The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is National Corporate Research, Ltd.

2.6 Places of Business of the Company. The Companys principal place of business is located at 1333 N. Kingsbury, 4th Floor, Chicago, Illinois 60622. The Company may have such additional places of business and offices as Original Member deems appropriate.

2.7 Nature of the Members Liabilities. No Member is liable, jointly or severally, for any debts or obligations of the Company, under a judgment, decree or order of a court, or in any other manner, solely by reason of being a Member.

2.8 Interests Certificated. Original Members Interest will be represented by a certificate and will be recorded on Schedule A hereto, as the same may be amended from time to time, and in the records of the Company.

2.9 Term. The term of the Company is perpetual.

2.10 Treatment of the Company for Income Tax Purposes. During such time as there is only one Member, the Company will be taxed either as a division or a sole proprietorship of such Member in accordance with the Code, applicable Treasury Regulations and other applicable law. Nothing contained in this Section affects, or is intended to affect, the status of the Company as a limited liability company under the Act.

3. Capital and Management of the Company. 3.1 Contributions. Original Member may, in its discretion, make capital Contributions to the Company.

3.2 No Interest on Contributions. No interest will be paid by the Company to any Member on any contribution to the Companys capital, whether or not such contribution is in excess of the amount of Contributions, if any, which such Member agreed to contribute to the Company under this Agreement.

3.3 Withdrawals. A Member is not entitled to withdraw any part of its Capital Account or to receive any distribution from the Company except as provided in this Agreement. No Member has the right to demand or receive property other than cash for its Interest.

3.4 Third-Party Creditor. A Members obligation to make a Contribution is not enforceable by a third-party creditor of the Company.

3.5 Management. The management of the Company is vested in Original Member. Subject to the terms and conditions of this Agreement and the Act, Original Member is the agent of the Company for the purpose of its ordinary business and affairs, and has complete authority over and exclusive control and management of the day-to-day affairs of the Company. The act of Original Member for carrying on the business of the Company in the usual way and in the ordinary course binds the Company.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3.6 Officers. The Original Member may from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the Officers) and assign titles (including, without limitation, Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, Vice President, Secretary and Treasurer) to any such person. Unless the Original Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office, subject to the restrictions described in Section 3.8 below. Any delegation pursuant to this Section 3.7 may be revoked at any time by the Original Member. An Officer may be removed with or without cause by the Original Member.

3.7 SRAM Holdings Class A Approval Matters. Neither Officers nor Members can take any action with regard to any Class A Approval Matter, as such term is defined in the Amended and Restated Limited Liability Operating Agreement of SRAM Holdings, LLC (the HoldoCo Agreement) attached as Exhibit C to the Purchase Agreement, dated as of August 6, 2008 by and among LB SRAM Holdings, SRAM Corporation and SRAM SP-2, Inc., without the consent of the Original Member, which consent was approved by the Class A Members, as such term is defined in the HoldCo Agreement. For the purpose of this Agreement, any references in Section 4.5(e) of the HoldCo Agreement to Company shall apply to the Company as defined herein, and any references to Units, Unit Equivalents, Members, Sale of the Company, Public Offering, Agreement and Certificate will be defined to have the corresponding meaning with respect to the Company.

3.8 Execution of Documents. Original Member or any other person designated by Original Member may execute any and all documents relating to the Company and the Companys business.

4. Distributions and Allocations. 4.1 Net Cash Flow. Net cash flow and other property of the Company which Original Member determines is no longer necessary for the Companys business is to be distributed, subject to the Act, at such times and in such amounts as Original Member determines. Any such distributions are to go to Original Member or as directed by Original Member. The Original Member may fix a concurrent or future date as a record date for the determination of Members entitled to receive any such distributions.

4.2 Distributions Upon Dissolution. Subject to the Act, upon the dissolution and winding up of the Company, the assets of the Company (or the proceeds of sales or other dispositions in liquidation of the assets of the Company as may be determined by Original Member) are to be distributed in the priority set forth as follows:

4.2.1 first, to discharge or to make adequate provision for (to the extent required by any lender or creditor) debts and obligations of the Company (other than debts and obligations of the Company to the Members and ex Members), and the payment of the expenses of liquidation;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 4.2.2 next, to fund reserves which Original Member deems reasonably necessary for any contingent or unforeseen debt of the Company;

4.2.3 next, to discharge or make adequate provision for debts and obligations of the Company to the Members and ex Members; and

4.2.4 finally, to Original Member.

4.3 Allocation of Profits, Losses and Credits. All Profits, Losses and credits of the Company are to be allocated to Original Member.

5. Other Business Opportunities. The Member and any person or entity affiliated with the Member may engage in or possess an interest in other business opportunities or ventures (unconnected with the Company) of every kind and description, independently or with others, including, without limitation, businesses that may compete with the Company. Neither the Member or any person or entity affiliated with the Member shall be required to present any such business opportunity or venture to the Company, even if the opportunity is of the character that, if presented to the Company, could be taken by it. Neither the Company nor any person or entity affiliated with the Company shall have any rights in or to such business opportunities or ventures or the income or profits derived therefrom by virtue of this Agreement, notwithstanding any duty otherwise existing at law or in equity. The provisions of this Section shall apply to the Member solely in its capacity as member of the Company and shall not be deemed to modify any contract or arrangement, including, without limitation, any noncompete provisions, otherwise agreed to by the Company and the Member.

6. Exculpation and Indemnification. 6.1 Neither the Member nor any Officer shall be liable to the Company or any other person or entity who is a party to or is otherwise bound by this Agreement for any loss, damage or claim incurred by reason of any act or omission performed or omitted by the Member or any such Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on the Member or any such Officer by this Agreement, except that the Member shall be liable for any such loss, damage or claim incurred by reason of the Members gross negligence or willful misconduct.

6.2 To the fullest extent permitted by applicable law, the Member and each Officer shall be entitled to indemnification from the Company for any loss, damage or claim incurred by the Member any each such Officer by reason of any act or omission performed or omitted by the Member or, any such Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on the Member or any such Officer by this Agreement, except that the Member or any such Officer shall not be entitled to be indemnified in respect of any loss, damage or claim incurred by the Member or any such Officer by reason of the Members or any such Officers gross negligence or willful misconduct with respect to such acts or omissions.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 7. Dissolution and Winding Up of the Company. 7.1 Events Causing the Dissolution of the Company. The Company is dissolved and is to be wound up upon the happening of any of the following events, whichever first occurs: (i) the occurrence of an Event of Withdrawal with respect to Original Member; (ii) the decision of Original Member to so dissolve and wind up the Company; or (iii) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

7.2 Winding Up. 7.2.1 Cessation of Business. Upon any dissolution of the Company, the Company is to be dissolved and is to cease carrying on its business, and its affairs are to be wound up as soon as practicable thereafter by Original Member. In winding up the affairs of the Company, Original Member is to proceed to liquidate the assets of the Company in such manner as it determines (including the sale of such assets if it so elects), allowing a reasonable time therefor to enable Original Member to minimize losses upon a liquidation.

7.2.2 Liquidating Distributions. Upon the dissolution and winding up of the Company and the liquidation of its assets, the proceeds (or the property of the Company which Original Member decides not to liquidate in its sole judgment) are to be applied and distributed in the manner and order provided in Section 4.2.

7.2.3 Termination. When all of the remaining property and assets of the Company have been liquidated or distributed as set forth herein, Original Member is to file all articles of termination and other documents required under the Act and other applicable law to effect a cancellation of the Certificate of Formation and to otherwise terminate the Company.

8. New Members. 8.1 New Members. Original Member may admit a person as a Member in the Company on such terms as it determines.

8.2 Amendment to The Agreement. As a condition to the admission of a new Member, this Agreement must be amended to comply with Treasury Regulation § 1.704-1(b) if applicable.

9. Pledgees Rights and Article 8. 9.1 Pledge. Notwithstanding any other provision in this Agreement, each Member shall be entitled to pledge its Interests to, and otherwise grant a lien and security interest in its Interests and all of its right, title and interest under this Agreement in favor of, the Companys lenders (or an agent on behalf of such lenders) without any further consents, approvals or actions required by such lenders (or agent), any Member, the Company or any other person under this Agreement or otherwise. So long as any such pledge of or security interest in any Members Interests is in effect, no consent of the Company or any Member shall be required to permit a pledgee thereof to be substituted for such Member under this Agreement upon the exercise of such pledgees rights with respect to such Interests. Upon closing of the transactions contemplated by that certain Purchase Agreement, dated as of August 6, 2008, by and among

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SRAM-SP2, Inc., SRAM Corporation and LB SRAM Holdings, LLC, each Member will pledge its Interests to, and grant a security interest in all of its right, title and interest under this Agreement in favor of, the agent of the Companys lenders (in such capacity, together with its successors, assigns and designated agents, as well as each and every subsequent replacement thereof, including under or with respect to each successor and each new credit agreement, including each such replacements successors, assigns and designated agents, the Agent) on behalf of itself and various lenders from time to time party to certain financing documents with the Company. Upon the exercise of the Agents rights in respect of such pledge and security interest, the Agent, or any purchaser of a Members Interests from the Agent, shall be substituted for such Member as a Member under this Agreement, and such substituted Member shall have all rights and powers as a Member under this Agreement. So long as any pledge of any Interests is in effect, this provision shall inure to the benefit of such pledgee and its successors, assigns and designated agents, as an intended third party beneficiary, and no amendment, modification or waiver of, or consent with respect to this provision shall in any event be effective without the prior written consent of such pledgee.

9.2 Article 8. The Company hereby irrevocably elects that all Interests in the Company shall be securities governed by Article 8 of the Uniform Commercial Code as in effect in the State of Delaware and each other applicable jurisdiction. So long as any pledge of any Interests is in effect, each certificate evidencing Interests in the Company shall bear the following legend: This certificate evidences an interest in the Company and shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in the State of Delaware and, to the extent permitted by applicable law, each other applicable jurisdiction. So long as any pledge of any Interests is in effect, this Section 9.2 shall not be amended and any purported amendment to this provision shall not take effect until all outstanding certificates have been surrendered for cancellation.

10. General Provisions. 10.1 Amendment. No amendment, modification, supplement or termination of any provision of this Agreement, nor consent to any departure therefrom, will in any event be effective unless the same is in writing and is approved by Original Member.

10.2 Governing Law. This Agreement and the rights and obligations of the parties hereunder are to be governed by and construed and interpreted in accordance with the laws of the State of Delaware applicable to contracts made and to be performed wholly within Delaware, without regard to choice or - conflict of laws rules.

10.3 Schedules. All of the Schedules attached to this Agreement are deemed incorporated herein by reference.

10.4 Successors and Assigns. All provisions of this Agreement are binding upon, inure to the benefit of and are enforceable by or against the parties and their respective successors and assigns.

[remainder of age intentionally left blank; signatures appear on next page]

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, this agreement has been executed as of the date first set forth above.

SRAM HOLDINGS, LLC

By: /s/ Stanley R. Day, Jr. Stanley R. Day, Jr. Chief Executive Officer

Percentage Member Interest

SRAM Holdings, LLC 100%

This FIRST AMENDMENT TO LIMITED LIABILITY COMPANY AGREEMENT (this Amendment) of SRAM, LLC (the Company), dated as of June 7, 2011 (the Effective Date), is adopted, executed and agreed to, for good and valuable consideration, by SRAM Holdings, LLC, a Delaware limited liability company (Original Member).

WITNESSETH

WHEREAS, the Company was formed under the Delaware Limited Liability Company Act, as amended, and exists pursuant to that certain Limited Liability Company Agreement of the Company, dated as of September 22, 2008 (the Agreement);

WHEREAS, Original Member is eliminating all Class A Units (as defined in that certain Amended and Restated Limited Liability Company Operating Agreement of the SRAM Holdings, LLC, dated as of September 30, 2008) through a series of transactions that will culminate in the direct or indirect acquisition by Original Member of all of the outstanding Class A Units (the Recapitalization); and

WHEREAS, in connection with the Recapitalization, the Company desires to amend the Agreement to remove any reference to the Class A Units.

NOW, THEREFORE, Original Member hereby agree as follows:

1. Definitions. Capitalized terms used but not defined herein shall have the meanings specified in the Agreement.

2. Amendments. Upon the Effective Date of this Amendment, the Agreement shall be amended as follows:

a. Section 3.6 of the Agreement is hereby deleted and replaced in its entirety by the following: Officers. The Original Member may from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the Officers) and assign titles (including, without limitation, Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, Vice President, Secretary and Treasurer) to any such person. Unless the Original Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section 3.6 may be revoked at any time by the Original Member. An Officer may be removed with or without cause by the Original Member. b. Section 3.7 of the Agreement is hereby deleted in its entirety.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3. No Other Amendments. Except as specifically amended hereby, the Agreement shall continue in full force and effect as written.

4. Captions. The paragraph captions used herein are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Amendment.

5. Governing Law. This Amendment and the rights and obligations of the parties hereunder are to be governed by and construed and interpreted in accordance with the laws of the State of Delaware applicable to contracts made and to be performed wholly within Delaware, without regard to choice or conflict of laws rules.

6. Successors and Assigns. All provisions of this Amendment are binding upon, inure to the benefit of and are enforceable by or against the parties and their respective successors and assigns.

7. Illegality and Severability. If application of any one or more of the provisions of this Amendment shall be unlawful under applicable law and regulations, then the parties hereto will attempt in good faith to make such alternative arrangements as may be legally permissible and which carry out as nearly as practicable the terms of this Amendment. Should any portion of this Amendment be deemed unenforceable by a court of competent jurisdiction, the remaining portion hereof shall remain unaffected and be interpreted as if such unenforceable portions were initially deleted.

8. Entire Agreement. The Agreement, as amended hereby, constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, by the parties hereto with respect to the subject matter hereof. All references in the Agreement to this Agreement, hereof, hereby and words of similar import shall refer to the Agreement as amended hereby.

9. Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original and all of which taken together shall constitute one instrument.

[Signature page follows]

SRAM HOLDINGS, LLC

By: /s/ Stanley R. Day, Jr. Name: Stanley R. Day, Jr. Title: Chief Executive Officer

[Signature Page to First Amendment to Limited Liability Company Agreement of SRAM, LLC]

EXECUTION VERSION

$655,000,000

FIRST LIEN CREDIT AGREEMENT

Dated as of June 7, 2011

among

SRAM, LLC, AS BORROWER

SRAM HOLDINGS, LLC, AS ONE OF THE GUARANTORS

THE LENDERS AND L/C ISSUERS PARTY HERETO

and

JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT

¨ ¨ ¨

J.P. MORGAN SECURITIES LLC, AS SOLE BOOKRUNNER

AND

GE CAPITAL MARKETS, INC., AS CO-ARRANGER AND SYNDICATION AGENT

MIZUHO CORPORATE BANK, LTD. AS CO-ARRANGER AND DOCUMENTATION AGENT

Page

ARTICLE 1 DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS 1

Section 1.1 Defined Terms 1 Section 1.2 UCC Terms 34 Section 1.3 Accounting Terms and Principles. 34 Section 1.4 Payments 35 Section 1.5 Interpretation. 35

ARTICLE 2 THE FACILITIES 36

Section 2.1 The Commitments 36 Section 2.2 Borrowing Procedures 36 Section 2.3 Swing Loans 37 Section 2.4 Letters of Credit 38 Section 2.5 Reduction and Termination of the Commitments 41 Section 2.6 Repayment of Loans 41 Section 2.7 Optional Prepayments 42 Section 2.8 Mandatory Prepayments 43 Section 2.9 Interest 44 Section 2.10 Conversion and Continuation Options 44 Section 2.11 Fees 45 Section 2.12 Limitations on Eurodollar Tranches 46 Section 2.13 Payments and Computations 46 Section 2.14 Inability to Determine Interest Rate 48 Section 2.15 Requirements of Law 48 Section 2.16 Breakage Costs; Increased Costs; Capital Requirements 49 Section 2.17 Taxes 50 Section 2.18 Replacement of Lenders 53 Section 2.19 Defaulting Lenders. 54 Section 2.20 Change of Lending Office. 55 Section 2.21 Incremental Facilities. 56 Section 2.22 Extensions of Term Loans and Revolving Credit Commitments 58

ARTICLE 3 CONDITIONS TO LOANS AND LETTERS OF CREDIT 60

Section 3.1 Conditions Precedent to Initial Loans and Letters of Credit 60 Section 3.2 Conditions Precedent to Each Loan and Letter of Credit 62 Section 3.3 Determinations of Initial Borrowing Conditions 63

ARTICLE 4 REPRESENTATIONS AND WARRANTIES 63

Section 4.1 Corporate Existence; Compliance with Law 63 Section 4.2 Loan and Related Documents 63 Section 4.3 Ownership of Group Members 64 Section 4.4 Financial Statements 64

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 4.5 No Change. 65 Section 4.6 Solvency 65 Section 4.7 Litigation 65 Section 4.8 Taxes 65 Section 4.9 Margin Regulations 66 Section 4.10 No Burdensome Obligations; No Defaults 66 Section 4.11 Investment Company Act 66 Section 4.12 Labor Matters 66 Section 4.13 ERISA 66 Section 4.14 Environmental Matters 66 Section 4.15 Intellectual Property 66 Section 4.16 Title; Real Property 67 Section 4.17 Full Disclosure 67 Section 4.18 Patriot Act 67 Section 4.19 Senior Indebtedness and Lien Priority 68 Section 4.20 Security Documents 68

ARTICLE 5 FINANCIAL COVENANTS 69

Section 5.1 Maximum Consolidated Leverage Ratio 69

ARTICLE 6 REPORTING COVENANTS 70

Section 6.1 Financial Statements 70 Section 6.2 Other Events 71 Section 6.3 Other Information 72

ARTICLE 7 AFFIRMATIVE COVENANTS 72

Section 7.1 Maintenance of Corporate Existence 72 Section 7.2 Compliance with Laws, Etc 72 Section 7.3 Payment of Obligations 72 Section 7.4 Maintenance of Property 72 Section 7.5 Maintenance of Insurance 72 Section 7.6 Keeping of Books 73 Section 7.7 Access to Books and Property 73 Section 7.8 Environmental 73 Section 7.9 Use of Proceeds 73 Section 7.10 Additional Collateral and Guaranties 74 Section 7.11 Credit Rating 75 Section 7.12 Quarterly Conference Calls 75 Section 7.13 Post-Closing Deliveries 75

ARTICLE 8 NEGATIVE COVENANTS 75

Section 8.1 Indebtedness 76 Section 8.2 Liens 78 Section 8.3 Investments 78 Section 8.4 Asset Sales 80 Section 8.5 Restricted Payments 81

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 8.6 Prepayment of Indebtedness 82 Section 8.7 Fundamental Changes 83 Section 8.8 Change in Nature of Business 84 Section 8.9 Transactions with Affiliates 84 Section 8.10 Third-Party Restrictions on Indebtedness, Liens, Investments or Restricted Payments 85 Section 8.11 Modification of Certain Documents 85 Section 8.12 Accounting Changes; Fiscal Year 86 Section 8.13 Capital Expenditures. 86

ARTICLE 9 EVENTS OF DEFAULT 86

Section 9.1 Definition 86 Section 9.2 Remedies 88

ARTICLE 10 THE ADMINISTRATIVE AGENT AND THE AGENTS 89

Section 10.1 Appointment of Administrative Agent 89 Section 10.2 Delegation of Duties 89 Section 10.3 Reliance and Liability 89 Section 10.4 Agent Individually 90 Section 10.5 Lender Credit Decision 90 Section 10.6 Indemnities 90 Section 10.7 Resignation of Administrative Agent or L/C Issuer 91 Section 10.8 Sub-Agents 91 Section 10.9 Notice of Default. 91 Section 10.10 Non-Reliance on Agents and Other Lenders. 91 Section 10.11 Documentation Agent and Syndication Agent. 92

ARTICLE 11 MISCELLANEOUS 92

Section 11.1 Amendments, Waivers, Etc 92 Section 11.2 Assignments and Participations; Binding Effect 95 Section 11.3 Costs and Expenses 99 Section 11.4 Survival 100 Section 11.5 Limitation of Liability for Certain Damages 100 Section 11.6 Right of Setoff 100 Section 11.7 Notices 101 Section 11.8 GOVERNING LAW 101 Section 11.9 Submission to Jurisdiction; Waivers. 102 Section 11.10 WAIVER OF JURY TRIAL. 103 Section 11.11 No Waiver; Cumulative Remedies. 103 Section 11.12 Severability 103 Section 11.13 Execution in Counterparts 103 Section 11.14 Entire Agreement 103 Section 11.15 Non-Public Information; Confidentiality. 103 Section 11.16 Patriot Act Notice 104 Section 11.17 Acknowledgements. 104 Section 11.18 Releases of Guarantees and Liens.+ 105

iii

Exhibit A Assignment Agreement Exhibit B Notes Exhibit C Notice of Borrowing Exhibit D Swingline Request Exhibit E Notice of Conversion or Continuation Exhibit F Compliance Certificate Exhibit G Collateral Update Certificate Exhibit H Increased Facility Activation Notice Exhibit I Form of New Lender Supplement Exhibit J First Lien Guaranty and Security Agreement Exhibit K Intercreditor Agreement Exhibit L U.S. Tax Certificate Exhibit M Affiliated Lender Assignment and Assumption

Schedule I Commitments Schedule II Approved Foreign Commercial Banks Schedule III Equity Redemption Schedule IV Foreign Restructuring Schedule 4.2 Third Party Consents Schedule 4.3 Capitalization Schedule 4.16 Title to Properties and Mortgages Schedule 7.13 Post-Closing Deliveries Schedule 8.1 Prior Indebtedness Schedule 8.2 Prior Liens Schedule 8.3 Prior Investments Schedule 8.9 Affiliate Transactions

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document THIS FIRST LIEN CREDIT AGREEMENT, DATED AS OF JUNE 7, 2011, IS ENTERED INTO AMONG SRAM, LLC, A DELAWARE LIMITED LIABILITY COMPANY (THE BORROWER), SRAM HOLDINGS, LLC, A DELAWARE LIMITED LIABILITY COMPANY (HOLDINGS), THE LENDERS (AS DEFINED BELOW), THE L/C ISSUERS (AS DEFINED BELOW) AND JPMORGAN CHASE BANK, N.A. (JPMORGAN CHASE BANK), AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT FOR THE LENDERS AND THE L/C ISSUERS (IN SUCH CAPACITY, AND TOGETHER WITH ITS SUCCESSORS AND PERMITTED ASSIGNS, THE ADMINISTRATIVE AGENT).

The parties hereto agree as follows:

ARTICLE 1 DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

Section 1.1 Defined Terms. As used in this Agreement, the following terms have the following meanings:

ABR means for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) the Eurodollar Rate that would be calculated as of such day (or, if such day is not a Business Day, as of the next preceding Business Day) in respect of a proposed Eurodollar Loan with a one-month Interest Period plus 1.0%; provided, however, that notwithstanding the rate calculated in accordance with the foregoing, at no time shall the ABR for the First Lien Term Facility be less than 2.25% per annum. Any change in the ABR due to a change in the Prime Rate, the Federal Funds Effective Rate or such Eurodollar Rate shall be effective as of the opening of business on the day of such change in the Prime Rate, the Federal Funds Effective Rate or such Eurodollar Rate, respectively.

ABR Loans mean Loans the rate of interest applicable to which is based upon the ABR.

Adjustment Date has the meaning specified in the Applicable Pricing Grid.

Administrative Agent has the meaning specified in the preamble hereto.

Advocacy SPE means SRAM Cycling Advocacy Fund, LLC, a Delaware limited liability company.

Affiliate means, with respect to any Person, each officer, director, general partner or joint-venturer of such Person and any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person; provided, however, that no Secured Party shall be an Affiliate of the Borrower. For purpose of this definition, control means the possession of either (a) the power to vote, or the beneficial ownership of, 10% or more of the Voting Stock of such Person or (b) the power to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

Affiliated Lender means any Affiliate of a Parent Company other than (i) a Parent Company or any Subsidiary of a Parent Company and (ii) any natural Person.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Affiliated Lender Assignment and Assumption has the meaning specified in Section 11.2(g).

Agents means the collective reference to the Syndication Agent, the Documentation Agent and the Administrative Agent.

Agent Indemnitee has the meaning specified in Section 10.6.

Agreement means this First Lien Credit Agreement.

Application means an application, in such form as the Issuing Lender may reasonably specify from time to time, requesting the Issuing Lender to open a Letter of Credit.

Applicable Margin means (a) for each Type of Loan other than Incremental Term Loans, the rate per annum set forth under the relevant column heading below:

ABR Loans Eurodollar Loans Revolving Loans and Swing Loans 2.50% 3.50% Term Loans 2.50% 3.50%

; provided, that on and after the first Adjustment Date occurring after the completion of the first full Fiscal Quarter of the Borrower after the Closing Date, the Applicable Margin with respect to Revolving Loans, Swing Loans and Term Loans will be determined pursuant to the Applicable Pricing Grid; and

(b) for Incremental Term Loans, such per annum rates as shall be agreed to by the Borrower and the applicable Incremental Term Lenders as shown in the applicable Increased Facility Activation Notice.

Applicable Pricing Grid means the table set forth below:

Applicable Margin for Applicable Margin for ABR Consolidated Leverage Ratio Eurodollar Loans Loans Greater than 3.50:1.00 3.50% 2.50%

Less than or equal to 3.50:1.00, but greater than 3.25% 2.25% 3.00:1.00

Less than or equal to 3.00:1.00 3.00% 2.00%

For the purposes of the Applicable Pricing Grid, changes in the Applicable Margin resulting from changes in the Consolidated Leverage Ratio shall become effective on the date (the Adjustment Date) that is three Business Days after the date on which financial statements are delivered to the Lenders pursuant to Section 6.1 and shall remain in effect until the next change to be effected pursuant to this paragraph. If any financial statements referred to above are not delivered within five Business Days from the time periods specified in Section 6, then, until the date that is three Business

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Days after the date on which such financial statements are delivered, the highest rate set forth in each column of the Applicable Pricing Grid shall apply. In addition, at all times while an Event of Default shall have occurred and be continuing, the highest rate set forth in each column of the Applicable Pricing Grid shall apply. Each determination of the Consolidated Leverage Ratio pursuant to the Applicable Pricing Grid shall be made in a manner consistent with the determination thereof pursuant to the Compliance Certificate.

Approved Fund means, with respect to any Lender, any Person (other than a natural Person) that (a) is or will be engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and (b) is advised or managed by (i) such Lender, (ii) any Affiliate of such Lender or (iii) any Person (other than an individual) or any Affiliate of any Person (other than an individual) that administers or manages such Lender.

Assignment means an assignment agreement entered into by a Lender, as assignor, and any Person, as assignee, pursuant to the terms and provisions of Section 11.2 (with the consent of any party whose consent is required by Section 11.2), accepted by the Administrative Agent, in substantially the form of Exhibit A, or any other form approved by the Administrative Agent.

Available Basket means, as of any date of determination, an amount equal to (without duplication):

(a) the sum of: (i) $5,000,000 plus (ii) the Available Excess Cash Flow Amount on such date plus (iii) returns, profits, distributions and similar amounts received in cash or Cash Equivalents on Investments made pursuant to Section 8.3 (b), (c), (d), (g), (h) and (i) (including as the result of the designation of an Unrestricted Subsidiary as a Subsidiary); (iv) Net Cash Proceeds received from equity issuances by the Reporting Person (other than proceeds from the first Qualified IPO) to the extent such Net Cash Proceeds are contributed to the Borrower; minus

(b) the sum of (i) the Available Basket used to pay cash dividends pursuant to Section 8.5(d), (ii) to fund Investments permitted pursuant to Section 8.3(h) or (iii) optional prepayments pursuant to Section 8.6(h).

Available Excess Cash Flow Amount means, as of any date of determination, an amount equal to (a) the sum of the amounts of Excess Cash Flow for all Excess Cash Flow Periods ending on or prior to the date of determination, minus (b) the sum at the time of determination of the aggregate amount of prepayments of Term Loans required to be made pursuant to Section 2.8(a) through the date of determination (including any optional prepayments of Term Loans or Revolving Loans that reduce the prepayments of Term Loans required to be made pursuant to Section 2.8(a)).

Available Revolving Commitment means, as to any Revolving Credit Lender at any time, an amount equal to the excess, if any, of (a) such Lenders Revolving Credit Commitment then in effect over (b) such Lenders Revolving Extensions of Credit then outstanding; provided, that in calculating any Lenders Revolving Extensions of Credit for the purpose of determining such Lenders Available Revolving Commitment pursuant to Section 2.11, the aggregate principal amount of Swing Loans then outstanding shall be deemed to be zero.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Bank Product means any of the following products, services or facilities extended to any Loan Party by a Lender or any of its Affiliates (or a Person who was a Lender or an Affiliate of a Lender at the time of initially providing such products, services or facilities): (a) cash management services consisting of operating, collections, payroll, trust, or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and stop payment services; (b) commercial credit card and merchant card services; and (c) other banking products or services as may be requested by any Loan Party, other than loans, letters of credit and Secured Hedging Agreements; provided, however, that for any of the foregoing to be included as an Obligation for purposes of a distribution under Section 2.13(g), the applicable Secured Party and Loan Party must have previously received the prior written consent of the Administrative Agent.

Bank Product Obligations means all liabilities and obligations of Loan Parties to any Lenders or their Affiliates (or a Person who was a Lender or an Affiliate of a Lender at the time of initially providing a Bank Product) under all Bank Products.

Bankruptcy Event means with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, so long as, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

Benefitted Lender has the meaning specified in Section 11.6.

Benefit Plan means any employee benefit plan as defined in Section 3(3) of ERISA (whether governed by the laws of the United States or otherwise) to which any Group Member incurs or otherwise has any obligation or liability, contingent or otherwise.

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

Board of Directors means, with respect to any Person, the board of directors, board of managers, or similar governing body of such Person or any committee thereof duly authorized to act on behalf of the board of directors, board of managers or similar governing body.

Borrowing means a borrowing consisting of Loans (other than Swing Loans and Loans deemed made pursuant to Section 2.3 or Section 2.4) made in one Facility on the same day by the Lenders according to their respective Commitments under such Facility.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Borrowing Date means any Business Day specified by the Borrower as a date on which the Borrower requests the relevant Lenders to make Loans hereunder.

Business Day a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close, provided, that with respect to notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, such day is also a day for trading by and between banks in Dollar deposits in the interbank eurodollar market.

Capital Expenditures means, for any Person for any period, the aggregate of all expenditures, whether or not made through the incurrence of Indebtedness, by such Person and its Subsidiaries during such period for the acquisition, leasing (pursuant to a Capital Lease), construction, replacement, repair, substitution or improvement of fixed or capital assets or additions to equipment, in each case required to be capitalized under GAAP on a Consolidated balance sheet of such Person, excluding (a) interest capitalized during construction, (b) any expenditure to the extent such expenditure is part of the aggregate amounts payable in connection with, or other consideration for, any Permitted Acquisition consummated during or prior to such period and (c) any expenditure made in connection with a Permitted Reinvestment.

Capital Lease means, with respect to any Person, any lease of, or other arrangement conveying the right to use, any property (whether real, personal or mixed) by such Person as lessee that has been or should be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.

Capitalized Lease Obligations means, at any time, with respect to any Capital Lease, any lease entered into as part of any Sale and Leaseback Transaction of any Person or any synthetic lease, the amount of all obligations of such Person that is (or that would be, if such synthetic lease or other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such Person prepared in accordance with GAAP.

Cash Equivalents means (a) any readily-marketable securities (i) issued by, or directly, unconditionally and fully guaranteed or insured by the United States federal government or in the case of Cash Equivalents held by Foreign Subsidiaries, the government of any OECD country, (ii) issued by any agency of the United States federal government the obligations of which are fully backed by the full faith and credit of the United States federal government, (b) any readily-marketable direct obligations issued by any other agency of the United States federal government, any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case having a rating of at least A-1 from S&P or at least P-1 from Moodys, (c) any commercial paper rated at least A-1 by S&P or P-1 by Moodys and issued by any Person organized under the laws of any state of the United States, (d) (1) any Dollar-denominated time deposit, insured certificate of deposit, overnight bank deposit or bankers acceptance issued or accepted by (i) any Lender or any Affiliate of a Lender or (ii) any commercial bank that is (A) organized under the laws of the United States, any state thereof or the District of Columbia, (B) adequately capitalized (as defined in the regulations of its primary federal banking regulators) and (C) has Tier 1 capital (as defined in such regulations) in excess of $250,000,000 or (2) in the case of Cash Equivalents held by a Foreign Subsidiary, any time deposit, certificate of deposit or overnight deposit with a commercial bank that either (x) (i) is organized under the laws of the country in which such Foreign Subsidiary making the deposit is formed or operates, (ii) has combined capital and surplus of at least $500,000,000 (or its foreign currency equivalent) and (iii) has ratings equivalent or better to BBB from Moodys or from comparable rating agencies, or (y) is listed on Schedule II hereto (or is a successor of any such listed institutions), (e) shares of any United States money market fund that (i) has substantially all of its assets invested continuously in the types of investments

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document referred to in clause (a), (b), (c) or (d) above with maturities as set forth in the proviso below, (ii) has net assets in excess of $500,000,000 and (iii) has obtained from either S&P or Moodys the highest rating obtainable for money market funds in the United States; provided, however, that the maturities of all obligations specified in any of clauses (a), (b), (c) and (d) above shall not exceed 365 days and (f) other cash equivalents from time to time approved by the Administrative Agent.

CERCLA means the United States Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §§ 9601 et seq.).

Change of Control means the occurrence of any of the following: (a) prior to a Qualified IPO and after giving effect to the Equity Redemption, Day Affiliates shall not directly or indirectly have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board of Directors of Holdings, (b) from and after a Qualified IPO, the acquisition of beneficial ownership, directly or indirectly, by any Person or group (within the meaning of the Securities Exchange Act of 1934, as amended, and the rules of the SEC thereunder as in effect on the date hereof), other than any Parent Company or Day Affiliates (or any groups or Persons directly or indirectly controlled by any one or more Day Affiliates), of Voting Stock of Holdings (or such Parent Company) representing 35% or more of the voting power of the total outstanding Voting Stock of Holdings (or such Parent Company), unless Day Affiliates (i) beneficially own greater percentages of the outstanding Voting Stock of Holdings (or such Parent Company) than such Person or group (that acquired at least 35%) or (ii) have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board of Directors of Holdings (or such Parent Company), or (c) Holdings shall cease to own and control legally and beneficially, directly or indirectly, all of the outstanding Stock of the Borrower.

Class means, as applicable with respect to a Facility (a) when used with respect to Lenders, the Lenders under such Facility, (b) when used with respect to Commitments, Commitments to provide such Facility and (c) when used with respect to Loans or Borrowings, Loans or Borrowings under such Facility.

Closing Date means June 7, 2011.

Code means the U.S. Internal Revenue Code of 1986, as amended from time to time.

Collateral means all property and interests in property and proceeds thereof now owned or hereafter acquired by any Loan Party in or upon which a Lien is granted or purported to be granted pursuant to any Loan Document.

Collateral Update Certificate means a certificate substantially in the form of Exhibit G.

Commitment means, with respect to any Lender, such Lenders Revolving Credit Commitment and Term Loan Commitment.

Commitment Fee Rate means 0.50%.

Compliance Certificate means a certificate substantially in the form of Exhibit F.

Conduit Lender means any special purpose corporation organized and administered by any Lender for the purpose of making Loans otherwise required to be made by such Lender and designated by such Lender in a written instrument; provided, that the designation by any Lender of a

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Conduit Lender shall not relieve the designating Lender of any of its obligations to fund a Loan under this Agreement if, for any reason, its Conduit Lender fails to fund any such Loan, and the designating Lender (and not the Conduit Lender) shall have the sole right and responsibility to deliver all consents and waivers required or requested under this Agreement with respect to its Conduit Lender, and provided, further, that no Conduit Lender shall (a) be entitled to receive any greater amount pursuant to this Agreement than the designating Lender would have been entitled to receive in respect of the extensions of credit made by such Conduit Lender or (b) be deemed to have any Commitment.

Consolidated means the accounts of the Reporting Person consolidated in accordance with GAAP.

Consolidated Cash Interest Expense has the meaning specified in the Compliance Certificate.

Consolidated Current Assets means, at any date, the total Consolidated current assets of the Reporting Person at such date other than cash and Cash Equivalents.

Consolidated Current Liabilities means, at any date, all Consolidated liabilities of the Reporting Person at such date that should be classified as current liabilities on a Consolidated balance sheet of such Reporting Person; provided, however, that Consolidated Current Liabilities shall exclude (i) the principal amount of the Loans and any Term Loans (as defined in the Second Lien Credit Agreement) then outstanding and (ii) Indebtedness maturing within one year and the current portion of long-term Indebtedness consisting of scheduled payments due within one (1) year.

Consolidated EBITDA has the meaning specified in the Compliance Certificate.

Consolidated First Lien Secured Debt shall mean, as of any date, the sum (a) the aggregate principal amount of Loans outstanding under this Agreement on such date, (b) the aggregate amount of unreimbursed drawings under Letters of Credit as of such date and (c) Indebtedness in respect of Secured Hedging Agreements and Bank Product Obligations as of such date.

Consolidated Interest Expense means, for any period, Consolidated interest expense of the Reporting Person for such period, to the extent deducted in the determination of Consolidated Net Income.

Consolidated Leverage Ratio has the meaning specified in the Compliance Certificate.

Consolidated Net Income has the meaning specified in the Compliance Certificate.

Consolidated Senior Secured Leverage Ratio means, as of the last day of any period of four consecutive Fiscal Quarters, the ratio of (a) Consolidated First Lien Secured Debt on such day to (b) Consolidated EBITDA for such period.

Consolidated Total Debt means all Indebtedness of the Reporting Person of a type described in clause (a), (b), (c)(i), (d) or (f) of the definition thereof and all Guaranty Obligations with respect to any such Indebtedness, in the case of such Reporting Person on a Consolidated basis.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document or joint venture agreement of such Person, (c) any other constitutive, organizational or governing document of such Person, whether or not equivalent, and (d) any other document setting forth the manner of election or duties of the directors, officers or managing members of such Person or the designation, amount or relative rights, limitations and preferences of any Stock of such Person.

Contractual Obligation means, with respect to any Person, any provision of any Security issued by such Person or of any document or undertaking (other than a Loan Document) to which such Person is a party or by which it or any of its property is bound or to which any of its property is subject.

Controlled Investment Affiliates means, with respect to any Person, any investment fund or investment vehicle that is both (i) organized by such Person or an Affiliate of such Person for the sole purpose of making equity or debt investments in one or more companies and (ii) controlled by or under common control with such Person. For purposes of this definition control means the power to direct or cause the direction of management and policies of a Person, whether by contract or otherwise.

Copyrights means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to copyrights and all mask work, database and design rights, whether or not registered or published, all registrations and recordations thereof and all applications in connection therewith.

Customary Permitted Liens means, with respect to any Person, any of the following:

(a) Liens (i) with respect to the payment of Taxes or (ii) of suppliers, carriers, materialmen, warehousemen, workmen or mechanics and other similar Liens, in each case imposed by law or arising in the ordinary course of business, and, for each of the Liens in clauses (i) and (ii) above for amounts that are not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves or other appropriate provisions are maintained on the books of such Person in accordance with GAAP;

(b) Liens of a collection bank on items in the course of collection arising under Section 4-208 of the UCC as in effect in the State of New York or any similar section under any applicable UCC or any similar Requirement of Law of any foreign jurisdiction;

(c) bankers Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by any Person, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that, unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;

(d) pledges or cash deposits made in the ordinary course of business (i) in connection with workers compensation, unemployment insurance or other types of social security benefits (other than any Lien imposed by ERISA), (ii) to secure the performance of bids, tenders, leases (other than Capital Leases) sales or other trade contracts (other than for the repayment of borrowed money) or (iii) made in lieu of, or to secure the performance of, surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation);

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (e) judgment liens (other than for the payment of Taxes) securing judgments and other proceedings not constituting an Event of Default under Section 9.1(e) and pledges or cash deposits made in lieu of, or to secure the performance of, judgment or appeal bonds in respect of such judgments and proceedings;

(f) Liens (i) arising by reason of zoning restrictions, easements, licenses, reservations, restrictions, covenants, rights-of-way, encroachments, minor defects or irregularities in title (including leasehold title) and other similar encumbrances on the use of real property or (ii) consisting of leases, licenses or subleases granted by a lessor, licensor or sublessor on its property (in each case other than Capital Leases) otherwise permitted under Section 8.4 that, for each of the Liens in clauses (i) and (ii) above, do not, in the aggregate, materially (x) impair the value or marketability of such real property or (y) interfere with the ordinary conduct of the business conducted and proposed to be conducted at such real property;

(g) Liens of landlords and mortgagees of landlords (i) arising by statute or under any lease or related Contractual Obligation entered into in the ordinary course of business, (ii) on fixtures and movable tangible property located on the real property leased or subleased from such landlord, (iii) for amounts not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves or other appropriate provisions are maintained on the books of such Person in accordance with GAAP;

(h) the title and interest of a lessor or sublessor in and to personal property leased or subleased (other than through a Capital Lease), in each case extending only to such personal property; and

(i) Liens in favor of customs and revenue authorities arising as a matter of law which secure payment of non-delinquent customs duties in connection with the importation of Inventory in the ordinary course of business.

Day Affiliates means (a) Stanley R. Day, Jr. and Frederick K.W. Day and their spouses, parents, children, siblings, cousins, mothers and fathers-in-law, sons and daughters-in-law and brothers and sisters-in-law and (b) various trusts for the benefit of the individuals described in clause (a) and the trustees thereof.

Default means any Event of Default and any event that, with the passing of time or the giving of notice or both, would become an Event of Default.

Defaulting Lender means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swing Loans or (iii) pay over to any Group Member any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lenders good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Group Member in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lenders good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Group Member, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit and Swing Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Group Members receipt of such certification in form and substance satisfactory to it and the Administrative Agent, (d) has failed to fund, and not cured, loans, participations, advances, or reimbursement obligations under one or more other syndicated credit facilities, unless subject to a good faith dispute or (e) has become the subject of a Bankruptcy Event.

Disclosure Documents means, collectively, (a) all confidential information memoranda and related materials prepared in connection with the syndication of the Facilities and (b) all other documents filed by any Group Member with the United States Securities and Exchange Commission.

Disposition means, with respect to any property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof. The terms Dispose and Disposed of shall have correlative meanings.

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

Domestic Person means any United States person under and as defined in Section 770l(a)(30) of the Code.

Domestic Subsidiary means any Subsidiary of Borrower which is organized under the laws of any state of the United States.

Dutch Auction means an auction of Term Loans conducted (a) pursuant to Section 11.2(g) to allow an Affiliated Lender to acquire Term Loans at a discount to par value and on a non pro rata basis, or (b) pursuant to Section 11.2(h) to allow a Purchasing Borrower Party to prepay Term Loans at a discount to par value and on a non pro rata basis, in each case in accordance with the applicable Dutch Auction Procedures.

Dutch Auction Procedures means with respect to a purchase of Term Loans by an Affiliated Lender pursuant to Section 11.2(g) or with respect to a purchase or prepayment of Term Loans by a Purchasing Borrower Party pursuant to Section 11.2(h), Dutch auction procedures as reasonably agreed upon by such Affiliated Lender or Purchasing Borrower Party, as the case may be, and the Administrative Agent.

Earn-Outs means, with respect to any Person, obligations of such Person arising from a Permitted Acquisition which are payable to the seller based on the achievement of specified financial results over time.

Eligible Assignee means (i) any Lender (other than a Defaulting Lender), any Affiliate of a Lender (other than a Defaulting Lender) and any Approved Fund (other than an Approved Fund of a Defaulting Lender), but in each case other than Affiliated Lenders and Purchasing Borrower Parties, (ii) any commercial bank, insurance company, investment or mutual fund or other entity which extends credit or buys loans in the ordinary course of its business and (iii) solely to the extent allowed in Section 11.2(g) and Section 11.2(h), Affiliated Lenders and Purchasing Borrower Parties.

Environmental Laws means all Requirements of Law and Permits imposing liability or standards of conduct for or relating to the regulation or protection of human health, safety, the environment or natural resources, including CERCLA, the SWDA, the Hazardous Materials Transportation Act (49 U.S.C. §§ 5101 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (7 U.S.C. §§ 136 et seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.), the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.), the Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), all regulations promulgated under any of the foregoing, all analogous Requirements of Law and Permits and any environmental transfer of ownership notification or approval statutes, including the Industrial Site Recovery Act (N.J. Stat. Ann. §§ 13:1K-6 et seq.).

Environmental Liabilities means all Liabilities (including costs of Remedial Actions, natural resource damages and costs and expenses of investigation and feasibility studies) that may be imposed on, incurred by or asserted against any Group Member as a result of, or related to, any claim, suit, action, investigation, proceeding or demand by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law or otherwise, arising under any Environmental Law or in connection with any environmental, health or safety condition or with any Release and resulting from the ownership, lease, sublease or other operation or occupation of property by any Group Member, whether on, prior or after the date hereof.

Equity Redemption means the repayment and redemption of all of Holdingss outstanding Class A Units (including payment of all accrued preferred distributions thereon and the common participation right associated therewith) held by the owners thereof, cash distributions to SRAM-SP2 to pay any taxes, expenses or other costs incurred by SRAM-SP2 or its shareholders in connection therewith, and the amendment and restatement of the Limited Liability Company Operating Agreement of Holdings to replace the separate Class A Units and Class B Units issued thereunder with a single class of common units, and to eliminate the corporate governance and liquidity rights associated with the Class A Units thereunder and corresponding changes to the Limited Liability Company Operating Agreement of the Borrower, all substantially as further described on Schedule III.

ERISA means the United States Employee Retirement Income Security Act of 1974.

ERISA Affiliate means, collectively, any Group Member, and any Person under common control, or treated as a single employer, with any Group Member, within the meaning of Section 414(b), (c), (m) or (o) of the Code.

ERISA Event means any of the following: (a) a reportable event described in Section 4043(b) of ERISA (unless the 30-day notice requirement has been duly waived under the applicable regulations, Section 4043(c) of ERISA) with respect to a Title IV Plan, (b) the withdrawal of any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA, (c) the complete or partial withdrawal of any ERISA Affiliate from any Multiemployer Plan, (d) with respect to any Multiemployer Plan, the filing of a notice of reorganization, insolvency or termination (or treatment of a plan amendment as termination) under Section 4041A of ERISA, (e) the filing of a notice of intent to terminate a Title IV Plan (or treatment of a plan amendment as termination) under Section 4041 of ERISA, (f) the institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC, (g) the failure to make any required contribution to any Title IV Plan or Multiemployer Plan when due, (h) the imposition of a lien under Section 412 of the Code or Section 302 or 4068 of ERISA on any property (or rights to property, whether real or personal) of any ERISA Affiliate, (i) the failure of a Benefit Plan or any trust thereunder intended to qualify for tax exempt status under Section 401 or 501 of the Code or other Requirements of Law to qualify thereunder and (j) any other event or condition that might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of any liability upon any ERISA Affiliate under Title IV of ERISA other than for PBGC premiums due but not delinquent.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Eurocurrency Reserve Requirements means for any day as applied to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates (expressed as a fraction) of reserve requirements in effect on such day (including basic, supplemental, marginal and emergency reserves) under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as Eurocurrency Liabilities in Regulation D of the Board) maintained by a member bank of the Federal Reserve System.

Eurodollar Base Rate means with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on the Reuters Screen LIBOR01 Page as of 11:00 A.M., London time, two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on such page (or otherwise on such screen), the Eurodollar Base Rate shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which the Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New York City time, two Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where its eurodollar and foreign currency and exchange operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein.

Eurodollar Loans means Loans the rate of interest applicable to which is based upon the Eurodollar Rate.

Eurodollar Rate means with respect to each day during each Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for such day in accordance with the following formula:

Eurodollar Base Rate 1.00 - Eurocurrency Reserve Requirements

; provided, however, that notwithstanding the rate calculated in accordance with the foregoing, at no time shall the Eurodollar Rate for the First Lien Term Facility be less than 1.25% per annum.

Eurodollar Tranche means the collective reference to Eurodollar Loans under a particular Facility the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

Event of Default has the meaning specified in Section 9.1.

Excess Cash Flow has the meaning specified in the Compliance Certificate.

Excess Cash Flow Period means each of (a) the Borrowers 2012 Fiscal Year and (b) each Fiscal Year of the Borrower thereafter.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Secured Party is a direct assignee of any other Secured Party (other than an assignee pursuant to Section 2.18) that was entitled, at the time the assignment of such other Secured Party became effective, to receive additional amounts pursuant to Section 2.17, (c) Taxes that are directly attributable to the failure (other than as a result of any change in a Requirement of Law) by any Secured Party to deliver documentation required to be delivered pursuant to Section 2.17(f) or (d) any withholding Taxes imposed on amounts payable as a result of a failure (other than by a Loan Party) to comply with FATCA to establish a complete exemption from withholding thereunder.

Existing Credit Agreement means that certain Amended and Restated Credit Agreement, dated as of April 30, 2010 among SRAM, LLC, the institutions party thereto as lenders and issuers and General Electric Capital Corporation, in its capacity as administrative agent thereunder.

Extension has the meaning specified in Section 2.22(a).

Extension Amendment has the meaning specified in Section 2.22(c).

Extension Offer has the meaning specified in Section 2.22(a).

Extended Revolving Credit Commitment has the meaning specified in Section 2.22(a).

Extended Term Loans has the meaning specified in Section 2.22(a).

Extending Term Lender has the meaning specified in Section 2.22(a).

Facilities means (a) the First Lien Term Facility, (b) the Revolving Credit Facility and (c) any Incremental Facility (and individually, each a Facility)

FATCA means Sections 1471 through 1474 of the Code, as of the date of this Agreement, and any regulations or official interpretations thereof.

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

Fee Letter means the letter agreement, dated as of May 16, 2011, addressed to Borrower from the Administrative Agent and accepted by Borrower, with respect to certain fees to be paid from time to time to the Administrative Agent and its Related Persons.

Fee Payment Date means (a) the third Business Day following the last day of each March, June, September and December and (b) the last day of the Revolving Credit Commitment Period.

Financial Statement means each financial statement delivered pursuant to Section 4.4 or Section 6.1.

First Lien Credit Facilities means the First Lien Term Facility and the Revolving Facility.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document First Lien Term Facility means the Term Loan Commitments and the provisions herein related to the Term Loans and shall include any Incremental Term Loans under an Incremental Facility as the context requires.

First Priority Obligations has the meaning specified in the Intercreditor Agreement.

Fiscal Quarter means each 3 fiscal month period ending on March 31, June 30, September 30 or December 31.

Fiscal Year means the twelve-month period ending on December 31.

Foreign Benefit Arrangement means any employee benefit arrangement mandated by non-US law that is maintained or contributed to by any Group Member or any ERISA Affiliate.

Foreign Plan means each employee benefit plan (within the meaning of Section 3(3) of ERISA, whether or not subject to ERISA) that is not subject to US law and is maintained or contributed to by any Group Member or any ERISA Affiliate.

Foreign Plan Event means, with respect to any Foreign Benefit Arrangement or Foreign Plan, (a) the failure to make or, if applicable, accrue in accordance with normal accounting practices, any employer or employee contributions required by applicable law or by the terms of such Foreign Benefit Arrangement or Foreign Plan; (b) the failure to register or loss of good standing with applicable regulatory authorities of any such Foreign Benefit Arrangement or Foreign Plan required to be registered; or (c) the failure of any Foreign Benefit Arrangement or Foreign Plan to comply with any material provisions of applicable law and regulations or with the material terms of such Foreign Benefit Arrangement or Foreign Plan.

Foreign Restructuring Note has the meaning specified in the definition of Foreign Restructuring.

Foreign Restructuring means the collective reference to the following transactions: (a) the making of a loan by SIC of up to $85,000,000 utilizing the Net Cash Proceeds of the first Qualified IPO to a newly formed Foreign Subsidiary, to be evidenced by a note (the Foreign Restructuring Note) issued by such newly formed Foreign Subsidiary to SIC and having terms and conditions reasonably satisfactory to the Administrative Agent (which note shall be pledged pursuant to the Guaranty and Security Agreement); (b) the use of the proceeds of such loan by such newly formed Foreign Subsidiary to acquire from the Borrower all of the outstanding Stock of all of the Foreign Subsidiaries of the Borrower in exchange for up to $85,000,000 in cash and equity of such newly formed Foreign Subsidiary; and (c) the transfer of ownership of the Stock of one or more Foreign Subsidiaries to one or more other Foreign Subsidiaries, all substantially as further described on Schedule IV.

Foreign Subsidiary means (i) any Subsidiary other than a Domestic Subsidiary and (ii) any Domestic Subsidiary that has no material assets other than stock of controlled foreign corporations as defined in Section 957(a) of the Code.

Form S-1 means the Form S-1 Registration Statement filed by SRAM International Corporation (SIC) with the United States Securities and Exchange Commission under the Securities Act on May 12, 2011, as amended from time to time.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Funding Office means the office of the Administrative Agent specified in Section 11.7 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower and the Lenders.

GAAP means generally accepted accounting principles in the United States of America, as in effect from time to time, set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, in the statements and pronouncements of the Financial Accounting Standards Board and in such other statements by such other entity as may be in general use by significant segments of the accounting profession that are applicable to the circumstances as of the date of determination. Subject to Section 1.3, all references to GAAP shall be to GAAP applied consistently with the principles used in the preparation of the Financial Statements described in Section 4.4(a).

Governmental Authority means any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any central bank, stock exchange, regulatory body, arbitrator, public sector entity, supra-national entity (including the European Union and the European Central Bank) and any self-regulatory organization (including the National Association of Insurance Commissioners).

Group Members means, collectively, the Borrower, its Subsidiaries, Holdings and, to the extent that SIC is the Reporting Person, SIC, SRAM-SP2 and the SRAM-SP2 Subs.

Group Members Accountants means PricewaterhouseCoopers or other nationally-recognized independent registered certified public accountants acceptable to the Administrative Agent.

Guarantor means Holdings, each Wholly Owned Subsidiary of the Borrower listed on Schedule 4.3 that is not a Foreign Subsidiary and each other Person that enters into any Guaranty Obligation with respect to the Obligations (it being understood that SIC, SRAM-SP2 and the SRAM-SP2 Subs shall each be a Guarantor to the extent SIC is the Reporting Person).

Guaranty and Security Agreement means the First Lien Guaranty and Security Agreement to be executed and delivered by Holdings, the Borrower and each Guarantor, substantially in the form of Exhibit J.

Guaranty Obligation means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person for any Indebtedness, lease, dividend or other obligation (the primary obligation) of another Person (the primary obligor), if the purpose or intent of such Person in incurring such liability, or the economic effect thereof, is to guarantee such primary obligation or provide support, assurance or comfort to the holder of such primary obligation or to protect or indemnify such holder against loss with respect to such primary obligation, including (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of any primary obligation, (b) the incurrence of reimbursement obligations with respect to any letter of credit or bank guarantee in support of any primary obligation, (c) the existence of any Lien, or any right, contingent or otherwise, to receive a Lien, on the property of such Person securing any part of any primary obligation and (d) any liability of such Person for a primary obligation through any Contractual Obligation (contingent or otherwise) or other arrangement (i) to purchase, repurchase or otherwise acquire such primary obligation or any security therefor or to provide funds for the payment or discharge of such primary obligation (whether in the form of a loan, advance, stock purchase, capital contribution or otherwise), (ii) to maintain the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document solvency, working capital, equity capital or any balance sheet item, level of income or cash flow, liquidity or financial condition of any primary obligor, (iii) to make take-or-pay or similar payments, if required, regardless of non-performance by any other party to any Contractual Obligation, (iv) to purchase, sell or lease (as lessor or lessee) any property, or to purchase or sell services, primarily for the purpose of enabling the primary obligor to satisfy such primary obligation or to protect the holder of such primary obligation against loss or (v) to supply funds to or in any other manner invest in, such primary obligor (including to pay for property or services irrespective of whether such property is received or such services are rendered); provided, however, that Guaranty Obligations shall not include (x) endorsements for collection or deposit in the ordinary course of business and (y) product warranties given in the ordinary course of business. The outstanding amount of any Guaranty Obligation shall equal the outstanding amount of the primary obligation so guaranteed or otherwise supported or, if lower, the stated maximum amount for which such Person may be liable under such Guaranty Obligation.

Hazardous Material means any substance or material that is classified, regulated or otherwise characterized under any Environmental Law as a waste or as hazardous, toxic, a contaminant or a pollutant or by other words of similar meaning or regulatory effect, including petroleum or any fraction thereof, asbestos, polychlorinated biphenyls and radioactive substances.

Hedging Agreement means any Interest Rate Contract, foreign exchange, swap, option or forward contract, spot, cap, floor or collar transaction, any other derivative instrument and any other similar speculative transaction and any other similar agreement or arrangement designed to alter the risks of any Person arising from fluctuations in any underlying variable.

Immaterial Subsidiary means, as of any date of determination, any Subsidiary of the Borrower that (a) contributed less than (i) 1% of Consolidated EBITDA (as defined herein without giving effect to any Subsidiaries of such Subsidiary) for the most recent four- quarter period for which financial statements are available and (ii) had assets (excluding intercompany accounts) constituting less than 1% of Consolidated total assets of the Borrower and its Subsidiaries as of the end of the most recent Fiscal Period for which financial statements are available (giving effect to the value of Stock owned by such Subsidiary but excluding the assets of the Subsidiaries of such Subsidiary), (b) together with all other such other Immaterial Subsidiaries, had (i) contributed less than 5% of Consolidated EBITDA for the most recent four-quarter period for which financial statements are available and (ii) assets (excluding intercompany accounts) constituting less than 5% of Consolidated total assets of the Borrower and its Subsidiaries as of the end of the most recent Fiscal Period for which financial statements are available, as reflected on the most recent financial statements delivered pursuant to Section 6.1 prior to such date) and (c) has been designated as such by the Borrower in a written notice delivered to the Administrative Agent (other than any such Subsidiary as to which the Borrower has revoked such designation by written notice to the Administrative Agent).

Incremental Facility has the meaning specified in Section 2.21(a).

Increased Facility Activation Date means any Business Day on which any Lender shall execute and deliver to the Administrative Agents an Increased Facility Activation Notice pursuant to Section 2.21(a).

Increased Facility Activation Notice means a notice substantially in the form of Exhibit H.

Incremental Facility Amendment has the meaning specified in Section 2.21(b).

Incremental Revolving Commitments has the meaning specified in Section 2.21(a).

Incremental Revolving Lender has the meaning specified in Section 2.21(c).

Incremental Term Lenders means (a) on any Increased Facility Activation Date relating to Incremental Term Loans, the Lenders signatory to the relevant Increased Facility Activation Notice and (b) thereafter, each Lender that is a holder of an Incremental Term Loan.

Incremental Term Loans has the meaning specified in Section 2.21(a).

Incremental Term Maturity Date means, with respect to the Incremental Term Loans to be made pursuant to any Increased Facility Activation Notice, the maturity date specified in such Increased Facility Activation Notice, which date shall not be earlier than the final maturity of the Term Loans.

Indebtedness of any Person means, without duplication, any of the following, whether or not matured: (a) all indebtedness for borrowed money, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all reimbursement and all obligations with respect to (i) letters of credit, bank guarantees or bankers acceptances or (ii) surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation) other than those entered into in the ordinary course of business, (d) all obligations to pay the deferred purchase price of property or services, other than (i) accrued expenses and trade payables incurred in the ordinary course of business and other than deferred compensation arrangements entered into in the ordinary course of business in consideration for actual services rendered and (ii) Earn-Outs (unless the performance requirements have been satisfied and the amount payable is fixed), (e) all obligations created or arising under any conditional sale or other title retention agreement, regardless of whether the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property, (f) all Capitalized Lease Obligations, (g) all obligations, whether or not contingent, to purchase, redeem, retire, defease or otherwise acquire for value any of its own Stock or Stock Equivalents (or any Stock or Stock Equivalent of a direct or indirect parent entity thereof) prior to the date that is 180 days after the Latest Term Loan Maturity Date, valued at, in the case of redeemable preferred Stock, the greater of the voluntary liquidation preference and the involuntary liquidation preference of such Stock plus accrued and unpaid dividends, provided that this clause (g) shall not apply to Stock held by any future, present or former employee, director, officer or consultant of any Group Member that is subject to repurchase pursuant to any management equity subscription agreement, stock option agreement, stock ownership plan, put agreement, stockholder agreement or similar agreement that may be in effect from time to time, (h) all payments that would be required to be made in respect of any Hedging Agreement in the event of a termination (including an early termination) on the date of determination and (i) all Guaranty Obligations for obligations of any other Person constituting Indebtedness of such other Person; provided, however, that the items in each of clauses (a) through (i) above shall constitute Indebtedness of such Person solely to the extent, directly or indirectly, (x) such Person is liable for any part of any such item, or (y) any such item is secured by a Lien on such Persons property.

Indemnified Liabilities has the meaning specified in Section 11.3.

Indemnitee has the meaning specified in Section 11.3.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Indemnified Taxes means all Taxes other than any (a) Excluded Taxes imposed on or with respect to any payment made by any Loan Party under any Loan Document or (b) Other Taxes.

Intercreditor Agreement the intercreditor agreement, dated as of June 7, 2011, among the Borrower, Holdings, the Administrative Agent and the Second Lien Administrative Agent substantially in the form of Exhibit K.

Initial Projections means those financial projections, dated June 30, 2011, covering the Fiscal Quarters ending on or prior to December 31, 2011 and the Fiscal Years ending in 2012 through 2016 and delivered to the Administrative Agent by the Borrower prior to the date hereof.

Intellectual Property means all rights, title and interests in or relating to intellectual property and industrial property arising under any Requirement of Law and all IP Ancillary Rights relating thereto, including all Copyrights, Patents, Trademarks, Internet Domain Names, Trade Secrets and IP Licenses.

Intellectual Property Security Agreement means each of the short-form Grant of Security Interest In Patent Rights, Trademark Rights or Copyright Rights, as applicable, between a Loan Party and the Administrative Agent and any supplements thereto, and including the Grant of Security Interest In Trademark Rights and the Grant of Security Interest In Patent Rights, each dated as of the date hereof, among the Borrower, Compositech, Inc., and the Administrative Agent.

Interest Payment Date means (a) as to any ABR Loan (other than any Swing Loan), the last day of each March, June, September and December (or, if an Event of Default is in existence, subject to Section 2.9(d), the last day of each calendar month) to occur while such Loan is outstanding and the final maturity date of such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period, (d) as to any Loan (other than any Revolving Loan that is an ABR Loan and any Swing Loan), the date of any repayment or prepayment made in respect thereof and (e) as to any Swing Loan, the day that such Loan is required to be repaid.

Interest Period means as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower in its Notice of Borrowing or Notice of Conversion or Continuation, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not later than 11:00 A.M., New York City time, on the date that is three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following: (i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day; (ii) the Borrower may not select an Interest Period under a particular Facility that would extend beyond the Revolving Credit Termination Date or beyond the date final payment is due on the relevant Term Loans, as the case may be;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (iii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; and (iv) the Borrower shall select Interest Periods so as not to require a payment or prepayment of any Eurodollar Loan during an Interest Period for such Eurodollar Loan.

Interest Rate Contracts means all interest rate swap agreements, interest rate cap agreements, interest rate collar agreements or interest rate insurance.

Internet Domain Names means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to Internet domain names.

Investment means, with respect to any Person, directly or indirectly, (a) to own, purchase or otherwise acquire, in each case whether beneficially or otherwise, any investment in, including any interest in, any Security of any other Person (other than any evidence of any Obligation), (b) to purchase or otherwise acquire, whether in one transaction or in a series of transactions, all or a significant part of the property of any other Person or a business conducted by any other Person or all or substantially all of the assets constituting the business of a division, branch, brand or other unit operation of any other Person, (c) to incur, or to remain liable under, any Guaranty Obligation for Indebtedness of any other Person, to assume the Indebtedness of any other Person or to make, hold, purchase or otherwise acquire, in each case directly or indirectly and without duplication, any deposit, loan, advance, commitment to lend or advance, or other extension of credit (including by deferring or extending the date of, in each case outside the ordinary course of business, the payment of the purchase price for Sales of property or services to any other Person, to the extent such payment obligation constitutes Indebtedness of such other Person), excluding deposits with financial institutions available for withdrawal on demand, prepaid expenses, accounts receivable and similar items created in the ordinary course of business, (d) to make, directly or indirectly, any contribution to the capital of any other Person or (e) to Sell any property for less than fair market value (including a disposition of cash or Cash Equivalents in exchange for consideration of lesser value); provided, however, that such Investment shall be valued at the difference between the value of the consideration for such Sale and the fair market value of the property Sold.

IP Ancillary Rights means, with respect to any other Intellectual Property, as applicable, all foreign counterparts to, and all divisionals, reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual Property and all income, royalties, proceeds and Liabilities at any time due or payable or asserted under or with respect to any of the foregoing or otherwise with respect to such Intellectual Property, including all rights to sue or recover at law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof, and, in each case, all rights to obtain any other IP Ancillary Right.

IP License means all Contractual Obligations (and all related IP Ancillary Rights), whether written or oral, granting any right title and interest in or relating to any Intellectual Property.

IRS means the Internal Revenue Service of the United States and any successor thereto.

Issue means, with respect to any Letter of Credit, to issue, extend the expiration date of, renew (including by failure to object to any automatic renewal on the last day such objection is permitted), increase the face amount of, or reduce or eliminate any scheduled decrease in the face amount of, such Letter of Credit, or to cause any Person to do any of the foregoing. The terms Issued and Issuance have correlative meanings.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Latest Term Loan Maturity Date means the later of the Scheduled Term Loan Maturity date or any Incremental Term Maturity Date.

L/C Commitment is $10,000,000.

L/C Exposure means at any time, the total L/C Obligations. The L/C Exposure of any Revolving Credit Lender at any time shall be its Revolving Percentage of the total L/C Exposure at such time.

L/C Issuer means each of JPMorgan Chase Bank, N.A. and any other Revolving Credit Lender approved by the Administrative Agent and the Borrower that has agreed in its sole discretion to act as an L/C Issuer hereunder, or any of their respective affiliates, in each case in its capacity as issuer of any Letter of Credit. Each reference herein to the L/C Issuer shall be deemed to be a reference to the relevant L/C Issuer.

L/C Obligations means, for any Letter of Credit at any time, the sum of (a) the L/C Reimbursement Obligations at such time for such Letter of Credit and (b) the aggregate maximum undrawn face amount of such Letter of Credit outstanding at such time.

L/C Participants means the collective reference to all the Revolving Credit Lenders other than the Issuing Lender.

L/C Reimbursement Obligation means, for any Letter of Credit, the obligation of the Borrower to the L/C Issuer thereof, as and when matured, to pay all amounts drawn under such Letter of Credit.

Lenders means, collectively, the Swingline Lender and any other financial institution or other Person that (a) is listed on the signature pages hereof as a Lender or (b) from time to time becomes a party hereto by execution of an Assignment or otherwise, in each case together with its successors; provided, that unless the context otherwise requires, each reference herein to the Lenders shall be deemed to include any Conduit Lender.

Letter of Credit has the meaning specified in Section 2.4(a).

Liabilities means all claims, actions, suits, judgments, damages, losses, liability, obligations, responsibilities, fines, penalties, sanctions, costs, fees, Taxes, commissions, charges, disbursements and expenses, in each case of any kind or nature (including interest accrued thereon or as a result thereto and fees, charges and disbursements of financial, legal and other advisors and consultants), whether joint or several, whether or not indirect, contingent, consequential, actual, punitive, treble or otherwise.

Lien means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), security interest or other security arrangement and any other preference, priority or preferential arrangement of any kind or nature whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.

Loan means any loan made or deemed made by any Lender hereunder.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Loan Documents means, collectively, this Agreement, any Notes, the Intercreditor Agreement, the Security Documents, any other security agreement, the Fee Letter, and, when executed, each document executed by a Loan Party and delivered to the Administrative Agent, any Lender or any L/C Issuer in connection with or pursuant to any of the foregoing or the Obligations, together with any modification of any term, or any waiver with respect to, any of the foregoing.

Loan Party means each Borrower and each Guarantor.

Majority Facility Lenders means, with respect to any Facility, the holders of more than 50% of the aggregate unpaid principal amount of the Term Loans or the Total Revolving Extensions of Credit, as the case may be, outstanding under such Facility (or, in the case of the Revolving Credit Facility, prior to any termination of the Revolving Credit Commitments, the holders of more than 50% of the Total Revolving Credit Commitments).

Material Adverse Effect means a material adverse change in any of (a) the financial condition, business, operations or property of the Group Members, taken as a whole, (b) the ability of any Loan Party to perform its material obligations under the Loan Documents, taken as a whole and (c) the validity or enforceability of any Loan Document or the rights and remedies of the Administrative Agent, the Lenders and the other Secured Parties under any Loan Document.

Minimum Extension Condition has the meaning specified in Section 2.22(b).

Model Year means the twelve-month period ending on June 30 of any year.

Moodys means Moodys Investors Service, Inc.

Mortgage means any mortgage, deed of trust or other document executed or required herein to be executed by any Loan Party and granting a security interest over real property in favor of the Administrative Agent as security for the Obligations.

Mortgaged Property means any real property subject to a Mortgage.

Mortgage Supporting Documents means, with respect to any Mortgage for a parcel of real property, (i) each document (including title policies or marked-up unconditional insurance binders (in each case, together with copies of all documents referred to therein), maps, ALTA (or TLTA, if applicable) as-built surveys (in form and as to date that is sufficiently acceptable to the title insurer issuing title insurance to the Administrative Agent for such title insurer to deliver endorsements to such title insurance as reasonably requested by the Administrative Agent), environmental assessments and reports and evidence regarding recording and payment of fees, insurance premium and taxes), (ii) if reasonably requested by the Administrative Agent, an opinion of counsel in the state in which such real property is located and an opinion of counsel in the jurisdiction of organization of the owner of each Mortgaged Property, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent, that the Administrative Agent may reasonably request, to create, register, perfect, maintain, evidence the existence, substance, form or validity of or enforce a valid lien on such parcel of real property in favor of the Administrative Agent for the benefit of the Secured Parties, subject only to such Liens as the Administrative Agent may approve and Customary Permitted Liens, (iii) (A) a policy of flood insurance that (1) covers any parcel of improved real property that is encumbered by any Mortgage and that is located in a special flood hazard area, and (2) is written in an amount as required by applicable law, (B) a life of loan standard flood hazard determination with respect to each Mortgaged Property, and (C) confirmation that the Borrower has received the notice requested pursuant to Section 208.25(i) of Regulation H of the Board and (iv) all recorded documents referred to, or listed as exceptions to title in, the title policy or policies referred to in subclause (i) above, and a copy of all other material documents affecting the Mortgaged Properties.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Multiemployer Plan means any multiemployer plan, as defined in Section 400l(a)(3) of ERISA, to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.

MNPI means any information regarding Borrower, its Subsidiaries or its Affiliates, or Borrowers assets, its ability to perform its Obligations or any other matter that could reasonably be expected to be material to a decision by any Lender to participate in any Dutch Auction or assign or acquire any Term Loans or to enter into any of the transactions contemplated thereby and that has not previously been disclosed to the Administrative Agent and the Lenders.

Net Cash Proceeds means proceeds received in cash from (a) any Sale of, or Property Loss Event with respect to, property, net of (i) the customary out-of-pocket cash costs, fees and expenses paid or required to be paid in connection therewith, (ii) taxes paid or reasonably estimated to be payable by any Group Member or any direct or indirect holder of the Stock of Holdings as a result thereof, and as a result of the distribution of such proceeds to the Borrower, (iii) any amount required to be paid or prepaid on Indebtedness (other than the Obligations and Indebtedness owing to any Group Member) secured by the property subject thereto, (iv) the amount of any reserves established by the Borrower and its Subsidiaries to fund contingent liabilities reasonably estimated to be payable, that are directly attributable to such Sale or Property Loss Event (provided that any reversal of any such reserves will be deemed to be Net Cash Proceeds received at the time and in the amount of such reversal), (v) any amounts required to be paid to any Person (other than any Group Member) owning a beneficial interest in the assets subject to such Sale or Property Loss Event (but not in excess of such Persons ratable ownership percentage of the proceeds from such Sale or Property Loss Event) and (vi) any other liabilities associated with such Sale or Property Loss Event and retained by any Group Member thereafter, to the extent reflected on the Consolidated balance sheet of the Borrower at the time thereof; or (b) any sale or issuance of Stock or incurrence of Indebtedness, in each case net of brokers, advisors and investment banking fees and other customary out-of-pocket underwriting discounts, commissions and other customary out-of-pocket cash costs, fees and expenses, in each case incurred in connection with such transaction; provided, however, that any such proceeds received by any Subsidiary of the Borrower that is not a Wholly Owned Subsidiary of the Borrower shall constitute Net Cash Proceeds only to the extent of the aggregate direct and indirect beneficial ownership interest of the Borrower therein.

New Lender has the meaning specified in Section 2.21(b).

New Lender Supplement has the meaning specified in Section 2.21(b).

No MNPI Representation means by a Person, a representation that such Person is not in possession of any MNPI that has not been disclosed to Lenders generally (other than those Lenders who have elected to not receive any non-public information with respect to the Group Members).

Non-U.S. Lender Party means each Lender, each L/C Issuer, each SPV and each participant, in each case that is not a Domestic Person.

Note means a promissory note of the Borrower, in substantially the form of Exhibit B, payable to the order of a Lender in any Facility in a principal amount equal to the amount of such Lenders Commitment under such Facility (or, in the case of the First Lien Term Facility or any Incremental Facility, the aggregate initial principal amount of the Term Loans or Incremental Term Loans, respectively).

Notice of Conversion or Continuation has the meaning specified in Section 2.10.

Obligations means, with respect to any Loan Party, all amounts, obligations, liabilities, covenants and duties of every type and description owing by such Loan Party to the Administrative Agent, any Lender, any L/C Issuer, any other Indemnitee, any participant, any SPV or any Secured Hedging Counterparty arising out of, under, or in connection with, any Loan Document, whether direct or indirect (regardless of whether acquired by assignment), absolute or contingent, due or to become due, whether liquidated or not, now existing or hereafter arising and however acquired, and whether or not evidenced by any instrument or for the payment of money, including, without duplication, (a) if such Loan Party is the Borrower, all Loans and L/C Obligations, (b) all interest, whether or not accruing after the filing of any petition in bankruptcy or after the commencement of any insolvency, reorganization or similar proceeding, and whether or not a claim for post-filing or post-petition interest is allowed in any such proceeding, and (c) all other fees, expenses (including fees, charges and disbursement of counsel), interest, commissions, charges, costs, disbursements, indemnities and reimbursement of amounts paid and other sums chargeable to such Loan Party under any Loan Document (including those payable to L/C Issuers as described in Section 2.11). Obligations shall include all Bank Product Obligations.

OID has the meaning specified in Section 2.21(a).

Other Connection Taxes means with respect to any Secured Party, Taxes imposed as a result of a present or former connection between such Secured Party and the jurisdiction imposing such Taxes (other than a connection arising from such Secured Party having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan Document).

Other Taxes means any present or future stamp, court, documentary, intangible, recording, filing or similar excise or property Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, or from the registration, receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document.

Parent Company means SIC or any Person, directly or indirectly, holding more than 50% of the Voting Stock of Holdings.

Participant has the meaning specified in Section 11.2(c).

Participant Register has the meaning specified in Section 11.2(c).

Patents means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to letters patent and applications therefor.

Patriot Act has the meaning specified in Section 11.16.

PBGC means the United States Pension Benefit Guaranty Corporation and any successor thereto.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Permit means, with respect to any Person, any permit, approval, authorization, license, registration, certificate, concession, grant, franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case whether or not having the force of law and applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

Permitted Acquisition means any Proposed Acquisition satisfying each of the following conditions: (i) in each case on a Pro Forma Basis, (1) no Default or Event of Default shall have occurred and be continuing and (2) the Consolidated Leverage Ratio (x) at any time prior to a Qualified IPO, shall not exceed 5.50:1.00 or (y) following a Qualified IPO, shall not exceed 3.50:1:00, and the Borrower shall have delivered to the Administrative Agent a Compliance Certificate demonstrating such compliance calculation in reasonable detail; (ii) if such Proposed Acquisition is structured as a stock acquisition, or a merger or consolidation, then either (A) the Person so acquired becomes a Wholly Owned Subsidiary or (B) such Person is merged with and into either the Borrower or a Wholly Owned Subsidiary of the Borrower (with the Borrower or such Subsidiary being the surviving entity in such merger); (iii) all of the provisions of Section 7.10 and the Security Documents have been or will be complied with in respect of such Proposed Acquisition; (iv) the aggregate amount of such Investments by Loan Parties in Stock or assets that are not (or do not become) owned by a Loan Party or in Stock of Persons that do not become Loan Parties shall not exceed $20,000,000; and (v) such Proposed Acquisition was not hostile prior to the consummation thereof.

Permitted Indebtedness means any Indebtedness of any Group Member that is not prohibited by Section 8.1.

Permitted Investment means any Investment of any Group Member that is not prohibited by Section 8.3.

Permitted Lien means any Lien on or with respect to the property of any Group Member that is not prohibited by Section 8.2 or any other provision of any Loan Document.

Permitted Refinancing means Indebtedness constituting a refinancing or extension of Permitted Indebtedness that (a) has an aggregate outstanding principal amount (excluding interest that accrued after the date of such refinancing) not greater than the aggregate principal amount of such Permitted Indebtedness outstanding at the time of such refinancing or extension, plus accrued interest on, the Indebtedness so refinanced or extended (plus the amount of reasonable premium and fees and expenses incurred in connection therewith), (b) has a weighted average maturity (measured as of the date of such refinancing or extension) and final maturity no shorter than that of such Permitted Indebtedness, (c) is not entered into as part of a Sale and Leaseback transaction, (d) is not secured by any property or any Lien other than those securing such Permitted Indebtedness and (e) is otherwise on terms not materially less favorable to the Group Members, taken as a whole, than those of such Permitted Indebtedness; provided, however, that, notwithstanding the foregoing, (x) the terms of such Permitted

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Indebtedness may be modified as part of such Permitted Refinancing if such modification would have been permitted pursuant to Section 8.11 and (y) no Guaranty Obligation for such Indebtedness shall constitute part of such Permitted Refinancing unless similar Guaranty Obligations with respect to such Permitted Indebtedness existed and constituted Permitted Indebtedness prior to such refinancing or extension.

Permitted Reinvestment means, with respect to the Net Cash Proceeds of any Sale or Property Loss Event, to acquire (or make Capital Expenditures with respect) to the extent otherwise permitted hereunder, property useful in the business of the Borrower or any of its Subsidiaries (including through a Permitted Acquisition) including, if such Property Loss Event involves loss or damage to property, to repair such loss or damage.

Person means any individual, partnership, corporation (including a business trust and a public benefit corporation), joint stock company, estate, association, firm, enterprise, trust, limited liability company, unincorporated association, joint venture and any other entity or Governmental Authority.

Pledged Stock has the meaning specified in the Guaranty and Security Agreement.

Prime Rate means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City (the Prime Rate not being intended to be the lowest rate of interest charged by JPMorgan Chase Bank, N.A. in connection with extensions of credit to debtors).

Pro Forma Balance Sheet has the meaning specified in Section 4.4(d).

Pro Forma Basis means, with respect to any determination for any period and any Pro Forma Transaction, that such determination shall be made by giving pro forma effect to each such Pro Forma Transaction, as if each such Pro Forma Transaction had been consummated on the first day of such period, based on historical results accounted for in accordance with GAAP and, to the extent applicable, reasonable assumptions that are specified in detail in the relevant Compliance Certificate, Financial Statement or other document provided to the Administrative Agent or any Lender in connection herewith in accordance with Regulation S-X of the Securities Act; provided that in the case of any Permitted Acquisition, pro forma effect shall be given to any operating expense reductions determined in good faith by the Borrower to be reasonably expected to result from such acquisition, but only to the extent such reductions are expected be effective substantially contemporaneously with closing of the acquisition or are otherwise approved by the Administrative Agent (such approval not to be unreasonably withheld).

Pro Forma Transaction means any transaction consummated as part of any Permitted Acquisition, Related Transactions, prepayment of Indebtedness, Earn-Out payment, as part of any designation of a Subsidiary as an Unrestricted Subsidiary, or in connection with the incurrence of Indebtedness under any Incremental Facility, together with each other transaction relating thereto and consummated in connection therewith, including any incurrence or repayment of Indebtedness.

Projections means, collectively, the Initial Projections and any document delivered pursuant to Section 6.1(e).

Property Loss Event means, with respect to any property, any loss of or damage to such property or any taking of such property or condemnation thereof.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Proposed Acquisition means (a) any proposed acquisition that is consensual and approved by the Board of Directors of such Proposed Acquisition Target, of all or substantially all of the assets or Stock of any Proposed Acquisition Target by the Borrower or any Subsidiary of the Borrower (or by Holdings or SIC or SRAM-SP2 or the SRAM-SP2 Subs to the extent such assets and Stock are transferred to the Borrower or any Subsidiary of the Borrower contemporaneously with such acquisition) or (b) any proposed merger of any Proposed Acquisition Target with or into the Borrower or any Subsidiary of the Borrower (and, in the case of a merger with the Borrower, with the Borrower being the surviving corporation).

Proposed Acquisition Target means any Person or any brand, line of business, division, branch, operating division or other unit operation of any Person.

Pro Rata Outstandings, of any Lender at any time, means (a) in the case of the First Lien Term Facility, the outstanding principal amount of the Term Loans owing to such Lender under the First Lien Term Facility, (b) in the case of the Revolving Credit Facility, the sum of (i) the outstanding principal amount of Revolving Loans owing to such Lender and (ii) the amount of the participation of such Lender in the L/C Obligations outstanding with respect to all Letters of Credit, and (c) in the case of an Incremental Facility, the outstanding principal amount of the Incremental Term Loans owing to such Lender.

Pro Rata Share means, with respect to any Lender and any Facility or Facilities at any time, the percentage obtained by dividing (a) the sum of the Commitments (or, if such Commitments in any such Facility are terminated, the Pro Rata Outstandings therein) of such Lender then in effect under such Facilities by (b) the sum of the Commitments (or, if such Commitments in any such Facility are terminated, the Pro Rata Outstandings therein) of all Lenders then in effect under such Facilities; provided, however, that, if there are no Commitments and no Pro Rata Outstandings in any of such Facilities, such Lenders Pro Rata Share in such Facilities shall be determined based on the Pro Rata Share in such Facilities most recently in effect, after giving effect to any subsequent assignment and any subsequent non-pro rata payments of any Lender pursuant to Section 2.18.

Purchasing Borrower Party means a Parent Company or any Subsidiary of a Parent Company that becomes an Eligible Assignee or a Participant pursuant to Section 11.2.

Qualified IPO means an underwritten public offering of the Stock of Holdings (or any Parent Company that directly or indirectly owns 100% of the Stock of Holdings formed for the purpose of issuing its Stock in connection with such public offering) (including, without limitation, the underwritten public offering contemplated by the Form S-1) which generates Net Cash Proceeds in the amount of at least $100,000,000.

Refinanced Term Loans has the meaning specified in Section 11.1.

Refunded Swing Loans has the meaning specified in Section 2.3(c)(i).

Regulation U means Regulation U of the Board as in effect from time to time.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Proceeds pursuant to a Contractual Obligation entered into prior to the earliest of (a) the Reinvestment Prepayment Date occurring under any of clauses (a) or (c) of such defined term, (b) the date upon which the Administrative Agent receives notice under clause (b) of the definition of Reinvestment Prepayment Date and (c) the date upon which Borrower receives notice under clause (d) of the definition of Reinvestment Prepayment Date.

Reinvestment Prepayment Date means, with respect to any portion of any Net Cash Proceeds of any Sale or Property Loss Event, the earliest of (a) the 365th day after the completion of the portion of such Sale or Property Loss Event corresponding to such Net Cash Proceeds, (b) the date that is 5 Business Days after the date on which the Borrower shall have notified the Administrative Agent of the Borrowers determination not to make Permitted Reinvestments with such Net Cash Proceeds, (c) the occurrence of any Event of Default set forth in Section 9.1(e)(ii) and (d) 10 Business Days after the delivery of a notice by the Administrative Agent or the Required Lenders to the Borrower during the continuance of any other Event of Default.

Related Documents means, collectively, the payoff letters with respect to the Existing Credit Agreement executed and delivered to the Administrative Agent in connection with Section 3.1(e), the documentation executed in connection with the closing of the Second Lien Term Facility and the Equity Redemption and each other document executed with respect to any of the foregoing or any Related Transaction.

Related Person means, with respect to any Person, each Affiliate of such Person and each director, officer, employee, agent, trustee, representative, attorney, accountant and each insurance, environmental, legal, financial and other advisor (including those retained in connection with the satisfaction or attempted satisfaction of any condition set forth in Article III) and other consultants and agents of or to such Person or any of its Affiliates, together with, if such Person is the Administrative Agent, each other Person or individual designated, nominated or otherwise mandated by or helping the Administrative Agent pursuant to and in accordance with Section 10.2 or any comparable provision of any Loan Document.

Related Transactions means, collectively, the termination and repayment of the Existing Credit Agreement and the release of collateral, liens and security documents thereunder, the closing of the Second Lien Term Facility and the Equity Redemption and the execution and delivery of all Related Documents and the payment of all related fees, costs and expenses.

Release means any release, threatened release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Material into or through the environment.

Remedial Action means all actions required to (a) clean up, remove, treat or in any other way address any Hazardous Material in the indoor or outdoor environment, (b) prevent or minimize any Release so that a Hazardous Material does not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment or (c) perform pre-remedial studies and investigations and post- remedial monitoring and care with respect to any Hazardous Material.

Replacement Term Loans has the meaning specified in Section 11.1.

Reporting Person means, (a) prior to a Qualified IPO, Holdings and (b) after a Qualified IPO, SIC.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Required Lenders means, at any time, Lenders (subject to Section 2.19 herein) having at such time in excess of 50% of the sum of the aggregate Revolving Credit Commitments (or, if such Commitments are terminated, the sum of the amounts of the participations in Swing Loans, the principal amount of unparticipated portions of the Swing Loans and the Pro Rata Outstandings in the Revolving Credit Facility) and Term Loan Commitments (or, if such Commitments are terminated, the Pro Rata Outstandings in the First Lien Term Facility) then in effect.

Required Revolving Credit Lenders means, at any time, Lenders (subject to Section 2.19 herein) having at such time in excess of 50% of the aggregate Revolving Credit Commitments (or, if such Commitments are terminated, the sum of the amounts of the participations in Swing Loans, the principal amount of the unparticipated portions of the Swing Loans and the Pro Rata Outstandings in the Revolving Credit Facility) then in effect.

Required Term Loan Lenders means, at any time, Lenders (subject to Section 2.19 herein) having at such time in excess of 50% of the aggregate Term Loan Commitments (or, if such Commitments are terminated, the Pro Rata Outstandings in the First Lien Term Facility) then in effect.

Requirements of Law means, with respect to any Person, collectively, the common law and all federal, state, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

Responsible Officer means, with respect to any Person, any of the president, chief executive officer, treasurer, assistant treasurer, controller, chief financial officer, managing member or general partner of such Person but, in any event, with respect to financial matters, any such officer that is responsible for preparing the Financial Statements delivered hereunder and, with respect to the documents delivered pursuant to Section 6.1(d), documents delivered on the Closing Date and documents delivered pursuant to Section 7.10, the secretary or assistant secretary of such Person or any other officer responsible for maintaining the corporate and similar records of such Person.

Restricted Payment means (a) any dividend, return of capital, distribution or any other payment, whether direct or indirect and whether in cash, Securities or other property, on account of any Stock or Stock Equivalent of the Borrower or any of its Subsidiaries, in each case now or hereafter outstanding, including with respect to a claim for rescission of a Sale of such Stock or Stock Equivalent and (b) any redemption, retirement, termination, defeasance, cancellation, purchase or other acquisition for value, whether direct or indirect, of any Stock or Stock Equivalent of any Group Member or of any direct or indirect parent entity of the Borrower, now or hereafter outstanding, and any payment or other transfer or setting aside of funds for any such redemption, retirement, termination, cancellation, purchase or other acquisition, whether directly or indirectly and whether to a sinking fund, a similar fund or otherwise.

Revolving Credit Commitment means, with respect to each Revolving Credit Lender, the commitment of such Lender to make Revolving Loans and acquire interests in other Revolving Credit Outstandings, which commitment is in the amount set forth opposite such Lenders name on Schedule I under the caption Revolving Credit Commitment, as amended to reflect Assignments and as such amount may be reduced pursuant to this Agreement. The aggregate amount of the Revolving Credit Commitments on the date hereof equals $50,000,000.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Revolving Credit Commitment Period means the period from and including the Closing Date to the Revolving Credit Termination Date.

Revolving Credit Facility means the Revolving Credit Commitments and the provisions herein related to the Revolving Loans, Swing Loans and Letters of Credit.

Revolving Credit Lender means each Lender that has a Revolving Credit Commitment, holds a Revolving Loan or participates in any Swing Loan or Letter of Credit.

Revolving Credit Outstandings means, at any time, the sum of, in each case to the extent outstanding at such time, (a) the aggregate principal amount of the Revolving Loans and Swing Loans and (b) the L/C Obligations for all Letters of Credit.

Revolving Credit Termination Date shall mean the earliest of (a) the Scheduled Revolving Credit Termination Date, (b) the date of termination of the Revolving Credit Commitments pursuant to Section 2.5 or Section 9.2 and (c) the date on which the Obligations become due and payable pursuant to Section 9.2.

Revolving Extensions of Credit means, as to any Revolving Credit Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Revolving Loans held by such Lender then outstanding, (b) such Lenders Revolving Percentage of the L/C Obligations then outstanding and (c) such Lenders Revolving Percentage of the aggregate principal amount of Swing Loans then outstanding.

Revolving Loan has the meaning specified in Section 2.1.

Revolving Percentage means, as to any Revolving Credit Lender at any time, the percentage which such Lenders Revolving Credit Commitment then constitutes of the Total Revolving Credit Commitments or, at any time after the Revolving Credit Commitments shall have expired or terminated, the percentage which the aggregate amount of such Lenders Revolving Extensions of Credit then outstanding constitutes of the aggregate principal amount of the Total Revolving Extensions of Credit then outstanding, provided, that, in the event that the Revolving Loans are paid in full prior to the reduction to zero of the Total Revolving Extensions of Credit, the Revolving Percentages shall be determined in a manner designed to ensure that the other outstanding Revolving Extensions of Credit shall be held by the Revolving Credit Lenders on a comparable basis. Notwithstanding the foregoing, in the case of Section 2.19 when a Defaulting Lender shall exist, Revolving Percentages shall be determined without regard to any Defaulting Lenders Revolving Credit Commitment.

S&P means Standard & Poors Financial Services LLC.

Sale and Leaseback Transaction means, with respect to any Person (the obligor), any Contractual Obligation or other arrangement with any other Person (the counterparty) consisting of a lease by such obligor of any property that, directly or indirectly, has been or is to be Sold by the obligor to such counterparty or to any other Person to whom funds have been advanced by such counterparty based on a Lien on, or an assignment of, such property or any obligations of such obligor under such lease.

Scheduled Revolving Credit Termination Date means the 5th anniversary of the Closing Date.

Scheduled Term Loan Maturity Date means the 7th anniversary of the Closing Date.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Second Lien Administrative Agent means JPMorgan Chase Bank, N.A., acting in its capacity as administrative agent for the holders of the loans under the Second Lien Term Facility.

Second Lien Credit Agreement means the Second Lien Credit Agreement dated as of the date hereof among the Borrower, Holdings, JPMorgan Chase Bank, N.A. as Administrative Agent and the lenders from time to time party thereto.

Second Lien Term Facility means the $185 million senior secured second lien term facility under the Second Lien Credit Agreement.

Second Lien Obligations means all Indebtedness of a Loan Party in respect of the Second Lien Term Facility.

Secured Hedging Agreement means any Hedging Agreement that (a) has been entered into with a Secured Hedging Counterparty, (b) in the case of a Hedging Agreement not entered into with or provided or arranged by the Administrative Agent or an Affiliate of the Administrative Agent, is expressly identified as being a Secured Hedging Agreement hereunder in a joint notice from such Loan Party and such Person delivered to the Administrative Agent reasonably promptly after the execution of such Hedging Agreement and (c) meets the requirements of Section 8.1(f).

Secured Hedging Counterparty means (a) a Person who has entered into a Hedging Agreement with a Loan Party if such Hedging Agreement was provided or arranged by the Administrative Agent or an Affiliate of the Administrative Agent, and any assignee of such Person or (b) a Lender or an Affiliate of a Lender who has entered into a Hedging Agreement with a Loan Party (or a Person who was a Lender or an Affiliate of a Lender at the time of execution and delivery of the Hedging Agreement).

Secured Parties means the Lenders, the L/C Issuers, the Administrative Agent, any Secured Hedging Counterparty, each holder of Bank Product Obligations and each other Indemnitee and any other holder of any Obligation of any Loan Party.

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

Security means all Stock, Stock Equivalents, voting trust certificates, bonds, debentures, instruments and other evidence of Indebtedness, whether or not secured, convertible or subordinated, all certificates of interest, share or participation in, all certificates for the acquisition of, and all warrants, options and other rights to acquire, any Security.

Security Documents means the collective reference to the Guaranty and Security Agreement and all other security documents (including any Mortgages) hereafter delivered to the Administrative Agent purporting to grant a Lien on any Property of any Loan Party to secure the Obligations.

Sell means, with respect to any property, to sell, convey, transfer, assign, license, lease or otherwise dispose of, any interest therein or to permit any Person to acquire any such interest (other than as a result of a Property Loss Event), including, in each case, through a Sale and Leaseback Transaction or through a sale, factoring at maturity, collection of or other disposal, with or without recourse, of any notes or accounts receivable. Conjugated forms thereof and the noun Sale have correlative meanings.

Solvent means, with respect to any Person as of any date of determination, that, as of such date, (a) the value of the assets of such Person (both at fair value and present fair saleable value) is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

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

SRAM Cycling Advocacy Donation means a one-time donation by any Group Member to a charitable organization to be formed as a successor to Advocacy SPE in an aggregate amount not to exceed $5,000,000 (it being understood and agreed that such donation shall not occur until after a Qualified IPO).

SRAM-SP2 means SRAM-SP2, Inc.

SRAM-SP2 Subs means SRAM SP-3, LLC and SRAM SP-4, LLC, separately and collectively.

Stock means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting.

Stock Equivalents means all securities convertible into or exchangeable for Stock or any other Stock Equivalent and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any Stock or any other Stock Equivalent, whether or not presently convertible, exchangeable or exercisable (but excluding any debt security that is convertible into, or exchangeable for, Stock or Stock Equivalents).

Subordinated Debt means any Indebtedness that is subordinated to the payment in full of the Obligations on terms and conditions reasonably satisfactory to the Administrative Agent.

Subsidiary means, with respect to any Person, any corporation, partnership, joint venture, limited liability company, association or other entity, the management of which is, directly or indirectly, controlled by, or of which an aggregate of more than 50% of the outstanding Voting Stock is, at the time, owned or controlled directly or indirectly by, such Person or one or more Subsidiaries of such Person; provided, however, that notwithstanding the foregoing, Unrestricted Subsidiaries and Advocacy SPE, unless Holdings otherwise elects, shall not be deemed to be a Subsidiary of Borrower, Holdings, or any Parent Company or a Loan Party or Group Member for purposes of this Agreement or any of the other Loan Documents, shall not be subject to the terms or provisions of this Agreement or any of the other Loan Documents, and shall be excluded from all Financial Statements and the calculation of financial covenants hereunder.

SWDA means the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.).

Swingline Lender means, each in its capacity as Swingline Lender hereunder, JPMorgan Chase Bank, N.A. or, upon the resignation of JPMorgan Chase Bank, N.A. as Administrative Agent hereunder, any Lender (or Affiliate or Approved Fund of any Lender) that agrees, with the approval of the Administrative Agent (or, if there is no such successor Administrative Agent, the Required Lenders) and the Borrower, to act as the Swingline Lender hereunder.

Swingline Request has the meaning specified in Section 2.3(b).

Swing Loan has the meaning specified in Section 2.3(a).

Swingline Exposure means at any time, the sum of the aggregate undrawn amount of all outstanding Swing Loans at such time. The Swingline Exposure of any Revolving Credit Lender at any time shall be its Revolving Percentage of the total Swingline Exposure at such time.

Swingline Participation Amount has the meaning specified in Section 2.3(c)(ii).

Tax Affiliate means, (a) the Borrower and its Subsidiaries and (b) any Affiliate of the Borrower with which the Borrower files or is eligible to file consolidated, combined or unitary Tax returns.

Taxes means any present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

Term Loans has the meaning specified in Section 2.1(b) and, unless the context otherwise requires, shall include any Incremental Term Loans and any Refinanced Term Loans or Replacement Term Loans as contemplated by Section 11.1. For the avoidance of doubt, Term Loans as used in Section 2.21 shall not include any Incremental Term Loans, Refinanced Term Loans or Replacement Term Loans.

Term Loan Commitment means, with respect to each Term Loan Lender, the commitment of such Lender to make Term Loans to the Borrower under the First Lien Term Facility, which commitment is in the amount set forth opposite such Lenders name on Schedule I under the caption Term Loan Commitment, as amended to reflect Assignments and as such amount may be reduced pursuant to this Agreement. The aggregate amount of the Term Loan Commitments on the date hereof equals $605,000,000.

Term Loan Lender means each Lender that has a Term Loan Commitment or that holds a Term Loan.

Term Loan Percentage means, as to any Term Loan Lender at any time, the percentage which such Lenders Term Loan Commitment then constitutes of the aggregate amount of the Term Loan Commitments (or, at any time after the Closing Date, the percentage which the aggregate principal amount of such Lenders Term Loans then outstanding constitutes of the aggregate principal amount of the Term Loans then outstanding) and, if applicable, the percentage which the aggregate principal amount of such Lenders Incremental Term Loans then outstanding constitutes of the aggregate principal amount of the Incremental Term Loans then outstanding).

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Title IV Plan means a pension plan subject to Title IV of ERISA, other than a Multiemployer Plan, to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.

Total Revolving Credit Commitments means, at any time, the aggregate amount of the Revolving Credit Commitments then in effect.

Total Revolving Extensions of Credit means, at any time, the aggregate amount of the Revolving Extensions of Credit of the Revolving Credit Lenders outstanding at such time.

Trademarks means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers and, in each case, all goodwill associated therewith, all registrations and recordations thereof and all applications in connection therewith.

Trade Secrets means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to trade secrets.

Transaction Costs has the meaning specified in Section 7.9.

Type shall refer, as to any Loan, to the nature of such Loan as a ABR Loan or a Eurodollar Loan.

UCC means the Uniform Commercial Code of any applicable jurisdiction and, if the applicable jurisdiction shall not have any Uniform Commercial Code, the Uniform Commercial Code as in effect in the State of New York.

United States or U.S. means the United States of America.

U.S. Tax Certificate has the meaning specified in Section 2.17(f)(ii)(4).

Unrestricted Subsidiary means any Subsidiary of the Borrower designated as such in accordance with the below. It is understood that Unrestricted Subsidiaries shall not be subject to Sections 2, 4, 5, 6, 7, 8 or 9 of this Agreement and shall be disregarded for the purposes of any calculation pursuant to this Agreement relating to financial matters. The Borrower may designate any Subsidiary (other than any Subsidiary previously designated as an Unrestricted Subsidiary) as an Unrestricted Subsidiary or redesignate any Unrestricted Subsidiary as a Subsidiary (it being understood that each such designation as an Unrestricted Subsidiary shall constitute an Investment (valued as the net book value of the Reporting Persons investment therein on the books of the Reporting Person with respect to such Subsidiary at the time of designation) in the non-Group Member subsidiary at the time of such designation) at any time by written notice to the Administrative Agent, provided that (i) both before and after giving effect thereto, no Event of Default or Default shall have occurred and be continuing, (ii) the Borrower would be in compliance with the covenants set forth in Section 5.1 (whether or not such covenants are in effect), in each case, as of the most recently completed Fiscal Quarter ending prior to such designation for which the financial statements and certificates required by Section 6.1(a) or Section 6.1(b) were required to be delivered, and in each case, on a Pro Forma Basis and (iii) such designation shall be subject to compliance with the provisions of Section 8.3. The designation of any Unrestricted Subsidiary as a Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Unrestricted Subsidiary existing at such time.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document U.S. Lender Party means each of the Administrative Agent, each Lender, each L/C Issuer, each SPV and each participant, in each case that is a Domestic Person.

Voting Stock means Stock of any Person having ordinary power to vote in the election of members of the Board of Directors, managers, trustees or other controlling Persons, of such Person (irrespective of whether, at the time, Stock of any other class or classes of such entity shall have or might have voting power by reason of the occurrence of any contingency).

Wholly Owned Subsidiary of any Person means any Subsidiary of such Person, all of the Stock of which (other than nominal holdings and directors qualifying shares) is owned by such Person, either directly or through one or more Wholly Owned Subsidiaries of such Person.

Withdrawal Liability means, at any time, any liability incurred (whether or not assessed) by any ERISA Affiliate and not yet satisfied or paid in full at such time with respect to any Multiemployer Plan pursuant to Section 4201 of ERISA.

Withholding Agent means the relevant Loan Party or the Administrative Agent, as applicable.

Working Capital means, for any Person at any date, its Consolidated Current Assets at such date minus its Consolidated Current Liabilities at such date.

Section 1.2 UCC Terms. The following terms have the meanings given to them in the applicable UCC: commodity account, commodity contract, commodity intermediary, deposit account, entitlement holder, entitlement order, equipment, financial asset, general intangible, goods, instruments, inventory, securities account, securities intermediary and security entitlement.

Section 1.3 Accounting Terms and Principles. (a) GAAP. All accounting determinations required to be made pursuant hereto shall, unless expressly otherwise provided herein, be made in accordance with GAAP. No change in the accounting principles used in the preparation of any Financial Statement hereafter adopted by Borrower shall be given effect if such change would affect a calculation that measures compliance with any provision of Article V or VIII unless the Borrower, the Administrative Agent and the Required Lenders agree to modify such provisions to reflect such changes in GAAP (and the Borrower, the Administrative Agent and the Required Lenders agree to negotiate such modification in good faith as soon as practical as reasonably requested by Borrower or the Administrative Agent) and, unless such provisions are modified, all Financial Statements, Compliance Certificates and similar documents provided hereunder shall be provided together with a reconciliation between the calculations and amounts set forth therein before and after giving effect to such change in GAAP. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to in Article V, Article VIII and elsewhere in this Agreement or the Compliance Certificate shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Loan Party or any Subsidiary of any Loan Party at fair value.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) Pro Forma. All components of financial calculations made to determine compliance with Article V and other financial ratios in accordance with this Agreement, shall be adjusted on a Pro Forma Basis to include or exclude, as the case may be, without duplication, such components of such calculations attributable to any Pro Forma Transaction consummated after the first day of the applicable period of determination and prior to the end of such period, as determined in good faith by the Borrower based on assumptions expressed therein and that were reasonable based on the information available to the Borrower at the time of preparation of the Compliance Certificate setting forth such calculations.

Section 1.4 Payments. The Administrative Agent may set up reasonable standards and procedures (consistent with the standards and procedures used by Administrative Agent with its other customers) to determine or redetermine the equivalent in Dollars of any amount expressed in any currency other than Dollars and otherwise may, but shall not be obligated to, rely on any determination made by any Loan Party or any L/C Issuer. Any such determination or redetermination by the Administrative Agent shall be conclusive and binding for all purposes, absent manifest error. No determination or redetermination by any Secured Party or Loan Party and no other currency conversion shall change or release any obligation of any Loan Party or of any Secured Party (other than the Administrative Agent and its Related Persons) under any Loan Document, each of which agrees to pay separately for any shortfall remaining after any conversion and payment of the amount as converted.

Section 1.5 Interpretation. (a) Certain Terms. Except as set forth in any Loan Document, all accounting terms not specifically defined herein shall be construed in accordance with GAAP (except for the term property, which shall be interpreted as broadly as possible, including, in any case, cash, Securities, other assets, rights under Contractual Obligations and Permits and any right or interest in any property). The terms herein, hereof and similar terms refer to this Agreement as a whole. In the computation of periods of time from a specified date to a later specified date in any Loan Document, the terms from means from and including and the words to and until each mean to but excluding and the word through means to and including. In any other case, the term including when used in any Loan Document means including without limitation. The term documents means all writings, however evidenced and whether in physical or electronic form, including all documents, instruments, agreements, notices, demands, certificates, forms, financial statements, opinions and reports. The term incur means incur, create, make, issue, assume or otherwise become directly or indirectly liable in respect of or responsible for, in each case whether directly or indirectly, and the terms incurrence and incurred and similar derivatives shall have correlative meanings.

(b) Certain References. Unless otherwise expressly indicated, references (i) in this Agreement to an Exhibit, Schedule, Article, Section or clause refer to the appropriate Exhibit or Schedule to, or Article, Section or clause in, this Agreement and (ii) in any Loan Document, to (A) any agreement shall include, without limitation, all exhibits, schedules, appendixes and annexes to such agreement and, unless the prior consent of any Secured Party required therefor is not obtained, any modification to any term of or amendment of such agreement, (B) any statute shall be to such statute as 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 and (C) any time of day shall be a reference to New York time. Titles of articles, sections, clauses, exhibits, schedules and annexes contained in any Loan Document are without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto. Unless otherwise expressly indicated, the meaning of any term defined (including by reference) in any Loan Document shall be equally applicable to both the singular and plural forms of such term.

Section 2.1 The Commitments. (a) Revolving Credit Commitments. Subject to the terms and conditions hereof, each Revolving Credit Lender severally agrees to make revolving credit loans (Revolving Loans) in Dollars to the Borrower from time to time during the Revolving Credit Commitment Period in an aggregate principal amount at any one time outstanding which, when added to such Lenders Revolving Percentage of the sum of (i) the L/C Obligations then outstanding and (ii) the aggregate principal amount of the Swing Loans then outstanding, does not exceed the amount of such Lenders Revolving Credit Commitment. During the Revolving Credit Commitment Period the Borrower may use the Revolving Credit Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Section 2.2 and Section 2.10.

(b) Term Loan Commitments. On the terms and subject to the conditions contained in this Agreement, each Term Loan Lender severally, but not jointly, agrees to make a loan (net of any applicable upfront fees) (each a Term Loan) in Dollars to the Borrower on the Closing Date, in an amount not to exceed such Lenders Term Loan Commitment. Amounts of Term Loans repaid may not be reborrowed. The Term Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Section 2.2 and Section 2.10.

Section 2.2 Borrowing Procedures. (a) Procedure for Term Loan Borrowing. The Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to 11:00 A.M., New York City time, one Business Day prior to the anticipated Closing Date) requesting that the Term Loan Lenders make the Term Loans on the Closing Date and specifying the amount to be borrowed. The Term Loans made on the Closing Date shall initially be ABR Loans. Upon receipt of such notice the Administrative Agent shall promptly notify each Term Loan Lender thereof. Not later than 1:00 P.M., New York City time, on the Closing Date each Term Loan Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the Term Loan or Term Loans to be made by such Lender. The Administrative Agent shall credit the account of the Borrower on the books of such office of the Administrative Agent with the aggregate of the amounts made available to the Administrative Agent by the Term Loan Lenders in immediately available funds.

(b) Procedure for Revolving Loan Borrowing. The Borrower may borrow under the Revolving Credit Commitments during the Revolving Credit Commitment Period on any Business Day, provided that the Borrower shall give the Administrative Agent irrevocable Notice of Borrowing (which notice must be received by the Administrative Agent prior to 11:00 A.M., New York City time, (a) three Business Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing Date, in the case of ABR Loans) (provided that any such notice of a borrowing of ABR Loans under the Revolving Credit Facility to finance payments required by Section 2.4(d) may be given not later than 11:00 A.M., New York City time, on the date of the proposed borrowing), specifying (i) the amount and Type of Revolving Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the case of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor. Each such notice may be made in a writing substantially in the form of Exhibit C (a Notice of Borrowing). Any Revolving Loans made on the Closing Date shall initially be ABR Loans. Each borrowing under the Revolving Credit Commitments shall be in an amount equal to (x) in the case of ABR Loans, $10,000 or a whole multiple

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document thereof (or, if the then aggregate Available Revolving Credit Commitments are less than $10,000, such lesser amount) and (y) in the case of Eurodollar Loans, $1,000,000 or a whole multiple of $250,000 in excess thereof; provided, that the Swingline Lender may request, on behalf of the Borrower, borrowings under the Revolving Credit Commitments that are ABR Loans in other amounts pursuant to Section 2.3. Upon receipt of any such notice from the Borrower, the Administrative Agent shall promptly notify each Revolving Credit Lender thereof. Each Revolving Credit Lender will make the amount of its pro rata share of each borrowing available to the Administrative Agent for the account of the Borrower at the Funding Office prior to 1:00 P.M., New York City time, on the Borrowing Date requested by the Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent crediting the account of the Borrower on the books of such office or by transferring such funds to another account of the Borrower designated by the Borrower in its Notice of Borrowing with the aggregate of the amounts made available to the Administrative Agent by the Revolving Credit Lenders and in like funds as received by the Administrative Agent.

Section 2.3 Swing Loans. (a) Availability. Subject to the terms and conditions hereof, the Swingline Lender agrees to make a portion of the credit otherwise available to the Borrower under the Revolving Credit Commitments from time to time during the Revolving Credit Commitment Period by making swing line loans (Swing Loans) in Dollars to the Borrower; provided that (i) the aggregate principal amount of Swing Loans outstanding at any time shall not exceed the Swingline Commitment then in effect (notwithstanding that the Swing Loans outstanding at any time, when aggregated with the Swingline Lenders other outstanding Revolving Loans, may exceed the Swingline Commitment then in effect) and (ii) the Borrower shall not request, and the Swingline Lender shall not make, any Swing Loan if, after giving effect to the making of such Swing Loan, the aggregate amount of the Available Revolving Credit Commitments would be less than zero. During the Revolving Credit Commitment Period, the Borrower may use the Swingline Commitment by borrowing, repaying and reborrowing, all in accordance with the terms and conditions hereof. Swing Loans shall be ABR Loans only.

(b) Borrowing Procedures. Whenever the Borrower desires that the Swingline Lender make Swing Loans it shall give the Swingline Lender irrevocable telephonic notice confirmed promptly in writing substantially in the form of Exhibit D (a Swingline Request) (which telephonic notice must be received by the Swingline Lender not later than 1:00 P.M., New York City time, on the proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date (which shall be a Business Day during the Revolving Credit Commitment Period). Each borrowing under the Swingline Commitment shall be in an amount equal to $10,000 or a whole multiple of $2,000 in excess thereof. Not later than 3:00 P.M., New York City time, on the Borrowing Date specified in a notice in respect of Swing Loans, the Swingline Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the amount of the Swing Loan to be made by the Swingline Lender. The Administrative Agent shall make the proceeds of such Swing Loan available to the Borrower on such Borrowing Date by depositing such proceeds in the account of the Borrower with the Administrative Agent or in another account of the Borrower designated by the Borrower in its Notice of Borrowing on such Borrowing Date in immediately available funds.

(c) Refinancing Swing Loans. (i) The Swingline Lender, at any time and from time to time in its sole and absolute discretion may, on behalf of the Borrower (which hereby irrevocably directs the Swingline Lender to act on its behalf), on one Business Days notice given by the Swingline Lender no later than 12:00 Noon, New York City time, request each Revolving Credit Lender to

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document make, and each Revolving Credit Lender hereby agrees to make, a Revolving Loan, in an amount equal to such Revolving Credit Lenders Revolving Percentage of the aggregate amount of the Swing Loans (the Refunded Swing Loans) outstanding on the date of such notice, to repay the Swingline Lender. Each Revolving Credit Lender shall make the amount of such Revolving Loan available to the Administrative Agent at the Funding Office in immediately available funds, not later than 10:00 A.M., New York City time, one Business Day after the date of such notice. The proceeds of such Revolving Loans shall be immediately made available by the Administrative Agent to the Swingline Lender for application by the Swingline Lender to the repayment of the Refunded Swing Loans. The Borrower irrevocably authorizes the Swingline Lender to charge the Borrowers accounts with the Administrative Agent (up to the amount available in each such account) in order to immediately pay the amount of such Refunded Swing Loans to the extent amounts received from the Revolving Credit Lenders are not sufficient to repay in full such Refunded Swing Loans. (ii) If prior to the time a Revolving Loan would have otherwise been made pursuant to Section 2.3(c)(i), one of the events described in Section 9.1(e) shall have occurred and be continuing with respect to the Borrower or if for any other reason, as determined by the Swingline Lender in its sole discretion, Revolving Loans may not be made as contemplated by Section 2.3(c)(i), each Revolving Credit Lender shall, on the date such Revolving Loan was to have been made pursuant to the notice referred to in Section 2.3(c)(i), purchase for cash an undivided participating interest in the then outstanding Swing Loans by paying to the Swingline Lender an amount (the Swingline Participation Amount) equal to (i) such Revolving Credit Lenders Revolving Percentage times (ii) the sum of the aggregate principal amount of Swing Loans then outstanding that were to have been repaid with such Revolving Loans. (iii) Whenever, at any time after the Swingline Lender has received from any Revolving Credit Lender such Lenders Swingline Participation Amount, the Swingline Lender receives any payment on account of the Swing Loans, the Swingline Lender will distribute to such Lender its Swingline Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lenders participating interest was outstanding and funded and, in the case of principal and interest payments, to reflect such Lenders pro rata portion of such payment if such payment is not sufficient to pay the principal of and interest on all Swing Loans then due); provided, however, that in the event that such payment received by the Swingline Lender is required to be returned, such Revolving Credit Lender will return to the Swingline Lender any portion thereof previously distributed to it by the Swingline Lender.

(d) Obligation to Fund Absolute. Each Revolving Credit Lenders obligation to make the Loans referred to in Section 2.3(c)(i) and to purchase participating interests pursuant to Section 2.3(c)(ii) shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such Revolving Credit Lender or the Borrower may have against the Swingline Lender, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 3, (iii) any adverse change in the condition (financial or otherwise) of the Borrower, (iv) any breach of this Agreement or any other Loan Document by the Borrower, any other Loan Party or any other Revolving Credit Lender or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 2.4 Letters of Credit. (a) Commitment and Conditions. Subject to the terms and conditions hereof, the L/C Issuer, in reliance on the agreements of the other Revolving Credit Lenders set forth in Section 2.4(c), agrees to issue letters of credit (Letters of Credit) for the account of the Borrower for itself or on behalf of any of its Subsidiaries on any Business Day during the Revolving Credit Commitment Period in such form as may be approved from time to time by the L/C Issuer; provided that the L/C Issuer shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the aggregate amount of the Available Revolving Credit Commitments would be less than zero. Each Letter of Credit shall (i) be denominated in Dollars and (ii) expire no later than the earlier of (x) the first anniversary of its date of issuance unless consented to by the L/C Issuer (in its sole discretion) and (y) the date that is five Business Days prior to the Revolving Credit Termination Date unless consented to by the L/C Issuer (in its sole discretion) or cash collateralized by the Borrower in an amount equal to 105% of the face amount thereof (which cash collateral shall be provided on a date reasonably acceptable to the L/C Issuer), provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above).

The L/C Issuer shall not at any time be obligated to issue any Letter of Credit if such issuance would conflict with, or cause the L/C Issuer or any L/C Participant to exceed any limits imposed by, any applicable Requirements of Law.

(b) Notice of Issuance. The Borrower may from time to time request that the L/C Issuer issue a Letter of Credit by delivering to the L/C Issuer at its address for notices specified herein an Application therefor, completed to the reasonable satisfaction of the L/C Issuer, and such other certificates, documents and other papers and information as the L/C Issuer may reasonably request. Upon receipt of any Application, the L/C Issuer will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby (but in no event shall the L/C Issuer be required to issue any Letter of Credit earlier than three Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by the L/C Issuer and the Borrower. The L/C Issuer shall furnish a copy of such Letter of Credit to the Borrower promptly following the issuance thereof. The L/C Issuer shall promptly furnish to the Administrative Agent, which shall in turn promptly furnish to the Lenders, notice of the issuance of each Letter of Credit (including the amount thereof).

(c) L/C Participations. (i) The L/C Issuer irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the L/C Issuer to issue Letters of Credit, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the L/C Issuer, on the terms and conditions set forth below, for such L/C Participants own account and risk an undivided interest equal to such L/C Participants Revolving Percentage in the L/C Issuers obligations and rights under and in respect of each Letter of Credit and the amount of each draft paid by the L/C Issuer thereunder. Each L/C Participant agrees with the L/C Issuer that, if a draft is paid under any Letter of Credit for which the L/C Issuer is not reimbursed in full by the Borrower in accordance with the terms of this Agreement (or in the event that any reimbursement received by the L/C Issuer shall be required to be returned by it at any time), such L/C Participant shall pay to the L/C Issuer upon demand at the L/C Issuers address for notices specified herein an amount equal to such L/C Participants Revolving Percentage of the amount that is not so reimbursed (or is so returned). Each L/C Participants obligation to pay such amount shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such L/C Participant may have against the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document L/C Issuer, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 5, (iii) any adverse change in the condition (financial or otherwise) of the Borrower, (iv) any breach of this Agreement or any other Loan Document by the Borrower, any other Loan Party or any other L/C Participant or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. (ii) If any amount required to be paid by any L/C Participant to the L/C Issuer pursuant to Section 2.4(c)(i) in respect of any unreimbursed portion of any payment made by the L/C Issuer under any Letter of Credit is paid to the L/C Issuer within three Business Days after the date such payment is due, such L/C Participant shall pay to the L/C Issuer on demand an amount equal to the product of (i) such amount, times (ii) the daily average Federal Funds Effective Rate during the period from and including the date such payment is required to the date on which such payment is immediately available to the L/C Issuer, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. If any such amount required to be paid by any L/C Participant pursuant to Section 2.4(c)(i) is not made available to the L/C Issuer by such L/C Participant within three Business Days after the date such payment is due, the L/C Issuer shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to ABR Loans under the Revolving Facility. A certificate of the L/C Issuer submitted to any L/C Participant with respect to any amounts owing under this Section shall be conclusive in the absence of manifest error. (iii) Whenever, at any time after the L/C Issuer has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with Section 2.4(c)(i), the L/C Issuer receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of Collateral applied thereto by the L/C Issuer), or any payment of interest on account thereof, the L/C Issuer will distribute to such L/C Participant its pro rata share thereof; provided, however, that in the event that any such payment received by the L/C Issuer shall be required to be returned by the L/C Issuer, such L/C Participant shall return to the L/C Issuer the portion thereof previously distributed by the L/C Issuer to it.

(d) Reimbursement Obligations of the Borrower. If any draft is paid under any Letter of Credit, the Borrower shall reimburse the L/C Issuer for the amount of (a) the draft so paid and (b) any Taxes (other than Excluded Taxes), fees, charges or other costs or expenses incurred by the L/C Issuer in connection with such payment, not later than 12:00 Noon, New York City time, on (i) the immediately following Business Day that the Borrower receives notice of such draft, if such notice is received on such day prior to 10:00 A.M., New York City time, or (ii) if clause (i) above does not apply, the second Business Day immediately following the day that the Borrower receives such notice. Each such payment shall be made to the L/C Issuer at its address for notices referred to herein in Dollars and in immediately available funds. Interest shall be payable on any such amounts from the date on which the relevant draft is paid until payment in full at the rate set forth in (x) until the second Business Day next succeeding the date of the relevant notice, Section 2.9(b) and (y) thereafter, Section 2.9(c).

(e) Letter of Credit Payments. If any draft shall be presented for payment under any Letter of Credit, the L/C Issuer shall promptly notify the Borrower of the date and amount thereof. The responsibility of the L/C Issuer to the Borrower in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are substantially in conformity with such Letter of Credit.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (f) Applications. To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Agreement, the provisions of this Agreement shall apply.

(g) Obligations Absolute. The Borrowers obligations under this Section 2 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that the Borrower may have or have had against the L/C Issuer, any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with the L/C Issuer that the L/C Issuer shall not be responsible for, and the Borrowers L/C Reimbursement Obligations under Section 2.4(d) shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee. The L/C Issuer shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the L/C Issuer. The Borrower agrees that any action taken or omitted by the L/C Issuer under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct, shall be binding on the Borrower and shall not result in any liability of the L/C Issuer to the Borrower.

Section 2.5 Reduction and Termination of the Commitments.The Borrower shall have the right, upon not less than three Business Days notice to the Administrative Agent, to terminate the Revolving Credit Commitments or, from time to time, to reduce the amount of the Revolving Credit Commitments; provided that no such termination or reduction of Revolving Credit Commitments shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Loans and Swing Loans made on the effective date thereof, the Total Revolving Extensions of Credit would exceed the Total Revolving Credit Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently the Revolving Credit Commitments then in effect.

Section 2.6 Repayment of Loans. (a) The Borrower promises to repay the entire unpaid principal amount of the Revolving Loans on the Scheduled Revolving Credit Termination Date. The Borrower promises to repay to the Swingline Lender the then unpaid principal amount of each Swing Loan on the earlier of the Revolving Credit Termination Date and the first date after such Swing Loan is made that is the 15th or last day of a calendar month and is at least two Business Days after such Swing Loan is made; provided that on each date that a Revolving Loan is borrowed, the Borrower shall repay all Swing Loans then outstanding.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) The Borrower promises to repay the Term Loans on the Scheduled Term Loan Maturity Date and at the dates and in the amounts set forth below:

DATE AMOUNT September 30, 2011 $1,512,500 December 31, 2011 $1,512,500 March 31, 2012 $1,512,500 June 30, 2012 $1,512,500 September 30, 2012 $1,512,500 December 31, 2012 $1,512,500 March 31, 2013 $1,512,500 June 30, 2013 $1,512,500 September 30, 2013 $1,512,500 December 31, 2013 $1,512,500 March 31, 2014 $1,512,500 June 30, 2014 $1,512,500 September 30, 2014 $1,512,500 December 31, 2014 $1,512,500 March 31, 2015 $1,512,500 June 30, 2015 $1,512,500 September 30, 2015 $1,512,500 December 31, 2015 $1,512,500 March 31, 2016 $1,512,500 June 30, 2016 $1,512,500 September 30, 2016 $1,512,500 December 31, 2016 $1,512,500 March 31, 2017 $1,512,500 June 30, 2017 $1,512,500 September 30, 2017 $1,512,500 December 31, 2017 $1,512,500 March 31, 2018 $1,512,500 June 7, 2018 Remaining principal balance of Term Loan

(c) The Incremental Term Loans of each Incremental Term Lender shall mature in consecutive installments (which shall be no more frequent than quarterly) as specified in the Increased Facility Activation Notice pursuant to which such Incremental Term Loans were made, provided that, prior to the final maturity of the Term Loans, the aggregate amount of such installments for any four consecutive Fiscal Quarters shall not exceed 1% of the aggregate principal amount of such Incremental Term Loans on the date such Loans were first made.

Section 2.7 Optional Prepayments. The Borrower may at any time and from time to time prepay the Loans, in whole or in part, without premium or penalty, upon irrevocable notice delivered to the Administrative Agent no later than 11:00 A.M., New York City time, three Business Days prior thereto, in the case of Eurodollar Loans, and no later than 11:00 A.M., New York City time, one Business Day prior thereto, in the case of ABR Loans, which notice shall specify the date and amount of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document prepayment and whether the prepayment is of Eurodollar Loans or ABR Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.16. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with (except in the case of Revolving Loans that are ABR Loans and Swing Loans) accrued interest to such date on the amount prepaid. Partial prepayments of Term Loans and Revolving Loans shall be in an aggregate principal amount of $500,000 or a whole multiple thereof. Partial prepayments of Swing Loans shall be in an aggregate principal amount of $100,000 or a whole multiple thereof.

All voluntary prepayments of the Term Loans effected (i) with the use of proceeds of Indebtedness (with the primary purpose of refinancing Term Loans at a lower interest rate) incurred by the Borrower from a substantially concurrent incurrence of syndicated term loans for which the total yield calculated including the upfront fees, any interest rate floors and any OID (as defined herein) but excluding any arrangement, underwriting or similar fee paid by the Borrower is lower than the total yield (as so calculated) with respect to the Term Loans, or (ii) pursuant to any repricing amendment in connection with the Term Loans or any refinancing of the Term Loans resulting in the total yield (as so calculated) payable thereon on the date of such amendment being lower than the total yield (as so calculated) with respect to the Term Loans shall be accompanied by a prepayment fee equal to 1.0% of the principal amount prepaid, or in the case of clause (ii) above, 1.0% of the aggregate amount of the Term Loans outstanding immediately prior to such amendment, in each case, if made on or prior to the first anniversary of the Closing Date.

Section 2.8 Mandatory Prepayments. (a) Excess Cash Flow. The Borrower shall pay or cause to be paid to the Administrative Agent, within 5 Business Days after the last date Financial Statements can be delivered pursuant to Section 6.1(c) for Fiscal Year 2012 and each Fiscal Year thereafter, an amount equal to 50% of the Excess Cash Flow for such Fiscal Year; provided, however, that should the Consolidated Leverage Ratio of Borrower on the last day of such Fiscal Year be less than 3.0 to 1.0, such percentage shall be reduced to 25% as to such Fiscal Year; provided; further, that should the Consolidated Leverage Ratio of Borrower on the last day of such Fiscal Year be less than 2.0 to 1.0, such percentage shall be reduced to 0% as to such Fiscal Year; and provided; further, that the amount of any prepayment due pursuant to this Section 2.8(a) shall be reduced, Dollar for Dollar, by the amount of any voluntary prepayment of the Term Loans or Revolving Loans (to the extent accompanied by a permanent reduction of the Revolving Credit Commitment) made by the Borrower, without duplication, during such Fiscal Year or in the subsequent Fiscal Year prior to the delivery of Financial Statements pursuant to Section 6.1(c).

(b) Debt Issuances. If any Indebtedness (excluding any Indebtedness incurred in accordance with Section 8.1) shall be issued or incurred by any Group Member, an amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the date of such issuance or incurrence toward the prepayment of the Term Loans.

(c) Asset Sales and Recovery Events. Upon receipt on or after the Closing Date by Borrower or any of its Subsidiaries of Net Cash Proceeds arising from (i) any Sale by any Group Member of any of its property other than Sales of its own Stock and Sales of property permitted hereunder in reliance upon any of clauses (a) through (e) of Section 8.4 or (ii) any Property Loss Event with respect to any property of any Group Member to the extent resulting, in the aggregate with all other such Property Loss Events, in the receipt by any of them of Net Cash Proceeds in excess of $5,000,000 in any Fiscal Year, the Borrower shall promptly (and in any event within five Business Days of its receipt thereof) prepay the Term Loans in an amount equal to 100% of such Net Cash Proceeds; provided, however, that,

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document upon any such receipt, if no Event of Default shall be continuing at the time of such receipt, any Group Member may make Permitted Reinvestments with such Net Cash Proceeds and the Borrower shall not be required to make or cause such payment to the extent (x) such Net Cash Proceeds are intended to be used to make Permitted Reinvestments and (y) on each Reinvestment Prepayment Date for such Net Cash Proceeds, the Borrower shall pay or cause to be paid to the Administrative Agent an amount equal to the Reinvestment Prepayment Amount applicable to such Reinvestment Prepayment Date and such Net Cash Proceeds.

(d) Amounts to be applied in connection with prepayments of Term Loans pursuant to this Section 2.8 shall be applied in accordance with Section 2.13(b). The application of any prepayment pursuant to this Section 2.8 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Loans under this Section 2.8 (except in the case of Revolving Loans that are ABR Loans and Swing Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.

(e) Excess Outstandings. On any date on which the aggregate principal amount of Revolving Credit Outstandings exceeds the aggregate Revolving Credit Commitments, the Borrower shall pay to the Administrative Agent an amount equal to such excess.

Section 2.9 Interest. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin.

(b) Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus the Applicable Margin.

(c) Payments. (i) If all or a portion of the principal amount of any Loan or L/C Reimbursement Obligation shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to (x) in the case of the Loans, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 2% or (y) in the case of L/C Reimbursement Obligations, the rate applicable to ABR Loans under the Revolving Facility plus 2%, and (ii) if all or a portion of any interest payable on any Loan or L/C Reimbursement Obligation or any commitment fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise) and the applicable cure period shall have expired, such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to ABR Loans under the relevant Facility plus 2% (or, in the case of any such other amounts that do not relate to a particular Facility, the rate then applicable to ABR Loans under the Revolving Facility plus 2%), in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full (as well after as before judgment).

(d) Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to paragraph (c) of this Section shall be payable from time to time on demand.

Section 2.10 Conversion and Continuation Options. (a) The Borrower may elect from time to time to convert Eurodollar Loans to ABR Loans by giving the Administrative Agent prior irrevocable notice in substantially the form of Exhibit E (a Notice of Conversion or Continuation) of such election

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document no later than 11:00 A.M., New York City time, on the Business Day preceding the proposed conversion date, provided that any such conversion of Eurodollar Loans may only be made on the last day of an Interest Period with respect thereto. The Borrower may elect from time to time to convert ABR Loans to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice of such election no later than 11:00 A.M., New York City time, on the third Business Day preceding the proposed conversion date (which notice shall specify the length of the initial Interest Period therefor), provided that no ABR Loan under a particular Facility may be converted into a Eurodollar Loan when any Event of Default has occurred and is continuing and the Administrative Agent or the Majority Facility Lenders in respect of such Facility have determined in its or their sole discretion not to permit such conversions. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

(b) Procedure. Any Eurodollar Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower giving irrevocable notice to the Administrative Agent, in accordance with the applicable provisions of the term Interest Period set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loans, provided that no Eurodollar Loan under a particular Facility may be continued as such when any Event of Default has occurred and is continuing and the Administrative Agent has or the Majority Facility Lenders in respect of such Facility have determined in its or their sole discretion not to permit such continuations, and provided, further, that if the Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso such Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest Period. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

Section 2.11 Fees. (a) Commitment Fees. The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Credit Lender a commitment fee for the period from and including the date hereof to the last day of the Revolving Credit Commitment Period, computed at the Commitment Fee Rate on the average daily amount of the Available Revolving Commitment of such Lender during the period for which payment is made, payable quarterly in arrears on each Fee Payment Date, commencing on the first such date to occur after the date hereof.

(b) Letter of Credit Fees. (i) The Borrower will pay a fee on all outstanding Letters of Credit at a per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans under the Revolving Facility, shared ratably among the Revolving Credit Lenders and payable quarterly in arrears on each Fee Payment Date after the issuance date. In addition, the Borrower shall pay to the L/C Issuer for its own account a fronting fee of 0.25% per annum on the undrawn and unexpired amount of each Letter of Credit, payable quarterly in arrears on each Fee Payment Date after the issuance date. (ii) In addition to the foregoing fees, the Borrower shall pay or reimburse the L/C Issuer for such normal and customary costs and expenses as are incurred or charged by the L/C Issuer in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit. (c) Additional Fees. The Borrower shall pay to the Administrative Agent and its Related Persons its reasonable and customary fees and expenses in connection with any payments made pursuant to Section 2.16(a) (Breakage Costs; Increased Costs; Capital Requirements) and the Borrower agrees to pay to the Administrative Agent the fees in the amounts and on the dates as set forth in any fee agreements with the Administrative Agent and to perform any other obligations contained therein.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 2.12 Limitations on Eurodollar Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall be outstanding at any one time.

Section 2.13 Payments and Computations. (a) Each borrowing by the Borrower from the Lenders hereunder, each payment by the Borrower on account of any commitment fee and any reduction of the Commitments of the Lenders shall be made pro rata according to the respective Term Loan Percentages or Revolving Percentages under the relevant Facility, as the case may be, of the relevant Lenders.

(b) Each payment (including each prepayment) by the Borrower on account of principal of and interest on the Term Loans shall be made pro rata according to the respective outstanding principal amounts of the Term Loans then held by the Term Loan Lenders. The amount of each optional principal prepayment of the Term Loans pursuant to Section 2.7 shall be applied to the remaining installments as directed by the Borrower and the amount of each mandatory prepayment of Term Loans pursuant to Section 2.8 shall be applied to any installments due within 12 months of such prepayment and then shall be applied to reduce the then remaining installments of the Term Loans, and Incremental Term Loans, as the case may be, pro rata based upon the respective then remaining principal amounts thereof. Amounts prepaid on account of the Term Loans may not be reborrowed.

(c) Each payment (including each prepayment) by the Borrower on account of principal of and interest on the Revolving Loans shall be made pro rata according to the respective outstanding principal amounts of the Revolving Loans then held by the Revolving Credit Lenders.

(d) All payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 12:00 Noon, New York City time, on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Funding Office, in Dollars and in immediately available funds. The Administrative Agent shall distribute such payments to each relevant Lender promptly upon receipt in like funds as received, net of any amounts owing by such Lender pursuant to Section 10.6. If any payment hereunder (other than payments on the Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

(e) Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon, at a rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate determined by

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the Administrative Agent in accordance with banking industry rules on interbank compensation, for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this paragraph shall be conclusive in the absence of manifest error. If such Lenders share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days after such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to ABR Loans under the relevant Facility, on demand, from the Borrower.

(f) Unless the Administrative Agent shall have been notified in writing by the Borrower prior to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is making such payment, and the Administrative Agent may, but shall not be required to, in reliance upon such assumption, make available to the Lenders their respective pro rata shares of a corresponding amount. If such payment is not made to the Administrative Agent by the Borrower within three Business Days after such due date, the Administrative Agent shall be entitled to recover, on demand, from each Lender to which any amount which was made available pursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily average Federal Funds Effective Rate. Nothing herein shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrower.

(g) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.3(c)(i), Section 2.3(c)(ii), Section 2.13(e), Section 2.13(f), Section 2.4(c)(i) or Section 10.6, then the Administrative Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender for the benefit of the Administrative Agent, the Swingline Lender or the L/C Issuer to satisfy such Lenders obligations to it under such Section until all such unsatisfied obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender under any such Section, in the case of each of clauses (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.

(h) Computations of Interests and Fees. (i) Interest and fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to ABR Loans the rate of interest on which is calculated on the basis of the Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the ABR or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of the effective date and the amount of each such change in interest rate. (ii) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.9(a).

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 2.14 Inability to Determine Interest Rate. If prior to the first day of any Interest Period: (a) the Administrative Agent shall have determined in good faith (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or (b) the Administrative Agent shall have received notice from the Majority Facility Lenders in respect of the relevant Facility that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period, then the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the relevant Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans under the relevant Facility requested to be made on the first day of such Interest Period shall be made as ABR Loans, (y) any Loans under the relevant Facility that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility shall be converted, on the last day of the then-current Interest Period, to ABR Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans under the relevant Facility shall be made or continued as such, nor shall the Borrower have the right to convert Loans under the relevant Facility to Eurodollar Loans.

Section 2.15 Requirements of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: (i) shall subject any Secured Party to any Taxes (other than (A) Indemnified Taxes, (B) Other Taxes and (C) Excluded Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit (or participations therein) by, or any other acquisition of funds by, any office of such Lender that is not otherwise included in the determination of the Eurodollar Rate; or (iii) shall impose on such Lender any other condition; and the result of any of the foregoing is to increase the cost to such Lender or such other Secured Party, by an amount that such Lender or other Secured Party deems to be material, of making, converting into, continuing or maintaining Loans or issuing or participating in Letters of Credit, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender or such other Secured Party, upon its demand, any additional amounts necessary to compensate such Lender or such other Secured Party for such increased cost or reduced amount receivable. If any Lender or such other Secured Party becomes entitled to claim any additional amounts pursuant to this paragraph, it shall promptly notify the Borrower (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) If any Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lenders or such corporations capital as a consequence of its obligations hereunder or under or in respect of any Letter of Credit to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lenders or such corporations policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a written request therefor, the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such corporation for such reduction.

(c) Notwithstanding anything herein to the contrary, (i) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or by United States or foreign regulatory authorities, in each case pursuant to Basel III, and (ii) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder or issued in connection therewith or in implementation thereof, shall in each case be deemed to be a change in law, regardless of the date enacted, adopted, issued or implemented.

(d) A certificate as to any additional amounts payable pursuant to this Section submitted by any Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. Notwithstanding anything to the contrary in this Section, the Borrower shall not be required to compensate a Lender pursuant to this Section for any amounts incurred more than 180 days prior to the date that such Lender notifies the Borrower of such Lenders intention to claim compensation therefor; provided that, if the circumstances giving rise to such claim have a retroactive effect, then such nine-month period shall be extended to include the period of such retroactive effect. The obligations of the Borrower pursuant to this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

(e) Except as explicitly provided for in Section 2.15(a), this Section 2.15 shall not apply to any costs arising in connection with Taxes, which shall be governed solely by the provisions of Section 2.17.

Section 2.16 Breakage Costs; Increased Costs; Capital Requirements. (a) Breakage Costs. The Borrower shall compensate each Lender, upon demand from such Lender to such Borrower (with copy to the Administrative Agent), for all Liabilities (including, in each case, those incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to prepare to fund, to fund or to maintain the Eurodollar Loans of such Lender to the Borrower but excluding any loss of the Applicable Margin on the relevant Loans) that such Lender may incur (A) to the extent, for any reason other than solely by reason of such Lender being a Defaulting Lender, a proposed Borrowing, conversion into or continuation of Eurodollar Loans does not occur on a date specified therefor in a Notice of Borrowing or a Notice of Conversion or Continuation or in a similar request made by telephone by the Borrower, (B) to the extent any Eurodollar Loan is paid (whether through a scheduled, optional or mandatory prepayment) or converted to a ABR Loan (including because of Section 2.14) on a date that is

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document not the last day of the applicable Interest Period or (C) as a consequence of any failure by the Borrower to repay Eurodollar Loans when required by the terms hereof. For purposes of this clause (a), each Lender shall be deemed to have funded each Eurodollar Loan made by it using a matching deposit or other borrowing in the London interbank market.

(b) Increased Costs. If at any time any Lender or L/C Issuer determines that, after the date hereof, the adoption of, or any change in or in the interpretation, application or administration of, or compliance with, any Requirement of Law (other than any imposition or increase of Eurocurrency Reserve Requirements) from any Governmental Authority shall have the effect of (i) increasing the cost to such Lender of making, funding or maintaining any Eurodollar Loan or to agree to do so or of participating, or agreeing to participate, in extensions of credit, (ii) increasing the cost to such L/C Issuer of Issuing or maintaining any Letter of Credit or of agreeing to do so or (iii) imposing any other cost to such Lender or L/C Issuer with respect to compliance with its obligations under any Loan Document, then, upon demand by such Lender or L/C Issuer (with copy to the Administrative Agent), the Borrower shall pay to the Administrative Agent for the account of such Lender or L/C Issuer amounts sufficient to compensate such Lender or L/C Issuer for such increased cost. This Section 2.16(b) shall not apply to any costs arising in connection with any Taxes, which shall be governed exclusively by the provisions of Section 2.15 or Section 2.17.

(c) Compensation Certificate. Each demand for compensation under this Section 2.16 shall be accompanied by a certificate of the Lender or L/C Issuer claiming such compensation, setting forth the amounts to be paid hereunder, which certificate shall be conclusive, binding and final for all purposes, absent manifest error. In determining such amount, such Lender or L/C Issuer may use any reasonable averaging and attribution methods.

(d) Delay in Requests. Failure or delay on the part of any Lender or L/C Issuer to demand compensation pursuant to this Section 2.16 shall not constitute a waiver of such Lenders or L/C Issuers right to demand such compensation; provided that Borrower shall not be required to compensate a Lender or L/C Issuer pursuant to this Section for any increased costs incurred or reductions suffered more than 180 days prior to the date that such Lender or the L/C Issuer, as the case may be, notifies Borrower of the change giving rise to such increased costs or reductions and of such Lenders or the L/C Issuers intention to claim compensation therefor (except that, if the change giving rise to such increased costs or reductions is retroactive, then the 180 day period referred to above shall be extended to include the period of retroactive effect thereof) .

Section 2.17. Taxes (a) Payments Free and Clear of Taxes. Each payment by any Loan Party under any Loan Document shall be made without withholding for any Taxes, unless such withholding is required by any law. If any Withholding Agent determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes, then such Withholding Agent may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law. If such Taxes are Indemnified Taxes, then the amount payable by such Loan Party shall be increased as necessary so that, net of such withholding (including such withholding applicable to additional amounts payable under this Section), the applicable Secured Party receives the amount it would have received had no such withholding been made.

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

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) As soon as practicable after any payment of any Indemnified Taxes or Other Taxes by any Loan Party to a Governmental Authority, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(d) The Loan Parties shall jointly and severally indemnify each Secured Party for any Indemnified Taxes or Other Taxes that are paid or payable by such Loan Party in connection with any Loan Document (including amounts paid or payable under this Section 2.17) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; provided that the Loan Parties shall not be required to indemnify any Secured Party for any loss, cost or expense (including any penalty or interest) to the extent arising out of any failure by the Administrative Agent or such Secured Party to timely pay or file a return relating to an Indemnified Tax or Other Tax if any Loan Party has paid the amount of such Tax to the Administrative Agent or such Secured Party. The indemnity under this Section 2.17(d) shall be paid within 10 days after the Secured Party delivers to the Borrower a certificate stating the amount of any Indemnified Taxes or Other Taxes so paid or payable by such Secured Party and describing the basis for the indemnification claim. Such certificate shall be conclusive of the amount so paid or payable absent manifest error. Such Secured Party shall deliver a copy of such certificate to the Administrative Agent.

(e) Each Lender shall severally indemnify the Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes or Other Taxes, only to the extent that the Loan Parties have not already indemnified the Administrative Agent for such Indemnified Taxes or Other Taxes and without limiting the obligation of the Loan Parties to do so) attributable to such Lender that are paid or payable by the Administrative Agent in connection with any Loan Document and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The indemnity under this Section 2.17(e) shall be paid within 10 days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the Administrative Agent. Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

(f) (i) Any Lender that is entitled to an exemption from, or reduction of, any applicable withholding Tax with respect to any payments under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without, or at a reduced rate of, withholding. In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to any withholding (including backup withholding) or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.17(f)(ii)(1) through Section 2.17(f)(ii)(5) below) shall not be required if in the Lenders judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense (or, in the case of a change in a Requirement of Law, any incremental material unreimbursed cost or expense) or would materially prejudice the legal or commercial position of such Lender. Upon the reasonable request of such Borrower or the Administrative Agent, any Lender shall update any form or certification previously delivered pursuant to this Section 2.17(f). If any form or certification previously delivered pursuant to this Section 2.17(f) expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall promptly (and in any event within 10 days after such expiration, obsolescence or inaccuracy) notify such Borrower and the Administrative Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (ii) Without limiting the generality of the foregoing, if the Borrower is a Domestic Person, any Lender with respect to such Borrower shall, if it is legally eligible to do so, deliver to such Borrower and the Administrative Agent (in such number of copies reasonably requested by such Borrower and the Administrative Agent) on or prior to the date on which such Lender becomes a party hereto, duly completed and executed copies of whichever of the following is applicable: (1) in the case of a U.S. Lender Party, IRS Form W-9 certifying that such U.S. Lender Party is exempt from U.S. federal backup withholding Tax; (2) in the case of a Non-U.S. Lender Party claiming the benefits of an income tax treaty to which the United States is a party (1) with respect to payments of interest under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the interest article of such income tax treaty and (2) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the business profits or other income article of such income tax treaty; (3) in the case of a Non-U.S. Lender Party for whom payments under any Loan Document constitute income that is effectively connected with such Non-U.S. Lender Partys conduct of a trade or business in the United States, IRS Form W-8ECI (4) in the case of a Non-U.S. Lender Party claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code both (1) IRS Form W-8BEN and (2) a certificate substantially in the form of Exhibit L (a U.S. Tax Certificate) to the effect that such Non-U.S. Lender Party is not (a) a bank within the meaning of Section 881(c)(3)(A) of the Code, (b) a 10 percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, (c) a controlled foreign corporation described in Section 881(c)(3)(C) of the Code and (d) conducting a trade or business in the United States with which the relevant interest payments are effectively connected; (5) in the case of a Non-U.S. Lender that is not the beneficial owner of payments made under this Agreement (including a partnership or a participating Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms prescribed in clauses (1), (2), (3), (4) and (6) of this paragraph (f)(ii) that would be required of each such beneficial owner or partner of such partnership if such beneficial owner or partner were a Non-U.S. Lender Party; provided, however, that if the Non-U.S. Lender Party is a partnership and one or more of its partners are claiming the exemption for portfolio interest under Section 881(c) of the Code, such Non-U.S. Lender Party may provide a U.S. Tax Certificate on behalf of such partners; or

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (6) any other form prescribed by law as a basis for claiming exemption from, or a reduction of, U.S. federal withholding Tax together with such supplementary documentation necessary to enable the Borrower or the Administrative Agent to determine the amount of Tax (if any) required by law to be withheld. (iii) If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Withholding Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Withholding Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Withholding Agent as may be necessary for the Withholding Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lenders obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.17(f)(ii), FATCA shall include any amendments made to FATCA after the date of this Agreement.

(g) If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.17 (including additional amounts paid pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 2.17 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid to such indemnifying party pursuant to the previous sentence (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.17(g), in no event will any indemnified party be required to pay any amount to any indemnifying party pursuant to this Section 2.17(g) if such payment would place such indemnified party in a less favorable position (on a net after-Tax basis) than such indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This Section 2.17(g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the indemnifying party or any other Person.

Section 2.18 Replacement of Lenders. The Borrower shall be permitted to replace any Lender that (a) requests reimbursement for amounts owing pursuant to Section 2.15, Section 2.16 (other than break-funding losses) or Section 2.17, (b) becomes a Defaulting Lender, or (c) does not consent to any proposed amendment, supplement, modification, consent or waiver of any provision of this Agreement or any other Loan Document that requires the consent of each of the Lenders or each of the Lenders affected thereby (so long as the consent of the Required Lenders has been obtained), with a replacement financial institution; provided that (i) such replacement does not conflict with any Requirement of Law, (ii) no Event of Default shall have occurred and be continuing at the time of such replacement, (iii) prior to any such replacement, such Lender shall have taken no action under Section 2.21 so as to eliminate the continued need for payment of amounts owing pursuant to Section 2.15, Section 2.16 or Section 2.17, (iv) the replacement financial institution shall purchase, at par, all Loans and other amounts owing to such replaced Lender on or prior to the date of replacement, (v) the Borrower

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document shall be liable to such replaced Lender under Section 2.16 if any Eurodollar Loan owing to such replaced Lender shall be purchased other than on the last day of the Interest Period relating thereto, (vi) the replacement financial institution shall be reasonably satisfactory to the Administrative Agent to the extent the assignment would require such consent under Section 11.2 (and any existing Lender shall be deemed to be satisfactory to Administrative Agent), (vii) the replaced Lender shall be obligated to make such replacement in accordance with the provisions of Section 11.2 (provided that the Borrower shall be obligated to pay the registration and processing fee referred to therein), (viii) until such time as such replacement shall be consummated, the Borrower shall pay all additional amounts (if any) required pursuant to Section 2.15, Section 2.16 or Section 2.17, as the case may be, and (ix) any such replacement shall not be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender.

Section 2.19 Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a) fees shall cease to accrue on the unfunded portion of the Revolving Credit Commitment of such Defaulting Lender pursuant to Section 2.11(a);

(b) the Revolving Credit Commitment and Revolving Extensions of Credit of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 11.1); provided, that this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender affected thereby;

(c) if any Swingline Exposure or L/C Exposure exists at the time such Lender becomes a Defaulting Lender then: (i) all or any part of the Swingline Exposure and L/C Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Revolving Percentages but only to the extent the sum of all non-Defaulting Lenders Revolving Extensions of Credit plus such Defaulting Lenders Swingline Exposure and L/C Exposure does not exceed the total of all non-Defaulting Lenders Revolving Credit Commitments; (ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize for the benefit of the L/C Issuer only the Borrowers obligations corresponding to such Defaulting Lenders L/C Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 9.1 for so long as such L/C Exposure is outstanding; (iii) if the Borrower cash collateralizes any portion of such Defaulting Lenders L/C Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.11(b)(i) with respect to such Defaulting Lenders L/C Exposure during the period such Defaulting Lenders L/C Exposure is cash collateralized;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (iv) if the L/C Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 2.11(a) and Section 2.11(b)(i) shall be adjusted in accordance with such non-Defaulting Lenders Revolving Percentages; and (v) if all or any portion of such Defaulting Lenders L/C Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Borrower, the L/C Issuer or any other Lender hereunder, all fees payable under Section 2.11(b)(i) with respect to such Defaulting Lenders L/C Exposure shall be payable to the L/C Issuer until and to the extent that such L/C Exposure is reallocated and/or cash collateralized; and

(d) so long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swing Loan and the L/C Issuer shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure and the Defaulting Lenders then outstanding L/C Exposure will be 100% covered by the Revolving Credit Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.19(c), and participating interests in any newly made Swing Loan or any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.19(c)(i) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event with respect to a parent company of any Lender shall occur following the date hereof and for so long as such event shall continue or (ii) the Swingline Lender or the L/C Issuer has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swing Loan and the L/C Issuer shall not be required to issue, amend or increase any Letter of Credit, unless the Swingline Lender or the L/C Issuer, as the case may be, shall have entered into arrangements with the Borrower or such Lender, satisfactory to the Swingline Lender or the L/C Issuer, as the case may be, to defease any risk to it in respect of such Lender hereunder, and the Issuing Lender agrees that cash collateral as contemplated by the preceding paragraph shall be sufficient to defease such risk if received by a date reasonably acceptable to the L/C Issuer (determined in its sole discretion).

In the event that the Administrative Agent, the Borrower, the Swingline Lender and the L/C Issuer each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and L/C Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lenders Revolving Credit Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swing Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Revolving Percentage.

Section 2.20 Change of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.15 or Section 2.17 with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event with the object of avoiding the consequences of such event; provided, that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending offices to suffer no economic, legal or regulatory disadvantage, and provided, further, that nothing in this Section shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 2.15 or Section 2.17.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 2.21 Incremental Facilities. (a) The Borrower and any one or more Lenders (including New Lenders) may from time to time agree that such Lenders shall make one or more new term loan commitments, request to add additional Term Loans or add one or more additional tranches of term loans (the Incremental Term Loans) or one or more increases in the Revolving Credit Commitments (the Incremental Revolving Commitments; each such increase or tranche, an Incremental Facility) in an aggregate amount not in excess of $75,000,000, by executing and delivering to the Administrative Agents an Increased Facility Activation Notice specifying (i) the amount of such increase and the Facility or Facilities involved, (ii) the applicable Incremental Facility Closing Date and (iii) in the case of Incremental Term Loans, (x) the applicable Incremental Term Maturity Date, (y) the amortization schedule for such Incremental Term Loans, which shall comply with Section 2.6(c), and (z) the Applicable Margin for such Incremental Term Loans; provided, that any Lender offered or approached to provide all or a portion of any Incremental Term Loans or Incremental Revolving Commitments may elect or decline, in its sole discretion, to provide the same. Such Incremental Term Loans or additional or Incremental Revolving Commitments shall become effective as of such Incremental Facility Closing Date; provided, that (1) no Default or Event of Default shall exist on such Incremental Facility Closing Date before or after giving effect to such Incremental Term Loans or Incremental Revolving Commitments or Revolving Loans, in respect of any additional or Incremental Revolving Commitments, as the case may be, pursuant thereto and after giving effect to any Permitted Acquisition consummated in accordance therewith; (2) on a Pro Forma Basis after giving effect to the incurrence of any such Incremental Facility (assuming, in the case of Incremental Revolving Commitments, the full drawing under the Revolving Facility and after giving effect to other permitted pro forma adjustment events and any permanent repayment of Indebtedness after the beginning of the relevant determination period but prior to or simultaneous with such borrowing), the Consolidated Senior Secured Leverage Ratio shall not exceed 3.50 to 1.00; (3) the proceeds of any Incremental Term Loans shall be used for general corporate purposes of the Borrower and its Subsidiaries (including Permitted Acquisitions and permitted Investments); (4) shall rank pari passu or junior in right of payment and security with the Obligations in respect of the Revolving Credit Commitments and the other outstanding Term Loans pursuant to documentation reasonably satisfactory to the Administrative Agent; (5) any Incremental Term Loans shall share ratably in any mandatory prepayments of the existing Term Loans as set forth in this Agreement; (6) in the case of any Incremental Term Loans, the maturity date thereof shall not be earlier than the Scheduled Term Loan Maturity Date and the weighted average life to maturity shall be equal to or greater than the weighted average life to maturity of the Term Loans; (7) in the case of any Incremental Term Loans, all terms (except as otherwise set forth in the applicable Increased Facility Activation Notice (including, without limitation, those related to the pricing of the Incremental Term Loans)) and documentation with respect to any Incremental Term Loans which differ from those with respect to the Term Loans shall be reasonably satisfactory to the Administrative Agent; provided, that if the total yield (calculated for both the Incremental Term Loans and the Term Loans, including the upfront fees, any interest rate floors and any OID (as defined below but excluding any arrangement, underwriting or similar fee paid by the Borrower)) in respect of any Incremental Term Loans exceeds the total yield by more than 0.50% for the existing Term Loans (it being understood that any such increase may take the form of original issue discount (OID), with OID being equated to the interest rates in a manner determined by the Administrative Agent based on an assumed four-year life to maturity), the Applicable Margin for the Term Loans shall be increased so that the total yield in respect of such Incremental Term Loans minus 0.50% is no higher than the total yield for the existing Term Loans; (8) in the case of any Incremental Revolving Commitments, such Incremental Revolving Commitments shall have the same terms and conditions as are applicable to the Revolving Commitments; (9) the representations and warranties under Article IV shall be true and correct in all material respects

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document immediately prior to, and after giving effect to such Incremental Term Loans or Incremental Revolving Commitments and (10) the Borrower shall deliver or cause to be delivered any customary legal opinions or other documents reasonably requested by Administrative Agent in connection with any such transaction, including any supplements or amendments to the Security Documents providing for such Incremental Term Loans or Incremental Revolving Commitments and the extensions of credit thereunder to be secured thereby. Each tranche of Incremental Term Loans and Incremental Revolving Commitments shall be in an integral multiple of $1,000,000 and be in an aggregate principal amount that is not less than $25,000,000 in case of Incremental Term Loans or $5,000,000 in case of Incremental Revolving Commitments (or in each case such lesser minimum amount approved by the Administrative Agent), provided that such amount may be less than the applicable minimum amount if such amount represents all the remaining availability under the Incremental Amount set forth above.

(b) Each notice from the Borrower pursuant to this Section shall set forth the requested amount and proposed terms of the relevant Incremental Term Loans and/or Incremental Revolving Commitments. Any New Lender that elects to extend Incremental Term Loans or Incremental Revolving Commitments shall be reasonably satisfactory to the Borrower and the Administrative Agent and, if not already a Lender, shall become a Lender under this Agreement pursuant to an amendment (an Incremental Facility Amendment) and a New Lender Supplement (each, a New Lender Supplement), substantially in the form of Exhibit I, whereupon such bank, financial institution or other entity (a New Lender) shall become a Lender for all purposes and to the same extent as if originally a party hereto and shall be bound by and entitled to the benefits of this Agreement and, as appropriate, the other Loan Documents, executed by Parent, the Borrower, such New Lender and the Administrative Agent. No Incremental Facility Amendment shall require the consent of any Lenders other than the New Lenders with respect to such Incremental Facility Amendment. No Lender shall be obligated to provide any Incremental Term Loans or Incremental Revolving Commitments, unless it so agrees. Commitments in respect of any Incremental Term Loans or Incremental Revolving Commitments shall become Commitments under this Agreement. An Incremental Facility Amendment may, without the consent of any other Lenders, effect such amendments to any Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section (including to provide for class voting provisions applicable to the New Lenders on terms comparable to the provisions of Section 11.1). The effectiveness of any Incremental Facility Amendment shall, unless otherwise agreed to by the Administrative Agent and the New Lenders, be subject to the satisfaction on the date thereof (each, an Incremental Facility Closing Date) of each of the conditions set forth in Section 3.2 (it being understood that all references to the date of making any extension of credit in Section 3.2 shall be deemed to refer to the Incremental Facility Closing Date). The proceeds of any Incremental Term Loans will be used for general corporate purposes (including financing Permitted Acquisitions).

(c) Unless otherwise agreed by the Administrative Agent, upon each increase in the Revolving Credit Commitments pursuant to this Section, each Revolving Credit Lender immediately prior to such increase will automatically and without further act be deemed to have assigned to each Lender providing a portion of the Incremental Revolving Commitment (each a Incremental Revolving Lender) in respect of such increase, and each such Incremental Revolving Lender will automatically and without further act be deemed to have assumed, a portion of such Revolving Credit Lenders participations hereunder in outstanding Letters of Credit and Swingline Loans such that, after giving effect to each such deemed assignment and assumption of participations, the percentage of the aggregate outstanding (i) participations hereunder in Letters of Credit and (ii) participations hereunder in Swingline Loans held by each Revolving Lender (including each such Incremental Revolving Lender) will equal the percentage of the aggregate Revolving Credit Commitments of all Revolving Credit Lenders represented by such Revolving Credit Lenders Revolving Credit Commitment. The Administrative Agent and the Lenders hereby agree that the minimum borrowing, pro rata borrowing and pro rata payment requirements contained elsewhere in this Agreement shall not apply to the transactions effected pursuant to this Section.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) Notwithstanding anything to the contrary in this Agreement, each of the parties hereto hereby agrees that, on each Increased Facility Activation Date, this Agreement shall be amended to the extent (but only to the extent) necessary to reflect the existence and terms of the Incremental Term Loans evidenced thereby. Any such deemed amendment may be effected in writing by the Administrative Agent with the Borrowers consent (not to be unreasonably withheld) and furnished to the other parties hereto.

Section 2.22 Extensions of Term Loans and Revolving Credit Commitments Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers (each, an Extension Offer) made from time to time by the Borrower to all Lenders of Term Loans with a like maturity date or Revolving Credit Commitments with a like maturity date, in each case on a pro rata basis (based on the aggregate outstanding principal amount of the respective Term Loans or Revolving Credit Commitments with a like maturity date, as the case may be) and on the same terms to each such Lender, the Borrower is hereby permitted to consummate from time to time transactions with individual Lenders that accept in their sole discretion the terms contained in such Extension Offers to extend the maturity date of each such Lenders Term Loans and/or Revolving Credit Commitments and otherwise modify the terms of such Term Loans and/or Revolving Credit Commitments pursuant to the terms of the relevant Extension Offer (including, without limitation, by increasing the interest rate or fees payable in respect of such Term Loans and/or Revolving Credit Commitments (and related outstandings) and/or modifying the amortization schedule in respect of such Lenders Term Loans) (each, an Extension, and each group of Term Loans or Revolving Credit Commitments, as applicable, in each case as so extended, as well as the original Term Loans and the original Revolving Credit Commitments (in each case not so extended), being a tranche; any Extended Term Loans shall constitute a separate tranche of Term Loans from the tranche of Term Loans from which they were converted, and any Extended Revolving Credit Commitments shall constitute a separate tranche of Revolving Credit Commitments from the tranche of Revolving Credit Commitments from which they were converted), so long as the following terms are satisfied: (i) no Default or Event of Default shall have occurred and be continuing at the time the offering document in respect of an Extension Offer is delivered to the Lenders, (ii) except as to interest rates, fees and final maturity (which shall be set forth in the relevant Extension Offer), the Revolving Credit Commitment of any Revolving Credit Lender that agrees to an Extension with respect to such Revolving Credit Commitment extended pursuant to an Extension (an Extended Revolving Credit Commitment), and the related outstandings, shall be a Revolving Credit Commitment (or related outstandings, as the case may be) with the same terms as the original Revolving Credit Commitments (and related outstandings); provided that (1) the borrowing and repayment (except for (A) payments of interest and fees at different rates on Extended Revolving Credit Commitments (and related outstandings), (B) repayments required upon the maturity date of the non-extended Revolving Credit Commitments and (C) repayment made in connection with a permanent repayment and termination of non- extended Revolving Credit Commitments) of Loans with respect to Extended Revolving Credit Commitments after the applicable Extension date shall be made on a pro rata basis with all other Revolving Credit Commitments, (2) the permanent repayment of Revolving Credit Loans with respect to, and termination of, Extended Revolving Credit Commitments after the applicable Extension date shall be made on a pro rata basis with all other Revolving Credit Commitments, except that the Borrower shall be permitted to permanently repay and terminate commitments of any such Class of Lenders on a better than a pro rata basis as compared to any other Class of Lenders with a later maturity date than such Class and (3) assignments and participations of Extended Revolving Credit Commitments and extended Revolving Credit Loans

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document shall be governed by the same assignment and participation provisions applicable to Revolving Credit Commitments and Revolving Credit Loans and (4) at no time shall there be Revolving Credit Commitments hereunder (including Extended Revolving Credit Commitments and any original Revolving Credit Commitments) which have more than two different maturity dates, (iii) except as to interest rates, fees, amortization, final maturity date, premium, required prepayment dates and participation in prepayments (which shall, subject to immediately succeeding clauses (iv), (v) and (vi), be set forth in the relevant Extension Offer), the Term Loans of any Term Lender that agrees to an Extension with respect to such Term Loans (an Extending Term Lender) extended pursuant to any Extension (Extended Term Loans) shall have the same terms as the tranche of Term Loans subject to such Extension Offer, (iv) the final maturity date of any Extended Term Loans shall be no earlier than the Latest Term Maturity Date, (v) the Weighted Average Life to Maturity of any Extended Term Loans shall be no less than 180 days longer than the remaining Weighted Average Life to Maturity of the Class extended thereby, (vi) any Extended Term Loans may participate on a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in any voluntary or mandatory repayments or prepayments hereunder, in each case as specified in the respective Extension Offer (and any such mandatory prepayment not accepted by the applicable Extending Term Lenders shall be applied to the non-extended Term Loans of the Class being extended), (vii) if the aggregate principal amount of Term Loans (calculated on the face amount thereof) or Revolving Credit Commitments, as the case may be, in respect of which Term Lenders or Revolving Credit Lenders, as the case may be, shall have accepted the relevant Extension Offer shall exceed the maximum aggregate principal amount of Term Loans or Revolving Credit Commitments, as the case may be, offered to be extended by the Borrower pursuant to such Extension Offer, then the Term Loans or Revolving Credit Loans, as the case may be, of such Term Lenders or Revolving Credit Lenders, as the case may be, shall be extended ratably up to such maximum amount based on the respective principal amounts (but not to exceed actual holdings of record) with respect to which such Term Lenders or Revolving Credit Lenders, as the case may be, have accepted such Extension Offer, (viii) all documentation in respect of such Extension shall be consistent with the foregoing and (ix) any applicable Minimum Extension Condition shall be satisfied unless waived by the Borrower.

(b) With respect to all Extensions consummated by the Borrower pursuant to this Section, (i) such Extensions shall not constitute voluntary or mandatory payments or prepayments for purposes of Section 2.22 and (ii) each Extension Offer shall specify the minimum amount of Term Loans or Revolving Credit Commitments to be tendered, which shall be with respect to Term Loans of a Class an integral multiple of $1,000,000 and an aggregate principal amount that is not less than $50,000,000 (or such lesser minimum amount agreed to by the Administrative Agent and the Borrower) and with respect to the Revolving Credit Commitments a minimum amount approved by the Administrative Agent (a Minimum Extension Condition). The Administrative Agent and the Lenders hereby consent to the transactions contemplated by this Section (including, for the avoidance of doubt, payment of any interest, fees or premium in respect of any Extended Term Loans and/or Extended Revolving Credit Commitments on the such terms as may be set forth in the relevant Extension Offer) and hereby waive the requirements of any provision of this Agreement (including, without limitation, Sections 2.7, Section 2.8 and Section 2.13) or any other Loan Document that may otherwise prohibit any such Extension or any other transaction contemplated by this Section.

(c) The consent of the Administrative Agent shall be required to effectuate any Extension. No consent of any Lender shall be required to effectuate any Extension, other than (A) the consent of each Lender agreeing to such Extension with respect to one or more of its Term Loans and/or Revolving Credit Commitments (or a portion thereof) and (B) with respect to any Extension of the Revolving Credit Commitments, the consent of the Issuing Bank and Swingline Lender, which consent shall not be unreasonably withheld or delayed. All Extended Term Loans, Extended Revolving Credit

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Commitments and all obligations in respect thereof shall be Obligations under this Agreement and the other Loan Documents that are secured by the Collateral on a pari passu basis with all other applicable Obligations under this Agreement and the other Loan Documents. The Lenders hereby irrevocably authorize the Administrative Agent to enter into amendments to this Agreement and the other Loan Documents (an Extension Amendment) with the Borrower as may be necessary in order to establish new tranches or sub-tranches in respect of Revolving Credit Commitments or Term Loans so extended and such technical amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrower in connection with the establishment of such new tranches or sub-tranches, in each case on terms consistent with this Section. In addition, if so provided in such amendment and with the consent of the Issuing Banks, participations in Letters of Credit expiring on or after the Maturity Date in respect of the Revolving Credit Facility shall be re-allocated from Lenders holding Revolving Credit Commitments to Lenders holding Extended Revolving Credit Commitments in accordance with the terms of such amendment; provided, however, that such participation interests shall, upon receipt thereof by the relevant Lenders holding Revolving Credit Commitments, be deemed to be participation interests in respect of such Revolving Credit Commitments and the terms of such participation interests (including, without limitation, the commission applicable thereto) shall be adjusted accordingly. Without limiting the foregoing, in connection with any Extensions the respective Loan Parties shall (at their expense) amend (and the Administrative Agent is hereby directed to amend) any Mortgage that has a maturity date prior to the then Latest Term Maturity Date so that such maturity date is extended to the then Latest Term Maturity Date (or such later date as may be advised by local counsel to the Administrative Agent).

(d) In connection with any Extension, the Borrower shall provide the Administrative Agent at least five Business Days (or such shorter period as may be agreed by the Administrative Agent) prior written notice thereof, and shall agree to such procedures (including, without limitation, regarding timing, rounding and other adjustments and to ensure reasonable administrative management of the credit facilities hereunder after such Extension), if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably to accomplish the purposes of this Section.

ARTICLE 3 CONDITIONS TO LOANS AND LETTERS OF CREDIT

Section 3.1 Conditions Precedent to Initial Loans and Letters of Credit. The obligation of each Lender to make any Loan on the Closing Date and the obligation of each L/C Issuer to Issue any Letter of Credit on the Closing Date is subject to the satisfaction or due waiver of each of the following conditions precedent:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (iii) the Intercreditor Agreement, executed and delivered by Holdings, the Borrower, the Administrative Agent and the Second Lien Administrative Agent; (iv) duly executed favorable opinions of counsel to the Loan Parties in New York, Delaware and Indiana each addressed to the Administrative Agent, the L/C Issuers and the Lenders and addressing such matters as the Administrative Agent may reasonably request; (v) a copy of each Constituent Document of each Loan Party that is on file with any Governmental Authority in any jurisdiction, certified (where available) as of a recent date by such Governmental Authority, together with, if applicable, certificates (where available) attesting to the good standing of such Loan Party in the jurisdiction of its organization; (vi) a certificate of the secretary or other officer of each Loan Party in charge of maintaining books and records of such Loan Party certifying as to (A) the names and signatures of each officer of such Loan Party authorized to execute and deliver any Loan Document, (B) the Constituent Documents of such Loan Party attached to such certificate are complete and correct copies of such Constituent Documents as in effect on the date of such certification (or, for any such Constituent Document delivered pursuant to clause (v) above, that there have been no changes from such Constituent Document so delivered) and (C) the resolutions of such Loan Partys Board of Directors approving and authorizing the execution, delivery and performance of each Loan Document to which such Loan Party is a party; and (vii) a certificate of a Responsible Officer of the Borrower to the effect that (A) each condition set forth in Section 3.2(b) has been satisfied, (B) both the Loan Parties taken as a whole and the Borrower are Solvent after giving effect to the initial Loans and Letters of Credit, the consummation of the Related Transactions, the application of the proceeds thereof in accordance with Section 7.9 and the payment of all estimated legal, accounting and other fees and expenses related hereto and thereto, (C) attached thereto are complete and correct copies of each principal document relating to the Equity Redemption requested by the Administrative Agent and (D) the consummation of the Related Transactions and the funding of the initial Loans hereunder and the use of proceeds thereof will not constitute a default (or any event which with due notice or lapse of time or both will be a default) under any material Contractual Obligation of Borrower or any of its Subsidiaries the default under which could reasonably be expected to have a Material Adverse Effect.

(b) Fee and Expenses. The Lenders and the Administrative Agent shall have received all fees required to be paid pursuant to the Fee Letter and hereunder, and the Administrative Agent shall have received payment for all of its reasonable and actual expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel), on or before the Closing Date. All such amounts will be paid with proceeds of Loans made on the Closing Date and will be reflected in the funding instructions given by the Borrower to the Administrative Agent on or before the Closing Date.

(c) Consents. Each Group Member shall have received all consents and authorizations required pursuant to any material Contractual Obligation with any other Person and shall have obtained all material Permits of, and effected all notices to and filings with, any Governmental Authority, in each case, as may be necessary in connection with the consummation of the transactions contemplated in any Loan Document or Related Document (including the Related Transactions).

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) Ratings. The Borrower shall have obtained a corporate credit rating and corporate family rating, respectively, for itself and its Subsidiaries from Moodys and S&P.

(e) Existing Credit Agreement; Indebtedness. The Administrative Agent shall have received evidence reasonably satisfactory to it that (i) the Existing Credit Agreement shall have been terminated and all amounts thereunder shall have been paid in full and satisfactory arrangements shall have been made for the termination of any Liens granted in connection therewith, as evidenced by a payoff letter duly executed and delivered by the Borrower and the lenders thereunder and (ii) after giving effect to the Related Transactions, neither the Borrower nor any of its Subsidiaries have any material Indebtedness other than the First Lien Credit Facilities and the Second Lien Term Facility or as otherwise disclosed in the Form S-1.

(f) Financial Statements. The Lenders shall have received the financial statements described in Section 4.4 and the Pro Forma Balance Sheet.

(g) Lien Searches. The Administrative Agent shall have received the results of a recent lien search in each of the jurisdictions in which UCC financing statements or other filings or recordations should be made to evidence or perfect security interests in all Collateral of the Loan Parties, and such search shall reveal no liens on any of the Collateral of the Loan Parties, except for Liens permitted by Section 8.2 or liens to be discharged on or prior to the Closing Date.

(h) Filings, Registrations and Recordings. Each document (including any UCC financing statement) required by the Security Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Lenders, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 8.2), shall be in proper form for filing, registration or recordation, to the extent such perfection can be achieved by the filing of a UCC financing statement.

(i) Patriot Act. The Lenders shall have received from each of the Loan Parties documentation and other information required by regulatory authorities under applicable know your customer and anti-money laundering rules and regulations, including, without limitation, the Patriot Act.

(j) No Material Adverse Effect. Since December 31, 2010, there have been no events, circumstances, developments or other changes in facts that would, in the aggregate, could reasonably be expected to have a Material Adverse Effect.

Section 3.2 Conditions Precedent to Each Loan and Letter of Credit. The obligation of each Lender on any date to make any Loan (including the Term Loan on the Closing Date) and of each L/C Issuer on any date (other than the Closing Date) to Issue any Letter of Credit is subject to the satisfaction of each of the following conditions precedent:

(a) Request. The Administrative Agent (and, in the case of any Issuance, the relevant L/C Issuer) shall have received, to the extent required by Article II, a written, timely and duly executed and completed Notice of Borrowing, Swingline Request or, as the case may be, an Application for Letters of Credit.

(b) Representations and Warranties; No Defaults. The following statements shall be true on such date, both before and after giving effect to such Loan or, as applicable, such Issuance: (i) the representations and warranties set forth in any Loan Document shall be true and correct (A) if such date is

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the Closing Date, in all material respects (except to the extent already qualified by materiality therein) on and as of such date and (B) otherwise, in all material respects on and as of such date or, to the extent such representations and warranties expressly relate to an earlier date, on and as of such earlier date and (ii) no Default shall be continuing.

The representations and warranties set forth in any Notice of Borrowing, Swingline Request or Application (or any certificate delivered in connection therewith) shall be deemed to be made again on and as of the date of the relevant Loan or Issuance and the acceptance of the proceeds thereof or of the delivery of the relevant Letter of Credit.

Section 3.3 Determinations of Initial Borrowing Conditions. For purposes of determining compliance with the conditions specified in Section 3.1, each Lender shall be deemed to be satisfied with each document and each other matter required to be satisfactory to such Lender unless, prior to the Closing Date, the Administrative Agent receives notice from such Lender specifying such Lenders objections and such Lender has not made available its Pro Rata Share of any Borrowing scheduled to be made on the Closing Date.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES

To induce the Lenders, the L/C Issuers and the Administrative Agent to enter into the Loan Documents, each of Holdings and the Borrower (and, to the extent set forth in any other Loan Document, each other Loan Party) represents and warrants to each of them each of the following on and as of each date applicable pursuant to Section 3.2:

Section 4.1 Corporate Existence; Compliance with Law. Each Group Member (a) is duly organized, validly existing and in good standing (to the extent such concept is applicable) under the laws of the jurisdiction of its organization, (b) is duly qualified to do business as a foreign entity and in good standing under the laws of each jurisdiction where such qualification is necessary, except where the failure to be so qualified or in good standing could not, in the aggregate, reasonably be expected to have a Material Adverse Effect, (c) has all requisite power and authority and the legal right to own, pledge, mortgage and operate its property, to lease or sublease any property it operates under lease or sublease and to conduct its business as now or currently proposed to be conducted, (d) is in compliance with its Constituent Documents, (e) is in compliance with all applicable Requirements of Law except where the failure to be in compliance could not reasonably be expected to have a Material Adverse Effect and (f) has all necessary Permits from or by, has made all necessary filings with, and has given all necessary notices to, each Governmental Authority having jurisdiction, to the extent required for such ownership, lease, sublease, operation, occupation or conduct of business, except where the failure to obtain such Permits, make such filings or give such notices could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 4.2 Loan and Related Documents. (a) Power and Authority. The execution, delivery and performance by each Loan Party of the Loan Documents and Related Documents to which it is a party and the consummation of the Related Transactions and other transactions contemplated therein (i) are within such Loan Partys corporate or similar powers and, at the time of execution thereof, have been duly authorized by all necessary corporate and similar action (including, if applicable, consent of holders of its Securities), (ii) do not (A) contravene such Loan Partys Constituent Documents, (B) violate any applicable material Requirement of Law, (C) conflict with, contravene, constitute a default or breach under, or result in or

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document permit the termination or acceleration of, any material Contractual Obligation of any Loan Party or any of its Subsidiaries (including other Related Documents or Loan Documents) other than those that could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and are not created or caused by, or a conflict, breach, default or termination or acceleration event under, any Loan Document or (D) result in the imposition of any Lien (other than a Permitted Lien) upon any property of any Loan Party or any of its Subsidiaries and (iii) do not require any Permit of, or filing with, any Governmental Authority or any consent of, or notice to, any Person, other than (A) with respect to the Loan Documents, the filings required to perfect the Liens created by the Loan Documents, (B) those listed on Schedule 4.2, or those of any members, managers, or directors of a Group Member, in either case which have been, or will be prior to the Closing Date, obtained or made, copies of which have been, or will be prior to the Closing Date, delivered to the Administrative Agent, and each of which on the Closing Date will be in full force and effect, and (C) those that, if not obtained, could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b) Due Execution and Delivery. From and after its delivery to the Administrative Agent, each Loan Document and Related Document has been duly executed and delivered to the other parties thereto by each Loan Party party thereto. This Agreement constitutes, and each other Loan Document and Related Documents upon execution will constitute, a legal, valid and binding obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

(c) Related Documents. As of the Closing Date, each representation and warranty in each Related Document is true and correct in all material respects and no default, or event that, with the giving of notice or lapse of time or both, would constitute a default, has occurred thereunder.

Section 4.3 Ownership of Group Members. Set forth on Schedule 4.3 is a complete and accurate list showing, as of the Closing Date, for each Group Member (it being understood that SIC, SRAM-SP2 and the SRAM-SP2 Subs are not Group Members as of the Closing Date) and each Subsidiary of any Group Member and each joint venture of any of them, its jurisdiction of organization, the number of shares of each class of Stock authorized (if applicable), the number outstanding on the Closing Date and the number and percentage of the outstanding shares of each such class owned (directly or indirectly) by the Borrower or Holdings. All outstanding Stock of each of them (other than SIC, SRAM-SP2 and the SRAM-SP2 Subs) has been validly issued, is fully paid and non-assessable (to the extent applicable) and, except in the case of Holdings, SIC, SRAM-SP2 and the SRAM-SP2 Subs, is owned beneficially and of record by a Group Member free and clear of all Liens other than the security interests created by the Loan Documents and Liens under clauses (a) and (e) of the definition of Customary Permitted Liens. There are no Stock Equivalents (or debt securities that are convertible into, or exchangeable for, Stock) with respect to the Stock of any Group Member (other than Holdings, SIC, SRAM-SP2 and the SRAM-SP2 Subs) or any Subsidiary of any Group Member and, as of the Closing Date, except as set forth on Schedule 4.3, there are no Stock Equivalents with respect to the Stock (or debt securities that are convertible into, or exchangeable for, Stock) of Holdings. Except as set forth on Schedule 4.3, there are no Contractual Obligations or other understandings to which any Group Member (other than SIC, SRAM-SP2 and the SRAM-SP2 Subs), or any Subsidiary of any Group Member is a party with respect to (including any restriction on) the issuance, voting, Sale or pledge of any Stock or Stock Equivalent of any Group Member or any such Subsidiary or joint venture.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 4.4 Financial Statements. (a) Each of (i) the audited Consolidated balance sheet of Holdings as at December 31, 2010 and the related Consolidated statements of income, retained earnings and cash flows of Holdings for the Fiscal Year then ended, certified by Group Members Accountants, and (ii) subject to the absence of footnote disclosure and normal year-end audit adjustments, the unaudited Consolidated balance sheets and related Consolidated statements of income and cash flows of Holdings and its subsidiaries, for the Fiscal Quarter ended March 31, 2011, copies of each of which have been furnished to the Administrative Agent, and fairly present in all material respects the Consolidated financial position, results of operations and cash flow of Borrower as at the dates indicated and for the periods indicated and which are prepared, in respect of each such balance sheet income statement, and audited statements of retained earnings and cash flows, in accordance with GAAP.

(b) On the Closing Date (prior to giving effect to the initial Loans and the consummation of the Related Transactions), none of Holdings or its Subsidiaries has any material liability or other obligation (including Indebtedness, Guaranty Obligations, contingent liabilities and liabilities for Taxes, long-term leases and unusual forward or long-term commitments) that is not reflected in the Financial Statements referred to in clause (a) above or in the notes thereto and not otherwise permitted by this Agreement.

(c) The Initial Projections have been prepared in light of the past operations of the business of Borrower and its Subsidiaries and reflect projections for the period beginning on the Closing Date through 2016 on a quarterly basis through June 30, 2011 and on a year-by- year basis thereafter. As of the Closing Date, the Initial Projections have been prepared in good faith based upon assumptions believed to be reasonable at the time made (it being understood and agreed that financial projections are not a guarantee of financial performance and actual results may differ from financial projections and such differences may be material).

(d) The unaudited Consolidated balance sheet of Borrower (the Pro Forma Balance Sheet) delivered to the Administrative Agent prior to the date hereof, has been prepared as of the date identified in Section 4.4(a) and reflects as of such date, on a Pro Forma Basis for the Related Transactions and the other transactions contemplated herein to occur on the Closing Date, the Consolidated financial condition of Borrower, and the assumptions expressed therein are reasonable based on the information available to the Borrower at such date and on the Closing Date.

Section 4.5 No Change. Since December 31, 2010, there has been no development or event that has had or could reasonably be expected to have a Material Adverse Effect.

Section 4.6 Solvency. Both before and after giving effect to (a) the Loans and Letters of Credit made or Issued on or prior to the date this representation and warranty is made, (b) the disbursement of the proceeds of such Loans, (c) the consummation of the Related Transactions and (d) the payment and accrual of all transaction costs in connection with the foregoing, both the Loan Parties taken as a whole and the Borrower are Solvent.

Section 4.7 Litigation. There are no pending (or, to the knowledge of any Group Member, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or disputes affecting the Borrower or any of its Subsidiaries with, by or before any Governmental Authority other than those that (a) cannot reasonably be expected to involve the Loan Documents, the Letters of Credit, the Related Documents, the Related Transactions and (b) could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Holdings and the Reporting Person, are true and correct in all material respects. Each of the Reporting Person and its Subsidiaries has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.

Section 4.9 Margin Regulations. The Borrower is not engaged in the business of extending credit for the purpose of, and no proceeds of any Loan or other extensions of credit hereunder will be used for the purpose of, buying or carrying margin stock (within the meaning of Regulation U of the Board) or extending credit to others for the purpose of purchasing or carrying any such margin stock, in each case in contravention of Regulation T, U or X of the Board.

Section 4.10 No Burdensome Obligations; No Defaults. No Group Member is a party to any Contractual Obligation, no Group Member has Constituent Documents containing obligations, and, to the knowledge of any Group Member, there are no applicable Requirements of Law, in each case the compliance with which would have, in the aggregate, reasonably be expected to have a Material Adverse Effect. No Group Member (and, to the knowledge of each Group Member, no other party thereto) is in default under or with respect to any Contractual Obligation of any Group Member, other than those that could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 4.11 Investment Company Act. No Group Member is an investment company or an affiliated person of, or promoter or principal underwriter for, an investment company, as such terms are defined in the Investment Company Act of 1940.

Section 4.12 Labor Matters. There are no strikes, work stoppages, slowdowns or lockouts existing, pending (or, to the knowledge of any Group Member, threatened) against or involving any Group Member, except, for those that could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 4.13 ERISA. No ERISA Event or Foreign Plan Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events or Foreign Plan Events for which liability is reasonably expected to occur, could reasonably be expected to have a Material Adverse Effect.

Section 4.14 Environmental Matters. Except as could not reasonably be expected in the aggregate to have a Material Adverse Effect, none of the Group Members (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability or has knowledge of any fact or circumstance that could reasonably be expected to result in any Environmental Liability, (iii) has received written notice of or otherwise has knowledge of any claim or proceeding or threatened claim or proceeding with respect to any Environmental Liability or Environmental Law, or (iv) has Released Hazardous Materials in a manner or to a location that would reasonably be expected to result in Liability to any Group Member.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Person, (b) each Group Members Intellectual Property is not being infringed by any Person in any material respect, and, (c) no other Person has contested any right, title or interest of any Group Member in, or relating to, any Intellectual Property other than, in each case, as could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. In addition, (x) there are no pending (or, to the knowledge of any Group Member, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or disputes affecting the Intellectual Property of any Group Member, (y) no judgment or order has been rendered by any competent Governmental Authority or arbitrator and no settlement agreement or similar Contractual Obligation has been entered into by any Group Member which would limit, cancel or challenge such Group Members rights in any Intellectual Property, and (z) no Group Member knows or has any reason to know of any valid basis for any claim based on any infringement, misappropriation, dilution, violation or impairment or contest of Intellectual Property rights, other than, in each case, as could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. To the knowledge of each Group Member, each Group Member takes commercially reasonable steps to maintain and protect the Intellectual Property to the extent the failure to so maintain could reasonably be expected to have a Material Adverse Effect.

Section 4.16 Title; Real Property. (a) Each Group Member has good and marketable fee simple title to all owned real property and valid leasehold interests in all leased real property, and owns all personal property, in each case that is purported to be owned or leased by it, including those reflected on the most recent Financial Statements delivered by the Borrower, and none of such property is subject to any Lien except Permitted Liens.

(b) Set forth on Schedule 4.16 is, as of the Closing Date, (i) a complete and accurate list of all real property owned in fee simple by any Group Member or in which any Group Member owns a leasehold interest setting forth, for each such real property, the current street address (including, where applicable, county, state and other relevant jurisdictions), the record owner thereof and, where applicable, each lessee and sublessee thereof, (ii) any lease, sublease, license or sublicense of such real property by any Group Member and (iii) for each such real property that the Administrative Agent has requested be subject to a Mortgage or that is otherwise material to the business of any Group Member, each Contractual Obligation by any Group Member, whether contingent or otherwise, to Sell such real property.

Section 4.17 Full Disclosure. The information furnished by or on behalf of any Group Member in connection with the negotiation of this Agreement or hereunder (including the information contained in any Financial Statement or Disclosure Document but excluding the Projections and any forecasts, projections or estimates contained in such information), taken as a whole, and after giving effect to any updates provided, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances when made, not misleading; provided, however, it is understood that Financial Statements only contain such disclosures as are required by GAAP. All Projections and pro forma financial information that are part of such information (including those set forth in any Projections delivered subsequent to the Closing Date and any forecasts, protections or estimates contained in such information) have been prepared in good faith based upon assumptions believed to be reasonable at the time made (it being understood and agreed that financial projections are not a guarantee of financial performance and actual results may differ from financial projections and such differences may be material).

Section 4.18 Patriot Act. No Group Member (and, to the knowledge of each Group Member, no joint venture or subsidiary thereof) is in violation in any material respects of any United States Requirements of Law relating to terrorism, sanctions or money laundering, including the United States Executive Order No. 13224 on Terrorist Financing and the Patriot Act.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 4.19 Senior Indebtedness and Lien Priority. The Obligations constitute First Priority Obligations of the Borrower under and as defined in the Intercreditor Agreement. The obligations of each Guarantor under the Guaranty and Security Agreement constitute First Priority Obligations of such Guarantor under and as defined in the Intercreditor Agreement and the Liens issued pursuant to this Agreement and the Guaranty and Security Agreement constitute first priority Liens in favor of the Administrative Agent (subject to Permitted Liens).

Section 4.20 Security Documents (a) The Guaranty and Security Agreement will, upon execution and delivery thereof and upon registration or the taking of any other perfection steps under applicable laws, be effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein and proceeds and products thereof. In the case of the Pledged Stock described in the Guaranty and Security Agreement, when stock certificates representing such Pledged Stock are delivered to the Administrative Agent (together with a properly completed and signed stock power or endorsement), and in the case of the other Collateral described in the Guaranty and Security Agreement, when financing statements and other filings specified on Schedule 2 thereto as of the Closing Date in appropriate form are filed in the offices specified on Schedule 2 thereto as of the Closing Date, the Liens created by the Guaranty and Security Agreement shall constitute fully perfected Liens on, and security interests in, all right, title and interest of the Loan Parties in such Collateral in which a Lien can be perfected under Article 9 of the New York UCC by filing or possession thereof, as security for the Obligations (as defined in the Guaranty and Security Agreement), in each case prior and superior in right to any other Person (except, in the case of Pledged Stock, Liens arising as a matter of law, and in the case of Collateral other than Pledged Stock, Liens permitted by Section 8.2).

(b) Each Intellectual Property Security Agreement will, upon execution and delivery thereof and upon registration or the taking of any other perfection steps under applicable laws, be effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the United States (i) registered copyrights, (ii) patents and patent applications and (iii) registered trademarks and trademark applications, in each case owned by or exclusively licensed to any Loan Party (to the extent the security interest would not be a breach under a license agreement) and included in the Intellectual Property that constitutes Collateral and described therein, and the proceeds thereof. Upon the filing of each Intellectual Property Security Agreement in the United States Patent and Trademark Office relative to patents and trademarks, and the United States Copyright Office relative to copyrights, together with provision for payment of all requisite fees, then to the extent that Liens may be perfected by such filings, the Lien created by each Intellectual Property Security Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in the U.S. patents and patent applications, U.S. trademark registrations and applications and U.S. copyright registrations, in each case included in the Intellectual Property constitutes Collateral and listed therein, and the proceeds thereof as of the Closing Date, as security for the Obligations (as defined in the Guaranty and Security Agreement), in each case prior and superior in right to any other Person (except Liens permitted by Section 8.2) (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office may be necessary to perfect a lien on U.S. trademark, patent and copyright applications and registrations acquired by the Loan Parties after the Closing Date) and it being further understood that, to the extent that the United States federal trademark, patent and copyright laws are not applicable to the perfection of security interests, the filing of financing statements under Section 7.10(f) shall perfect the Liens granted by the Loan Parties on such Intellectual Property to the extent perfection can be obtained by filing UCC financing statements.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) Upon the execution and delivery of any Mortgage to be executed and delivered pursuant to Section 7.10, such Mortgage shall be effective to create in favor of the Administrative Agent for the benefit of the Secured Parties a legal, valid and enforceable Lien on the mortgaged property described therein and proceeds thereof; and when such Mortgage is filed in the recording office designated by the Borrower, such Mortgage shall constitute a fully perfected first priority Lien on, and security interest in, all right, title and interest of the Loan Parties in such mortgaged property and the proceeds thereof, as security for the Obligations (as defined in the relevant Mortgage), in each case prior and superior in right to any other Person (other than Liens permitted by Section 8.2).

ARTICLE 5 FINANCIAL COVENANTS

Borrower agrees with the Lenders, the L/C Issuers and the Administrative Agent to each of the following, so long as (i) the Revolving Credit Commitments remain in effect and any Revolving Loan shall be outstanding or (ii) any Letter of Credit remains outstanding (unless fully cash collateralized or backstopped on terms reasonably satisfactory to the Administrative Agent):

Section 5.1 Maximum Consolidated Leverage Ratio. Reporting Person shall not have, on the last day of each Fiscal Quarter set forth below, a Consolidated Leverage Ratio greater than the maximum ratio set forth opposite such Fiscal Quarter (it being understood and agreed that the testing of such financial covenant shall not commence until the date of a borrowing of a Revolving Loan or the issuance of a Letter of Credit, and shall continue only for so long as any Revolving Loan or Letter of Credit is outstanding as provided above) and shall in all cases be tested as of the most recently ended Fiscal Quarter for which Financial Statements have been delivered; provided that if a Qualified IPO shall not have occurred as of September 30, 2011, the Consolidated Leverage Ratio for such Fiscal Quarter ended September 30, 2011, shall not exceed 6.25:1.0:

MAXIMUM CONSOLIDATED FISCAL QUARTER ENDING LEVERAGE RATIO September 30, 2011 4.50:1.0 December 31, 2011 4.25:1.0 March 31, 2012 3.75:1.0 June 30, 2012 3.50:1.0 September 30, 2012 3.25:1.0 December 31, 2012 3.25:1.0 March 31, 2013 3.00:1.0 June 30, 2013 3.00:1.0 September 30, 2013 3.00:1.0 December 31, 2013 3.00:1.0 March 31, 2014 2.75:1.0 June 30, 2014 2.75:1.0 September 30, 2014 2.75:1.0 December 31, 2014 2.75:1.0 March 31, 2015 2.75:1.0 June 30, 2015 2.75:1.0 September 30, 2015 2.75:1.0 December 31, 2015 2.75:1.0 March 31, 2016 2.75:1.0 June 30, 2016 2.75:1.0

Each of Holdings and the Borrower (and, to the extent set forth in any other Loan Document, each other Loan Party) agrees with the Lenders, the L/C Issuers and the Administrative Agent to each of the following, as long as any Obligation (other than contingent indemnification obligations for which no claim has been made) or any Commitment remains outstanding:

Section 6.1 Financial Statements. The Borrower shall deliver to the Administrative Agent each of the following:

(a) Quarterly Reports. Within 45 days after the end of each Fiscal Quarter (commencing with the Fiscal Quarter ending June 30, 2011), the Consolidated unaudited balance sheet of the Reporting Person as of the close of such Fiscal Quarter and related Consolidated statements of income and cash flow for such calendar month and that portion of the Fiscal Year ending as of the close of such Fiscal Quarter, setting forth in comparative form the figures for the corresponding period in the prior Fiscal Year and the figures contained in the latest Projections, in each case certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the Consolidated financial position, results of operations and cash flow of the Reporting Person as at the dates indicated and for the periods indicated and, in respect of the balance sheet and statements of income, in accordance with GAAP (subject to the absence of footnote disclosure and normal year-end audit adjustments).

(b) Annual Reports. Within 120 days after the end of each Fiscal Year (commencing with the Fiscal Year 2011), the Consolidated balance sheet of the Reporting Person as of the end of such year and related Consolidated statements of income, stockholders equity and cash flow for such Fiscal Year, each prepared in accordance with GAAP, together with a certification by the Group Members Accountants that such Consolidated Financial Statements fairly present in all material respects the Consolidated financial position, results of operations and cash flow of the Reporting Person as at the dates indicated and for the periods indicated therein in accordance with GAAP without qualification as to the scope of the audit or as to going concern and without any other similar qualification.

(c) Compliance Certificate. Together with each delivery of any Financial Statement pursuant to clause (a) or (b) above, a Compliance Certificate duly executed by a Responsible Officer of the Borrower that, among other things, (i) if delivered together with any Financial Statement pursuant to clause (b) above, shows the calculations used in determining Excess Cash Flow, (ii) if applicable, demonstrates compliance with each financial covenant contained in Article V that is tested at least on a quarterly basis and (iii) states that no Default is continuing as of the date of delivery of such Compliance Certificate or, if a Default is continuing, states the nature thereof and the action that the Borrower proposes to take with respect thereto.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) Collateral Update Certificate. Within 45 days after the end of each Fiscal Quarter (commencing with the Fiscal Quarter ending June 30, 2011), a Collateral Update Certificate duly executed by a Responsible Officer of the Reporting Person to which the following information is either attached as schedules or separately delivered or made available to Administrative Agent: supplements to Schedule 6 to the Guaranty and Security Agreement for each Grantor (as defined therein) in accordance with Section 5.7 of the Guaranty and Security Agreement, together with short-form intellectual property agreements and assignments with respect to such Intellectual Property as described in said Section 5.7.

(e) Additional Projections. Not later than 30 days after the end of each Model Year, (i) any significant revisions to the annual forecasts of the Reporting Person and its Subsidiaries for such Model Year and (ii) forecasts prepared by management of the Reporting Person (A) for each Fiscal Quarter in such succeeding Model Year and (B) for each other succeeding Model Year through the Model Year containing the Latest Term Loan Maturity Date, in each case including in such forecasts (x) a projected Model Year Consolidated balance sheet, income statement and statement of cash flows, (y) a statement of all of the material assumptions on which such forecasts are based and (z) substantially the same type of financial information as that contained in the Initial Projections.

(f) Management Discussion and Analysis. At any time prior to the consummation of a Qualified IPO, together with each delivery of any Compliance Certificate pursuant to clause (c) above, a discussion and analysis of the financial condition and results of operations of the Reporting Person for the portion of the Fiscal Year then elapsed and discussing the reasons for any significant variations from the Projections for such period and the figures for the corresponding period in the previous Fiscal Year, all in form substantially similar to that delivered to Administrative Agent prior to the Closing Date.

(g) Audit Reports, Management Letters, Etc. Together with each delivery of any Financial Statement for any Fiscal Year pursuant to clause (b) above, copies of each management letter, audit report or similar letter or report received by the Reporting Person or any of its Subsidiaries from any independent registered certified public accountant (including the Group Members Accountants) in connection with such Financial Statements or any audit thereof, each certified to be complete and correct copies by a Responsible Officer of the Borrower as part of the Compliance Certificate delivered in connection with such Financial Statements.

Section 6.2 Other Events. The Borrower shall give the Administrative Agent notice of each of the following (which may be made by telephone if promptly confirmed in writing) promptly after any Responsible Officer of any Group Member knows or has reason to know of it: (a)(i) any Default and (ii) any event that could reasonably be expected to have a Material Adverse Effect, specifying, in each case, the nature and anticipated effect thereof and any action proposed to be taken in connection therewith, (b) any event (other than any event involving loss or damage to property) reasonably expected to result in a mandatory payment of the Obligations pursuant to Section 2.8, stating the material terms and conditions of such transaction and estimating the Net Cash Proceeds thereof, (c) the commencement of, or any material developments in, any action, investigation, suit, proceeding, audit, claim, demand, order or dispute with, by or before any Governmental Authority affecting any Group Member or any property of any Group Member that (i) seeks injunctive or similar relief and could reasonably be expected to have a Material Adverse Effect, (ii) in the reasonable judgment of the Borrower, exposes any Group Member to liability in an aggregate amount in excess of $10,000,000 or (iii) if adversely determined could reasonably be expected to have a Material Adverse Effect, (d) the acquisition of any material real property or the entering into any material lease and (e) the occurrence of an ERISA Event or a Foreign Plan Event.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 6.3 Other Information. The Borrower shall provide the Administrative Agent with such other documents and information with respect to the business, property, condition (financial or otherwise), legal, financial or corporate or similar affairs or operations of the Reporting Person or any of its Subsidiaries as the Administrative Agent or any Lender through the Administrative Agent may from time to time reasonably request.

ARTICLE 7 AFFIRMATIVE COVENANTS

Section 7.1 Maintenance of Corporate Existence. Each Group Member shall (a) preserve and maintain its legal existence, except in the consummation of transactions expressly permitted by Sections 8.4 and Section 8.7, and (b) preserve and maintain it rights (charter and statutory), privileges, franchises and Permits necessary or desirable in the conduct of its business, except, in the case of this clause (b), where the failure to do so could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 7.2 Compliance with Laws, Etc. Each Group Member shall comply with all applicable Requirements of Law, Contractual Obligations and Permits, except for such failures to comply that could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 7.3 Payment of Obligations. Each Group Member shall pay or discharge before they become delinquent (a) all material claims, Taxes, assessments, charges and levies imposed by any Governmental Authority and (b) all other lawful claims that, in each case, if unpaid could not reasonably be expected to have a Material Adverse Effect, except, in each case, for those whose amount or validity is being contested in good faith by proper proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Group Member in accordance with GAAP.

Section 7.4 Maintenance of Property. Each Group Member shall maintain and preserve (a) in good working order and condition all of its property necessary in the conduct of its business (ordinary wear and tear and insured casualty excepted) and (b) all rights, permits, licenses, approvals and privileges (including all Permits) and the Patents, Copyrights and Trademarks owned by each Group Member that, in each case, is necessary, used or useful, whether because of its ownership, lease, sublease or other operation or occupation of property or other conduct of its business, and shall make all necessary or appropriate filings with, and give all required notices to, Government Authorities, except for such failures to maintain and preserve the items set forth in clauses (a) and (b) above that could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 7.5 Maintenance of Insurance. Each Group Member shall (a) maintain or cause to be maintained in full force and effect all policies of insurance of any kind with respect to the property and businesses of the Group Members (including policies of life, fire, theft, product liability, public liability, property damage, other casualty, employee fidelity, workers compensation, business

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document interruption and employee health and welfare insurance) with financially sound and reputable insurance companies or associations (in each case that are not Affiliates of the Borrower) of a nature and coverage which are customarily carried by businesses of the size, character and risk profile of the business of the Group Members in connection with similar financings and (b) cause all such insurance relating to any property or business of any Loan Party to name the Administrative Agent on behalf of the Secured Parties as additional insured or loss payee, as appropriate, and to provide that no cancellation, material reduction in amounts, material reduction in coverages, or material increases in deductibles shall be effective until after 30 days notice thereof to the Administrative Agent.

Section 7.6 Keeping of Books. The Group Members shall keep proper books of record and account, in which full, true and correct entries in all material respects shall be made in accordance with GAAP and all other applicable Requirements of Law of all financial transactions and the assets and business of each Group Member.

Section 7.7 Access to Books and Property. Each Group Member shall permit the Administrative Agent accompanied by the Lender and their respective Related Persons, at any reasonable time during normal business hours and with reasonable advance notice (except that, during the continuance of an Event of Default, no such notice shall be required) to (a) visit and inspect the property of each Group Member and examine and make copies of and abstracts from, the corporate (and similar), financial, operating and other books and records of each Group Member (provided, however, that so long as no Event of Default is continuing, not more often than (i) twice per Fiscal Year to the Borrowers corporate headquarters and (ii) once per Fiscal Year to each other property of the Borrower or any Subsidiary (but, so long as no Event of Default is continuing, the Borrower shall only be responsible for the fees, costs and expenses of one individual with respect to any visit made pursuant to this clause (ii), without any limitation on the number of individuals that may attend such visitation), (b) discuss the affairs, finances and accounts of each Group Member with any officer or director of any Group Member and (c) communicate directly with any registered certified public accountants (including the Group Members Accountants) of any Group Member (provided, however, that a representative of Borrower may be present during any such communication and only the Borrower, Administrative Agent and/or its Related Persons may participate in such communications). Subject to the foregoing, each Group Member shall authorize their respective registered certified public accountants (including the Group Members Accountants) to communicate directly with the Administrative Agent and to disclose to the Administrative Agent all financial statements and other documents and information as they might have and the Administrative Agent reasonably requests with respect to any Group Member.

Section 7.8 Environmental. Each Group Member shall comply with, and maintain its real property, whether owned, leased, subleased or otherwise operated or occupied, in compliance with, all applicable Environmental Laws (including by implementing any Remedial Action necessary to achieve such compliance or that is required by orders and directives of any Governmental Authority) except for failures to comply that could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 7.9 Use of Proceeds. The proceeds of the Loans shall be used by the Borrower (and, to the extent distributed to them by the Borrower, each other Group Member) solely (a) to consummate the Related Transactions, (b) to repay in full all obligations under the Existing Credit Agreement, (c) to pay fees and expenses incurred in connection with the foregoing and the Loan Documents (the Transaction Costs) and (d) for working capital and general corporate and similar purposes.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 7.10 Additional Collateral and Guaranties. To the extent not delivered to the Administrative Agent on or before the Closing Date (including in respect of after-acquired property and Persons that become Subsidiaries of any Loan Party after the Closing Date or Persons that are required to become Guarantors after the Closing Date but excluding any items covered by Section 7.13), each Group Member shall, promptly, do each of the following, unless otherwise agreed by the Administrative Agent:

(a) deliver to the Administrative Agent such modifications and/or joinders to the terms of the Loan Documents (or, to the extent applicable as determined by the Administrative Agent, such other documents), in each case in form and substance reasonably satisfactory to the Administrative Agent and as the Administrative Agent deems necessary or advisable in order to ensure the following: (i) (A) SIC, if and when it becomes a Reporting Person, (B) each Subsidiary of any Loan Party that has entered into Guaranty Obligations with respect to any Indebtedness of the Borrower and (C) each Wholly Owned Subsidiary of any Loan Party (including SRAM-SP2 and the SRAM-SP2 Subs if and when SIC becomes a Reporting Person) shall guaranty, as primary obligor and not as surety, the payment of the Obligations of the Borrower; and (ii) each Loan Party (including any Person required to become a Guarantor pursuant to clause (i) above) shall effectively grant to the Administrative Agent, for the benefit of the Secured Parties, a valid and enforceable security interest in substantially all of its property, including all of the Stock and Stock Equivalents and other Securities of its Subsidiaries held by it, as security for the Obligations of such Loan Party; provided, however, that (1) Mortgages shall only be required to be delivered pursuant to clause (c) below and (2), unless the Borrower and the Administrative Agent otherwise agree, in no event shall (A) Administrative Agent require the delivery of, or notation of its Lien on, any motor vehicle certificates of title, (B) any Foreign Subsidiary or Advocacy SPE be required to guaranty the payment of any Obligation, (C) any Loan Party or any Group Member, individually or collectively, be required to pledge in excess of 65% of the outstanding Voting Stock of any Foreign Subsidiary, (D) any Loan Party or any Group Member, individually or collectively, be required to pledge any Stock of any Foreign Subsidiary which is not a direct Wholly Owned Subsidiary of Borrower, (E) SIC, SRAM-SP2, or the SRAM-SP2 Subs be required to pledge any Stock; (F) a security interest or Lien be required to be granted on any property of any Foreign Subsidiary or Advocacy SPE as security for any Obligation, (G) the Administrative Agent require the grant by SIC, SRAM-SP2, or the SRAM-SP2 Subs, Holdings or any Subsidiary of any security interest or property that is not required to be granted, or require that any such Loan Party take steps with respect to property that are not required to be taken in connection with security interests on similar property, by the terms of any Loan Document to which it is a party, (H) the Administrative Agent require the grant by SIC, SRAM-SP2, the SRAM-SP2 Subs, Holdings or any Subsidiary of any security interest on assets as to which the Administrative Agent reasonably determines (by sending written notice of such determination to Borrower) that the costs of obtaining such security interest or perfection thereof are excessive in relation to the practical benefit to the Lenders of the security interest to be afforded thereby, or (I) any deposit account or securities account be required to be subject to a control agreement.

(b) deliver to the Administrative Agent all documents representing all Stock, Stock Equivalents and other Securities pledged pursuant to the documents delivered pursuant to clause (a) above, together with undated powers or endorsements duly executed in blank;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) with respect to any property acquired after the Closing Date, upon request of the Administrative Agent, (i) deliver to Administrative Agent (i) a Mortgage on any real property (other than real property with respect to which a Group Member would be permitted to grant a Lien to another Person at the time of Administrative Agents request pursuant to Section 8.2(d) or (g)) with a fair market value in excess of $5,000,000 owned by any Loan Party and (ii) use commercially reasonable efforts to deliver to Administrative Agent all Mortgage Supporting Documents relating to a Mortgage delivered pursuant to the preceding clause (i) on any real property (other than real property with respect to which a Group Member would be permitted to grant a Lien to another Person at the time of Administrative Agents request pursuant to Section 8.2(d) or (g)) owned by any Loan Party;

(d) to take all other actions (not inconsistent with the foregoing) reasonably necessary to ensure the validity or continuing validity of any guaranty for any Obligation or any Lien securing any Obligation otherwise required to be granted by the Loan Documents, to perfect, maintain, evidence or enforce any such Lien securing any Obligation or to ensure any such Liens have the same priority as that of the Liens on similar Collateral set forth in the Loan Documents executed on the Closing Date (or, for Collateral located outside the United States, a similar priority reasonably acceptable to the Administrative Agent), including the filing of UCC financing statements in such jurisdictions as may be required by the Loan Documents or applicable Requirements of Law or as the Administrative Agent may otherwise reasonably request; and

(e) at the Administrative Agents request, deliver to the Administrative Agent legal opinions relating to the matters described in Section 7.10(c) or in connection with a Permitted Acquisition resulting in a new Loan Party which Permitted Acquisition involved an aggregate consideration price of at least $30,000,000, which opinions shall be in form and substance and from counsel reasonably satisfactory to, the Administrative Agent.

Section 7.11 Credit Rating. The Borrower shall at all times use its commercially reasonable efforts to cause a public corporate family and corporate credit rating by S&P and by Moodys to be maintained with respect to each of the Facilities and Borrower hereunder.

Section 7.12 Quarterly Conference Calls The Borrower shall use its commercially reasonable efforts to host quarterly conference calls with Lenders and certain members of management and to provide opportunity for questions and answers in connection therewith; provided that this Section 7.12 shall no longer be applicable upon consummation of a Qualified IPO.

Section 7.13 Post-Closing Deliveries. Each of Holdings and the Borrower shall, and shall cause each Subsidiary of the Borrower to, (a) deliver to the Administrative Agent each item set forth on Schedule 7.13 in form and substance reasonably satisfactory to the Administrative Agent and (b) perform each action set forth in Schedule 7.13 in a manner reasonably satisfactory to the Administrative Agent, in each case (x) within the period set forth opposite each such item or action on such Schedule and (y) unless otherwise agreed by the Administrative Agent in respect of any such item or action.

ARTICLE 8 NEGATIVE COVENANTS

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 8.1 Indebtedness. No Group Member shall, directly or indirectly, incur or otherwise remain liable with respect to or responsible for, any Indebtedness except for the following:

(a) the Obligations and the Second Lien Obligations;

(b) Indebtedness existing on the date hereof and set forth on Schedule 8.1, together with any Permitted Refinancing of any Indebtedness permitted hereunder in reliance upon this clause (b);

(c) Indebtedness consisting of Capitalized Lease Obligations and purchase money Indebtedness, in each case incurred by any Group Member (other than Holdings, SIC, SRAM-SP2 and the SRAM-SP2 Subs (to the extent it is a Loan Party)) to finance the acquisition, repair, improvement or construction of fixed or capital assets of such Group Member, together with any Permitted Refinancing of any Indebtedness permitted hereunder in reliance upon this clause (c); provided, however, that (i) the aggregate outstanding principal amount of all such Indebtedness does not exceed $20,000,000 at any time and (ii) the principal amount of such Indebtedness does not exceed the cost of the property so acquired or built or of such repairs or improvements financed, whether directly or through a Permitted Refinancing, with such Indebtedness (each measured at the time such acquisition, repair, improvement or construction is made);

(d) Capitalized Lease Obligations arising under Sale and Leaseback Transactions permitted hereunder in reliance upon Section 8.4(b)(ii);

(e) intercompany loans owing to any Group Member (or Parent Company in connection with the Foreign Restructuring Note) and constituting Permitted Investments of such Group Member;

(f) (i) obligations under the Interest Rate Contracts in effect on the Closing Date and (ii) obligations under other Hedging Agreements entered into for the sole purpose of hedging in the normal course of business and not for speculative purposes;

(g) Guaranty Obligations of any Group Member with respect to Indebtedness of any Group Member other than Holdings;

(h) unsecured Indebtedness in respect of promissory notes issued to consultants, employees, officers or directors or former consultants, employees, officers or directors of any Group Member in connection with repurchases of Stock or Stock Equivalents of Holdings or any Parent Company permitted by Section 8.5(c)(iii); provided, that no payments may be made on such notes if a Default is then continuing or would result therefrom;

(i) Indebtedness under bids, trade contracts (other than for debt for borrowed money), leases (other than Capitalized Lease Obligations), statutory obligations, surety, bid, stay, customs and appeal bonds, performance, performance and completion and return of money bonds, government contracts, financial assurances and completion guarantees and similar obligations in respect of workers compensation claims, property, casualty or liability insurance claims, in each case provided or incurred in the ordinary course of business, (including those incurred to secure health, safety and environmental obligations) in the ordinary course of business;

(j) cash management obligations and other Indebtedness in respect of netting services, overdraft protection and similar arrangements, in each case, in connection with cash management and deposit accounts;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (k) (i) Indebtedness of a Person or Indebtedness attaching to assets of a Person that, in either case, becomes a Loan Party or a Subsidiary of a Loan Party or Indebtedness attaching to assets that are acquired by any Loan Party or a Subsidiary of a Loan Party as the result of a Permitted Acquisition; provided that (x) such Indebtedness existed at the time such Person or at the time such assets were acquired and, in each case, was not created in anticipation thereof, (y) such Indebtedness is not guaranteed in any respect by any Loan Party (other than by any such Person that so becomes a Loan Party), and (z) the aggregate principal amount of all such Indebtedness does not exceed $15,000,000 at any time outstanding in respect of all assets or Persons so acquired during the term of this Agreement (calculated at the time such Person becomes a Loan Party or a Subsidiary of a Loan Party or the consummation of the Permitted Acquisition) and (ii) any Permitted Refinancing in respect thereof;

(l) Earn-Outs in a maximum amount payable not to exceed (i) $10,000,000 in respect of any Permitted Acquisition and (ii) $40,000,000 in respect of all Permitted Acquisitions; provided that no Earn-Outs in connection with a Permitted Acquisition shall be subject to such limitations to the extent that (A) such Earn-Outs are not payable, by their terms, during such times as the Loan Documents remain in effect or (B) such Earn-Outs by their terms are subordinated to the Obligations on terms and conditions reasonably satisfactory to the Administrative Agent (with the following conditions to payment: (x) no Event of Default shall exist at the time of, or after giving effect to any Earn-Out payment and (y) Borrower shall be in pro forma covenant compliance with the financial covenants set forth in Article V on a Pro Forma Basis as of the last day of the last Fiscal Quarter for which Financial Statements have been delivered hereunder after giving effect to any Earn-Out payment;

(m) Indebtedness arising from agreements providing for indemnification or adjustment of purchase price or similar obligations, in each case incurred in connection with the disposition of any business, assets or Stock to the extent permitted under this Agreement;

(n) Indebtedness consisting of a working capital line of credit provided to each of Sandleford Limited in Taiwan and Livisham Limited in Europe, separately, in an aggregate principal amount for both working capital lines combined not to exceed $10,000,000; provided, that (i) no Event of Default shall be continuing at the time such line of credit is entered into, or immediately after giving effect thereto, (ii) no other Group Member (other than the Group Member entering into such working capital line) shall be obligated in respect of such Indebtedness and there shall be no recourse to any assets of any other Group Member and (iii) the Liens granted to the holders of such Indebtedness shall be subordinated to the Liens under the Loan Documents on terms and conditions reasonably satisfactory to the Administrative Agent;

(o) unsecured Indebtedness incurred to finance a Permitted Acquisition; provided, however, that the aggregate outstanding principal amount of all such Indebtedness shall not exceed $150,000,000 at any time;

(p) any additional Indebtedness of any Group Member; provided, however, that (i) the aggregate outstanding principal amount of all such Indebtedness shall not exceed $50,000,000 at any time and (ii) any Lien securing such additional Indebtedness is in respect of Indebtedness of a type permitted under Section 8.1(c), Section 8.1(d) and Section 8.1(k) and Liens described under Section 8.2(d) and Section 8.2(e); and

(q) Subordinated Debt so long as (x) no Default or Event of Default shall have occurred and be continuing and (y) both prior to and immediately after giving effect to such Subordinated Debt the Consolidated Leverage Ratio, determined on a Pro Forma Basis, shall not exceed 5:00:1:00.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 8.2 Liens. No Group Member shall incur, maintain or otherwise suffer to exist any Lien upon or with respect to any of its property, whether now owned or hereafter acquired, or assign any right to receive income or profits, except for the following:

(a) Liens created pursuant to any Loan Document and Liens securing the Second Lien Obligations (subject to the Intercreditor Agreement);

(b) Customary Permitted Liens;

(c) Liens existing on the date hereof and set forth on Schedule 8.2 and any refinancing or replacements of the Indebtedness underlying such Liens to the extent permitted hereunder;

(d) Liens on the property of the Borrower or any of its Subsidiaries (i) securing Indebtedness permitted hereunder in reliance upon Section 8.1(c) or Section 8.1(d); provided, however, that (A) such Liens exist prior to the acquisition of, or attach substantially simultaneously with, or within 90 days after, the acquisition, repair, improvement or construction of, such property financed, whether directly or through a Permitted Refinancing, by such Indebtedness and (B) such Liens do not extend to any property of any Group Member other than the property (and proceeds thereof) acquired or built, or the improvements or repairs, financed, whether directly or through a Permitted Refinancing, by such Indebtedness (or the proceeds thereof or any accessions or additions thereto) or (ii) securing Indebtedness, whether directly or through a Permitted Refinancing, permitted by Section 8.1(k) that consists of Liens on assets other than accounts, inventory and documents, instruments and general intangibles relating thereto; provided that (A) such Lien was not created in contemplation of such acquisition or such Person becoming a Subsidiary and (B) such Lien only covers the assets financed by such Indebtedness (or by the Indebtedness refinanced by such Permitted Refinancing) and does not extend to or cover any other assets or property (other than the proceeds or products thereof or any accessions or additions thereto);

(e) Liens on the property of the Borrower or any of its Subsidiaries securing the Permitted Refinancing of any Indebtedness secured by any Lien on such property permitted hereunder in reliance upon clause (c) or (d) above, this clause (e) or clause (f) below without any change in the property subject to such Liens;

(f) Liens on the property of Sandleford Limited in Taiwan and Livisham Limited in Europe, in each case consisting of accounts, inventory and documents, instruments and general intangibles relating thereto and securing Indebtedness permitted under Section 8.1(n); provided, however, that such Liens are subordinated as described in Section 8.1(n); and

(g) additional Liens on any property of the Borrower or any of its Subsidiaries securing any of their Indebtedness or their other liabilities; provided, however, that the aggregate outstanding principal amount of all such Indebtedness and other liabilities secured by property of the Loan Parties shall not exceed $30,000,000 at any time and, if such Liens secure Indebtedness under Section 8.1(p), the applicable conditions referenced in Section 8.1(p)(ii) are satisfied.

Section 8.3 Investments. No Group Member shall make or maintain, directly or indirectly, any Investment except for the following:

(a) Investments existing on the date hereof and set forth on Schedule 8.3;

(b) Investments in cash and Cash Equivalents;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) (i) endorsements for collection or deposit in the ordinary course of business consistent with past practice, (ii) extensions of trade credit (other than to Affiliates of the Borrower) arising or acquired in the ordinary course of business and (iii) Investments received in settlements in the ordinary course of business of such extensions of trade credit;

(d) Investments made as part of a Permitted Acquisition;

(e) Investments by (i) SIC, SRAM-SP2 or the SRAM-SP2 Subs in Holdings, by SRAM-SP2 in the SRAM-SP2 Subs, by SIC in any Person which has no assets other than Stock in Holdings, or by Holdings in the Borrower, (ii) any Loan Party (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)) in any other Loan Party (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)), (iii) any Group Member that is not a Loan Party in any Group Member (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)) or in any joint venture, (iv) any Loan Party in any Group Member prior to the Closing Date, and (v) any Loan Party (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)) after the Closing Date in any Group Member that is not a Loan Party or in any joint venture; provided, however, that the aggregate outstanding amount of all Investments permitted pursuant to this clause (v) shall not exceed $30,000,000 at any time; and provided, further, that any Investment consisting of loans or advances to any Loan Party pursuant to clause (iii) above shall be subordinated in full to the payment of the Obligations of such Loan Party on terms and conditions reasonably satisfactory to the Administrative Agent;

(f) loans or advances to employees of SIC, Holdings, the Borrower or any of its Subsidiaries to finance travel, entertainment and relocation expenses and other ordinary business purposes in the ordinary course of business as presently conducted; provided, however, that the aggregate outstanding principal amount of all loans and advances permitted pursuant to this clause (f) shall not exceed $2,500,000 at any time;

(g) Investments by the Borrower or any of its Subsidiaries for which the consideration consists solely of newly issued Stock of Holdings or any Parent Company;

(h) Investments in an amount equal to the Available Basket, so long as (x) no Default or Event of Default shall have occurred and be continuing and (y) both prior to and immediately after giving effect to such Investment the Consolidated Leverage Ratio, determined on a Pro Forma Basis, shall not exceed (a) at any time prior to a Qualified IPO, 5.50:1.00 or (b) following a Qualified IPO, 3.50:1:00;

(i) any additional Investment by the Borrower or any of its Subsidiaries; provided, however, that the aggregate outstanding amount of all such Investments shall not exceed $15,000,000 at any time;

(i) extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods in the ordinary course of business, (ii) Investments under Hedging Agreements otherwise permissible under this Agreement, (iii) Investments in the form of Guaranties otherwise permitted by Section 8.1, (iv) Investments resulting from Sales of property otherwise permissible by Section 8.4;

(j) Investments among the Borrower and its Subsidiaries consisting of the transfer of cash in connection with the management of short-term working capital (or Capital Expenditures) needs and excess liquidity of the Borrower and its Subsidiaries in the ordinary course of business consistent with past practice (it being understood that cash in excess of short-term working capital (or Capital Expenditure) needs will be maintained with one or more Loan Parties);

(l) Investments consisting of the SRAM Cycling Advocacy Donation; and

(m) Investments deemed made in Subsidiaries which are designated as Unrestricted Subsidiaries in an aggregate amount not to exceed $10,000,000.

Section 8.4 Asset Sales. No Group Member shall Sell any of its property (other than cash) or issue shares of its own Stock, except for the following:

(a) In each case to the extent entered into in the ordinary course of business (i) Sales of Cash Equivalents, Sales of inventory, or Sales of property that has become obsolete or worn out or is surplus, and (ii) licenses of Intellectual Property, (iii) Sales and discounts (without recourse) of overdue accounts, but only in connection with the compromise or collection thereof consistent with customary industry practice, (iv) Liens permitted by Section 8.2 and Investments permitted by Section 8.3, (v) so long as no Default is continuing or would result therefrom, sales of non-strategic assets acquired as a part of a Permitted Acquisition which are sold for fair market value payable in cash upon such sale; provided, that the aggregate Net Cash Proceeds received from such sales under this clause (v) in respect of any Permitted Acquisition does not exceed 25% of the consideration payable in connection with such Permitted Acquisition (calculated in accordance with clause (a) of the definition thereof); provided, further, that if such sales in respect of any Permitted Acquisition are proposed to exceed such 25% level, then Administrative Agent shall provide its prior written consent to sales in excess of such 25% level and all Net Cash Proceeds exceeding such 25% level shall be applied against the Obligations in accordance with Section 2.8(d) and (vi) Sales or abandonment of any Intellectual Property no longer determined to be material to the business of any Group Member as determined by such Group Member in its reasonable business judgment;

(b) (i) a true lease or sublease of real property not constituting Indebtedness and not entered into as part of a Sale and Leaseback Transaction and (ii) a Sale of property pursuant to a Sale and Leaseback Transaction; provided, however, that the aggregate fair market value (measured at the time of the applicable Sale) of all property covered by any outstanding Sale and Leaseback Transaction at any time shall not exceed $10,000,000;

(c) (i) any Sale of any property (other than owned Stock or Stock Equivalents in any Group Member unless in connection with the Foreign Restructuring or unless the Administrative Agent has provided its prior written consent) by any Group Member (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)) to any other Group Member (other than Holdings, SIC, SRAM- SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)) to the extent any resulting Investment constitutes a Permitted Investment, (ii) any Restricted Payment by any Group Member (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)) permitted pursuant to Section 8.5 and (iii) any distribution by Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs of the proceeds of Restricted Payments from any other Group Member to the extent permitted in Section 8.5;

(d) (i) any issuance by SIC, Holdings, SRAM-SP2 or the SRAM-SP2 Subs of its own Stock or Stock Equivalents, (ii) any issuance by the Borrower of its own Stock to Holdings, (iii) any issuance by any Subsidiary of the Borrower of its own Stock to any Group Member, provided, however,

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (and in each case, except pursuant to a Qualified IPO) that (A) the proportion of such Stock and of each class of such Stock (both on an outstanding and fully-diluted basis) directly or indirectly held by the Loan Parties, taken as a whole in such Subsidiary, does not change as a result of such Sale or issuance and (B) the Administrative Agent following such issuance continues to have a perfected Lien on all Stock of such Subsidiary owned by the Loan Parties to the extent the Administrative Agent is entitled to a Lien thereon pursuant to the terms of this Agreement, unless otherwise permitted under the terms of this Agreement and (iv) to the extent necessary to satisfy any Requirement of Law in the jurisdiction of incorporation of any Subsidiary of the Borrower, any issuance by such Subsidiary of its own Stock constituting directors qualifying shares or nominal holdings; and

(e) as long as no Default is continuing or would result therefrom, any Sale of property (other than as part of a Sale and Leaseback Transaction) of, or Sale or issuance of its own Stock by, any Group Member (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)) (i) in connection with the Foreign Restructuring, or (ii) for fair market value payable in cash upon such sale; provided, however, that the aggregate consideration received during any Fiscal Year for all such Sales permitted pursuant to clause (ii) shall not exceed $20,000,000.

Section 8.5 Restricted Payments. No Group Member (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs) shall directly or indirectly, declare, order, pay, make or set apart any sum for any Restricted Payment except for the following (and Holdings shall not use the proceeds of any Restricted Payment made in reliance under clause (c) below other than as set forth in such clause (c) (but otherwise shall not be restricted from making any Restricted Payment)):

(a)(i) Restricted Payments (A) by Holdings to SIC, SRAM-SP2 or the SRAM-SP2 Subs (B) by any Group Member (other than Holdings) that is a Loan Party to any Loan Party other than Holdings and (C) by any Group Member that is not a Loan Party to any Group Member other than Holdings and (ii) dividends and distributions by any Subsidiary of the Borrower that is not a Loan Party to any holder of its Stock, to the extent made to all such holders ratably according to their ownership interests in such Stock;

(b) dividends and distributions declared and paid on the common Stock of any Group Member ratably to the holders of such common Stock and payable only in common Stock of such Group Member;

(c) cash dividends on the Stock of the Borrower to Holdings paid and declared solely for the purpose of funding the following: (i) so long as Holdings is treated as a partnership, limited liability company, S corporation or other pass-through entity for U.S. federal income tax purposes, cash distributions to the holders of the Stock of Holdings to the extent necessary to pay income Taxes (including estimates thereof), including but not limited to Taxes on income and estimates thereof during the period from January 1, 2011 through the closing of a Qualified IPO, of such holders (or the direct or indirect holders of Stock of such holders) to the extent permitted by the Constituent Documents of Holdings with respect to the income of Holdings attributable to the income of the Borrower and its Subsidiaries; (ii) ordinary operating expenses of Holdings and any Parent Company (including SIC, SRAM-SP2 and the SRAM-SP2 Subs); provided, however, that the amount of such cash dividends paid in any Fiscal Year shall not exceed $3,000,000 in the aggregate;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (iii) the redemption, purchase or other acquisition or retirement for value of Holdings or any Parent Companys (including SICs, SRAM-SP2s and the SRAM-SP2 Subs) Stock (or Stock Equivalents) from any Person or present or former employee, consultant, director or officer (or the assigns, estate, heirs or current or former spouses thereof) of any Group Member upon the death, disability or termination of employment of such employee, director or officer; provided, however, that the amount of such cash paid in reliance upon this clause (iii) shall not exceed $15,000,000 in the aggregate so long as the aggregate amount paid in any Fiscal Year does not exceed $5,000,000; and (iv) the Equity Redemption; provided, however, that no action that would otherwise be permitted hereunder in reliance upon this clause (c) (other than clause (i), (ii), or (iv) above) shall be permitted if (A) a Default is then continuing or would result therefrom or (B) such action is otherwise prohibited under any Loan Document or under the terms of any Indebtedness (other than the Obligations) of any Group Member;

(d) cash dividends paid by Borrower to Holdings, from the Available Basket, so long as (x) no Default or Event of Default shall have occurred and be continuing and (y) both prior to and immediately after giving effect to such dividend the Consolidated Leverage Ratio, determined on a Pro Forma Basis, shall not exceed (x) at any time prior to a Qualified IPO, 5.50:1.00 or (y) following a Qualified IPO, 3.50:1:00; and

(e) other Restricted Payments which do not exceed $4,000,000 in the aggregate in any Fiscal Year; provided, however, that no such Restricted Payments shall be permitted if an Event of Default is then continuing or would result therefrom.

Section 8.6 Prepayment of Indebtedness. No Group Member shall (x) prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof any Indebtedness (including for the avoidance of doubt, obligations owing under the Second Lien Term Facility and obligations under the Foreign Restructuring Note), (y) set apart any property for such purpose, whether directly or indirectly and whether to a sinking fund, a similar fund or otherwise, or (z) make any payment in violation of any subordination terms of any Indebtedness; provided, however, that each Group Member may, to the extent otherwise permitted by the Loan Documents, do each of the following:

(a)(i) prepay the Obligations, (ii) consummate a Permitted Refinancing as long as no Default has occurred and is continuing and (iii) prepay in full on the Closing Date Indebtedness owing under the Existing Credit Agreement;

(b) prepay any Indebtedness owing by such Group Member under the Second Lien Term Facility; provided, that (i) such prepayment is made (x) no later than six months following the Closing Date and (y) concurrently with the receipt of, and with, the Net Cash Proceeds of the first Qualified IPO or a portion thereof and (ii) no Default or Event of Default has occurred and is then continuing or would result therefrom;

(c) prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof (or set apart any property for such purpose) (A) in the case of any Group Member that is not a Loan Party, any Indebtedness owing by such Group Member to any other Group Member (other than Holdings) and (B) otherwise, any Indebtedness owing to any Loan Party (other than Holdings);

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) make required repayments or redemptions of Indebtedness (other than Indebtedness owing to any Affiliate of the Borrower) but only, in the case of Subordinated Debt, to the extent not prohibited under the terms of the subordination provisions applicable thereto;

(e) prepay any revolving Indebtedness under any working capital line of credit permitted by Section 8.1(n);

(f) prepay any Indebtedness under the Second Lien Term Facility so long as the Consolidated Senior Secured Leverage Ratio on a Pro Form Basis, after giving effect thereto, does not exceed 2.50:1.00;

(g) prepay Indebtedness under the Foreign Restructuring Note so long as it is held by, and any such prepayments are made to, the Borrower or any Subsidiary of Borrower which is a Loan Party;

(h) prepay prior to the scheduled maturity thereof any other Indebtedness (other than Subordinated Debt, Earn-Outs, Indebtedness under the Foreign Restructuring Note and Indebtedness under the Second Lien Term Facility) so long as (i) no Event of Default is continuing at the time of, or would result after giving effect to, such prepayment and (ii) availability under the Revolving Credit Commitment plus unrestricted cash or Cash Equivalents is in excess of $10,000,000 immediately after giving effect to any such prepayment; and

(i) the Borrower may prepay Indebtedness (other than Subordinated Debt, Earn-Outs, Indebtedness under the Foreign Restructuring Note and Indebtedness under the Second Lien Term Facility) from the Available Basket in an amount equal to the Available Basket, so long as (x) no Default or Event of Default shall have occurred and be continuing and (y) both prior to and immediately after giving effect to such prepayment the Consolidated Leverage Ratio, determined on a Pro Forma Basis, shall not exceed (x) at any time prior to a Qualified IPO, 5.50:1.00 or (y) following a Qualified IPO, 3.50:1:00.

Section 8.7 Fundamental Changes. Except in connection with the Foreign Restructuring, no Group Member shall (a) merge, consolidate or amalgamate with any Person, (b) liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its property or business, (c) acquire all or substantially all of the Stock or Stock Equivalents of any Person or (d) acquire all or substantially all of the assets of any Person or all or substantially all of the assets constituting any line of business, division, branch, operating division, brand or other unit operation of any Person, in each case except for the following: (x) to consummate any Permitted Acquisition, (y) the merger, consolidation, amalgamation or in connection with the liquidation of any Subsidiary of the Borrower that is a Loan Party with or into any Loan Party or of any Subsidiary that is not a Loan Party with or into any other Subsidiary and (z) the merger, consolidation or amalgamation of any Group Member (other than Holdings) for the sole purpose of changing its State or form of organization; provided, however, that (A) in the case of any merger, consolidation or amalgamation involving the Borrower, the Borrower shall be the surviving Person, (B) in the case of any merger, consolidation or amalgamation involving any other Loan Party, a Loan Party shall be the surviving Person, (C) in the case of any merger, consolidation or amalgamation involving a Loan Party that is a Domestic Subsidiary, such Loan Party that is a Domestic Subsidiary shall be the surviving Person, and (D) in the case of any merger, consolidation or amalgamation involving a Loan Party that is a Foreign Subsidiary (and not involving a Loan Party that is a Domestic Subsidiary), such Loan Party that is a Foreign Subsidiary shall be the surviving Person, and in each such case all actions required to maintain the perfection of the Lien of the Administrative Agent on the Stock or property of such Loan Party shall have been made.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 8.8 Change in Nature of Business. (a) No Group Member (other than Holdings, SRAM-SP2, the SRAM-SP2 Subs and any Parent Company) shall carry on any business, operations or activities (whether directly, through a joint venture, in connection with a Permitted Acquisition or otherwise) substantially different from those carried on by the Borrower and its Subsidiaries, taken as a whole, at the date hereof and business, operations and activities reasonably related thereto.

(b) Holdings, SIC, SRAM-SP2 and the SRAM-SP2 Subs shall not engage in any business, operations or activity, or hold any material property, other than (i) in the case of SIC, related to its status as a public reporting company (if applicable), (ii) in the case of Holdings, holding Stock and Stock Equivalents of the Borrower and Advocacy SPE, and in the case of SIC, holding the Foreign Restructuring Note, and Stock and Stock Equivalents of Holdings, SRAM-SP2 and the SRAM-SP2 Subs, (iii) in the case of SRAM-SP2, holding Stock and Stock Equivalents of Holdings and the SRAM-SP2 Subs, (iv) in the case of the SRAM-SP2 Subs, holding Stock and Stock Equivalents of Holdings, (v) issuing, selling and redeeming its own Stock, (vi) paying Taxes, (vii) holding directors and shareholders meetings, preparing corporate and similar records and other activities required to maintain its separate corporate or other legal structure, (viii) preparing reports to, and preparing and making notices to and filings with, Governmental Authorities and to its holders of Stock and Stock Equivalents or Indebtedness, (ix) receiving, and holding proceeds of, Restricted Payments from the Borrower and its Subsidiaries and distributing the proceeds thereof to the extent not prohibited by Section 8.5, (x) as necessary to consummate any Permitted Acquisition and a Qualified IPO, and (xi) other activities related or incidental to any of the foregoing.

Section 8.9 Transactions with Affiliates. Except as otherwise expressly permitted herein, (1) no Group Member shall enter into any transaction directly or indirectly with, or for the benefit of, any Affiliate of the Borrower that is not a Group Member (including Guaranty Obligations with respect to any obligation of any such Affiliate), and (2) no Loan Party shall enter into any transaction directly or indirectly with, or for the benefit of, any Affiliate of the Borrower that is not a Loan Party (including Guaranty Obligations with respect to any obligation of any such Affiliate), in each case except for (a) transactions in the ordinary course of business on a basis no less favorable to such Group Member (in the case of clause (1) above) or Loan Party (in the case of clause (2) above), as would be obtained in a comparable arms length transaction with a Person not an Affiliate of the Borrower, (b) Restricted Payments, the proceeds of which, if received by Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs, are used in compliance with Section 8.5 and (c) reasonable salaries and other reasonable director or employee compensation to (and expense reimbursement and indemnification arrangements for) officers and directors of any Group Member, (d) Permitted Investments, (e) arrangements in existence on the Closing Date as set forth on Schedule 8.9, (g) issuances of Stock or Stock Equivalents by Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs to an Affiliate and (h) transactions among Group Members that are not Loan Parties to the extent not otherwise prohibited by this Agreement; provided, that in no event shall any Group Member perform or provide any management, consulting, administrative or similar services to or for any Person other than another Loan Party, a Subsidiary of a Loan Party or a customer in the ordinary course of business. Notwithstanding the foregoing, and for avoidance of doubt, this Section 8.9 shall not be deemed to prohibit any Group Member from (i) making donations to non-profit organizations, including World Bicycle Relief, (ii) providing administrative services to World Bicycle Relief, or (iii) paying compensation and providing benefits to F.K. Day while F.K. Day devotes substantial time and attention to World Bicycle Relief if otherwise permitted by the terms of this Agreement.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 8.10 Third-Party Restrictions on Indebtedness, Liens, Investments or Restricted Payments. No Group Member shall incur or otherwise suffer to exist or become effective or remain liable on or responsible for any Contractual Obligation limiting the ability of (a) any Subsidiary of the Borrower to make Restricted Payments to, or Investments in, or repay Indebtedness or otherwise Sell property to, any Group Member (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs) or (b) any Group Member to incur or suffer to exist any Lien upon any property of any Group Member, whether now owned or hereafter acquired, securing any of its Obligations (including any equal and ratable clause and any similar Contractual Obligation requiring, when a Lien is granted on any property, another Lien to be granted on such property or any other property), except, for each of clauses (a) and (b) above, (i) pursuant to the Loan Documents and the Loan Documents as defined in the Second Lien Credit Agreement (including any such refinancing permitted therein), (ii) limitations on Liens on and restrictions on Sales of any property whose acquisition, repair, improvement or construction is financed by purchase money Indebtedness, Capitalized Lease Obligations or Permitted Refinancings permitted hereunder in reliance upon Section 8.1(b), Section 8.1(c), Section 8.1(d), Section 8.1(k) and Section 8.1(p) and set forth in the Contractual Obligations governing such Indebtedness, Capitalized Lease Obligations or Permitted Refinancing or Guaranty Obligations with respect thereto, (iii) restrictions contained in any agreement governing the Sale of property permitted pursuant to Section 8.4 so long as such restrictions solely relate to the property that is the subject of such Sale, (iv) pursuant to any agreements governing a working capital facility permitted under Section 8.1(n) so long as such restrictions relate solely to the Foreign Subsidiary party to such agreements; provided, that any such restrictions shall be no more restrictive than the provisions of this Agreement and shall permit all the transactions permitted under this Agreement, and (v) customary restrictions and conditions contained in leases, licenses and other contracts entered into in the ordinary course of business and relating solely to the property that is the subject of such leases, licenses and contracts.

Section 8.11 Modification of Certain Documents. No Group Member shall do any of the following:

(a) amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to any Constituent Document of, or otherwise change the capital structure of, any Group Member (including the terms of any of their outstanding Stock or Stock Equivalents), except (i) for an amendment to the Constituent Documents of Holdings and Borrower in connection with the Equity Redemption, (ii) for an amendment to the Constituent Documents of SIC, SRAM-SP2 or the SRAM-SP2 Subs which does not materially and adversely affect the rights and privileges of any Group Member and does not materially affect the interests of any Secured Party under the Loan Documents or in the Collateral, (iii) for any such amendment, modification, waiver or other change that (x) would extend the scheduled redemption date or reduce the amount of any scheduled redemption payment or reduce the rate or extend any date for payment of dividends thereon and (y) does not involve the payment of a consent fee, or (iv) for any such amendment, modification, waiver or other change that (a) does not elect, or permit the election, to treat the Stock or Stock Equivalents of any limited liability company (or similar entity) as certificated unless such certificates have been pledged and delivered to the Administrative Agent and (b) does not materially and adversely affect the rights and privileges of any Group Member and do not materially affect the interests of any Secured Party under the Loan Documents or in the Collateral; or

(b) waive or otherwise modify any term of any Subordinated Debt to the extent prohibited under the terms of the subordination provisions applicable thereto; or

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) waive or otherwise modify any term of any Second Lien Obligations that (i) would shorten the maturity or increase the amount of any payment of principal thereof or increase the rate or accelerate any date for payment of interest thereon or add any material covenants or material security in favor of the holders thereof (unless such Group Member agrees in writing to add such covenants or security to this Agreement), (ii) would increase the obligations of the obligor or confer additional rights on the holder of such Second Lien Obligations in a manner which would be materially adverse to the interests of the Lenders (unless such Group Member agrees in writing to confer such additional rights to the holders of the Obligations), or (iii) is otherwise prohibited under the Intercreditor Agreement.

Section 8.12 Accounting Changes; Fiscal Year. No Group Member shall change its (a) accounting treatment or reporting practices, except as required by GAAP or any Requirement of Law, or (b) its fiscal year or its method for determining fiscal quarters or fiscal months.

Section 8.13 Capital Expenditures. No Group Member shall make or commit to make any Capital Expenditure, except Capital Expenditures of the Borrower and its Subsidiaries not exceeding $30,000,000 per Fiscal Year; provided, that (a) up to 50% of any such amount referred to above, if not so expended in the Fiscal Year for which it is permitted, may be carried over for expenditure in the next succeeding Fiscal Year and (b) Capital Expenditures made pursuant to this Section during any Fiscal Year shall be deemed made, first, in respect of amounts carried over from the prior Fiscal Year pursuant to clause (a) above and, second, in respect of amounts permitted for such Fiscal Year as provided above; provided that if the Consolidated Leverage Ratio at any Fiscal Quarter for which audited financial statements are available is less than 2.75:1.00 then this Section 8.17 shall no longer be applicable.

ARTICLE 9 EVENTS OF DEFAULT

Section 9.1 Definition. Each of the following shall be an Event of Default:

(a) the Borrower shall fail to pay (i) any principal of any Loan or any L/C Reimbursement Obligation when the same becomes due and payable or (ii) any interest on any Loan, any fee under any Loan Document or any other Obligation (other than those set forth in clause (i) above) and, in the case of this clause (ii), such non-payment continues for a period of 3 Business Days after the due date therefor; or

(b) any representation, warranty or certification made or deemed made by or on behalf of any Loan Party in any Loan Document or by or on behalf of any Loan Party (or any Responsible Officer thereof) in connection with any Loan Document (including in any document delivered in connection with any Loan Document) shall prove to have been incorrect in any material respect when made or deemed made; or

(c) any Loan Party shall fail to comply with (i) any provision of Section 6.1 (Financial Statements), Section 6.2(a)(i) (Other Events), Section 7.1 (Maintenance of Corporate Existence), Section 7.9 (Use of Proceeds) or Article VIII (Negative Covenants) or (ii) any other provision of any Loan Document (other than any provision of ARTICLE 5) if, in the case of this clause (ii), such failure shall remain unremedied for 30 days after the earlier of (A) the date on which a Responsible Officer of the Borrower becomes aware of such failure and (B) the date on which notice thereof shall have been given to the Borrower by the Administrative Agent or the Required Lenders; or (iii) any provision of ARTICLE V (Financial Covenants), provided that an Event of Default under this clause (iii) shall not constitute an Event of Default for purposes of any Term Loan unless and until the Revolving

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Credit Lenders have declared an Event of Default with respect thereto and have terminated or suspended the Revolving Credit Commitments or have declared all outstanding obligations under the Revolving Credit Facility to be immediately due and payable in accordance with this Agreement, it being understood and agreed that the vote by Revolving Credit Lenders to accelerate the Revolving Credit Outstandings or terminate or suspend the Revolving Credit Commitments shall only require the vote of the Required Revolving Credit Lenders and upon such acceleration, only the vote of the Required Term Loan Lenders shall be required to decide whether an Event of Default has occurred with respect to the Term Loans in accordance with this Section 9.1(c); or

(d) (i) any Group Member shall fail to make any payment when due (whether due because of scheduled maturity, required prepayment provisions, acceleration, demand or otherwise) or within any applicable period of cure or grace on any Indebtedness of any Group Member (other than the Obligations or any Hedging Agreement) and, in each case, such failure relates to Indebtedness having a principal amount of $15,000,000 or more, (ii) any other event shall occur or condition shall exist under any Contractual Obligation relating to any such Indebtedness having a principal amount of $15,000,000 or more, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness (other than Indebtedness incurred to finance the acquisition or lease of specific assets that becomes due as a result of the voluntary Sale permitted under this Agreement of the assets securing such Indebtedness) or (iii) any such Indebtedness having a principal amount of $15,000,000 or more shall become or be declared to be due and payable, or be required to be prepaid, redeemed, defeased or repurchased prior to the stated maturity thereof (other than by (a) a regularly scheduled required prepayment or (b) Indebtedness incurred to finance the acquisition or lease of specific assets that becomes due as a result of the voluntary Sale permitted under this Agreement of the assets securing such Indebtedness); or

(e)(i) any Group Member (other than an Immaterial Subsidiary) shall generally not pay its debts as such debts become due, shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors, (ii) any proceeding shall be instituted by or against any Group Member (other than an Immaterial Subsidiary) seeking to adjudicate it a bankrupt or insolvent or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, composition of it or its debts or any similar order, in each case under any Requirement of Law relating to bankruptcy, insolvency or reorganization or relief of debtors or seeking the entry of an order for relief or the appointment of a custodian, receiver, trustee, conservator, liquidating agent, liquidator, other similar official or other official with similar powers, in each case for it or for any substantial part of its property and, in the case of any such proceedings instituted against (but not by or with the consent of) any Group Member (other than an Immaterial Subsidiary), either such proceedings shall remain undismissed or unstayed for a period of 60 days or more or an order or decree approving or ordering any of the foregoing shall be entered or (iii) any Group Member (other than an Immaterial Subsidiary) shall take any corporate or similar action or any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i) or (ii) above;or

(f) one or more judgments, orders or decrees (or other similar process) shall be rendered against any Group Member (other than an Immaterial Subsidiary) (i)(A) in the case of money judgments, orders and decrees, involving an aggregate amount (excluding amounts adequately covered by insurance payable to any Group Member, to the extent the relevant insurer has not denied coverage therefor) in excess of $15,000,000 or (B) otherwise, that would reasonably be expected to have, in the aggregate, a Material Adverse Effect and (ii)(A) enforcement proceedings (which shall not include the filing of a judgment lien or obtaining a garnishment or similar order so long as no further action is taken in respect thereof) shall have been legally and properly commenced by any creditor upon any such judgment, order or decree or (B) such judgment, order or decree shall not have been vacated or discharged for a period of 30 consecutive days and there shall not be in effect (by reason of a pending appeal or otherwise) any stay of enforcement thereof; or

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (g) except pursuant to a valid, binding and enforceable termination or release permitted under the Loan Documents and executed by the Administrative Agent or as otherwise expressly permitted under any Loan Document, (i) any provision of any Loan Document shall, at any time after the delivery of such Loan Document, fail to be valid and binding on, or enforceable against, any Loan Party party thereto, (ii) any Loan Document purporting to grant a Lien to secure any Obligation shall, at any time after the delivery of such Loan Document, fail to create a valid and enforceable Lien (in accordance with, and to the extent permitted by, the laws of the applicable jurisdiction) on any Collateral purported to be covered thereby having a value of at least $5,000,000 for any piece of Collateral or $10,000,000 for all such Collateral purported to be covered thereby or such Lien shall fail or cease to be a perfected Lien (in accordance with, and to the extent permitted by, the laws of the applicable jurisdiction) with the priority purported to be created in the relevant Loan Document or (iii) any subordination provisions applicable to any Subordinated Debt shall, in whole or in part, terminate or otherwise fail or cease to be valid and binding on, or enforceable against, the holders of such Subordinated Debt or (iv) or any Group Member shall state in writing to the Administrative Agent, any Lender or otherwise publicly that any of the events described in clause (i), (ii) or (iii) above shall have occurred; or

(h) the Liens in respect of the Second Lien Obligations shall cease, for any reason, to be validly subordinated to the Liens in respect of the First Lien Credit Facilities, as provided in the Intercreditor Agreement, or any Loan Party or any Affiliate of any Loan Party shall so assert in writing;

(i) (i) an ERISA Event and or a Foreign Plan Event shall have occurred; (ii) a trustee shall be appointed by a United States district court to administer any Pension Plan; (iii) the PBGC shall institute proceedings to terminate any Pension Plan; (iv) any Group Member or any of their respective ERISA Affiliates shall have been notified by the sponsor of a Multiemployer Plan that it has incurred or will be assessed Withdrawal Liability to such Multiemployer Plan and such entity does not have reasonable grounds for contesting such Withdrawal Liability or is not contesting such Withdrawal Liability in a timely and appropriate manner; or (v) any other event or condition shall occur or exist with respect to a Plan, a Foreign Benefit Arrangement, or a Foreign Plan; and in each case in clauses (i) through (v) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect;

(j) there shall occur any Change of Control.

Section 9.2 Remedies. During the continuance of any Event of Default, the Administrative Agent may, and, at the request of the Required Lenders, shall, in each case by notice to the Borrower and in addition to any other right or remedy provided under any Loan Document or by any applicable Requirement of Law, do each of the following: (a) declare all or any portion of the Commitments terminated, whereupon the Commitments shall immediately be reduced by such portion or, in the case of a termination in whole, shall terminate together with any obligation any Lender may have hereunder to make any Loan and any L/C Issuer may have hereunder to Issue any Letter of Credit or (b) declare immediately due and payable all or part of any Obligation (including any accrued but unpaid interest thereon), whereupon the same shall become immediately due and payable, without presentment, demand, protest or further notice or other requirements of any kind, all of which are hereby expressly waived by Holdings and the Borrower (and, to the extent provided in any other Loan Document, other Loan Parties); provided, however, that, effective immediately upon the occurrence of the Events of Default specified in Section 9.1(e)(ii), (x) the Commitments of each Lender to make Loans and the commitment of each L/C Issuer to Issue Letters of Credit shall each automatically be terminated and (y)

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document each Obligation (including in each case any accrued all accrued but unpaid interest thereon) shall automatically become and be due and payable, without presentment, demand, protest or further notice or other requirement of any kind, all of which are hereby expressly waived by Holdings and the Borrower (and, to the extent provided in any other Loan Document, any other Loan Party).

ARTICLE 10 THE ADMINISTRATIVE AGENT AND THE AGENTS

Section 10.1 Appointment of Administrative Agent. Each Lender hereby irrevocably designates and appoints the Administrative Agent as the agent of such Lender under this Agreement and the other Loan Documents, and each such Lender irrevocably authorizes the Administrative Agent, in such capacity, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent.

Section 10.2 Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement and the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys in-fact selected by it with reasonable care.

Section 10.3 Reliance and Liability. (a) The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any instrument, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy or email message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including counsel to Holdings or the Borrower), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders (or, if so specified by this Agreement, all Lenders) as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of the Required Lenders (or, if so specified by this Agreement, all Lenders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of any Loan Party a party thereto to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party.

Section 10.4 Agent Individually. Each Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with any Loan Party as though such Agent were not an Agent. With respect to its Loans made or renewed by it and with respect to any Letter of Credit issued or participated in by it, each Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not an Agent, and the terms Lender and Lenders shall include each Agent in its individual capacity.

Section 10.5 Lender Credit Decision. Each Lender and each L/C Issuer acknowledges that it shall, independently and without reliance upon the Administrative Agent, any Lender or L/C Issuer or any of their Related Persons or upon any document (including the Disclosure Documents) solely or in part because such document was transmitted by the Administrative Agent or any of its Related Persons, conduct its own independent investigation of the financial condition and affairs of each Loan Party and make and continue to make its own credit decisions in connection with entering into, and taking or not taking any action under, any Loan Document or with respect to any transaction contemplated in any Loan Document, in each case based on such documents and information as it shall deem appropriate. Except for documents expressly required by any Loan Document to be transmitted by the Administrative Agent to the Lenders or L/C Issuers, the Administrative Agent shall not have any duty or responsibility to provide any Lender or L/C Issuer with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any Loan Party or any Affiliate of any Loan Party that may come in to the possession of the Administrative Agent or any of its Related Persons.

Section 10.6 Indemnities. The Lenders agree to indemnify each Agent and its officers, directors, employees, affiliates, agents, advisors and controlling persons (each, an Agent Indemnitee) (to the extent not reimbursed by Holdings or the Borrower and without limiting the obligation of Holdings or the Borrower to do so), ratably according to their respective Pro Rata Outstandings in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Pro Rata Outstandings immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against such Agent Indemnitee in any way relating to or arising out of, the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent Indemnitee under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from such Agent Indemnitees gross negligence or willful misconduct. The agreements in this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 10.7 Resignation of Administrative Agent or L/C Issuer. (a) The Administrative Agent may resign as Administrative Agent upon 10 days notice to the Lenders and the Borrower. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the other Loan Documents, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall (unless an Event of Default under Section 9.1(a) or Section 9.1(f) with respect to the Borrower shall have occurred and be continuing) be subject to approval by the Borrower (which approval shall not be unreasonably withheld or delayed), whereupon such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term Administrative Agent shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agents rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Loans. If no successor agent has accepted appointment as Administrative Agent by the date that is 10 days following a retiring Administrative Agents notice of resignation, the retiring Administrative Agents resignation shall nevertheless thereupon become effective, and the Lenders shall assume and perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. After any retiring Administrative Agents resignation as Administrative Agent, the provisions of this Article X and of Section 11.3 shall continue to inure to its benefit.

Section 10.8 Sub-Agents. Each of the parties hereto agrees that the Administrative Agent may retain Persons to act as collateral agents for the Secured Parties for purposes of holding, administering and enforcing Liens on Collateral located outside the United States. Such Persons shall receive all the benefits of expense reimbursement and indemnifications (to the same extent as the Administrative Agent is entitled to reimbursement and indemnifications) set forth in Section 10.6 and Section 11.3 of this Agreement.

Section 10.9 Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless the Administrative Agent has received notice from a Lender, Holdings or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a notice of default. In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so specified by this Agreement, all Lenders); provided that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.

Section 10.10 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges that neither the Agents nor any of their respective officers, directors, employees, agents, advisors, attorneys-in-fact or affiliates have made any representations or warranties to it and that no act by any Agent hereafter taken, including any review of the affairs of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute any representation or warranty by any Agent to any Lender. Each Lender represents to the Agents that it has, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates and made its own decision to make its Loans

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Loan Party or any affiliate of a Loan Party that may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, advisors, attorneys-in-fact or affiliates.

Section 10.11 Documentation Agent and Syndication Agent. None of the Documentation Agent, the Syndication Agent or any Co- Arranger shall have any duties or responsibilities hereunder in its capacity as such.

ARTICLE 11 MISCELLANEOUS

Section 11.1 Amendments, Waivers, Etc. Neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 11.1. The Required Lenders and each Loan Party party to the relevant Loan Document may, or, with the written consent of the Required Lenders, the Administrative Agent and each Loan Party party to the relevant Loan Document may, from time to time, (a) enter into written amendments, consents, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that any such amendment or waiver to the terms and conditions of Section 5.1 shall be subject only to the consent of the Required Revolving Credit Lenders; provided, further, that no such waiver and no such amendment, consent, supplement or modification shall (i) forgive or reduce the principal amount or extend the final scheduled date of maturity of any Loan, extend the scheduled date of any amortization payment in respect of any Term Loan, reduce the stated rate of any interest or fee payable hereunder (except (x) in connection with the waiver of applicability of any post-default increase in interest rates (which waiver shall be effective with the consent of the Majority Facility Lenders of each adversely affected Facility) and (y) that any amendment or modification of defined terms used in the financial covenant in this Agreement shall not constitute a reduction in the rate of interest or fees for purposes of this clause (i)) or extend the scheduled date of any payment thereof, or increase the amount or extend the expiration date of any Lenders Revolving Credit Commitment, in each case without the written consent of each Lender directly affected thereby; (ii) eliminate or reduce the voting rights of any Lender under this Section 11.1 without the written consent of such Lender; (iii) reduce any percentage specified in the definition of Required Lenders, consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Loan Documents, release all or substantially all of the Collateral or release all or substantially all of the Guarantors from their obligations under the Guaranty and Security Agreement, in each case without the written consent of all Lenders; (iv) amend, modify or waive any provision of Section 2.13 without the written consent of the Majority Facility Lenders in respect of each Facility adversely affected thereby; (v) reduce the percentage specified in the definition of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Majority Facility Lenders with respect to any Facility without the written consent of all Lenders under such Facility; (vii) amend, modify or waive any provision of Section 10.1 or any other provision of any Loan Document that affects the Administrative Agent without the written consent of the Administrative Agent; (viii) amend, modify or waive any provision of Section 2.3 without the written consent of the Swingline Lender; or (ix) amend, modify or waive any provision of Section 2.4 without the written consent of the L/C Issuer. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the Administrative Agent and all future holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the Administrative Agent shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.

Notwithstanding anything in this Agreement or any other Loan Document to the contrary, the Borrower may enter into Incremental Facility Amendments in accordance with Section 2.21, and Extension Amendments in accordance with Section 2.22.

Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (a) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share in the benefits of this Agreement and the other Loan Documents with the Term Loans and Revolving Extensions of Credit and the accrued interest and fees in respect thereof and (b) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders and Majority Facility Lenders.

In addition, notwithstanding the foregoing, this Agreement may be amended with the written consent of the Agents, Holdings, the Borrower and the Lenders providing the relevant Replacement Term Loans to permit the refinancing of all or any portion of outstanding Term Loans or any tranche thereof (Refinanced Term Loans) with a replacement term loan tranche hereunder (Replacement Term Loans); provided that (a) the aggregate principal amount of such Replacement Term Loans shall not exceed the aggregate principal amount of such Refinanced Term Loans, (b) the Applicable Margin for such Replacement Term Loans shall not be higher than the Applicable Margin for such Refinanced Term Loans, (c) the weighted average life to maturity of such Replacement Term Loans shall not be shorter than the weighted average life to maturity of such Refinanced Term Loans at the time of such refinancing and (d) all other terms applicable to such Replacement Term Loans shall be substantially identical to, or less favorable to the Lenders providing such Replacement Term Loans than those applicable to such Refinanced Term Loans, except to the extent necessary to provide for covenants and other terms applicable to any period after the latest final maturity of the Term Loans in effect immediately prior to such refinancing.

In addition, notwithstanding anything to the contrary contained herein, if following the Closing Date, the Administrative Agent and the Borrower shall have jointly identified any error or omission of a technical or immaterial nature, in each case, in any provision of this Agreement or any other Loan Document, then the Administrative Agent and the Borrower shall be permitted to amend such provision and such amendment shall become effective without any further action or consent of any other party to this Agreement or any other Loan Document if the same is not objected to in writing by the Required Lenders within five Business Days following receipt of notice thereof. It is understood that posting such amendment electronically on IntraLinks/IntraAgency with notice of such posting by the Administrative Agent to the Required Lenders shall be deemed adequate receipt of notice of such amendment.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document reorganization, arrangement, insolvency or liquidation proceeding under any state bankruptcy or similar law, for one year and one day after the payment in full of the latest maturing commercial paper note issued by such Conduit Lender; provided, however, that each Lender designating any Conduit Lender hereby agrees to indemnify, save and hold harmless each other party hereto for any loss, cost, damage or expense arising out of its inability to institute such a proceeding against such Conduit Lender during such period of forbearance.

(g) Notwithstanding anything to the contrary contained herein, any Lender may assign all or any portion of its Term Loans hereunder to any Person who, after giving effect to such assignment, would be an Affiliated Lender; provided that (i) such assignment is made pursuant to (A) an open market purchase or (B) a Dutch Auction open to all Lenders of the applicable Class on a pro rata basis; (ii) the assigning Lender and Affiliated Lender purchasing such Lenders Term Loans shall execute and deliver to the Administrative Agent an assignment agreement substantially in the form of Exhibit M hereto (an Affiliated Lender Assignment and Assumption) in lieu of an Assignment; (iii) at the time of such assignment and after giving effect to such assignment, Affiliated Lenders shall not, in the aggregate, own or hold Term Loans (including participating interests) with an aggregate principal amount in excess of 15% of the principal amount of all Term Loans then outstanding; (iv) each Affiliated Lender shall at each of the time of the initiation of and consummation of such assignment (a) affirm the No MNPI Representation and (b) if it is not able to affirm the No MNPI Representation, such Affiliated Lender will inform the assignor and the assignor will deliver to such Affiliated Lender customary written assurance that it is a sophisticated investor and is willing to proceed with the assignment; and (v) if an Affiliated Lender assigns Term Loans acquired by it in accordance with this Section 11.2(g) such Affiliated Lender shall at the time of assignment of any Term Loans held by it (i) affirm the No MNPI Representation and (b) if it is not able to affirm the No MNPI Representation, the assignee will deliver to such Affiliated Lender customary written assurance that it is a sophisticated investor and is willing to proceed with the assignment; and (vi) the Affiliated Lender shall (A) execute a waiver in form and substance reasonably satisfactory to the Administrative Agent that it shall have no right whatsoever so long as such Person is an Affiliated Lender (1) to vote as a Lender with respect to any amendment, modification, waiver, consent or other such action with respect to any of the terms of this Agreement or any other Loan Document (it being understood that such interest will be deemed voted in the same proportion as the allocation of voting with respect to such matter by those Lenders who are not Affiliated Lenders), provided that, notwithstanding the foregoing, (x) such Affiliated Lender shall be permitted to vote as a Lender if such amendment, modification, waiver, consent or other such action (A) requires the vote of all Lenders or all affected Lenders and all Lenders or all affected Lenders, as the case may be, have given their consent thereto, or (B) disproportionately affects such Affiliated Lender in its capacity as a Lender as compared to other Lenders that are not Affiliated Lenders and (y) no amendment, modification, waiver, consent or other action shall deprive any Affiliated Lender of its share of any payments which the Lenders are entitled to share on a pro rata basis hereunder without consent of such Affiliated Lender, (2)

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 11.2 Assignments and Participations; Binding Effect. (a) Binding Effect. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any affiliate of the L/C Issuer that issues any Letter of Credit), except that (i) the Borrower and Holdings may not assign or otherwise transfer any of their rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.

(b) Right to Assign. (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Eligible Assignees, other than a natural person, all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it) with the prior written consent of: (A) the Borrower (such consent not to be unreasonably withheld), provided that no consent of the Borrower shall be required for an assignment to a Lender, an affiliate of a Lender, an Approved Fund or, if an Event of Default under Section 9.1(a) or Section 9.1(e) has occurred and is continuing, any other Person; and provided, further, that the Borrower shall be deemed to have consented to any such assignment unless the Borrower shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof; (B) the Administrative Agent (such consent not to be unreasonably withheld), provided that no consent of the Administrative Agent shall be required for an assignment of all or any portion of a Term Loan to a Lender, an affiliate of a Lender or an Approved Fund; and (C) an Issuing Bank (such consent not to be unreasonably withheld), provided that no consent of an Issuing Bank shall be required for an assignment of all or any portion of a Term Loan.

(ii) Assignments shall be subject to the following additional conditions: (A) except in the case of an assignment to a Lender, an affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lenders Commitments or Loans under any Facility, the amount of the Commitments or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000 (in the case of the First Lien Term Facility) and $5,000,000 (in the case of the Revolving Facility)) unless each of the Borrower and the Administrative Agent otherwise consent, provided that (1) no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing and (2) such amounts shall be aggregated in respect of each Lender and its affiliates or Approved Funds, if any; (B) (1) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment, together with a processing and recordation fee of $3,500 and (2) the assigning Lender shall have paid in full any amounts owing by it to the Administrative Agent; and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (C) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its Affiliates and their related parties or their respective securities) will be made available and who may receive such information in accordance with the assignees compliance procedures and applicable laws, including federal and state securities laws; (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) below, from and after the effective date specified in each Assignment the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment, be released from its obligations under this Agreement (and, in the case of an Assignment covering all of the assigning Lenders rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, Section 2.17, Section 2.20 and Section 11.3). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 11.2 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section. (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount (and stated interest) of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the Register). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the L/C Issuer and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender (as to its own interest), at any reasonable time and from time to time upon reasonable prior notice. (v) Upon its receipt of a duly completed Assignment executed by an assigning Lender and an assignee, the assignees completed administrative questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document rights and obligations under this Agreement. Any agreement pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that (i) requires the consent of each Lender directly affected thereby pursuant to the proviso to the second sentence of Section 11.1 and (ii) directly affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Section 2.15, Section 2.17 and Section 2.20 (subject to the requirements and limitations therein, including the requirements under Section 2.17(f) (it being understood that the documentation required under Section 2.17(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (i) agrees to be subject to the provisions of Section 2.15 and Section 2.17 as if it were an assignee under paragraph (b) of this Section and (ii) shall not be entitled to receive any greater payment under Section 2.15 or Section 2.17, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from an adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof that occurs after the Participant acquired the applicable participation. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.7(b) as though it were a Lender, provided such Participant shall be subject to Section 11.7(a) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participants interest in the Loans or other obligations under this Agreement (the Participant Register); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participants interest in any Commitments, Loans, Letters of Credit or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(e) The Borrower, upon receipt of written notice from the relevant Lender, agrees to issue Notes to any Lender requiring Notes to facilitate transactions of the type described in paragraph (d) above.

(f) Notwithstanding the foregoing, any Conduit Lender may assign any or all of the Loans it may have funded hereunder to its designating Lender without the consent of the Borrower or the Administrative Agent and without regard to the limitations set forth in Section 11.2(b). Each of Holdings, the Borrower, each Lender and the Administrative Agent hereby confirms that it will not institute against a Conduit Lender or join any other Person in instituting against a Conduit Lender any bankruptcy,

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document subject to subclause (1) of this paragraph (g), to otherwise vote as a Lender on any matter related to this Agreement or any other Loan Document, (3) to receive advice of counsel to the Administrative Agent or to Lenders other than Affiliated Lenders or to challenge the Lenders attorney-client privilege or (4) to make or bring any claim, in its capacity as a Lender, against the Administrative Agent or any Lender with respect to the duties and obligations of such Persons under the Loan Documents (except with respect to rights expressly retained under subclause (1) of this paragraph (g)), and (B) acknowledge and agree that the Obligations owned by it shall be non-voting under sections 1126 and 1129 of the Bankruptcy Code in the event that any proceeding thereunder shall be instituted by or against any Group Member, or, alternatively, to the extent that the foregoing non-voting designation is deemed unenforceable for any reason, each Affiliated Lender shall vote in such proceedings in the same proportion as the allocation of voting with respect to such matter by those Lenders who are not Affiliated Lenders, except to the extent that any plan of reorganization proposes to treat the obligations held by such Affiliated Lender in a manner that is less favorable in any material respect to such Affiliated Lender than the proposed treatment of similar obligations held by Lenders that are not Affiliated Lenders.

(h) Notwithstanding anything else to the contrary contained in this Agreement, any Lender may assign all or a portion of its Term Loans to any Purchasing Borrower Party in accordance with Section 11.2(b); provided that: (i) the assigning Lender and the Purchasing Borrower Party purchasing such Lenders Term Loans, as applicable, shall execute and deliver to the Administrative Agent an Affiliated Lender Assignment and Assumption in lieu of an Assignment; (ii) such assignment shall be made pursuant to a Dutch Auction open to all Lenders of the applicable Class on a pro rata basis; (iii) any Loans assigned to any Purchasing Borrower Party shall be automatically and permanently cancelled upon the effectiveness of such assignment and will thereafter no longer be outstanding for any purpose hereunder; (iv) if the Purchasing Borrower Party is a Group Member, immediately after giving effect to any such purchase, no Revolving Loans or Swing Loans shall be outstanding and no Default or Event of Default shall exist; (v) gain from any such purchase shall not increase Consolidated EBITDA; (vi) the applicable Purchasing Borrower Party shall at the commencement of such Dutch Auction and at the time of such assignment affirm the No MNPI Representation; and (vii) the aggregate outstanding principal amount of the Term Loans of the applicable Class shall be deemed reduced by the full par value of the aggregate principal amount of the Term Loans purchased pursuant to this Section 11.2(h) and each principal repayment installment with respect to the Term Loans of such Class shall be reduced pro rata by the aggregate principal amount of Term Loans purchased.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document any communication by or among Administrative Agent and one or more Lenders, except to the extent such information or materials have been made available to the Borrower or its representatives (and in any case, other than the right to receive notices of prepayments and other administrative notices in respect of its Loans required to be delivered to Lenders pursuant to Section 2), or (iii) make or bring (or participate in, other than as a passive participant in or recipient of its pro rata benefits of) any claim, in its capacity as a Lender, against Administrative Agent or any other Lender with respect to any duties or obligations or alleged duties or obligations of such Agent or any other such Lender under the Loan Documents in the absence, with respect to any such Person, of the gross negligence, bad faith (including a material breach of obligations under the Loan Documents) or willful misconduct by such Person and its Related Persons (as determined by a court of competent jurisdiction by final and nonappealable judgment).

Section 11.3 Costs and Expenses. The Borrower agrees (a) to pay or reimburse the Administrative Agent for all its reasonable and actual third party costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including the reasonable fees, disbursements and other charges of external counsel (not to exceed one transaction counsel and one local law firm per each appropriate jurisdiction) to the Administrative Agent and filing and recording fees and expenses, with statements with respect to the foregoing to be submitted to the Borrower prior to the Closing Date (in the case of amounts to be paid on the Closing Date) and from time to time thereafter on a quarterly basis or such other periodic basis as the Administrative Agent shall deem appropriate, (b) to pay or reimburse the Administrative Agent and the Lenders for all their reasonable and actual third party costs and expenses incurred in connection with any restructuring (while an Event of Default is continuing) or work-out (while an Event of Default is continuing) or the enforcement or preservation of any rights under this Agreement, the other Loan Documents and any such other documents, including the reasonable fees and disbursements of counsel (but limited to no more than one primary external counsel and, if applicable, local and regulatory counsel in each appropriate jurisdiction), and one primary external counsel (and, in addition to such firm, any local and regulatory counsel engaged in each appropriate jurisdiction by such firm) as counsel for the Lenders taken as a whole (and in the case of a conflict of interest, one additional counsel to such affected Lenders taken as a whole), (c) to pay, indemnify, and hold each Lender and the Administrative Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other similar Taxes (excluding, in all cases, Excluded Taxes), if any, that may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, and (d) to pay, indemnify, and hold each Lender and the Administrative Agent, their affiliates and their respective affiliates respective officers, directors, employees, agents, advisors and controlling persons (each, an Indemnitee) harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, reasonable and actual third party costs, reasonable and actual third party expenses or reasonable and actual third party disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents and any such other documents, including any of the foregoing relating to the use of proceeds of the Loans and Letters of Credit or the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of any Group Member or any of the of its real property and the reasonable fees and expenses of legal counsel in connection with claims, actions or proceedings by any Indemnitee against any Loan Party under any Loan Document (all the foregoing in this clause (d), collectively, the Indemnified Liabilities), provided, that the Borrower shall have no obligation hereunder to any

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee or from breach in bad faith by an Indemnitee of its obligations under the Loan Documents, and provided, further, that this Section 11.3(d) shall not apply with respect to Taxes. Without limiting the foregoing, and to the extent permitted by applicable law, the Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries to waive, all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee. All amounts due under this Section 11.3 shall be payable not later than 10 Business Days after written demand therefor. Statements payable by the Borrower pursuant to this Section 11.3 shall be submitted to Borrower at Borrowers notice address as set forth in Section 11.8, or to such other Person or address as may be hereafter designated by the Borrower in a written notice to the Administrative Agent. The agreements in this Section 11.3 shall survive the termination of this Agreement and the repayment of the Loans and all other amounts payable hereunder. Indemnified matters set forth in this Section shall exclude in all circumstances any liabilities or losses arising from the trading, sale or discount of any Obligations of the Administrative Agent or any Lender.

Section 11.4 Survival. Any indemnification or other protection provided to any Indemnitee pursuant to any Loan Document (including pursuant to Section 2.16 (Breakage Costs; Increased Costs; Capital Requirements), Section 2.17 (Taxes), Article X (The Administrative Agent), Section 11.3 (Costs and Expenses), Section 10.6 (Indemnities) or this Section 11.4) and all representations and warranties made in any Loan Document and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall (A) survive the assignment of rights by, or replacement of, a Lender, the termination of the Commitments and the payment in full, satisfaction or discharge of all other Obligations under the Loan Documents and (B) inure to the benefit of any Person that at any time held a right thereunder (as an Indemnitee or otherwise) and, thereafter, its successors and permitted assigns.

Section 11.5 Limitation of Liability for Certain Damages. In no event shall any Loan Parties or any Indemnitee be liable on any theory of liability for any special, indirect, consequential or punitive damages (including any loss of profits, business or anticipated savings). Each Indemnitee and each Loan Party hereby waives, releases and agrees (and shall cause each other Loan Party to waive, release and agree) not to sue upon any such claim for any special, indirect, consequential or punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor; provided that nothing contained in this sentence shall limit Borrowers indemnity obligations to the extent set forth in Section 11.3

Section 11.6 Right of Setoff. (a) Except to the extent that this Agreement or a court order expressly provides for payments to be allocated to a particular Lender or to the Lenders under a particular Facility, if any Lender (a Benefitted Lender) shall receive any payment of all or part of the Obligations owing to it (other than in connection with an assignment made pursuant to Section 11.2), or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 9.1(e), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of the Obligations owing to such other Lender, such Benefitted Lender shall purchase for cash from the other Lenders a participating interest in such portion of the Obligations owing to each such other Lender, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such collateral ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, upon any Obligations becoming due and payable by the Borrower (whether at the stated maturity, by acceleration or during the continuance of an Event of Default otherwise), to apply to the payment of such Obligations, by setoff or otherwise, any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender, any Affiliate thereof or any of their respective branches or agencies to or for the credit or the account of the Borrower. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such application made by such Lender, provided that the failure to give such notice shall not affect the validity of such application.

Section 11.7 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, addressed as follows in the case of Holdings, the Borrower and the Administrative Agent, and as set forth in an administrative questionnaire delivered to the Administrative Agent in the case of the Lenders, or to such other address as may be hereafter notified by the respective parties hereto:

Holdings: SRAM Holdings, LLC 1333 North Kingsbury, 4th Floor Chicago, Illinois 60642 Attention: Michael Herr Telecopy: (312) 664-8826 Telephone: (312) 664-8800 with a copy to: Lewis, Rice & Fingersh, L.C. 600 Washington Avenue, Suite 2500 St. Louis, Missouri 63101 Attention: Mark C. Winings Telecopy: (314) 612-7840 Telephone: (314) 444-7840

Borrower: SRAM, LLC 1333 North Kingsbury, 4th Floor Chicago, Illinois 60642 Attention: Michael Herr Telecopy: (312) 664-8826 Telephone: (312) 664-8800 Lewis, Rice & Fingersh, L.C. with a copy to: 600 Washington Avenue, Suite 2500 St. Louis, Missouri 63101 Attention: Mark C. Winings Telecopy: (314) 612-7840 Telephone: (314) 444-7840

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Administrative Agent: 10 South Dearborn Street Chicago, IL 60603 Attention: Tammy Roehm Telecopy: (312) 361-3100 Telephone: (312) 732-6637 provided that any notice, request or demand to or upon the Borrower, the Administrative Agent or the Lenders shall not be effective until received.

Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Section 2 unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the 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.

Section 11.8 GOVERNING LAW. THIS AGREEMENT, EACH OTHER LOAN DOCUMENT THAT DOES NOT EXPRESSLY SET FORTH ITS APPLICABLE LAW, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO AND THERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

Section 11.9 Submission to Jurisdiction; Waivers. Each of Holdings and the Borrower hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction (or, in the case of matters relating to the Security Documents, non-exclusive jurisdiction) of the courts of the State of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to Holdings or the Borrower, as the case may be at its address set forth in Section 11.8 or at such other address of which the Administrative Agent shall have been notified pursuant thereto; and

(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction;

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 11.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY) AND FOR ANY COUNTERCLAIM THEREIN. EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THE LOAN DOCUMENTS, AS APPLICABLE, BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.10.

Section 11.11 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

Section 11.12 Severability . Any provision of any Loan Document being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of any Loan Document or any part of such provision in any other jurisdiction.

Section 11.13 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this Agreement by facsimile transmission, or PDF format shall be as effective as delivery of a manually executed counterpart hereof.

Section 11.14 Entire Agreement. This Agreement and the Loan Documents embody the entire agreement of the parties and supersede all prior agreements and understandings relating to the subject matter thereof and any prior letter of interest, commitment letter, fee letter, confidentiality and similar agreements involving any Loan Party and any of the Administrative Agent, any Lender or any L/C Issuer or any of their respective Affiliates relating to a financing of substantially similar form, purpose or effect. In the event of any conflict between the terms of this Agreement and any other Loan Document, the terms of this Agreement shall govern (unless such terms of such other Loan Documents are necessary to comply with applicable Requirements of Law, in which case such terms shall govern to the extent necessary to comply therewith).

Section 11.15 Non-Public Information; Confidentiality. Each of the Administrative Agent and each Lender agrees to keep confidential all non-public information provided to it by any Loan Party, the Administrative Agent or any Lender pursuant to or in connection with this Agreement; provided that nothing herein shall prevent the Administrative Agent or any Lender from disclosing any such information (a) to the Administrative Agent, any other Lender or, subject to an agreement to comply

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document with the provisions of this Section, any affiliate thereof, (b) subject to an agreement to comply with the provisions of this Section, to any actual or prospective Eligible Assignee or any direct or indirect counterparty to any Swap Agreement (or any professional advisor to such counterparty), (c) to its employees, directors, agents, attorneys, accountants and other professional advisors or those of any of its affiliates who have been advised of the confidential nature of such information, (d) upon the request or demand of any Governmental Authority, (e) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (f) if requested or required to do so in connection with any litigation or similar proceeding relating to this Agreement or any other Loan Document, (g) that has been publicly disclosed, (h) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lenders investment portfolio in connection with ratings issued with respect to such Lender, (i) in connection with the exercise of any remedy hereunder or under any other Loan Document, or (j) if agreed by the Borrower in its sole discretion, to any other Person.

Each Lender acknowledges that information furnished to it pursuant to this Agreement or the other Loan Documents may include material non-public information concerning the Borrower and its Affiliates and their related parties or their respective securities, and confirms that it has developed compliance procedures regarding the use of material non-public information and that it will handle such material non- public information in accordance with those procedures and applicable law, including federal and state securities laws.

All information, including requests for waivers and amendments, furnished by the Borrower or the Administrative Agent pursuant to, or in the course of administering, this Agreement or the other Loan Documents will be syndicate-level information, which may contain material non-public information about the Borrower and its Affiliates and their related parties or their respective securities. Accordingly, each Lender represents to the Borrower and the Administrative Agent that it has identified in its administrative questionnaire a credit contact who may receive information that may contain material non-public information in accordance with its compliance procedures and applicable law, including federal and state securities laws.

Section 11.16 Patriot Act Notice. Each Lender subject to the USA Patriot Act of 2001 (31 U.S.C. 5318 et seq.) (the Patriot Act) hereby notifies the Borrower that, pursuant to Section 326 thereof, it is required to obtain, verify and record information that identifies the Borrower, including the name and address of the Borrower and other information allowing such Lender to identify the Borrower in accordance with such act.

Section 11.17 Acknowledgements. Each of Holdings and the Borrower hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

(b) neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to Holdings or the Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between Administrative Agent and Lenders, on one hand, and Holdings and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among Holdings, the Borrower and the Lenders.

Section 11.8 Releases of Guarantees and Liens. (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Administrative Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender except as expressly required by Section 11.1), and the Administrative Agent agrees, to take any action requested by the Borrower having the effect of releasing any Collateral or guarantee obligations (i) to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 11.1, (ii) of any Subsidiary which has been designated as an Unrestricted Subsidiary or (iii) under the circumstances described in paragraph (b) below. Without limiting the generality of the foregoing, each Lender irrevocably authorizes Administrative Agent, and Administrative Agent agrees, to release Collateral consisting of Stock of Foreign Subsidiaries upon Borrowers request in connection with the Foreign Restructuring, so long as Administrative Agent is reasonably satisfied that following the Foreign Restructuring it will have a Lien on at least 65% of the Stock of any Foreign Subsidiary which is a direct Wholly Owned Subsidiary of Borrower.

(b) At such time as the Loans, the L/C Reimbursement Obligations and the other obligations under the Loan Documents (other than obligations under or in respect of Hedging Agreements and contingent obligations for which no claim has been made) shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created by the Security Documents, and the Security Documents and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Loan Party under the Security Documents shall terminate, all without delivery of any instrument or performance of any act by any Person.

[SIGNATURE PAGES FOLLOW]

105

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

SRAM, LLC, AS BORROWER

By: /s/ Michael R. Herr Name: Michael R. Herr Title: Chief Financial Officer

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document JPMORGAN CHASE BANK, N.A., as Administrative Agent and as a Lender By: /s Tamara Roehm Name: Tamara Roehm Title: Senior Banker

J.P. MORGAN SECURITIES LLC, as Sole Bookrunner

By: /s/ Gerry Murray Name: Gerry Murray Title: Managing Director

GE CAPITAL MARKETS, INC., as Syndication Agent

By: /s/ David Mahon Name: David Mahon Title: Managing Director

GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender

By: /s/ Rebecca A. Ford Name: Rebecca A. Ford Title: Duly Authorized Signatory

MIZUHO CORPORATE BANK, LTD., as Documentation Agent and as a Lender

By: /s/ James R. Fayen Name: James R. Fayen Title: Deputy General Manager

RAYMOND JAMES BANK, FSB, as a Lender

By: /s/ James M. Armstrong Name: James M. Armstrong Title: Vice President

BANK OF AMERICA, N.A., as a Lender

By: /s/ Brian Peterson Name: Brian Peterson Title: Senior Vice President

FORM OF ASSIGNMENT

This ASSIGNMENT, dated as of the Effective Date, is entered into between the Assignor and the Assignee (each as defined below).

The parties hereto hereby agree as follows:

Borrower: SRAM, LLC, a Delaware limited liability company (the Borrower)

Administrative Agent: JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the Lenders and the L/C Issuers (in such capacity and together with its successors and permitted assigns, the Administrative Agent)

Credit Agreement: First Lien Credit Agreement, dated as of June 7, 2011, among the Borrower, SRAM Holdings, LLC, as one of the Guarantors, the Lenders and the L/C Issuers party thereto and the Administrative Agent (as the same may be amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement; capitalized terms used herein without definition are used as defined in the Credit Agreement)

[Trade Date: , 20 ]1

Effective Date: , 20 2

1 Insert for informational purposes only if needed to determine other arrangements between the assignor and the assignee. 2 To be filled out by Administrative Agent upon entry in the Register.

A-1

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Aggregate amount of Commitments or principal Aggregate amount of amount of Loans for all Commitments4 or principal Facility Assigned3 Lenders amount of Loans Assigned5 Percentage Assigned6

$ $ . %

[THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK]

3 Fill in the appropriate defined term for the type of facilities under the Credit Agreement that are being assigned under this Assignment. (e.g., Revolving Credit Facility, Term Loan Facility, etc.) 4 In the case of the Revolving Credit Facility, includes Revolving Loans and interests, participations and obligations to participate in L/C Obligations and Swing Loans. 5 Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date. The aggregate amounts are inserted for informational purposes only to help in calculating the percentages assigned which, themselves, are for informational purposes only. 6 Set forth, to at least 9 decimals, the Assigned Interest as a percentage of the aggregate Commitment or Loans in the Facility. This percentage is set forth for informational purposes only and is not intended to be binding. The assignments are based on the amounts assigned not on the percentages listed in this column.

A-2

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 1. Assignment. Assignor hereby sells and assigns to Assignee, and Assignee hereby purchases and assumes from Assignor, Assignors rights and obligations in its capacity as Lender under the Credit Agreement (including Liabilities owing to or by Assignor thereunder) and the other Loan Documents, in each case to the extent related to the amounts identified above (the Assigned Interest).

Section 2. Representations, Warranties and Covenants of Assignors. Assignor (a) represents and warrants to Assignee and the Administrative Agent that (i) it has full power and authority, and has taken all actions necessary for it, to execute and deliver this Assignment and to consummate the transactions contemplated hereby and (ii) it is the legal and beneficial owner of its Assigned Interest and that such Assigned Interest is free and clear of any Lien and other adverse claims, and (iii) by executing, signing and delivering this Assignment via ClearPar® or any other electronic settlement system designated by the Administrative Agent, the Person signing, executing and delivering this Assignment on behalf of the Assignor is an authorized signer for the Assignor and is authorized to execute, sign and deliver this Agreement, (b) makes no other representation or warranty and assumes no responsibility, including with respect to the aggregate amount of the Facilities, the percentage of the Facilities represented by the amounts assigned, any statements, representations and warranties made in or in connection with any Loan Document or any other document or information furnished pursuant thereto, the execution, legality, validity, enforceability or genuineness of any Loan Document or any document or information provided in connection therewith and the existence, nature or value of any Collateral, (c) assumes no responsibility (and makes no representation or warranty) with respect to the financial condition of any Group Member or Loan Party or the performance or nonperformance by any Loan Party of any obligation under any Loan Document or any document provided in connection therewith and (d) attaches any Notes held by it evidencing at least in part the Assigned Interest of such Assignor (or, if applicable, an affidavit of loss or similar affidavit therefor) and requests that the Administrative Agent exchange such Notes for new Notes in accordance with the Credit Agreement.

Section 3. Representations, Warranties and Covenants of Assignees. Assignee (a) represents and warrants to Assignor and the Administrative Agent that (i) it has full power and authority, and has taken all actions necessary for Assignee, to execute and deliver this Assignment and to consummate the transactions contemplated hereby, (ii) to the extent indicated above, is an Affiliate or an Approved Fund of the Lender set forth above and (iii) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest assigned to it hereunder and either such Assignee or the Person exercising discretion in making the decision for such assignment is experienced in acquiring assets of such type, (iv) by executing, signing and delivering this Assignment via ClearPar® or any other electronic settlement system designated by the Administrative Agent, the Person signing, executing and delivering this Assignment on behalf of the Assignor is an authorized signer for the Assignor and is authorized to execute, sign and deliver this Agreement, (b) appoints and authorizes the Administrative Agent to take such action as administrative agent and collateral agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto, (c) shall perform in accordance with their terms all obligations that, by the terms of the Loan Documents, are required to be performed by it as a Lender, (d) confirms it has received such documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and shall continue to make its own credit decisions in taking or not taking any action under any Loan Document independently and without reliance upon any Secured Party and based on such documents and information as it shall deem appropriate at the time, (e) acknowledges and agrees that, as a Lender, it may receive material non-public information and confidential information concerning the Loan Parties and their Affiliates and Securities and agrees to use such information in accordance with Section 11.15 of the Credit Agreement, (f) specifies as its applicable lending offices (and addresses for notices) the offices at the addresses set forth beneath its name on the signature pages hereof, (g) shall pay to the Administrative

A-3

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Agent a processing and recordation fee in the amount of $3,500 to the extent such fee is required to be paid under Section 11.2(b) of the Credit Agreement and (h) to the extent required pursuant to Section 2.17(f) of the Credit Agreement, attaches two completed originals of Forms W-8ECI, W-8BEN, W-8EXP, W-8IMY, W-9 or any other applicable required document.

Section 4. Determination of Effective Date; Register. Following the due execution and delivery of this Assignment by Assignor, Assignee and, to the extent required by Section 11.2(b) of the Credit Agreement, the Borrower, this Assignment (including its attachments) will be delivered to the Administrative Agent for its acceptance and recording in the Register. The effective date of this Assignment (the Effective Date) shall be the later of (i) the acceptance of this Assignment by the Administrative Agent and (ii) the recording of this Assignment in the Register. The Administrative Agent shall insert the Effective Date when known in the space provided therefor at the beginning of this Assignment.

Section 5. Effect. As of the Effective Date, (a) Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment, have the rights and obligations of a Lender under the Credit Agreement and (b) Assignor shall, to the extent provided in this Assignment, relinquish its rights (except those surviving the termination of the Commitments and payment in full of the Obligations) and be released from its obligations under the Loan Documents other than those obligations relating to events and circumstances occurring prior to the Effective Date.

Section 6. Distribution of Payments. On and after the Effective Date, the Administrative Agent shall make all payments under the Loan Documents in respect of each Assigned Interest (a) in the case of amounts accrued to but excluding the Effective Date, to Assignor and (b) otherwise, to the Assignee.

Section 7. Miscellaneous. This Assignment is a Loan Document and, as such, is subject to certain provisions of the Credit Agreement, including Sections 1.5 (Interpretation), 11.9 (Submission to Jurisdiction; Waivers) and 11.10 (Waiver of Jury Trial) thereof. On and after the Effective Date, this Assignment shall be binding upon, and inure to the benefit of, the Assignors, Assignees, the Administrative Agent and their Related Persons and their successors and assigns. This Assignment shall be governed by, and be construed and interpreted in accordance with, the law of the State of New York. This Assignment may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this Assignment by facsimile transmission or Electronic Transmission shall be as effective as delivery of a manually executed counterpart of this Assignment.

[SIGNATURE PAGES FOLLOW]

A-4

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

[NAME OF ASSIGNOR] as Assignor

By: Name: Title:

[NAME OF ASSIGNEE] as Assignee

By: Name: Title:

Lending Office for Eurodollar Loans:

[Insert Address (including contact name, fax number and e-mail address)]

Lending Office (and address for notices) for any other purpose:

[Insert Address (including contact name, fax number and e-mail address)]

[SIGNATURE PAGE FOR ASSIGNMENT FOR SRAM, LLCS CREDIT AGREEMENT]

JPMORGAN CHASE BANK, N.A. as Administrative Agent

By: Name: Title:

SRAM, LLC7

By: Name: Title:

7 Include only if required pursuant to Section 11.2(b) of the Credit Agreement.

[SIGNATURE PAGE FOR ASSIGNMENT FOR SRAM, LLCS CREDIT AGREEMENT]

FORM OF [REVOLVING LOAN] [TERM LOAN] NOTE

Lender: [Name of Lender] New York, New York Principal Amount: $ , 20

FOR VALUE RECEIVED, the undersigned, SRAM, LLC, a Delaware limited liability company (the Borrower), hereby promises to pay to the order of the Lender set forth above (the Lender) the Principal Amount set forth above, or, if less, the aggregate unpaid principal amount of [all Revolving Loans] [the Term Loans] (as defined in the Credit Agreement referred to below) of the Lender to the Borrower, payable at such times and in such amounts as are specified in the Credit Agreement.

The Borrower promises to pay interest on the unpaid principal amount of the [Revolving Loans] [Term Loans] from the date made until such principal amount is paid in full, payable at such times and at such interest rates as are specified in the Credit Agreement. Demand, diligence, presentment, protest and notice of non-payment and protest are hereby waived by the Borrower.

Both principal and interest are payable in Dollars to JPMorgan Chase Bank, N.A., as Administrative Agent, in accordance with the Credit Agreement, in immediately available funds.

This Note is one of the Notes referred to in, and is entitled to the benefits of, the First Lien Credit Agreement, dated as of June 7, 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement), among the Borrower, SRAM Holdings, LLC, as one of the Guarantors, the Lenders and the L/C Issuers party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the Lenders and the L/C Issuers. Capitalized terms used herein without definition are used as defined in the Credit Agreement.

The Credit Agreement, among other things, (a) provides for the making of [Revolving Loans] [a Term Loan] by the Lender to the Borrower in an aggregate amount [not to exceed at any time outstanding][equal to] the Principal Amount set forth above, the indebtedness of the Borrower resulting from such [Revolving Loans] [Term Loans] being evidenced by this Note and (b) contains provisions for acceleration of the maturity of the unpaid principal amount of this Note upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein.

This Note is a Loan Document, is entitled to the benefits of the Loan Documents and is subject to certain provisions of the Credit Agreement, including Sections 1.5 (Interpretation), 11.9 (Submission to Jurisdiction; Waivers) and 11.10 (Waiver of Jury Trial) thereof.

This Note is a registered obligation, transferable only upon notation in the Register, and no assignment hereof shall be effective until recorded therein.

This Note shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.

[SIGNATURE PAGES FOLLOW]

B-1

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered by its duly authorized officer as of the day and year and at the place set forth above.

SRAM, LLC

By: Name: Title:

[SIGNATURE PAGE FROM PROMISSORY NOTE OF SRAM, LLC FOR THE BENEFIT OF [NAME OF LENDER]]

FORM OF NOTICE OF BORROWING

JPMORGAN CHASE BANK, N.A. as Administrative Agent under the Credit Agreement referred to below

, 20

Attention:

Re: SRAM, LLC (the Borrower)

Reference is made to the First Lien Credit Agreement, dated as of June 7, 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement), among the Borrower, SRAM Holdings, LLC, as one of the Guarantors, the Lenders and the L/C Issuers party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for such Lenders and the L/C Issuers. Capitalized terms used herein without definition are used as defined in the Credit Agreement.

The Borrower hereby gives you irrevocable notice, pursuant to Section 2.2 of the Credit Agreement of its request of a Borrowing (the Proposed Borrowing) under the Credit Agreement and, in that connection, sets forth the following information: A. The date of the Proposed Borrowing is , 8 (the Funding Date). B. The aggregate principal amount of the Proposed Borrowing of Revolving Loans is $ , of which $ consists of ABR Loans and $ consists of Eurodollar Loans having an initial Interest Period of months. C. The aggregate principal amount of the Proposed Borrowing of Term Loans is $ , of which $ consists of ABR Loans and $ consists of Eurodollar Loans having an initial Interest Period of months.9

The Borrower hereby certifies that the following statements are true on the date hereof, both before and after giving effect to the Proposed Borrowing and any other Loan to be made or Letter of Credit to be Issued on or before the Funding Date:

8 For Term Loans, must be the Closing Date. 9 Delete for any Proposed Borrowing after the Closing Date.

C-1

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (i) the representations and warranties set forth in Article IV of the Credit Agreement and elsewhere in the Loan Documents are true and correct in all material respects on and as of such Funding Date [except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct on and as of such date];10 and (ii) no Default is continuing.

SRAM, LLC

By: Name: Title:

10 Insert for Proposed Borrowings after the Closing Date.

[SIGNATURE PAGE TO NOTICE OF BORROWING DATED , 20 ]

FORM OF SWINGLINE REQUEST

JPMORGAN CHASE BANK, N.A., as Administrative Agent under the Credit Agreement referred to below

Attention:

, 20

Re: SRAM, LLC (the Borrower)

The Borrower hereby gives you irrevocable notice pursuant to Section 2.3 of the Credit Agreement that it requests Swing Loans under the Credit Agreement (the Proposed Advance) and, in that connection, sets for the following information: A. The date of the Proposed Advance is , 20 (the Funding Date). B. The aggregate principal amount of the Proposed Advance of Swing Loan is $ .

The Borrower hereby certifies that the following statements are true on the date hereof both before and after giving effect to the Proposed Advance and any other Loan to be made or Letter of Credit to be Issued on or before the Funding Date: (i) the representations and warranties set forth in Article IV of the Credit Agreement and elsewhere in the Loan Documents are true and correct in all material respects on and as of such Funding Date [except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct on and as of such date];11 and (ii) no Default is continuing.

11 Insert for Proposed Borrowings after the Closing Date.

D-1

By: Name: Title:

[SIGNATURE PAGE TO NOTICE OF BORROWING DATED , 20 ]

FORM OF NOTICE OF CONVERSION OR CONTINUATION

JPMORGAN CHASE BANK, N.A. as Administrative Agent under the Credit Agreement referred to below

, 20 Attention:

Re: SRAM, LLC (the Borrower)

The Borrower hereby gives you irrevocable notice, pursuant to Section 2.10 of the Credit Agreement of its request for the following: A. a continuation, on , 20 , as Eurodollar Loans having an Interest Period of months of [Term Loans] [Revolving Loans] in an aggregate outstanding principal amount of $ having an Interest Period ending on the proposed date for such continuation; B. a conversion, on , 20 , to Eurodollar Loans having an Interest Period of months of [Term Loans] [Revolving Loans] in an aggregate outstanding principal amount of $ ; and C. a conversion, on , 20 , to ABR Loans, of [Term Loans] [Revolving Loans] in an aggregate outstanding principal amount of $ .

In connection herewith, the Borrower hereby certifies that no Event of Default is continuing on the date hereof, both before and after giving effect to any Loan to be made or Letter of Credit to be Issued on or before any date for any proposed conversion or continuation set forth above.

SRAM, LLC

By: Name: Title:

FORM OF COMPLIANCE CERTIFICATE

, 20

This certificate is delivered pursuant to Section 6.1(c) of, and in connection with the consummation of the transactions contemplated in, the First Lien Credit Agreement, dated as of June 7, 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement), among SRAM, LLC (the Borrower), SRAM Holdings, LLC, as one of the Guarantors, the Lenders and L/C Issuers party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the Lenders and L/C Issuers (the Administrative Agent). Capitalized terms used herein and not otherwise defined herein are used herein as defined in the Credit Agreement.

The undersigned, a duly authorized Responsible Officer of the Borrower having the name and title set forth below under his signature, hereby certifies, on behalf of the Borrower (and not in his individual capacity) for the benefit of the Secured Parties and pursuant to Section 6.1 of the Credit Agreement that such Responsible Officer of the Borrower is familiar with the Credit Agreement and that, in accordance with each of the following sections of the Credit Agreement, each of the following is true on the date hereof, both before and after giving effect to any Loan to be made or Letter of Credit to be Issued on or before the date hereof: (a) In accordance with Section 6.1[(a)/(b)] of the Credit Agreement, attached hereto as Annex A are the Financial Statements for the [Fiscal Quarter/Fiscal Year] ended , 20 required to be delivered pursuant to Section 6.1[(a)/(b)] of the Credit Agreement. Such Financial Statements fairly present in all material respects the Consolidated financial position, results of operations and cash flow of the Reporting Person as at the dates indicated therein and for the periods indicated therein and, in respect of the balance sheet and statements of income delivered under Section 6.1(a) of the Credit Agreement, in accordance with GAAP [(subject to the absence of footnote disclosure and normal year-end audit adjustments)]12 [without qualification as to the scope of the audit or as to going concern and without any other similar qualification, together with the certificate from the Group Members Accountants with respect to such Consolidated Financial Statements required to be delivered pursuant to Section 6.1(b) of the Credit Agreement. The examination by the Group Members Accountants in connection with such Financial Statements has been made in accordance with the standards of the United States Public Company accounting Oversight Board (or any successor entity).]13 (b) [In accordance with Section 6.1(c) of the Credit Agreement, attached hereto as Annex B are the calculations used to determine compliance with the financial covenant contained in Article V of the Credit Agreement that is tested on a quarterly basis with details set forth in such Annex B, with adjustments as required by the definition of Pro Forma Basis,]14 [and the calculations used in determining Excess Cash Flow]15.

12 Insert language in brackets only for quarterly reports. 13 Insert language in brackets only for annual certifications. 14 Insert bracketed language only if Article V is applicable. 15 Insert bracketed language only for annual reports.

F-1

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) In accordance with Section 6.1(c) of the Credit Agreement, no Default is continuing as of the date hereof[, except as provided for on Annex C attached hereto, with respect to each of which the Borrower proposes to take the actions set forth on Annex C]. (d) [In accordance with Section 6.1(f) of the Credit Agreement, attached hereto as Annex D is a discussion and analysis of the financial condition and results of operations of the Group Members for the portion of the Fiscal Year elapsed on or prior to the date hereof discussing the reasons for any significant variations from the Projections for such period and the figures for the corresponding period in the previous Fiscal Year.]16 (g) [In accordance with Sections 6.1(g) of the Credit Agreement, attached hereto as Annex F are complete and correct copies of each management letter, audit report or similar letter or report received by any Group Member from any independent registered certified public accountant (including the Group Members Accountants) in connection with such Financial Statements or any audit thereof.]17 (h) [Attached hereto as Annex G are calculations setting forth the cash balances and working capital items of the Loan Parties, on the one hand, and the Subsidiaries which are not Loan Parties, on the other hand, as of the end of the Fiscal Quarter ended , 20__.]18

16 Insert bracketed language only if a Qualified IPO has not been consummated. 17 Insert bracketed language only for annual reports. 18 Insert language in brackets only for quarterly reports.

F-2

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, the undersigned has executed this certificate on the date first written above.

SRAM, LLC

By:

Name: Title:

[SIGNATURE PAGE TO COMPLIANCE CERTIFICATE]

FINANCIAL STATEMENTS

F-4

FINANCIAL CALCULATIONS

(SEE ATTACHED)

F-5

For purposes of calculating Excess Cash Flow, Unfinanced Capital Expenditures is defined as follows:

1. For any Person for any period, the aggregate of all expenditures, whether or not made through the incurrence of Indebtedness, by such Person and its Subsidiaries during such period for the acquisition, leasing (pursuant to a Capital Lease), construction, replacement, repair, substitution or improvement of fixed or capital assets or additions to equipment, in each case required to be capitalized under GAAP on a Consolidated balance sheet of such Person $

To the extent included above and without duplication, less:

2. Interest capitalized during construction

3. Any expenditure to the extent such expenditure is part of the aggregate amounts payable in connection with, or other consideration for, any Permitted Acquisition consummated during or prior to such period

4. Any expenditure made in connection with a Permitted Reinvestment

5. Any expenditure financed with Net Cash Proceeds of equity issuances permitted herein which Borrower is not required to pay to Administrative Agent under this Agreement

6. Total capital expenditures (line 1, minus the sum of lines 2 through 5) $

7. To the extent included above, less: Amounts financed or proposed to be financed through the incurrence of Capitalized Lease Obligations or any long-term Indebtedness other than the Obligations

Unfinanced Capital Expenditures (line 6 minus line 7) $

F-6

For purposes of calculating Excess Cash Flow, Consolidated Cash Interest Expense is defined as follows:

1. For any Person for any period, Consolidated Interest Expense of such Person and its Subsidiaries for such period $

To the extent included in Consolidated Interest Expense and without duplication, less:

2. The amortized amount or write-off or write-down of debt discount or debt issuance costs and commissions, prepayment premiums and other fees and charges associated with Indebtedness (including without limitation net costs (or net gains) under Interest Rate Contracts for such period)

3. All fees, charges, commissions, discounts, and other similar obligations (other than reimbursement obligations) with respect to bank guarantees, bankers acceptances, surety bonds and performance bonds (whether or not matured)

4. Non-cash charges relating to write-ups or write-downs in the book or carrying value of Indebtedness

5. Interest payable in evidences of Indebtedness or by addition to the principal of the related Indebtedness

6. Any other non-cash interest expense

7. To the extent not netted in calculating Consolidated Interest Expense, and without duplication, Consolidated interest income

Consolidated Cash Interest Expense (line 1 minus the sum of lines 2 through 7) $

F-7

The Consolidated Leverage Ratio is defined as follows for any Person as of any date of determination:

1. The average of the sum of the aggregate balance of outstanding Revolving Loans and Swing Loans as of the last day of each month in the twelve month period (or shorter period commencing on the Closing Date) ended on the date of measurement $

Plus, as of the date of measurement:

2. L/C Obligations

3. Aggregate outstanding principal balance of Term Loans and Term Loans (as defined in the Second Lien Credit Agreement)

4. Principal portion of Capitalized Lease Obligations and Indebtedness secured by purchase money Liens

5. Without duplication, all other Indebtedness and Guaranty Obligations included in the definition of Consolidated Total Debt, in each case of such Person and its Subsidiaries on a Consolidated basis

6. Less: The sum of unrestricted Cash and Cash Equivalents as of the day of measurement but not in excess of $7,500,000

7. Consolidated Net Total Debt (sum of lines 1 through 5, minus line 6) $

8. Consolidated EBITDA for the last period of four consecutive Fiscal Quarters ending on such date $

9. Consolidated Leverage Ratio (line 7 divided by line 8 above)

10. Maximum Consolidated Leverage Ratio

In Compliance19 Yes /No

19 If applicable.

F-8

Consolidated EBITDA is defined as follows with respect to any Person for any period of four consecutive Fiscal Quarters:

1. Consolidated net income (or loss) of such Person and its Subsidiaries for such period $

To the extent included above and without duplication, less:

2. The net income of any other Person in which such Person or one of its Subsidiaries has a joint interest with a third-party (which interest does not cause the net income of such other Person to be Consolidated into the net income of such Person), except to the extent of the amount of dividends or distributions paid to such Person or Subsidiary $

3. The net income of any Subsidiary of such Person (other than a Guarantor) that is, on the last day of such period, subject to any restriction or limitation on the payment of dividends or the making of other distributions, to the extent such restriction or limitation would prevent an amount equal to such net income to be paid to the Borrower (whether as a distribution, fee or otherwise) $

4. The net income of any other Person arising prior to such other Person becoming or being designated a Subsidiary of such Person or merging or consolidating into such Person or its Subsidiaries $

5. Consolidated Net Income (line 1 minus the sum of lines 2 through 4) $

To the extent included in the calculation of Consolidated Net Income and without duplication, plus:

6. Any provision for (i) United States federal and state income taxes, foreign income taxes, franchise taxes, or other taxes measured by net income, profits or capital (or any similar measures), and (ii) withholding taxes $

7. Consolidated Interest Expense20 $

20 For the avoidance of doubt, and without duplication, Consolidated Interest Expense shall, at the election of Borrower, include, to the extent included in the calculation of Consolidated Net Income, all commitment fees and other costs, fees and expenses payable by such Person and its Subsidiaries during such period in order to effect, or because of, the incurrence of any Indebtedness (excluding Transaction Costs), to the extent paid in cash.

F-9

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 8. Any net loss or expense from extraordinary (in accordance with GAAP) and non-recurring or unusual items21, with such non-recurring or unusual items to the extent the nature of such non-recurring or unusual items has been identified with reasonable specificity and disclosed in writing to Administrative Agent and, if in excess of $5,000,000 in any 12 month period, as are acceptable to Administrative Agent (with consent not to be unreasonably withheld). $

9. Any depreciation, depletion and amortization expense22 $

10. Any aggregate net loss on the Sale of property (other than accounts (as defined under the applicable UCC) and inventory) in each case outside the ordinary course of business, and net of any loss from discontinued operations or the Sale thereof $

11. Any other non-cash expense, charge or loss for such period, which amount shall not include write-offs, write-downs or reserves with respect to accounts and inventory23 $

21 For the avoidance of doubt and without duplication, such non-recurring and unusual amounts shall, at the election of Borrower, include, to the extent included in the calculation of Consolidated Net Income, severance costs, litigation settlement costs, costs associated with curtailments and modifications to pension and post-retirement employee benefit plans, costs associated with facilities openings or closings and consolidation, relocation or integration costs and other business optimization and restructuring charges and expenses. 22 For the avoidance of doubt and without duplication, such amortization shall, at the election of Borrower, include, to the extent included in the calculation of Consolidated Net Income, the amortization of deferred gains. 23 For the avoidance of doubt and without duplication, non-cash expenditures, charges, losses or gains shall, at the election of Borrower, include, to the extent included in the calculation of Consolidated Net Income, (A) the amount of any non-cash compensation deduction or charge, whether as the result of any grant of Stock or Stock Equivalents to employees, officers, directors or consultants or otherwise, (B) deferred financing costs written off, premiums paid and other net gains or losses in connection with any early extinguishment of Indebtedness (including in connection with the Related Transactions), (C) write-offs, write-downs or write-ups of goodwill or other intangibles, (D) pension adjustments under FAS 87, including changes to pension plan accounting policies, (E) the impact of foreign currency translations and transactions and hedging transactions, and (F) amortization of inventory write up, deferred revenue adjustment or any other non cash adjustments resulting from the application of purchase accounting as required under Statement of Financial Accounting Standards No. 141 or 141R Business Combinations, amortization of intangibles (including, but not limited to, goodwill and the cost of non-competition agreements), fair value adjustments, including earn-outs, transaction expenses and including any non cash charges associated with any impairment analysis required under Statement of Financial Accounting Standards No. 142 Goodwill, and other Intangible Assets.

F-10

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12. To the extent actually reimbursed, expenses incurred to the extent covered by indemnification provisions in any agreement in connection with a Permitted Acquisition or by any insurance (including business interruption insurance) $

13. Fees, expenses and costs incurred by SRAM International Corporation, Holdings and its Subsidiaries in connection with (i) the Loan Documents or the Related Transactions (including Transaction Costs), (ii) the issuance of Stock and incurrence of Indebtedness permitted under this Agreement (including a Qualified IPO), (iii) any Permitted Acquisition or other Investment permitted hereunder, in each case whether or not consummated and solely to the extent disclosed in writing to Administrative Agent, (iv) restructuring costs and severance payments (up to $11,000,000) in connection with the Loan Parties (or Subsidiaries) restructuring initiatives and headcount reductions at their manufacturing facilities in Germany; and (v) restructuring costs and expenses in connection with the Foreign Restructuring $

14. Any expense reimbursement paid to non-employee directors $

15. The amount of any SRAM Cycling Advocacy Donation $

To the extent included in the calculation of Consolidated Net Income and without duplication, less:

16. Any net gain from extraordinary items (in accordance with GAAP), and non-recurring or unusual items24 $

17. Any net aggregate gain from the Sale of property (other than accounts (as defined in the applicable UCC) and inventory), in each case outside the ordinary course of business, and any net gain from discontinued operations or the Sale thereof $

24 For the avoidance of doubt and without duplication, such non-recurring and unusual amounts shall, at the election of Borrower, include, to the extent included in the calculation of Consolidated Net Income, severance costs, litigation settlement costs, costs associated with curtailments and modifications to pension and post-retirement employee benefit plans, costs associated with facilities openings or closings and consolidation, relocation or integration costs and other business optimization and restructuring charges and expenses.

F-11

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 18. Any other non-cash income or gain25, including any reversal of a charge referred to in line 11 above by reason of a decrease in the value of any Stock or Stock Equivalent but excluding any write-ups or reversals of write-downs or reserves with respect to accounts and inventory $

Consolidated EBITDA (line 5 plus the sum of lines 6 through 15, minus the sum of lines 16 through 18) $

25 For the avoidance of doubt and without duplication, non-cash expenditures, charges, losses or gains shall, at the election of Borrower, include, to the extent included in the calculation of Consolidated Net Income, (A) the amount of any non-cash compensation deduction or charge, whether as the result of any grant of Stock or Stock Equivalents to employees, officers, directors or consultants or otherwise, (B) deferred financing costs written off, premiums paid and other net gains or losses in connection with any early extinguishment of Indebtedness (including in connection with the Related Transactions), (C) write-offs, write-downs or write-ups of goodwill or other intangibles, (D) pension adjustments under FAS 87, including changes to pension plan accounting policies, (E) the impact of foreign currency translations and transactions and hedging transactions, and (F) amortization of inventory write up, deferred revenue adjustment or any other non cash adjustments resulting from the application of purchase accounting as required under Statement of Financial Accounting Standards No. 141 or 141R Business Combinations, amortization of intangibles (including, but not limited to, goodwill and the cost of non-competition agreements), fair value adjustments, including earn-outs, transaction expenses and including any non cash charges associated with any impairment analysis required under Statement of Financial Accounting Standards No. 142 Goodwill, and other Intangible Assets.

F-12

Excess Cash Flow is defined as follows: 1. Consolidated EBITDA for such period $

Without duplication, less:

2. Any scheduled cash principal payment on the Term Loans and the Revolving Loans to the extent paid on the Revolving Credit Termination Date during such period $

3. Any scheduled or other mandatory (other than mandatory prepayments financed with the net cash proceeds of the event giving rise to the mandatory prepayment requirement), or (to the extent permitted by this Agreement) voluntary cash payment made by the Borrower or any of its Subsidiaries during such period on any Capitalized Lease Obligation or other Indebtedness (other than the Loans or Term Loans (as defined in the Second Lien Credit Agreement) (but only, if such Indebtedness may be reborrowed, to the extent such payment results in a permanent reduction in commitments thereof) including Earn-Out payments to the extent such Earn-Outs are Indebtedness $

4. Unfinanced Capital Expenditures made by such Person or any of its Subsidiaries during such period to the extent permitted by this Agreement $

5. Any amounts paid in cash on account of Permitted Acquisitions (including purchase price adjustments) by such Person or any of its Subsidiaries during such period to the extent permitted by this Agreement, excluding any such amounts to the extent financed through the incurrence of long-term Indebtedness (other than the Obligations) or equity issuances $

6. Restricted Payments made in cash during such period under and permitted by Section 8.5(c)(i) (but not in duplication of line 9 below), (ii), (iii) and (iv) of the Credit Agreement, 8.5(d) (except to the extent paid with the Available Excess Cash Flow Amount) or 8.5(e) of the Credit Agreement, to the extent not already included in Consolidated EBITDA as a reduction in such calculation $

7. Consolidated Cash Interest Expense of such Person for such period $

F-13

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 8. Any net cash losses from extraordinary items and all amounts added to Consolidated EBITDA arising from (i) line item 8 under the calculation of Consolidated EBITDA, (ii) line item 10 under the calculation of Consolidated EBITDA, (iii) line item 13 under the calculation of Consolidated EBITDA, (iv) line item 14 under the calculation of Consolidated EBITDA, and (v) line item 15 under the calculation of Consolidated EBITDA in the case of any such items in clauses (i) through (v) only to the extent such amounts were paid in cash during such period $

9. To the extent paid or payable currently in cash by such Person in respect of such period, (A) United States federal and state income taxes, foreign income taxes, franchise taxes, or other taxes measured by net income, profits or capital (or any similar measures), and (B) withholding taxes $

10. Any increase in the Working Capital during such period (measured as the excess of such Working Capital at the end of such period over such Working Capital at the beginning of such period) $

11. Cash expenditures made in respect of Interest Rate Contracts during such period, to the extent not reflected in the determination of Consolidated EBITDA $

Without duplication, plus:

12. Any decrease in the Working Capital during such period (measured as the excess of such Working Capital at the beginning of such period over such Working Capital at the end thereof) $

13. Any amounts deducted (other than non-cash items) in the calculation of Consolidated EBITDA under line item 17 therein $

Excess Cash Flow (line 1 minus the sum of lines 2 through 11 plus lines 12 and 13) $

F-14

CONTINUING DEFAULTS]26

26 Delete if not used in the text of the certificate.

F-15

MANAGEMENT DISCUSSION AND ANALYSIS

F-16

INTERCOMPANY INDEBTEDNESS

F-17

MANAGEMENT LETTERS

F-18

WORKING CAPITAL ITEMS AND CASH BALANCES

F-19

FORM OF COLLATERAL UPDATE CERTIFICATE

, 20

This certificate is delivered pursuant to Section 6.1(d) of, and in connection with the consummation of the transactions contemplated in, the First Lien Credit Agreement, dated as of June 7, 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement), among SRAM, LLC (the Borrower), SRAM Holdings, LLC, as one of the Guarantors, the Lenders and the L/C Issuers party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the Lenders and the L/C Issuers (the Administrative Agent). Capitalized terms used herein and not otherwise defined herein are used herein as defined in the Credit Agreement.

[Signature Page Follows]

G-1

SRAM, LLC

By:

Name: Title:

NOTICE OF CHANGES TO SCHEDULE 6 (INTELLECTUAL PROPERTY) OF THE GUARANTY AND SECURITY AGREEMENT

FORM OF INCREASED FACILITY ACTIVATION NOTICE

To: JPMorgan Chase Bank, N.A., as Administrative Agent under the Credit Agreement referred to below

Reference is made to the First Lien Credit Agreement, dated as of June 7, 2011 (as amended, supplemented or otherwise modified from time to time, the Credit Agreement), among the Borrower, SRAM Holdings, LLC, as one of the Guarantors, the Lenders, the L/C Issuers party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for such Lenders and the L/C Issuers (in such capacity, the Administrative Agent). Unless otherwise defined herein, terms defined in the Credit Agreement used herein shall have the meanings given to them in the Credit Agreement.

This notice is an Increased Facility Activation Notice referred to in Section 2.21(a) of the Credit Agreement, and the Borrower and each of the Lenders party to this Increased Facility Activation Notice notify the Administrative Agent of the following pursuant to Section 2.21 of the Credit Agreement: 1. Each Lender party hereto agrees to make Incremental Term Loans as set forth opposite such Lenders name on the signature pages hereof under the caption Increased Facility Amount. 2. The aggregate principal amount of Incremental Term Loans requested by this Increased Facility Activation Notice is $ .1 3. The Increased Facility Closing Date is . 4. The Incremental Term Maturity Date is . 5. The amortization schedule for Incremental Term Loans is attached hereto as Annex I and complies with Section 2.6(c). 6. The Applicable Margin for the Incremental Term Loans is .

The agreement of each Lender party hereto to make the Incremental Term Loans is subject to the satisfaction, prior to or concurrently with the making of such commitment or extension of credit on the Increased Facility Closing Date, of the following conditions precedent: (a) The Administrative Agent shall have received this notice, executed and delivered by the Borrower and each Lender party hereto. (b) The Administrative Agent shall have received a certificate stating that the conditions set forth in Section 2.21(a) to the Credit Agreement are satisfied, executed by a Responsible Officer of the Borrower.

1 Not to exceed $75,000,000. Minimum amount of at least (i) $5,000,000 in case of Incremental Revolving Commitments or (ii) $25,000,000 in case of Incremental Term Loans.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) To the extent reasonably requested by the Administrative Agent, attached hereto as Attachment I are: legal opinions, board resolutions and other closing certificates and reaffirmation agreements and additional documents and filings (including amendments to the Security Documents and title endorsement bring downs). (d) Attached hereto as Annex II are the computations demonstrating compliance on a pro forma basis with the financial covenants set forth in Section 5.1 of the Credit Agreement after giving effect to such Incremental Term Loan, if any, and the application of the proceeds therefrom as if made and applied on the date of the most-recent financial statements of the Borrower delivered pursuant to Section 6.1 of the Credit Agreement. (e)(i) Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date, except to the extent such representations and warranties expressly date to an earlier date, in which case such representations and warranties shall be true and correct in all material respects on and as of such earlier date, and (ii) no Default or Event of Default shall have then occurred and be continuing.

[Signature page follows]

By: Name: Title:

Incremental Term Loan Amount [NAME OF LENDER] $ By: Name: Title:

CONSENTED TO BY: JPMORGAN CHASE BANK, N.A., as Administrative Agent

By: Name: Title:

[Incremental Term Loans Amortization Schedule]

The information described herein is as of , , and pertains to the period from , to , .

[Set forth covenant calculations]

[Legal opinions]

[Resolutions]

[By-Laws/Limited Liability Company Agreement]

[Certificate of Incorporation/Formation and Long-Form Good Standing]

[Additional documents and filings to the extent requested by the Administrative Agent and consistent with those delivered on Closing Date pursuant to Article 4 of the Credit Agreement]

FORM OF NEW LENDER SUPPLEMENT

SUPPLEMENT, dated as of , , to the First Lien Credit Agreement, dated as of June 7, 2011, (as amended, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement), among the Borrower, SRAM Holdings, LLC, as one of the Guarantors, the Lenders and the L/C Issuers party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for such Lenders and the L/C Issuers (in such capacity, the Administrative Agent). Unless otherwise defined herein, terms defined in the Credit Agreement used herein shall have the meanings given to them in the Credit Agreement.

W I T N E S S E T H:

WHEREAS, the Credit Agreement provides in Section 2.21(b) thereof that any bank, financial institution or other entity may become a party to the Credit Agreement with the consent of the Borrower and the Administrative Agent (which consent, in the case of the Administrative Agent, shall not be unreasonably withheld) by executing and delivering to the Borrower and the Administrative Agent a supplement to the Credit Agreement in substantially the form of this Supplement; and

WHEREAS, the undersigned now desires to become a party to the Credit Agreement;

NOW, THEREFORE, the undersigned hereby agrees as follows: 1. The undersigned agrees to be bound by the provisions of the Credit Agreement, and agrees that it shall, on the date this Supplement is accepted by the Borrower and the Administrative Agent, become a Lender for all purposes of the Credit Agreement to the same extent as if originally a party thereto, with an Incremental Term Loan of $ . 2. The undersigned (a) represents and warrants that it is legally authorized to enter into this Supplement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements referred to in Section 6.1 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Supplement; (c) agrees that it has made and will, independently and without reliance upon any Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or any instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Loan Documents or any instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender including, without limitation, if it is organized under the laws of a jurisdiction outside the United States, its obligation pursuant to Section 2.17(f) of the Credit Agreement. 3. The undersigneds address for notices for the purposes of the Credit Agreement is as follows:

(Attention)

(Telecopy)

(Telephone)

4. This Supplement may be executed in counterparts, each of which shall be deemed to constitute an original, but all of which when taken together shall constitute one and the same instrument. Delivery of an executed signature page of this Supplement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart thereof.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.

(Name of Lender)

By: Name: Title:

Accepted this day of , .

SRAM, LLC

By: Name: Title:

JPMORGAN CHASE BANK, N.A., as Administrative Agent

By: Name: Title:

FORM OF GUARANTY AND SECURITY AGREEMENT

FORM OF INTERCREDITOR AGREEMENT

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is made to the First Lien Credit Agreement, dated as of June 7, 2011 (as amended, supplemented or otherwise modified from time to time, the Credit Agreement), among SRAM, LLC (the Borrower), SRAM Holdings, LLC, as one of the Guarantors, the Lenders and the L/C Issuers party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the Lenders and the L/C Issuers (the Administrative Agent). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code and (v) the interest payments in question are not effectively connected with the undersigneds conduct of a U.S. trade or business.

The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

IN WITNESS WHEREOF, the undersigned has duly executed this certificate.

[NAME OF LENDER]

By: Name: Title:

Date: , 20

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement, neither the undersigned nor any of its partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigneds or its partners/members conduct of a U.S. trade or business.

The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of its partners/members claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

IN WITNESS WHEREOF, the undersigned has duly executed this certificate.

[NAME OF LENDER]

By: Name: Title:

Date: , 20

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (v) the interest payments in question are not effectively connected with the undersigneds conduct of a U.S. trade or business.

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

IN WITNESS WHEREOF, the undersigned has duly executed this certificate.

[NAME OF PARTICIPANT]

By: Name: Title:

Date: , 20

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigneds or its partners/members conduct of a U.S. trade or business.

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of its partners/members claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

IN WITNESS WHEREOF, the undersigned has duly executed this certificate.

[NAME OF PARTICIPANT]

By: Name: Title:

Date: , 20

FORM OF AFFILIATED LENDER ASSIGNMENT AND ASSUMPTION

The Assignor identified on Schedule 1 hereto (the Assignor) and the Assignee identified on Schedule 1 hereto (the Assignee) agree as follows: 1. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, as of the Effective Date (as defined below), the interest described in Schedule 1 hereto (the Assigned Interest) in and to the Assignors rights and obligations under the Credit Agreement with respect to those credit facilities contained in the Credit Agreement as are set forth on Schedule 1 hereto (individually, an Assigned Facility; collectively, the Assigned Facilities), in a principal amount for each Assigned Facility as set forth on Schedule 1 hereto. 2. The Assignor (a) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document or with respect to the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto, other than that the Assignor has not created any adverse claim upon the interest being assigned by it hereunder and that such interest is free and clear of any such adverse claim and (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower, any of its Affiliates or any other obligor or the performance or observance by the Borrower, any of its Affiliates or any other obligor of any of their respective obligations under the Credit Agreement or any other Loan Document or any other instrument or document furnished pursuant hereto or thereto. 3. The Assignee represents and warrants that (a) it is legally authorized to enter into this Assignment and Assumption; (b) it is an Affiliated Lender pursuant to Section 11.2(g) of the Credit Agreement; and (c) the other terms and conditions with respect to this Assignment and Assumption set forth in Section 11.2(g) of the Credit Agreement have been satisfied. For the avoidance of doubt, Lenders shall not be permitted to assign Revolving Commitments or Revolving Loans to any Affiliated Lender. 4. The Assignee (a) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements delivered pursuant to Section 6.1 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption; (b) agrees that it will, independently and without reliance upon the Assignor, the Agents or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, the other Loan Documents or any other instrument or document furnished

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document pursuant hereto or thereto; (c) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (d) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender including its obligations, if any, pursuant to Section 2.17(f) of the Credit Agreement. 5. The effective date of this Assignment and Assumption shall be the Effective Date of Assignment described in Schedule 1 hereto (the Effective Date). Following the execution of this Assignment and Assumption, it will be delivered to the Administrative Agent for acceptance by it and recording by the Administrative Agent pursuant to the Credit Agreement, effective as of the Effective Date (which shall not, unless otherwise agreed to by the Administrative Agent, be earlier than five Business Days after the date of such acceptance and recording by the Administrative Agent). 6. Upon such acceptance and recording, 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 the Effective Date and to the Assignee for amounts which have accrued subsequent to the Effective Date.][to the Assignee whether such amounts have accrued prior to the Effective Date or accrue subsequent to 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.] 7. From and after the Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Assumption, have the rights and obligations of a Lender thereunder and under the other Loan Documents and shall be bound by the provisions thereof and (b) the Assignor shall, to the extent provided in this Assignment and Assumption, relinquish its rights and be released from its obligations under the Credit Agreement. 8. This Assignment and Assumption shall be governed by and construed in accordance with the laws of the State of New York. 9. This Assignment and Assumption may be executed in counterparts, each of which shall be deemed to constitute an original, but all of which when taken together shall constitute one and the same instrument. Delivery of an executed signature page of this Assignment and Assumption by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart thereof.

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Assumption to be executed as of the date first above written by their respective duly authorized officers on Schedule 1 hereto.

to Assignment and Assumption with respect to

the First Lien Credit Agreement, dated as of June 7, 2011 (as amended, supplemented or otherwise modified from time to time, the Credit Agreement), among SRAM, LLC (the Borrower), SRAM Holdings, LLC, as one of the Guarantors, the Lenders and the L/C Issuers party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the Lenders and the L/C Issuers (the Administrative Agent).

Name of Assignor:

Name of Assignee: (a) Assignee is an Affiliate of: [Name of Lender] (b) Assignee is an Approved Fund administered or managed by: [Name of Lender] [an affiliate of [Name of Lender]] [an entity or an Affiliate of an entity that administers or manages [Name of Lender]]

Effective Date of Assignment:

Principal Amount Commitment Percentage Credit Facility Assigned Assigned Assigned

$ . %

[Name of Assignee] [Name of Assignor]

By: By: Name: Name: Title: Title:

Accepted for Recordation in the Register: Required Consents (if any):

JPMORGAN CHASE BANK, N.A., as Administrative SRAM, LLC, as Borrower Agent

By: By: Name: Name: Title: Title:

JPMORGAN CHASE BANK, N.A., as Administrative Agent

By: Name: Title:

This document constitutes the schedules referenced in Article 4 (the Disclosure Schedules) of that certain First Lien Credit Agreement (the Agreement), dated as of June 7, 2011, among SRAM, LLC as Borrower, SRAM Holdings, LLC, as one of the Guarantors, the Lenders and L/C Issuers party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent and forms a part of the representations and warranties set forth in Article 4 of the Agreement. The representations and warranties contained in Article 4 of the Agreement are subject to the exceptions and other information set forth in the Disclosure Schedules. The Disclosure Schedules herein are numbered to correspond to the applicable Section of the Agreement to which the disclosure relates; except any information set forth in one of these Disclosure Schedules will be deemed to apply to each other section or subsection of the Disclosure Schedules to which its relevance is reasonably apparent; provided, further, that, anything in the Agreement to the contrary notwithstanding, the inclusion of an item in these Disclosure Schedules as an exception to a representation or warranty will not be deemed an admission that the item represents a material exception or material fact, event or circumstance or that the item has had or would reasonably be expected to have a Material Adverse Effect. Capitalized terms used herein and not otherwise defined will have the respective meanings ascribed to such terms in the Agreement.

Lender Commitment JPMorgan Chase Bank, N.A. $13,000,000 General Electric Capital Corporation $10,000,000 Bank of America, N.A. $10,000,000 Mizuho Corporate Bank, Ltd. $10,000,000 Raymond James Bank, FSB $7,000,000

Country Bank Ireland Bank of America Ireland Bank of Ireland Taiwan Bank of Taiwan Hong Kong JPMorgan Chase China Agriculture Bank of China China Industrial and Commercial Bank of China Germany Commerzbank Portugal BPI Banque Portugues Investimento The Netherlands ABN Amro Bank The Netherlands Bank of America Australia JPMorgan Chase France Bank of America

On the Closing Date, after repayment of any obligations outstanding under the Existing Credit Agreement, the Borrower will distribute the remaining proceeds of the First Lien Term Facility and Second Lien Term Facility to Holdings to enable Holdings to effect a redemption of all outstanding Class A Units and to pay related transaction expenses. Holdings will effect the redemption of the Class A Units by a series of related transactions that may include: (i) a cash distribution to SRAM-SP2 in redemption of portion of its Class B Units, which cash will be used by SRAM-SP2 (or a Subsidiary of SRAM-SP2) to purchase the Stock of certain Persons that hold Class A Units (the Blocker Corporations), (ii) cash distributions to SRAM-SP2 to pay any taxes, expenses or other costs incurred by SRAM-SP2 or its shareholders in connection with the transaction, (iii) a cash distribution to all Persons other than the Blocker Corporations that hold Class A Units in full and complete redemption of their Class A Units and (iv) an amendment and restatement of the Limited Liability Company Operating Agreement of Holdings to replace the separate Class A Units and Class B Units issued thereunder with a single class of common units, and to eliminate the corporate governance and liquidity rights associated with the Class A Units. Following the Equity Redemption, SRAM-SP2 may cause the consolidation of the Blocker Corporations into one or more limited liability companies or other type of legal entity.

In connection with the consummation of an initial public offering of Stock of a Parent Company, the direct and indirect beneficial owners of Holdings will exchange their Stock of Holdings for Stock of the Parent Company. The exchange may be effected by (i) a transfer of Stock of Holdings to the Parent Company in exchange for Stock of the Parent Company or (ii) a transfer of Stock of a Person that holds Stock of Holdings to the Parent Company or a Subsidiary of the Parent Company in exchange for Stock of the Parent Company. These transfers may be effected by a direct Stock-for-Stock exchange or by merger or combination with the Parent Company or a Subsidiary of the Parent Company.

After the Closing Date, Borrower will contribute the Stock of the following wholly-owned Foreign Subsidiaries to Livisham Limited, another wholly-owned Foreign Subsidiary of Borrower: (i) SRAM Europe Sales & Service B.V., (ii) SRAM Deutschland GmbH and (iii) SRAMPort Transmissoes Mecanicas LDA. Any pledge of the Stock of the contributed Foreign Subsidiaries shall terminate upon contribution to Livisham Limited.

Immediately following the consummation of an initial public offering of Stock of a Parent Company, the Parent Company will loan a portion of the proceeds of the offering to an existing or newly-formed Foreign Subsidiary (Foreign Holdco) in an amount not to exceed $85 million and will pledge the note receivable as collateral for the Obligations. Foreign Holdco will use the proceeds of the borrowing and issue Stock to the Borrower as consideration for the acquisition of all of the Stock of some or all of Borrowers Foreign Subsidiaries. Forshan Shunde SRAM Bicycle Component Company Ltd. (China) may remain a direct subsidiary of SRAM, LLC, with its assets to be transferred to a new Chinese entity formed under Foreign Holdco at a later date and then dissolved. The Borrower will pledge 65% of the Stock of Foreign Holdco, and any pledge of the Stock of Borrowers other Foreign Subsidiaries shall terminate upon acquisition of the Foreign Subsidiaries by Foreign Holdco. Foreign Holdco will initially elect to be treated as a disregarded entity for U.S. federal income tax purpose and then will elect to be treated as a corporation for U.S. federal income tax purposes effective following its acquisition of Borrowers Foreign Subsidiaries.

1. Consents by the Holders of Class A Units to the Equity Redemption.

(a) Ownership

Jurisdiction of Shares/Units Shares Entity Organization Authorized Outstanding Ownership SRAM, LLC Delaware, USA N/A N/A SRAM Holdings, LLC - 100% ownership interest

SRAM Holdings, LLC Delaware, USA No limit, additional units Class A Units - 3,640,000 TCP SRAM Holdings, may be issued as allowed LLC - 3,410,823.64063 Class B Units - 5,460,000 under the Operating Class A Units Agreement. Incentive Units 538,238 JPM Mezzanine Capital, 675,000 Incentive Units LLC - 85,264.05451 Class A Units GE Capital Equity Holdings Inc. - 37,871.65913 Class A Units Gleacher Mezzanine Fund II, L.P. - 85,542.62536 Class A Units GMF SRAM Holdings Corp. - 12,923.68854 Class A Units Southern Farm Bureau Life Insurance Company - 7,574.33183 Class A Units SRAM-SP2, Inc. - 5,391,839 Class B Units SRAM International, Inc. - 68,161 Class B Units SRAM Managers, current and former Directors, and employees 539,533 Incentive Units

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Jurisdiction of Shares/Units Shares Entity Organization Authorized Outstanding Ownership Compositech, Inc. Indiana, USA Voting Common Stock - Voting Common - Borrower - 3,365,750 23,500,000 3,365,750 voting common; 1,442,500 non-voting common Non-Voting Common Stock Non-Voting Common - - 1,500,000 1,442,500

Livisham Limited Ireland Ordinary Shares - 100,000 Ordinary Shares - 10,000 Borrower - 10,000 ordinary shares

Sandleford Limited Ireland Ordinary Shares - 1,000,000 Ordinary Shares - 7,900 Borrower - 7,900 ordinary shares; 2,100 cumulative Cumulative Preference Cumulative Preference preference shares Shares - 1,000,000 Shares - 2,100

Foshan Shunde SRAM China Registered Capital - Paid Up Capital - Borrower - Bicycle Component US$435,100.00 US$435,100.00 US$435,100.00 in equity Company Limited interests in the company

SRAM Deutschland Germany Total Company Capital - Total Capital Subscribed - Borrower - has subscribed GmbH 26,000 Euros 26,000 Euros to a capital share of 26,000 Euros

SRAM Europe Sales and Netherlands 200 shares 40 shares Borrower - 40 shares Services B.V.

SRAM Hong Kong Hong Kong 1,000 shares 100 shares Borrower - 100 shares Trading Company Ltd.

SRAMPORT - Portugal Registered Share Capital - Issued Share Capital - Borrower - 97,744.38 Transmissões Mecânicas 139,633.40 Euros 139,633.40 Euros Euros of share capital LDA SRAM Deutschland GmbH - 41,889.02 Euros of share capital

Sandleford Limited Taiwan N/A N/A Sandleford Limited Taiwan Branch 100%

SRAM Service France France 2 shares 2 shares Livisham Limited 2 SARL shares

SRAM Australia Pty Australia 1 share 1 share Borrower 1 share Limited

SRAM Cycling Delaware, USA N/A N/A SRAM Holdings, LLC - Advocacy LLC 100% ownership interest

SRAM Suzhou Drive China Train Co., Ltd.1

1 In the process of dissolution.

(c) Contractual Obligations 1. The transfer of shares in the following Group Members is subject to restrictions contained within the Group Members Constituent Documents: a. SRAM Holdings, LLC b. SRAM Europe Sales and Services B.V. c. SRAM Hong Kong Trading Company Limited d. Sandleford Limited e. Foshan Shunde SRAM Bicycle Component Company Limited f. SRAMPORT - Transmissões Mecânicas LDA g. Sandleford Limited Taiwan Branch

1. Compositech, Inc. is the owner of the following real property: 5241 Walt Place Indianapolis, IN 46254 Parcels of land located at 1180 N. Main Street Speedway, IN 462242 2. SRAMPORT - Transmissões Mecânicas LDA is the owner of the following real property: Bairro Industrial de Pedrulha Apartado 8150-3020 Coimbra Codex Portugal 3. Borrower and/or its Subsidiaries lease the following real property:

Street Lease Leasing Property Address Agreement Landlord Entity Colorado Springs, CO, 1610 Garden of the Gods Lease Agreement dated 10/ COS Realty, LLC Borrower USA3 Road 16/06 Colorado Springs, CO 80907

Chicago, IL USA 1333 N. Kingsbury Commercial Loft Lease Everbury Partners, Ltd. Borrower Chicago, IL 60642 dated 1/19/01, as amended by Amendment #1 to Commercial Loft Lease dated 9/17/07

Spearfish, SD 3100 First Avenue Lease Agreement dated 5/4/ Cavmar, L.L.C. Borrower USA Spearfish, SD 57783 11

Germany Factory Romstrasse 1 Lease dated 2/17/98, as ROSEA Grundstcks- SRAM Deutschland 97424 Schweinfurt amended by Amendment Vermietungsgesellschaft GmbH Germany No. 1 dated 1/29/01 and mbH & Co. Objeckt Amendment No. 2 dated 12/ Schwwinfurt KG 16/02.

2 This land is to be transferred by quit claim deed without additional consideration after closing. 3 Lease is currently being negotiated with Net Fund I, Ltd. for property located at 980 Elkton Drive, Colorado Springs, Colorado.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Street Lease Leasing Property Address Agreement Landlord Entity German Apartment Krumme Gasse 23 Lease effective 3/16/07. Rudolf Schreiter SRAM Deutschland 97421 Schweinfurt, GmbH Germany

German Parking Lease Parking Place No. 5 Lease effective 3/16/07 Rudolf Schreiter SRAM Deutschland Krumme Gasse 23 GmbH 97421 Schweinfurt, Germany

San Luis Obispo, CA, 3050 Broad Street Commercial Lease 3030, Inc. Borrower USA (Truvativ) Suite 101 Agreement dated 4/1/04, as San Luis Obispo, CA amended by First Lease Addendum dated 5/20/04, Second Lease Addendum dated 5/21/07, Third Lease Addendum dated 1/5/08 and Fourth Lease Addendum dated June 25, 2008

Shunde, China Beiha Industrial Village Leases dated 1/24/05 and Foshan City Shunde District Foshan Shunde SRAM Lunjiao Road 11/1/06 Lunjiao Beihai Asset Bicycle Component Guangzhu Highway Management Office Company Limited Shunde, China

Taiwan Factory No 9-1/9-11/11-2/13-1/15 Lease dated 5/15/06 Lin Yongsan Sandleford Limited Lane 187, Sihu Road (Taiwan Branch) Dali City Taichung County, 412 Taiwan

Taiwan Factory No. 15 Lease dated 5/15/06 Wu Cau Fumei Sandleford Limited Lane 187, Sihu Road (Taiwan Branch) Dali City Taichung County 412 Taiwan

Taiwan Land No. 198-4 Lease dated 7/1/04 Zeng Linluan Sandleford Limited Caohu Sec. (Taiwan Branch) Dali City Taichung County 412 Taiwan

Taiwan Land No. 199-11 Lease dated 6/30/04 Xie Wande Sandleford Limited Caohou Sec. (Taiwan Branch) Dali City Taichung County 412 Taiwan

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Street Lease Leasing Property Address Agreement Landlord Entity Taiwan Land No. 198-5 Lease dated 6/1/05 Lin Qixong Sandleford Limited Caohou Sec. (Taiwan Branch) Dali City Taichung County 412 Taiwan

Taiwan Land No. 180-6/180-4 Lease dated 4/1/05 Cai Suzhen Sandleford Limited Caohou Sec. (Taiwan Branch) Dali City Taichung County 412 Taiwan

Taiwan Land No. 180-5 Lease dated 4/16/05 Huang Shuijin Sandleford Limited Caohou Sec. (Taiwan Branch) Dali City Taichung County 412 Taiwan

Taiwan Parking Lot No. 0087-0000 Lease dated 8/1/08 Lin Song-Fa Sandleford Limited Xihu South Sec. Dali City (Taiwan Branch) Taichung County 412 Taiwan

Taiwan Parking Lot No. 0086-0000 Lease dated 7/1/08 Lin Song-Liang Sandleford Limited Xihu South Sec. Dali City (Taiwan Branch) Taichung County 413 Taiwan

Taiwan #526 Hou Juang Road Lease dated 10/1/05 Tsai, Hsen Shon Sandleford Limited bet Twen Dist. (Taiwan Branch) Taichung City Taiwan

Taiwan Factory No. 1596-1 Chung Shan Lease dated 4/1/07 Jun Cien International Sandleford Limited Road (Toyman) (Taiwan Branch) Shen Kang Hsiang, Taichung Hsein 429, Taiwan

Taiwan Factory No. 1598-8, Chung Shan Lease dated 1/1/09 Li-Sheau Huang (Toyman) Sandleford Limited Road (Taiwan Branch) Shen Kang Hsiang, Taichung Hsien 429, Taiwan

Taiwan Factory No. 1598, Chung Shan Lease dated 3/1/07 Jun Cien International Sandleford Limited Road (Toyman) (Taiwan Branch) Shen Kang Hsiang, Taichung Hsien 429, Taiwan

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Street Lease Leasing Property Address Agreement Landlord Entity Taiwan Factory No. 1598, Chung Shan Lease dated 1/1/09 Jun Cien International Sandleford Limited Road (Toyman) (Taiwan Branch) Shen Kang Hsiang, Taichung Hsien 429, Taiwan

Taiwan Factory No. 1598, Chung Shan Lease dated 3/1/07 Wun Han Chen (Toyman) Sandleford Limited Road (Taiwan Branch) Shen Kang Hsiang, Taichung Hsien 429, Taiwan

Taiwan Factory No. 1598-1, Chung Shan Lease dated 1/1/09 Wun Han Chen (Toyman) Sandleford Limited Road (Taiwan Branch) Shen Kang Hsiang, Taichung Hsien 429, Taiwan (No. 1057 and No. 1598)

Taiwan Factory No. 1600 Chung Shan Lease dated 7/1/07 Hong, Tong Hsin Sandleford Limited Road (Taiwan Branch) Shen Kang Hsiang, Taichung Hsien 429, Taiwan

Taiwan Factory No. 1596 Chung Shan Lease dated 6/1/08 Chang, Jin Tian Sandleford Limited Road (Shoe maker) (Taiwan Branch) Shen Kang Hsiang, Taichung Hsien, Taiwan

Taiwan #469 Hou Juang Road Lease dated 5/1/06 Fuida Co. Sandleford Limited Pei Tun District (Taiwan Branch) Taichung 406 Taiwan

Taiwan #675/676 Jen Teh Tuan Lease dated 4/1/06 Fuida Co. Sandleford Limited Pei Tun District (Taiwan Branch) Taichung 406 Taiwan

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Street Lease Leasing Property Address Agreement Landlord Entity Taiwan Factory No. 1016-000, Shen Tsun Lease dated 5/1/06 Wang, Yi Bon Sandleford Limited Tuan, (Taiwan Branch) Shen Kang Hsiang, Taichung Hsien 429, Taiwan

Taiwan No. 1016-000, Shen Tsun Lease dated 7/1/09 Wang, Yi Bon Sandleford Limited parking lot Tuan, (Taiwan Branch) Shen Kang Hsiang, Taichung Hsien 429, Taiwan

Taiwan Factory No. 1017-000, Shen Tsun Lease dated 5/1/07 Chen, Wei-Tin Sandleford Limited Tuan, (Taiwan Branch) Shen Kang Hsiang, Taichung Hsien 429, Taiwan

Taiwan No. 1017-000, Shen Tsun Lease dated 8/1/07 Chen, Wei-Tin Sandleford Limited parking lot Tuan, (Taiwan Branch) Shen Kang Hsiang, Taichung Hsien 429, Taiwan

Taiwan No. 1381, Chung Shan Lease dated 8/1/07 Lin, Su Yin Sandleford Limited parking lot Road (Taiwan Branch) Shen Kang Hsiang, Taichung Hsien 429 Taiwan

Taiwan No. 1028 Shenkang Lease dated 4/1/10 Yon Jin-Wang, Yon Su Sandleford Limited parking lot Shen Kang Hsiang Wang (Taiwan Branch) Taiwan

Taiwan No. 1028 Shenkang Lease dated 3/1/08 Jin-Jen Jiang Sandleford Limited parking lot Shen Kang Hsiang (Taiwan Branch) Taiwan

Taiwan anodizing No. 1027 Shenkang Lease dated 2/1/10 Wang, Lon-Fu Sandleford Limited building Shen Kang Hsiang (Taiwan Branch) Taiwan

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Street Lease Leasing Property Address Agreement Landlord Entity Taiwan No. 125, Chung Shan Lease dated 8/1/08 Wang, Lon Fu Sandleford Limited parking lot Road (Taiwan Branch) Shen Kang Hsiang Taiwan

Taiwan Portion of First Floor Lease dated 10/1/08 Hsen-Shong Tsai (ADC) Sandleford Limited No. 526 Houzhuang Road (Taiwan Branch) Pei Tun District Taichung 406, Taiwan

Ireland Property Unit No. 8A Lease dated 7/31/06. Joseph Monaghan, Mary Livisham Limited Maritana Gate Monaghan, Paul Monaghan Canada Street & Derek Monaghan Waterford Ireland

Netherlands Property Paasbosweg 14-16 Lease dated 7/1/10 Bedrijfshuisvesting Evert de SRAM Europe Sales & Nijkerk Lang BV Services B.V. Netherlands

France Property Burospace de Vinci Lease dated 8/1/10 Em2c Promotion SRAM Service France Batiment Neptune SARL 50 Voie Albert Einstein Alpespace 73800 Francin France

Australia Property 6 Macro Court, Rowville Commercial Lease dated Kady Investments Pty Ltd SRAM Australia Pty Ltd Australia 5/1/2011

I. GERMANY

Delivery No. Action Date I.1 Notify account banks of the release of GECCs liens June 30, 2011, or such later date as agreed to by the Administrative Agent in its reasonable discretion

I.2 Return blank notifications of debtors under the assignment of June 30, 2011, or such later date as agreed to by the claims to SRAM Germany or evidence their destruction Administrative Agent in its reasonable discretion

I.3 Notify SRAM Germanys insurers of the release of the insurance September 30, 2011, or such later date as agreed to by the assignment and the re-transfer of the assigned insurance claims Administrative Agent in its reasonable discretion back to SRAM Germany

I.4 De-register the pledges and assignments of SRAM Deutschlands December 31, 2011, or such later date as agreed to by the intellectual property rights Administrative Agent in its reasonable discretion

II. HONG KONG

Delivery No. Action Date II.1 File Form M-2 in respect of the release of the 2008 Debenture June 30, 2011, or such later date as agreed to by the Administrative Agent in its reasonable discretion

II.2 File Form M-2 in respect of the release of the 2010 Debenture June 30, 2011, or such later date as agreed to by the Administrative Agent in its sole discretion

II.3 File Form T10 to request removal of registered particulars of June 30, 2011, or such later date as agreed to by the GECCs interest in SRAM LLCs registered trademark in Hong Administrative Agent in its sole discretion Kong

II.4 Delivery by GECC to ABN Amro Bank N.V. Taipei Branch of June 30, 2011, or such later date as agreed to by the notice of release of the Debenture and obtain acknowledge of Administrative Agent in its sole discretion receipt of notice from ABN Amro Bank N.V. Taipei Branch

Delivery No. Action Date III.1 File three Form C-6 release forms with the Register of Mortgages June 30, 2011, or such later date as agreed to by the and Charges Administrative Agent in its sole discretion

IV. PORTUGAL

Delivery No. Action Date IV.1 Delivery by GECC of notarised and apostilled Powers of Attorneys June 17, 2011, or such later date as agreed to by the Administrative Agent in its reasonable discretion

IV.2 Entering into of the Public Deed of termination of Mortgage, June 19, 2011, or such later date as agreed to by the Pledges and certain Powers of Attorneys Administrative Agent in its reasonable discretion

IV.3 File release of Mortgage with the Land Registry Office June 19, 2011, or such later date as agreed to by the Administrative Agent in its reasonable discretion

IV.4 File release of Pledge over Quotas with the Commercial Registry June 19, 2011, or such later date as agreed to by the Office Administrative Agent in its reasonable discretion

IV.5 Delivery by GECC to SRAMPORT of the originals of Notices of June 19, 2011, or as soon as reasonably practicable after such date Pledge

Delivery No. Action Date V.1 Obtain the signature of Mizuho Bank to the Agreement to Cancel July 15, 2011, or such later date as agreed to by the Chattel Mortgage Administrative Agent in its reasonable discretion

V.2 Delivery by GECC to Bank of Taiwan of notice of cancellation of June 30, 2011, or such later date as agreed to by the controlled deposit account agreement Administrative Agent in its reasonable discretion

1. SRAM, LLC and SRAM Holdings, LLC are parties to that certain Amended and Restated Credit Agreement dated as of April 30, 2010, and all indebtedness and obligations thereunder will be paid in full with the proceeds of the Loans on the Closing Date. 2. SRAM Corporation entered into that certain Guaranty dated July 31, 2006 related to the Lease between Joseph Monaghan, Mary Monaghan, Paul Monaghan & Derek Monaghan and Livisham Ltd. dated July 31, 2006. 3. Lease Agreement by and between Compositech, Inc. and Konica Minolta Business Solutions, U.S.A., Inc. dated March 27, 2008 related to the Bizhub C253 photocopier used by Compositech, Inc., which by its terms is intended to be a Finance Lease under Article 2A of the Uniform Commercial Code. 4. Master Lease Agreement by and between U.S. Bancorp Equipment Finance, Inc. Machine Tool Finance Group and SRAM, LLC, as successor by assignment to Quarq Technology, Inc. dated November 2, 2010 related to the Brother TC-32BN QT CNC Vertical Machining Center, which by its terms is intended to be a Finance Lease under Article 2A of the Uniform Commercial Code. 5. On May 4, 2011, SRAM, LLC acquired certain assets and certain liabilities of Quarq Tehcnology, Inc. The purchase price includes an earn-out clause that could result in an additional maximum purchase price of $6,000,000. The future earn-out is based on a two year period and is based on the net sales of Quarq Technology, Inc. products.

1. Lease Agreement by and between Compositech, Inc. and Konica Minolta Business Solutions, U.S.A., Inc. dated March 27, 2008 related to the Bizhub C253 photocopier used by Compositech, Inc., which by its terms is intended to be a Finance Lease under Article 2A of the Uniform Commercial Code. 2. Financing Statement of U.S. Bancorp Equipment Finance, Inc. naming SRAM, LLC as debtor filed May 13, 2011, No. 2011 1821019, with the Delaware Secretary of State, covering one (1) Brother TC-32BN QT CNC Vertical Machining Center together with all replacements, parts, repairs, additions, accessions and accessories, etc. 3. Liens in connection with the Existing Credit Agreement, to be released as contemplated hereby.

None

1. SRAM Corporation entered into Non-Compete Agreements with some or all of its stockholders, including certain Affiliates, as a part of the transactions contemplated by that certain Purchase Agreement dated as of August 6, 2008 by and among LB SRAM Holdings, LLC, SRAM Corporation and SRAM-SP2, Inc. 2. SRAM Holding, LLC entered into Indemnification Agreements with one or more members of its Board of Managers. These Indemnification Agreements provide for SRAM Holdings to indemnify such Managers to the fullest extent permitted by law for any claims in which such Managers may be involved arising out of or incidental to the business or activities of or relating to SRAM Holdings. 3. Administration Support Services Agreement, dated October 1, 2008, by and between Sandleford Limited and Sandleford Limited Taiwan Branch. 4. Administrative Support Services Agreement dated October 1, 2008 by and between SRAM, LLC and Forshan Shunde SRAM Bicycle Component Company Ltd. 5. Administrative Support Services Agreement dated October 1, 2008 by and between SRAM, LLC and Livisham Limited. 6. Administrative Support Services Agreement dated October 1, 2008 by and between SRAM, LLC and SRAM Hong Kong Trading Company Ltd. 7. Amendment No. 1 to Research and Development Agreement, dated January 1, 2009, by and between Livisham Ltd. and SRAMPort- Transmissões Mecânicas Lda 8. Dealer Service Direct Support Agreement, dated August 16, 2010, by and between Livisham Limited and SRAM Service France SARL. 9. Dealer Service Direct Support Agreement, dated December 10, 2007, by and between Livisham Limited and SRAM Deutschland GmbH. 10. Dealer Service Direct Support Agreement, dated October 1, 2009, by and between Livisham Limited and SRAM Europe Sales & Service B.V. 11. Intangible Property License Agreement, dated October 1, 2008, by and between SRAM LLC and Livisham Limited. 12. Intangible Property License Agreement, dated October 1, 2008, by and between SRAM LLC and Sandleford Ltd. Taiwan Branch. 13. Intangible Property License Agreement, dated October 1, 2008, by and between SRAM LLC and SRAM Hong Kong Trading Company. 14. Manufacturing Agreement, dated January 1, 2010, by and between Livisham Limited (SRAM Corporation Europe) and SRAM Deutschland GmbH.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 15. Marketing Services Agreement, dated January 1, 2009, by and between SRAM LLC and Sandleford Ltd. Taiwan Branch. 16. Marketing Services Agreement, dated October 1, 2008, by and between SRAM LLC and Livisham Limited. 17. Personnel Support Agreement, dated January 1, 2004, by and between Livisam Ltd. and SRAM Deutschland GmbH. 18. Product Management Agreement, dated January 1, 2000, by and between Livisham Limited (SRAM Corporation Europe) and SRAM Deutschland GmbH. 19. Purchase Contract, dated January 1, 2010, between Livisham Ltd. and Foshan Shunde SRAM Bicycle Component Company Ltd. 20. Purchase Contract, dated January 1, 2010, between Livisham Ltd. and Sandleford Ltd. Taiwan Branch. 21. Research and Development Agreement, dated January 1, 2000, by and between Livisham Ltd. and SRAM Deutschland GmbH, as amended. 22. Royalty Agreement, by and between SRAM, LLC, as successor to SRAM Corporation, and Foshan Shunde SRAM Bicycle Component Company Ltd. 23. Sales and Customer Service Agreement, dated January 1, 2000, by and between SRAM Europe Sales and Services B.V. and SRAM Deutschland GmbH. 24. Sales and Marketing Services Agreement, dated January 1, 2000, by and between Livisham Limited (SRAM Corporation Europe) and SRAM Europe Sales & Services B.V. 25. Sales and Marketing Services Agreement, dated October 1, 2008, by and between SRAM LLC and Forshan Shunde SRAM Bicycle Component Company Ltd. 26. Sales and Marketing Services Agreement, dated October 1, 2008, by and between SRAM LLC and SRAM Hong Kong Trading Company Ltd. 27. Trademark license agreement dated September 1, 2004 between SRAM, LLC and Sandleford Ltd.

EXECUTION VERSION

$185,000,000

SECOND LIEN CREDIT AGREEMENT

Dated as of June 7, 2011

among

SRAM, LLC, AS BORROWER

SRAM HOLDINGS, LLC, AS ONE OF THE GUARANTORS

THE LENDERS PARTY HERETO

and

JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT

¿ ¿ ¿

J.P. MORGAN SECURITIES LLC, AS SOLE BOOKRUNNER

Page ARTICLE 1 DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS 1

Section 1.1 Defined Terms 1 Section 1.2 UCC Terms 28 Section 1.3 Accounting Terms and Principles 29 Section 1.4 Payments 29 Section 1.5 Interpretation 29

ARTICLE 2 THE SECOND LIEN FACILITY 30

Section 2.1 Term Loan Commitments 30 Section 2.2 Procedure for Term Loan Borrowing 30 Section 2.3 Repayment of Term Loans 30 Section 2.4 Optional Prepayments 31 Section 2.5 Mandatory Prepayments 31 Section 2.6 Interest 32 Section 2.7 Conversion and Continuation Options 32 Section 2.8 Fees 33 Section 2.9 Limitations on Eurodollar Tranches 33 Section 2.10 Payments and Computations 33 Section 2.11 Inability to Determine Interest Rate 35 Section 2.12 Requirements of Law 36 Section 2.13 Breakage Costs; Increased Costs; Capital Requirements 37 Section 2.14 Taxes 38 Section 2.15 Replacement of Lenders 41 Section 2.16 Change of Lending Office 41 Section 2.17 Extensions of Term Loans 41

ARTICLE 3 CONDITIONS TO TERM LOANS 43

Section 3.1 Conditions Precedent to Term Loans 43 Section 3.2 Determinations of Initial Borrowing Conditions 45

ARTICLE 4 REPRESENTATIONS AND WARRANTIES 45

Section 4.1 Corporate Existence; Compliance with Law 45 Section 4.2 Term Loan and Related Documents 46 Section 4.3 Ownership of Group Members 46 Section 4.4 Financial Statements 47 Section 4.5 No Change 47 Section 4.6 Solvency 47 Section 4.7 Litigation 48 Section 4.8 Taxes 48 Section 4.9 Margin Regulations 48 Section 4.10 No Burdensome Obligations; No Defaults 48

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 4.11 Investment Company Act 48 Section 4.12 Labor Matters 48 Section 4.13 ERISA 48 Section 4.14 Environmental Matters 48 Section 4.15 Intellectual Property 49 Section 4.16 Title; Real Property 49 Section 4.17 Full Disclosure 49 Section 4.18 Patriot Act 50 Section 4.19 Security Documents 50

ARTICLE 5 REPORTING COVENANTS 51

Section 5.1 Financial Statements 51 Section 5.2 Other Events 52 Section 5.3 Other Information 53

ARTICLE 6 AFFIRMATIVE COVENANTS 53

Section 6.1 Maintenance of Corporate Existence 53 Section 6.2 Compliance with Laws, Etc 53 Section 6.3 Payment of Obligations 53 Section 6.4 Maintenance of Property 53 Section 6.5 Maintenance of Insurance 53 Section 6.6 Keeping of Books 54 Section 6.7 Access to Books and Property 54 Section 6.8 Environmental 54 Section 6.9 Use of Proceeds 54 Section 6.10 Additional Collateral and Guaranties 55 Section 6.11 Credit Rating 56 Section 6.12 Quarterly Conference Calls 56 Section 6.13 Post-Closing Deliveries 56

ARTICLE 7 NEGATIVE COVENANTS 57

Section 7.1 Indebtedness 57 Section 7.2 Liens 59 Section 7.3 Investments 60 Section 7.4 Asset Sales 61 Section 7.5 Restricted Payments 62 Section 7.6 Prepayment of Indebtedness 63 Section 7.7 Fundamental Changes 64 Section 7.8 Change in Nature of Business 64 Section 7.9 Transactions with Affiliates 65 Section 7.10 Third-Party Restrictions on Indebtedness, Liens, Investments or Restricted Payments 65 Section 7.11 Modification of Certain Documents 66 Section 7.12 Accounting Changes; Fiscal Year 66 Section 7.13 Capital Expenditures 66

Section 8.1 Definition 67 Section 8.2 Remedies 69

ARTICLE 9 THE ADMINISTRATIVE AGENT 69

Section 9.1 Appointment of Administrative Agent 69 Section 9.2 Delegation of Duties 69 Section 9.3 Reliance and Liability 69 Section 9.4 Agent Individually 70 Section 9.5 Lender Credit Decision 70 Section 9.6 Indemnities 71 Section 9.7 Resignation of Administrative Agent 71 Section 9.8 Sub-Agents 71 Section 9.9 Notice of Default 71 Section 9.10 Non-Reliance on Administrative Agent and Other Lenders 72

ARTICLE 10 MISCELLANEOUS 72

Section 10.1 Amendments, Waivers, Etc 72 Section 10.2 Assignments and Participations; Binding Effect 74 Section 10.3 Costs and Expenses 79 Section 10.4 Survival 80 Section 10.5 Limitation of Liability for Certain Damages 80 Section 10.6 Right of Setoff 80 Section 10.7 Notices 81 Section 10.8 GOVERNING LAW 82 Section 10.9 Submission to Jurisdiction; Waivers 82 Section 10.10 WAIVER OF JURY TRIAL 82 Section 10.11 No Waiver; Cumulative Remedies 83 Section 10.12 Severability 83 Section 10.13 Execution in Counterparts 83 Section 10.14 Entire Agreement 83 Section 10.15 Non-Public Information; Confidentiality 83 Section 10.16 Patriot Act Notice 84 Section 10.17 Acknowledgements 84 Section 10.18 Releases of Guarantees and Liens 85 Section 10.19 Conflicts with Intercreditor Agreement 85

iii

Exhibit A Assignment Agreement Exhibit B Notes Exhibit C Notice of Borrowing Exhibit D Notice of Conversion or Continuation Exhibit E Compliance Certificate Exhibit F Collateral Update Certificate Exhibit G Second Lien Guaranty and Security Agreement Exhibit H Form of Intercreditor Agreement Exhibit I U.S. Tax Certificate Exhibit J Affiliated Lender Assignment and Assumption

Schedule I Approved Foreign Commercial Banks Schedule II Equity Redemption Schedule III Foreign Restructuring Schedule 4.2 Third Party Consents Schedule 4.3 Capitalization Schedule 4.16 Title to Properties and Mortgages Schedule 6.13 Post-Closing Deliveries Schedule 7.1 Prior Indebtedness Schedule 7.2 Prior Liens Schedule 7.3 Prior Investments Schedule 7.9 Affiliate Transactions

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document THIS SECOND LIEN CREDIT AGREEMENT, DATED AS OF JUNE 7, 2011, IS ENTERED INTO AMONG SRAM, LLC, A DELAWARE LIMITED LIABILITY COMPANY (THE BORROWER), SRAM HOLDINGS, LLC, A DELAWARE LIMITED LIABILITY COMPANY (HOLDINGS), THE LENDERS (AS DEFINED BELOW) AND JPMORGAN CHASE BANK, N.A. (JPMORGAN CHASE BANK), AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT FOR THE LENDERS (IN SUCH CAPACITY, AND TOGETHER WITH ITS SUCCESSORS AND PERMITTED ASSIGNS, THE ADMINISTRATIVE AGENT).

The parties hereto agree as follows:

ARTICLE 1 DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

Section 1.1 Defined Terms. As used in this Agreement, the following terms have the following meanings:

ABR means for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) the Eurodollar Rate that would be calculated as of such day (or, if such day is not a Business Day, as of the next preceding Business Day) in respect of a proposed Eurodollar Loan with a one-month Interest Period plus 1.0%; provided, however, that notwithstanding the rate calculated in accordance with the foregoing, at no time shall the ABR for the Second Lien Term Facility be less than 2.50% per annum. Any change in the ABR due to a change in the Prime Rate, the Federal Funds Effective Rate or such Eurodollar Rate shall be effective as of the opening of business on the day of such change in the Prime Rate, the Federal Funds Effective Rate or such Eurodollar Rate, respectively.

ABR Loans mean Term Loans the rate of interest applicable to which is based upon the ABR.

Administrative Agent has the meaning specified in the preamble hereto.

Advocacy SPE means SRAM Cycling Advocacy Fund, LLC, a Delaware limited liability company.

Affiliated Lender means any Affiliate of a Parent Company other than (i) a Parent Company or any Subsidiary of a Parent Company and (ii) any natural Person.

Affiliated Lender Assignment and Assumption has the meaning specified in Section 10.2(g).

Agent Indemnitee has the meaning specified in Section 9.6.

Applicable Margin means (a) for ABR Loans, 6.00% and (b) for Eurodollar Loans, 7.00%.

Assignment means an assignment agreement entered into by a Lender, as assignor, and any Person, as assignee, pursuant to the terms and provisions of Section 10.2 (with the consent of any party whose consent is required by Section 10.2), accepted by the Administrative Agent, in substantially the form of Exhibit A, or any other form approved by the Administrative Agent.

Available Basket means, as of any date of determination, an amount equal to (without duplication):

(a) the sum of: (i) $6,000,000 plus (ii) the Available Excess Cash Flow Amount on such date plus (iii) returns, profits, distributions and similar amounts received in cash or Cash Equivalents on Investments made pursuant to Section 7.3(b), (c), (d), (g), (h) and (i) (including as the result of the designation of an Unrestricted Subsidiary as a Subsidiary); (iv) Net Cash Proceeds received from equity issuances by the Reporting Person (other than proceeds from the first Qualified IPO) to the extent such Net Cash Proceeds are contributed to the Borrower; minus

(b) the sum of (i) the Available Basket used to pay cash dividends pursuant to Section 7.5(d), (ii) to fund Investments permitted pursuant to Section 7.3(h) or (iii) optional prepayments pursuant to Section 7.6(h).

Available Excess Cash Flow Amount means, as of any date of determination, an amount equal to (a) the sum of the amounts of Excess Cash Flow for all Excess Cash Flow Periods ending on or prior to the date of determination, minus (b) the sum at the time of determination of the aggregate amount of prepayments of Term Loans required to be made pursuant to Section 2.5(a) through the date of determination (including any optional prepayments of Term Loans that reduce the prepayments of Term Loans required to be made pursuant to Section 2.5(a)).

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, so long as such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

Benefitted Lender has the meaning specified in Section 10.6.

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

Borrowing means a borrowing consisting of Term Loans made on the same day by the Lenders according to their respective Term Loan Commitments under the Second Lien Term Facility.

Borrowing Date means any Business Day specified by the Borrower as a date on which the Borrower requests the relevant Lenders to make Term Loans hereunder.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Capitalized Lease Obligations means, at any time, with respect to any Capital Lease, any lease entered into as part of any Sale and Leaseback Transaction of any Person or any synthetic lease, the amount of all obligations of such Person that is (or that would be, if such synthetic lease or other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such Person prepared in accordance with GAAP.

Cash Equivalents means (a) any readily-marketable securities (i) issued by, or directly, unconditionally and fully guaranteed or insured by the United States federal government or in the case of Cash Equivalents held by Foreign Subsidiaries, the government of any OECD country, (ii) issued by any agency of the United States federal government the obligations of which are fully backed by the full faith and credit of the United States federal government, (b) any readily-marketable direct obligations issued by any other agency of the United States federal government, any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case having a rating of at least A-1 from S&P or at least P-1 from Moodys, (c) any commercial paper rated at least A-1 by S&P or P-1 by Moodys and issued by any Person organized under the laws of any state of the United States, (d) (1) any Dollar-denominated time deposit, insured certificate of deposit, overnight bank deposit or bankers acceptance issued or accepted by (i) any Lender or any Affiliate of a Lender or (ii) any commercial bank that is (A) organized under the laws of the United States, any state thereof or the District of Columbia, (B) adequately capitalized (as defined in the regulations of its primary federal banking regulators) and (C) has Tier 1 capital (as defined in such regulations) in excess of $250,000,000 or (2) in the case of Cash Equivalents held by a Foreign Subsidiary, any time deposit, certificate of deposit or overnight deposit with a commercial bank that either (x) (i) is organized under the laws of the country in which such Foreign Subsidiary making the deposit is formed or operates, (ii) has combined capital and surplus of at least $500,000,000 (or its foreign currency equivalent) and (iii) has ratings equivalent or better to BBB from Moodys or from comparable rating agencies, or (y) is listed on Schedule I hereto (or is a successor of any such listed institutions), (e) shares of any United States money market fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clause (a), (b), (c) or (d) above with maturities as set forth in the proviso below, (ii) has net assets in excess of $500,000,000 and (iii) has obtained from either S&P or Moodys the highest rating obtainable for money market funds in the United States; provided, however, that the maturities of all obligations specified in any of clauses (a), (b), (c) and (d) above shall not exceed 365 days and (f) other cash equivalents from time to time approved by the Administrative Agent.

CERCLA means the United States Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §§ 9601 et seq.).

Code means the U.S. Internal Revenue Code of 1986, as amended from time to time.

Collateral Update Certificate means a certificate substantially in the form of Exhibit F.

Compliance Certificate means a certificate substantially in the form of Exhibit E.

Conduit Lender means any special purpose corporation organized and administered by any Lender for the purpose of making Term Loans otherwise required to be made by such Lender and designated by such Lender in a written instrument; provided, that the designation by any Lender of a Conduit Lender shall not relieve the designating Lender of any of its obligations to fund a Term Loan under this Agreement if, for any reason, its Conduit Lender fails to fund any such Term Loan, and the designating Lender (and not the Conduit Lender) shall have the sole right and responsibility to deliver all consents and waivers required or requested under this Agreement with respect to its Conduit Lender, and provided, further, that no Conduit Lender shall (a) be entitled to receive any greater amount pursuant to this Agreement than the designating Lender would have been entitled to receive in respect of the extensions of credit made by such Conduit Lender or (b) be deemed to have any Term Loan Commitment.

Consolidated means the accounts of the Reporting Person consolidated in accordance with GAAP.

Consolidated Cash Interest Expense has the meaning specified in the Compliance Certificate.

Consolidated Current Assets means, at any date, the total Consolidated current assets of the Reporting Person at such date other than cash and Cash Equivalents.

Consolidated Current Liabilities means, at any date, all Consolidated liabilities of the Reporting Person at such date that should be classified as current liabilities on a Consolidated balance sheet of such Reporting Person; provided, however, that Consolidated Current Liabilities shall exclude (i) the principal amount of the Term Loans and Loans (as defined in the First Lien Credit Agreement) then outstanding, and (ii) Indebtedness maturing within one year and the current portion of long-term Indebtedness consisting of scheduled payments due within one (1) year.

Consolidated EBITDA has the meaning specified in the Compliance Certificate.

Consolidated Interest Expense means, for any period, Consolidated interest expense of the Reporting Person for such period, to the extent deducted in the determination of Consolidated Net Income.

Consolidated Leverage Ratio has the meaning specified in the Compliance Certificate.

Consolidated Net Income has the meaning specified in the Compliance Certificate.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Total Debt means all Indebtedness of the Reporting Person of a type described in clause (a), (b), (c)(i), (d) or (f) of the definition thereof and all Guaranty Obligations with respect to any such Indebtedness, in the case of such Reporting Person on a Consolidated basis.

Constituent Documents means, with respect to any Person, collectively and, in each case, together with any modification of any term thereof, (a) the articles of incorporation, certificate of incorporation, constitution or certificate of formation of such Person, (b) the bylaws, operating agreement or joint venture agreement of such Person, (c) any other constitutive, organizational or governing document of such Person, whether or not equivalent, and (d) any other document setting forth the manner of election or duties of the directors, officers or managing members of such Person or the designation, amount or relative rights, limitations and preferences of any Stock of such Person.

Customary Permitted Liens means, with respect to any Person, any of the following:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) pledges or cash deposits made in the ordinary course of business (i) in connection with workers compensation, unemployment insurance or other types of social security benefits (other than any Lien imposed by ERISA), (ii) to secure the performance of bids, tenders, leases (other than Capital Leases) sales or other trade contracts (other than for the repayment of borrowed money) or (iii) made in lieu of, or to secure the performance of, surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation);

(e) judgment liens (other than for the payment of Taxes) securing judgments and other proceedings not constituting an Event of Default under Section 8.1(e) and pledges or cash deposits made in lieu of, or to secure the performance of, judgment or appeal bonds in respect of such judgments and proceedings;

(f) Liens (i) arising by reason of zoning restrictions, easements, licenses, reservations, restrictions, covenants, rights-of-way, encroachments, minor defects or irregularities in title (including leasehold title) and other similar encumbrances on the use of real property or (ii) consisting of leases, licenses or subleases granted by a lessor, licensor or sublessor on its property (in each case other than Capital Leases) otherwise permitted under Section 7.4 that, for each of the Liens in clauses (i) and (ii) above, do not, in the aggregate, materially (x) impair the value or marketability of such real property or (y) interfere with the ordinary conduct of the business conducted and proposed to be conducted at such real property;

(h) the title and interest of a lessor or sublessor in and to personal property leased or subleased (other than through a Capital Lease), in each case extending only to such personal property; and

Default means any Event of Default and any event that, with the passing of time or the giving of notice or both, would become an Event of Default.

Defaulting Lender means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Term Loans or (ii) pay over to any Group Member any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lenders good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Group Member in writing, or has made a public statement to the effect, that it does not intend or expect to

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lenders good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Group Member, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Term Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Group Members receipt of such certification in form and substance satisfactory to it and the Administrative Agent, (d) has failed to fund, and not cured, loans, participations, advances, or reimbursement obligations under one or more other syndicated credit facilities, unless subject to a good faith dispute or (e) has become the subject of a Bankruptcy Event.

Disclosure Documents means, collectively, (a) all confidential information memoranda and related materials prepared in connection with the syndication of the Second Lien Term Facility and (b) all other documents filed by any Group Member with the United States Securities and Exchange Commission.

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

Domestic Person means any United States person under and as defined in Section 770l(a)(30) of the Code.

Domestic Subsidiary means any Subsidiary of Borrower which is organized under the laws of any state of the United States.

Dutch Auction means an auction of Term Loans conducted (a) pursuant to Section 10.2(g) to allow an Affiliated Lender to acquire Term Loans at a discount to par value and on a non pro rata basis, or (b) pursuant to Section 10.2(h) to allow a Purchasing Borrower Party to prepay Term Loans at a discount to par value and on a non pro rata basis, in each case in accordance with the applicable Dutch Auction Procedures.

Dutch Auction Procedures means with respect to a purchase of Term Loans by an Affiliated Lender pursuant to Section 10.2(g) or with respect to a purchase or prepayment of Term Loans by a Purchasing Borrower Party pursuant to Section 10.2(h), Dutch auction procedures as reasonably agreed upon by such Affiliated Lender or Purchasing Borrower Party, as the case may be, and the Administrative Agent.

Eligible Assignee means (i) any Lender (other than a Defaulting Lender), any Affiliate of a Lender (other than a Defaulting Lender) and any Approved Fund (other than an Approved Fund of a Defaulting Lender), but in each case other than Affiliated Lenders and Purchasing Borrower Parties, (ii) any commercial bank, insurance company, investment or mutual fund or other entity which extends credit or buys loans in the ordinary course of its business and (iii) solely to the extent allowed in Section 10.2(g) and Section 10.2(h), Affiliated Lenders and Purchasing Borrower Parties.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Environmental Laws means all Requirements of Law and Permits imposing liability or standards of conduct for or relating to the regulation or protection of human health, safety, the environment or natural resources, including CERCLA, the SWDA, the Hazardous Materials Transportation Act (49 U.S.C. §§ 5101 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.), the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.), the Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), all regulations promulgated under any of the foregoing, all analogous Requirements of Law and Permits and any environmental transfer of ownership notification or approval statutes, including the Industrial Site Recovery Act (N.J. Stat. Ann. §§ 13:1K-6 et seq.).

ERISA means the United States Employee Retirement Income Security Act of 1974.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document lien under Section 412 of the Code or Section 302 or 4068 of ERISA on any property (or rights to property, whether real or personal) of any ERISA Affiliate, (i) the failure of a Benefit Plan or any trust thereunder intended to qualify for tax exempt status under Section 401 or 501 of the Code or other Requirements of Law to qualify thereunder and (j) any other event or condition that might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of any liability upon any ERISA Affiliate under Title IV of ERISA other than for PBGC premiums due but not delinquent.

Eurocurrency Reserve Requirements means for any day as applied to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates (expressed as a fraction) of reserve requirements in effect on such day (including basic, supplemental, marginal and emergency reserves) under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as Eurocurrency Liabilities in Regulation D of the Board) maintained by a member bank of the Federal Reserve System.

Eurodollar Loans means Term Loans the rate of interest applicable to which is based upon the Eurodollar Rate.

Eurodollar Rate means with respect to each day during each Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for such day in accordance with the following formula:

Eurodollar Base Rate 1.00 - Eurocurrency Reserve Requirements

; provided, however, that notwithstanding the rate calculated in accordance with the foregoing, at no time shall the Eurodollar Rate be less than 1.50% per annum.

Eurodollar Tranche means the collective reference to Eurodollar Loans the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Eurodollar Loans shall originally have been made on the same day).

Event of Default has the meaning specified in Section 8.1.

Excess Cash Flow has the meaning specified in the Compliance Certificate.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Excess Cash Flow Period means each of (a) the Borrowers 2012 Fiscal Year and (b) each Fiscal Year of the Borrower thereafter.

Excluded Taxes means with respect to any payment made by any Loan Party under any Loan Document, any of the following Taxes imposed on or with respect to a Secured Party: (a) Other Connection Taxes on gross or net income, profits or revenue and any franchise Taxes (including any branch profits Taxes), (b) in the case of a Non-U.S. Lender Party, U.S. federal withholding Taxes to the extent that the obligation to withhold amounts was imposed pursuant to a Requirement of Law on the date that such Person became a Secured Party under this Agreement, except in each case to the extent such Secured Party is a direct assignee of any other Secured Party (other than an assignee pursuant to Section 2.15) that was entitled, at the time the assignment of such other Secured Party became effective, to receive additional amounts pursuant to Section 2.14, (c) Taxes that are directly attributable to the failure (other than as a result of any change in a Requirement of Law) by any Secured Party to deliver documentation required to be delivered pursuant to Section 2.14(f) or (d) any withholding Taxes imposed on amounts payable as a result of a failure (other than by a Loan Party) to comply with FATCA to establish a complete exemption from withholding thereunder.

Extension has the meaning specified in Section 2.17(a).

Extension Amendment has the meaning specified in Section 2.17(c).

Extension Offer has the meaning specified in Section 2.17(a).

Extended Term Loans has the meaning specified in Section 2.17(a).

Extending Term Lender has the meaning specified in Section 2.17(a).

FATCA means Sections 1471 through 1474 of the Code, as of the date of this Agreement, and any regulations or official interpretations thereof.

Financial Statement means each financial statement delivered pursuant to Section 4.4 or Section 5.1.

First Lien Administrative Agent means JPMorgan Chase Bank, N.A., acting in its capacity as administrative agent for the holders of the loans under the First Lien Credit Facilities.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document First Lien Credit Agreement means the First Lien Credit Agreement dated as of the date hereof among the Borrower, Holdings, JPMorgan Chase Bank, N.A. as Administrative Agent and the lenders from time party thereto.

First Lien Credit Facilities means the First Lien Term Facility and the First Lien Revolving Facility under the First Lien Credit Agreement, and shall include any Incremental Term Loans thereunder.

First Lien Revolving Facility means the $50,000,000 senior secured first lien revolving facility under the First Lien Credit Agreement

First Lien Term Facility means the $605,000,000 senior secured first lien term facility under the First Lien Credit Agreement.

First Lien Term Loans means the outstanding term loans under the First Lien Term Facility.

First Priority Obligations has the meaning specified in the Intercreditor Agreement.

Fiscal Quarter means each 3 fiscal month period ending on March 31, June 30, September 30 or December 31.

Fiscal Year means the twelve-month period ending on December 31.

Foreign Benefit Arrangement means any employee benefit arrangement mandated by non-US law that is maintained or contributed to by any Group Member or any ERISA Affiliate.

Foreign Restructuring Note has the meaning specified in the definition of Foreign Restructuring.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Borrower in exchange for up to $85,000,000 in cash and equity of such newly formed Foreign Subsidiary; and (c) the transfer of ownership of the Stock of one or more Foreign Subsidiaries to one or more other Foreign Subsidiaries, all substantially as further described on Schedule III.

Funding Office means the office of the Administrative Agent specified in Section 10.7 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower and the Lenders.

Group Members means, collectively, the Borrower, its Subsidiaries, Holdings and, to the extent that SIC is the Reporting Person, SIC, SRAM-SP2 and the SRAM-SP2 Subs.

Group Members Accountants means PricewaterhouseCoopers or other nationally-recognized independent registered certified public accountants acceptable to the Administrative Agent.

Guaranty and Security Agreement means the Second Lien Guaranty and Security Agreement to be executed and delivered by Holdings, the Borrower and each Guarantor, substantially in the form of Exhibit G.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document incurring such liability, or the economic effect thereof, is to guarantee such primary obligation or provide support, assurance or comfort to the holder of such primary obligation or to protect or indemnify such holder against loss with respect to such primary obligation, including (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of any primary obligation, (b) the incurrence of reimbursement obligations with respect to any letter of credit or bank guarantee in support of any primary obligation, (c) the existence of any Lien, or any right, contingent or otherwise, to receive a Lien, on the property of such Person securing any part of any primary obligation and (d) any liability of such Person for a primary obligation through any Contractual Obligation (contingent or otherwise) or other arrangement (i) to purchase, repurchase or otherwise acquire such primary obligation or any security therefor or to provide funds for the payment or discharge of such primary obligation (whether in the form of a loan, advance, stock purchase, capital contribution or otherwise), (ii) to maintain the solvency, working capital, equity capital or any balance sheet item, level of income or cash flow, liquidity or financial condition of any primary obligor, (iii) to make take-or-pay or similar payments, if required, regardless of non-performance by any other party to any Contractual Obligation, (iv) to purchase, sell or lease (as lessor or lessee) any property, or to purchase or sell services, primarily for the purpose of enabling the primary obligor to satisfy such primary obligation or to protect the holder of such primary obligation against loss or (v) to supply funds to or in any other manner invest in, such primary obligor (including to pay for property or services irrespective of whether such property is received or such services are rendered); provided, however, that Guaranty Obligations shall not include (x) endorsements for collection or deposit in the ordinary course of business and (y) product warranties given in the ordinary course of business. The outstanding amount of any Guaranty Obligation shall equal the outstanding amount of the primary obligation so guaranteed or otherwise supported or, if lower, the stated maximum amount for which such Person may be liable under such Guaranty Obligation.

Immaterial Subsidiary means, as of any date of determination, any Subsidiary of the Borrower that (a) contributed less than (i) 1% of Consolidated EBITDA (as defined herein without giving effect to any Subsidiaries of such Subsidiary) for the most recent four- quarter period for which financial statements are available and (ii) had assets (excluding intercompany accounts) constituting less than 1% of Consolidated total assets of the Borrower and its Subsidiaries as of the end of the most recent Fiscal Period for which financial statements are available (giving effect to the value of Stock owned by such Subsidiary but excluding the assets of the Subsidiaries of such Subsidiary), (b) together with all other such other Immaterial Subsidiaries, had (i) contributed less than 5% of Consolidated EBITDA for the most recent four-quarter period for which financial statements are available and (ii) assets (excluding intercompany accounts) constituting less than 5% of Consolidated total assets of the Borrower and its Subsidiaries as of the end of the most recent Fiscal Period for which financial statements are available, as reflected on the most recent financial statements delivered pursuant to Section 5.1 prior to such date) and (c) has been designated as such by the Borrower in a written notice delivered to the Administrative Agent (other than any such Subsidiary as to which the Borrower has revoked such designation by written notice to the Administrative Agent).

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Indebtedness of any Person means, without duplication, any of the following, whether or not matured: (a) all indebtedness for borrowed money, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all reimbursement and all obligations with respect to (i) letters of credit, bank guarantees or bankers acceptances or (ii) surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation) other than those entered into in the ordinary course of business, (d) all obligations to pay the deferred purchase price of property or services, other than (i) accrued expenses and trade payables incurred in the ordinary course of business and other than deferred compensation arrangements entered into in the ordinary course of business in consideration for actual services rendered and (ii) Earn-Outs (unless the performance requirements have been satisfied and the amount payable is fixed), (e) all obligations created or arising under any conditional sale or other title retention agreement, regardless of whether the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property, (f) all Capitalized Lease Obligations, (g) all obligations, whether or not contingent, to purchase, redeem, retire, defease or otherwise acquire for value any of its own Stock or Stock Equivalents (or any Stock or Stock Equivalent of a direct or indirect parent entity thereof) prior to the date that is 180 days after the Term Loan Maturity Date, valued at, in the case of redeemable preferred Stock, the greater of the voluntary liquidation preference and the involuntary liquidation preference of such Stock plus accrued and unpaid dividends, provided that this clause (g) shall not apply to Stock held by any future, present or former employee, director, officer or consultant of any Group Member that is subject to repurchase pursuant to any management equity subscription agreement, stock option agreement, stock ownership plan, put agreement, stockholder agreement or similar agreement that may be in effect from time to time, (h) all payments that would be required to be made in respect of any Hedging Agreement in the event of a termination (including an early termination) on the date of determination and (i) all Guaranty Obligations for obligations of any other Person constituting Indebtedness of such other Person; provided, however, that the items in each of clauses (a) through (i) above shall constitute Indebtedness of such Person solely to the extent, directly or indirectly, (x) such Person is liable for any part of any such item, or (y) any such item is secured by a Lien on such Persons property.

Indemnified Liabilities has the meaning specified in Section 10.3.

Indemnitee has the meaning specified in Section 10.3.

Indemnified Taxes means all Taxes other than any (a) Excluded Taxes imposed on or with respect to any payment made by any Loan Party under any Loan Document or (b) Other Taxes.

Intercreditor Agreement the intercreditor agreement, dated as of June 7, 2011, among the Borrower, Holdings, the Administrative Agent and the First Lien Administrative Agent substantially in the form of Exhibit H.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Intellectual Property Security Agreement means each of the short-form Grant of Security Interest In Patent Rights, Trademark Rights or Copyright Rights, as applicable, between a Loan Party and the Administrative Agent and any supplements thereto, and including the Grant of Security Interest In Trademark Rights and the Grant of Security Interest In Patent Rights, each dated as of the date hereof, among the Borrower, Compositech, Inc., and the Administrative Agent.

Interest Payment Date means (a) as to any ABR Loan, the last day of each March, June, September and December (or, if an Event of Default is in existence, subject to Section 2.6(d), the last day of each calendar month) to occur while such ABR Loan is outstanding and the final maturity date of such ABR Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period and (d) as to any Term Loan, the date of any repayment or prepayment made in respect thereof.

Interest Period means as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower in its Notice of Borrowing or Notice of Conversion or Continuation, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not later than 11:00 A.M., New York City time, on the date that is three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following: (i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day; (ii) the Borrower may not select an Interest Period that would extend beyond the date final payment is due on the Term Loans; (iii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; and (iv) the Borrower shall select Interest Periods so as not to require a payment or prepayment of any Eurodollar Loan during an Interest Period for such Eurodollar Loan.

Interest Rate Contracts means all interest rate swap agreements, interest rate cap agreements, interest rate collar agreements or interest rate insurance.

Internet Domain Names means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to Internet domain names.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document significant part of the property of any other Person or a business conducted by any other Person or all or substantially all of the assets constituting the business of a division, branch, brand or other unit operation of any other Person, (c) to incur, or to remain liable under, any Guaranty Obligation for Indebtedness of any other Person, to assume the Indebtedness of any other Person or to make, hold, purchase or otherwise acquire, in each case directly or indirectly and without duplication, any deposit, loan, advance, commitment to lend or advance, or other extension of credit (including by deferring or extending the date of, in each case outside the ordinary course of business, the payment of the purchase price for Sales of property or services to any other Person, to the extent such payment obligation constitutes Indebtedness of such other Person), excluding deposits with financial institutions available for withdrawal on demand, prepaid expenses, accounts receivable and similar items created in the ordinary course of business, (d) to make, directly or indirectly, any contribution to the capital of any other Person or (e) to Sell any property for less than fair market value (including a disposition of cash or Cash Equivalents in exchange for consideration of lesser value); provided, however, that such Investment shall be valued at the difference between the value of the consideration for such Sale and the fair market value of the property Sold.

IP License means all Contractual Obligations (and all related IP Ancillary Rights), whether written or oral, granting any right title and interest in or relating to any Intellectual Property.

IRS means the Internal Revenue Service of the United States and any successor thereto.

Lenders means, any financial institution or other Person that (a) is listed on the signature pages hereof as a Lender or (b) from time to time becomes a party hereto by execution of an Assignment or otherwise, in each case together with its successors; provided, that unless the context otherwise requires, each reference herein to the Lenders shall be deemed to include any Conduit Lender.

Loan Documents means, collectively, this Agreement, any Notes, the Intercreditor Agreement, the Security Documents, any other security agreement, the Fee Letter, and, when executed, each document executed by a Loan Party and delivered to the Administrative Agent or any Lender in connection with or pursuant to any of the foregoing or the Obligations, together with any modification of any term, or any waiver with respect to, any of the foregoing.

Model Year means the twelve-month period ending on June 30 of any year.

Moodys means Moodys Investors Service, Inc.

Mortgaged Property means any real property subject to a Mortgage.

Multiemployer Plan means any multiemployer plan, as defined in Section 400l(a)(3) of ERISA, to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Net Cash Proceeds means proceeds received in cash from (a) any Sale of, or Property Loss Event with respect to, property, net of (i) the customary out-of-pocket cash costs, fees and expenses paid or required to be paid in connection therewith, (ii) taxes paid or reasonably estimated to be payable by any Group Member or any direct or indirect holder of the Stock of Holdings as a result thereof, and as a result of the distribution of such proceeds to the Borrower, (iii) any amount required to be paid or prepaid on Indebtedness (other than the Obligations and Indebtedness owing to any Group Member) secured by the property subject thereto, (iv) the amount of any reserves established by the Borrower and its Subsidiaries to fund contingent liabilities reasonably estimated to be payable, that are directly attributable to such Sale or Property Loss Event (provided that any reversal of any such reserves will be deemed to be Net Cash Proceeds received at the time and in the amount of such reversal), (v) any amounts required to be paid to any Person (other than any Group Member) owning a beneficial interest in the assets subject to such Sale or Property Loss Event (but not in excess of such Persons ratable ownership percentage of the proceeds from such Sale or Property Loss Event) and (vi) any other liabilities associated with such Sale or Property Loss Event and retained by any Group Member thereafter, to the extent reflected on the Consolidated balance sheet of the Borrower at the time thereof; or (b) any sale or issuance of Stock or incurrence of Indebtedness, in each case net of brokers, advisors and investment banking fees and other customary out-of-pocket underwriting discounts, commissions and other customary out-of-pocket cash costs, fees and expenses, in each case incurred in connection with such transaction; provided, however, that any such proceeds received by any Subsidiary of the Borrower that is not a Wholly Owned Subsidiary of the Borrower shall constitute Net Cash Proceeds only to the extent of the aggregate direct and indirect beneficial ownership interest of the Borrower therein.

Non-U.S. Lender Party means each Lender, each SPV and each participant, in each case that is not a Domestic Person.

Note means a promissory note of the Borrower, in substantially the form of Exhibit B, payable to the order of a Lender in a principal amount equal to the amount of such Lenders aggregate initial principal amount of the Term Loans.

Notice of Borrowing has the meaning specified in Section 2.1.

Notice of Conversion or Continuation has the meaning specified in Section 2.7.

Obligations means, with respect to any Loan Party, all amounts, obligations, liabilities, covenants and duties of every type and description owing by such Loan Party to the Administrative Agent, any Lender, any other Indemnitee, any participant, any SPV or any Secured Hedging Counterparty arising out of, under, or in connection with, any Loan Document, whether direct or indirect (regardless of whether acquired by assignment), absolute or contingent, due or to become due, whether liquidated or not, now existing or hereafter arising and however acquired, and whether or not evidenced by any instrument or for the payment of money, including, without duplication, (a) if such Loan Party is the Borrower, all Term Loans, (b) all interest, whether or not accruing after the filing of any petition in bankruptcy or after the commencement of any insolvency, reorganization or similar proceeding, and whether or not a claim for post-filing or post-petition interest is allowed in any such proceeding, and (c) all other fees, expenses (including fees, charges and disbursement of counsel), interest, commissions, charges, costs, disbursements, indemnities and reimbursement of amounts paid and other sums chargeable to such Loan Party under any Loan Document.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Other Connection Taxes means with respect to any Secured Party, Taxes imposed as a result of a present or former connection between such Secured Party and the jurisdiction imposing such Taxes (other than a connection arising from such Secured Party having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan Document).

Parent Company means SIC or any Person, directly or indirectly, holding more than 50% of the Voting Stock of Holdings.

Participant has the meaning specified in Section 10.2(c).

Participant Register has the meaning specified in Section 10.2(c).

Patents means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to letters patent and applications therefor.

Patriot Act has the meaning specified in Section 10.16.

PBGC means the United States Pension Benefit Guaranty Corporation and any successor thereto.

Permit means, with respect to any Person, any permit, approval, authorization, license, registration, certificate, concession, grant, franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case whether or not having the force of law and applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (iii) all of the provisions of Section 6.10 and the Security Documents have been or will be complied with in respect of such Proposed Acquisition; (iv) the aggregate amount of such Investments by Loan Parties in Stock or assets that are not (or do not become) owned by a Loan Party or in Stock of Persons that do not become Loan Parties shall not exceed $23,000,000; and (v) such Proposed Acquisition was not hostile prior to the consummation thereof.

Permitted Indebtedness means any Indebtedness of any Group Member that is not prohibited by Section 7.1.

Permitted Investment means any Investment of any Group Member that is not prohibited by Section 7.3.

Permitted Lien means any Lien on or with respect to the property of any Group Member that is not prohibited by Section 7.2 or any other provision of any Loan Document.

Pledged Stock has the meaning specified in the Guaranty and Security Agreement.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Prime Rate means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City (the Prime Rate not being intended to be the lowest rate of interest charged by JPMorgan Chase Bank, N.A. in connection with extensions of credit to debtors).

Pro Forma Balance Sheet has the meaning specified in Section 4.4(d).

Pro Forma Transaction means any transaction consummated as part of any Permitted Acquisition, Related Transactions, prepayment of Indebtedness, Earn-Out payment, as part of any designation of a Subsidiary as an Unrestricted Subsidiary, together with each other transaction relating thereto and consummated in connection therewith, including any incurrence or repayment of Indebtedness.

Projections means, collectively, the Initial Projections and any document delivered pursuant to Section 5.1(e).

Property Loss Event means, with respect to any property, any loss of or damage to such property or any taking of such property or condemnation thereof.

Proposed Acquisition means (a) any proposed acquisition that is consensual and approved by the Board of Directors of such Proposed Acquisition Target, of all or substantially all of the assets or Stock of any Proposed Acquisition Target by the Borrower or any Subsidiary of the Borrower (or by Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs to the extent such assets and Stock are transferred to the Borrower or any Subsidiary of the Borrower contemporaneously with such acquisition) or (b) any proposed merger of any Proposed Acquisition Target with or into the Borrower or any Subsidiary of the Borrower (and, in the case of a merger with the Borrower, with the Borrower being the surviving corporation).

Proposed Acquisition Target means any Person or any brand, line of business, division, branch, operating division or other unit operation of any Person.

Pro Rata Outstandings, of any Lender at any time, means the outstanding principal amount of the Term Loans owing to such Lender.

Pro Rata Share means, with respect to any Lender and the Second Lien Term Facility at any time, the percentage obtained by dividing (a) the sum of the Term Loan Commitments (or, if the Term Loan Commitments are terminated, the Pro Rata Outstandings therein) of such Lender then in effect under such the Second Lien Term Facility by (b) the sum of the Term Loan Commitments (or, if the Term

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Loan Commitments in the Second Lien Term Facility are terminated, the Pro Rata Outstandings therein) of all Lenders then in effect under the Second Lien Term Facility; provided, however, that, if there are no Term Loan Commitments and no Pro Rata Outstandings in the Second Lien Term Facility, such Lenders Pro Rata Share in the Second Lien Term Facility shall be determined based on the Pro Rata Share in the Second Lien Term Facility most recently in effect, after giving effect to any subsequent assignment and any subsequent non-pro rata payments of any Lender pursuant to Section 2.15.

Purchasing Borrower Party means a Parent Company or any Subsidiary of a Parent Company that becomes an Eligible Assignee or a Participant pursuant to Section 10.2.

Refinanced Term Loans has the meaning specified in Section 10.1.

Regulation U means Regulation U of the Board as in effect from time to time.

Reinvestment Prepayment Amount means, with respect to any Net Cash Proceeds on the Reinvestment Prepayment Date therefor, the amount of such Net Cash Proceeds less any amount paid or required to be paid by any Group Member to make Permitted Reinvestments with such Net Cash Proceeds pursuant to a Contractual Obligation entered into prior to the earliest of (a) the Reinvestment Prepayment Date occurring under any of clauses (a) or (c) of such defined term, (b) the date upon which the Administrative Agent receives notice under clause (b) of the definition of Reinvestment Prepayment Date and (c) the date upon which Borrower receives notice under clause (d) of the definition of Reinvestment Prepayment Date.

Reinvestment Prepayment Date means, with respect to any portion of any Net Cash Proceeds of any Sale or Property Loss Event, the earliest of (a) the 365th day after the completion of the portion of such Sale or Property Loss Event corresponding to such Net Cash Proceeds, (b) the date that is 5 Business Days after the date on which the Borrower shall have notified the Administrative Agent of the Borrowers determination not to make Permitted Reinvestments with such Net Cash Proceeds, (c) the occurrence of any Event of Default set forth in Section 8.1(e)(ii) and (d) 10 Business Days after the delivery of a notice by the Administrative Agent or the Required Lenders to the Borrower during the continuance of any other Event of Default.

Related Documents means, collectively, the payoff letters with respect to the Existing Credit Agreement executed and delivered to the Administrative Agent in connection with Section 3.1(e), the documentation executed in connection with the closing of the First Lien Credit Facilities and the Equity Redemption and each other document executed with respect to any of the foregoing or any Related Transaction.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document agents of or to such Person or any of its Affiliates, together with, if such Person is the Administrative Agent, each other Person or individual designated, nominated or otherwise mandated by or helping the Administrative Agent pursuant to and in accordance with Section 9.2 or any comparable provision of any Loan Document.

Related Transactions means, collectively, the termination and repayment of the Existing Credit Agreement and the release of collateral, liens and security documents thereunder, the closing of the First Lien Credit Facilities and the Equity Redemption and the execution and delivery of all Related Documents and the payment of all related fees, costs and expenses.

Replacement Term Loans has the meaning specified in Section 10.1.

Reporting Person means, (a) prior to a Qualified IPO, Holdings and (b) after a Qualified IPO, SIC.

Required Lenders means, at any time, Lenders having at such time in excess of 50% of the aggregate Term Loan Commitments (or, if such Term Loan Commitments are terminated, the Pro Rata Outstandings in the Second Lien Term Facility) then in effect.

Responsible Officer means, with respect to any Person, any of the president, chief executive officer, treasurer, assistant treasurer, controller, chief financial officer, managing member or general partner of such Person but, in any event, with respect to financial matters, any such officer that is responsible for preparing the Financial Statements delivered hereunder and, with respect to the documents delivered pursuant to Section 5.1(d), documents delivered on the Closing Date and documents delivered pursuant to Section 6.10, the secretary or assistant secretary of such Person or any other officer responsible for maintaining the corporate and similar records of such Person.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document for value, whether direct or indirect, of any Stock or Stock Equivalent of any Group Member or of any direct or indirect parent entity of the Borrower, now or hereafter outstanding, and any payment or other transfer or setting aside of funds for any such redemption, retirement, termination, cancellation, purchase or other acquisition, whether directly or indirectly and whether to a sinking fund, a similar fund or otherwise.

S&P means Standard & Poors Financial Services LLC.

Second Lien Term Facility means the Term Loan Commitments and the Term Loans.

Secured Parties means the Lenders, the Administrative Agent, any Secured Hedging Counterparty and each other Indemnitee and any other holder of any Obligation of any Loan Party.

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

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

SRAM-SP2 means SRAM-SP2, Inc.

SRAM-SP2 Subs means SRAM SP-3, LLC and SRAM SP-4, LLC, separately and collectively.

Subordinated Debt means any Indebtedness that is subordinated to the payment in full of the Obligations on terms and conditions reasonably satisfactory to the Administrative Agent.

Tax Affiliate means, (a) the Borrower and its Subsidiaries and (b) any Affiliate of the Borrower with which the Borrower files or is eligible to file consolidated, combined or unitary Tax returns.

Term Loans has the meaning specified in Section 2.1 and, unless the context otherwise requires, shall include any Refinanced Term Loans or Replacement Term Loans as contemplated by Section 10.1.

Term Loan Commitment means, with respect to each Term Loan Lender, the commitment of such Lender to make Term Loans to the Borrower under the Second Lien Term Facility, as amended to reflect Assignments and as such amount may be reduced pursuant to this Agreement. The aggregate amount of the Term Loan Commitments on the date hereof equals $185,000,000.

Term Loan Lender means each Lender that has a Term Loan Commitment or that holds a Term Loan.

Term Loan Maturity Date means December 7, 2018, the seven and a half year anniversary of the Closing Date.

Title IV Plan means a pension plan subject to Title IV of ERISA, other than a Multiemployer Plan, to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.

Trade Secrets means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to trade secrets.

Transaction Costs has the meaning specified in Section 6.9.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Type shall refer, as to any Term Loan, to the nature of such Term Loan as a ABR Loan or a Eurodollar Loan.

United States or U.S. means the United States of America.

U.S. Tax Certificate has the meaning specified in Section 2.14(f)(ii)(4).

Unrestricted Subsidiary means any Subsidiary of the Borrower designated as such in accordance with the below. It is understood that Unrestricted Subsidiaries shall not be subject to Sections 2, 4, 5, 6, 7 or 8 of this Agreement and shall be disregarded for the purposes of any calculation pursuant to this Agreement relating to financial matters. The Borrower may designate any Subsidiary (other than any Subsidiary previously designated as an Unrestricted Subsidiary) as an Unrestricted Subsidiary or redesignate any Unrestricted Subsidiary as a Subsidiary (it being understood that each such designation as an Unrestricted Subsidiary shall constitute an Investment (valued as the net book value of the Reporting Persons investment therein on the books of the Reporting Person with respect to such Subsidiary at the time of designation) in the non-Group Member subsidiary at the time of such designation) at any time by written notice to the Administrative Agent, provided that (i) both before and after giving effect thereto, no Event of Default or Default shall have occurred and be continuing and (ii) such designation shall be subject to compliance with the provisions of Section 7.3. The designation of any Unrestricted Subsidiary as a Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Unrestricted Subsidiary existing at such time.

U.S. Lender Party means each of the Administrative Agent, each Lender, each SPV and each participant, in each case that is a Domestic Person.

Withholding Agent means the relevant Loan Party or the Administrative Agent, as applicable.

Working Capital means, for any Person at any date, its Consolidated Current Assets at such date minus its Consolidated Current Liabilities at such date.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 1.3 Accounting Terms and Principles. (a) GAAP. All accounting determinations required to be made pursuant hereto shall, unless expressly otherwise provided herein, be made in accordance with GAAP. No change in the accounting principles used in the preparation of any Financial Statement hereafter adopted by Borrower shall be given effect if such change would affect a calculation that measures compliance with any provision of Article VII unless the Borrower, the Administrative Agent and the Required Lenders agree to modify such provisions to reflect such changes in GAAP (and the Borrower, the Administrative Agent and the Required Lenders agree to negotiate such modification in good faith as soon as practical as reasonably requested by Borrower or the Administrative Agent) and, unless such provisions are modified, all Financial Statements, Compliance Certificates and similar documents provided hereunder shall be provided together with a reconciliation between the calculations and amounts set forth therein before and after giving effect to such change in GAAP. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to in Article VII and elsewhere in this Agreement or the Compliance Certificate shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Loan Party or any Subsidiary of any Loan Party at fair value.

(b) Pro Forma. All components of financial calculations made to determine compliance with financial ratios in accordance with this Agreement, shall be adjusted on a Pro Forma Basis to include or exclude, as the case may be, without duplication, such components of such calculations attributable to any Pro Forma Transaction consummated after the first day of the applicable period of determination and prior to the end of such period, as determined in good faith by the Borrower based on assumptions expressed therein and that were reasonable based on the information available to the Borrower at the time of preparation of the Compliance Certificate setting forth such calculations.

Section 1.4 Payments. The Administrative Agent may set up reasonable standards and procedures (consistent with the standards and procedures used by Administrative Agent with its other customers) to determine or redetermine the equivalent in Dollars of any amount expressed in any currency other than Dollars and otherwise may, but shall not be obligated to, rely on any determination made by any Loan Party. Any such determination or redetermination by the Administrative Agent shall be conclusive and binding for all purposes, absent manifest error. No determination or redetermination by any Secured Party or Loan Party and no other currency conversion shall change or release any obligation of any Loan Party or of any Secured Party (other than the Administrative Agent and its Related Persons) under any Loan Document, each of which agrees to pay separately for any shortfall remaining after any conversion and payment of the amount as converted.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document and including and the words to and until each mean to but excluding and the word through means to and including. In any other case, the term including when used in any Loan Document means including without limitation. The term documents means all writings, however evidenced and whether in physical or electronic form, including all documents, instruments, agreements, notices, demands, certificates, forms, financial statements, opinions and reports. The term incur means incur, create, make, issue, assume or otherwise become directly or indirectly liable in respect of or responsible for, in each case whether directly or indirectly, and the terms incurrence and incurred and similar derivatives shall have correlative meanings.

ARTICLE 2 THE SECOND LIEN FACILITY

Section 2.1 Term Loan Commitments On the terms and subject to the conditions contained in this Agreement, each Term Loan Lender severally, but not jointly, agrees to make a loan (net of any applicable upfront fees) (each a Term Loan) in Dollars to the Borrower on the Closing Date, in an amount not to exceed such Lenders Term Loan Commitment. Amounts of Term Loans repaid may not be reborrowed. The Term Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Section 2.2 and Section 2.7.

Section 2.2 Procedure for Term Loan Borrowing. The Borrower shall give the Administrative Agent irrevocable notice in writing substantially in the form of Exhibit C (a Notice of Borrowing) (which notice must be received by the Administrative Agent prior to 11:00 A.M., New York City time, one Business Day prior to the anticipated Closing Date) requesting that the Term Loan Lenders make the Term Loans on the Closing Date and specifying the amount to be borrowed. The Term Loans made on the Closing Date shall initially be ABR Loans. Upon receipt of such notice the Administrative Agent shall promptly notify each Term Loan Lender thereof. Not later than 1:00 P.M., New York City time, on the Closing Date each Term Loan Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the Term Loan or Term Loans to be made by such Lender. The Administrative Agent shall credit the account of the Borrower on the books of such office of the Administrative Agent with the aggregate of the amounts made available to the Administrative Agent by the Term Loan Lenders in immediately available funds.

Section 2.3 Repayment of Term Loans. The Term Loans shall be due and payable by the Borrower on the Term Loan Maturity Date.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 2.4 Optional Prepayments. The Borrower may at any time and from time to time prepay the Term Loans, in whole or in part, without premium or penalty, upon irrevocable notice delivered to the Administrative Agent no later than 11:00 A.M., New York City time, three Business Days prior thereto, in the case of Eurodollar Loans, and no later than 11:00 A.M., New York City time, one Business Day prior thereto, in the case of ABR Loans, which notice shall specify the date and amount of prepayment and whether the prepayment is of Eurodollar Loans or ABR Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.13. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest to such date on the amount prepaid. Partial prepayments of Term Loans shall be in an aggregate principal amount of $500,000 or a whole multiple thereof.

All voluntary prepayments of the Term Loans shall be accompanied by (x) a prepayment fee equal to 3.0% of the principal amount prepaid if made during the period commencing on the Closing Date and ending eighteen months thereafter; provided that no such prepayment premium shall apply to prepayments made in accordance with Section 2.5(d), (y) a prepayment fee equal to 2.0% of the principal amount prepaid if made during the next succeeding twelve month period or (z), a prepayment fee equal to 1.0% of the principal amount prepaid if made during the next succeeding twelve month period.

Section 2.5 Mandatory Prepayments. (a) Excess Cash Flow. The Borrower shall pay or cause to be paid to the Administrative Agent, within 5 Business Days after the last date Financial Statements can be delivered pursuant to Section 5.1(c) for Fiscal Year 2012 and each Fiscal Year thereafter, an amount equal to 50% of the Excess Cash Flow for such Fiscal Year; provided, however, that should the Consolidated Leverage Ratio of Borrower on the last day of such Fiscal Year be less than 3.50 to 1.0, such percentage shall be reduced to 25% as to such Fiscal Year; provided; further, that should the Consolidated Leverage Ratio of Borrower on the last day of such Fiscal Year be less than 2.25 to 1.0, such percentage shall be reduced to 0% as to such Fiscal Year; and provided; further, that the amount of any prepayment due pursuant to this Section 2.5(a) shall be reduced, Dollar for Dollar, by the sum of the principal amount of any (1) voluntary prepayment of the Term Loans pursuant to Section 2.4 made by the Borrower, without duplication, during such Fiscal Year or in the subsequent Fiscal Year prior to the delivery of Financial Statements pursuant to Section 5.1(c) and (2) prepayment of First Lien Term Loans or Revolving Loans (as defined in the First Lien Credit Agreement) (to the extent accompanied by a permanent reduction of the Revolving Credit Commitment) (as defined in the First Lien Credit Agreement) prepaid pursuant to Section 2.7 (or any successor provision) or Section 2.8(a) (or any successor provision) of the First Lien Credit Agreement, to the extent the amount so prepaid reduced the mandatory prepayment otherwise required under the First Lien Credit Agreement with respect to the Excess Cash Flow for the applicable Fiscal Year.

(b) Debt Issuances. If any Indebtedness (excluding any Indebtedness incurred in accordance with Section 7.1) shall be issued or incurred by any Group Member, an amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the date of such issuance or incurrence toward the prepayment of the Term Loans provided; that the amount of any prepayment due pursuant to this Section 2.5(b) shall be reduced, Dollar for Dollar, by the amount of any prepayment made pursuant to Section 2.8 (b) (or any successor provision) of the First Lien Credit Agreement in respect of the receipt of such Net Cash Proceeds.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document reliance upon any of clauses (a) through (e) of Section 7.4 or (ii) any Property Loss Event with respect to any property of any Group Member to the extent resulting, in the aggregate with all other such Property Loss Events, in the receipt by any of them of Net Cash Proceeds in excess of $5,000,000 in any Fiscal Year, the Borrower shall promptly (and in any event within five Business Days of its receipt thereof) prepay the Term Loans in an amount equal to 100% of such Net Cash Proceeds; provided, however, that, upon any such receipt, if no Event of Default shall be continuing at the time of such receipt, any Group Member may make Permitted Reinvestments with such Net Cash Proceeds and the Borrower shall not be required to make or cause such payment to the extent (x) such Net Cash Proceeds are intended to be used to make Permitted Reinvestments and (y) on each Reinvestment Prepayment Date for such Net Cash Proceeds, the Borrower shall pay or cause to be paid to the Administrative Agent an amount equal to the Reinvestment Prepayment Amount applicable to such Reinvestment Prepayment Date and such Net Cash Proceeds; provided further that any such mandatory prepayment pursuant to this Section 2.5(c) shall be reduced, Dollar for Dollar, by the amount of any prepayment made pursuant to Section 2.8(c) (or any successor provision) of the First Lien Credit Agreement in respect of the receipt of such Net Cash Proceeds.

(d) If there is a Qualified IPO within six months of the Closing Date, the Borrower shall, within five Business Days of the receipt of any Net Cash Proceeds of such Qualified IPO, apply such Net Cash Proceeds toward the prepayment of the Term Loans.

(e) The application of any prepayment pursuant to this Section 2.5 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Term Loans under this Section 2.5 shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.

Section 2.6 Interest. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin.

(b) Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus the Applicable Margin.

(c) Payments. (i) If all or a portion of the principal amount of any Term Loan shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to (x) in the case of the Term Loans, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 2% and (ii) if all or a portion of any interest payable on any other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise) and the applicable cure period shall have expired, such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to ABR Loans plus 2%, in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full (as well after as before judgment).

(d) Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to paragraph (c) of this Section shall be payable from time to time on demand.

Section 2.7 Conversion and Continuation Options. (a) The Borrower may elect from time to time to convert Eurodollar Loans to ABR Loans by giving the Administrative Agent prior irrevocable notice in substantially the form of Exhibit D (a Notice of Conversion or Continuation) of such election no later than 11:00 A.M., New York City time, on the Business Day preceding the proposed conversion date, provided that any such conversion of Eurodollar Loans may only be made on the last day

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document of an Interest Period with respect thereto. The Borrower may elect from time to time to convert ABR Loans to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice of such election no later than 11:00 A.M., New York City time, on the third Business Day preceding the proposed conversion date (which notice shall specify the length of the initial Interest Period therefor), provided that no ABR Loan may be converted into a Eurodollar Loan when any Event of Default has occurred and is continuing and the Administrative Agent or the Required Lenders have determined in its or their sole discretion not to permit such conversions. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

(b) Procedure. Any Eurodollar Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower giving irrevocable notice to the Administrative Agent, in accordance with the applicable provisions of the term Interest Period set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Eurodollar Loans, provided that no Eurodollar Loan under the Second Lien Term Facility may be continued as such when any Event of Default has occurred and is continuing and the Administrative Agent has or the Required Lenders have determined in its or their sole discretion not to permit such continuations, and provided, further, that if the Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso such Eurodollar Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest Period. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

Section 2.8 Fees. The Borrower shall pay to the Administrative Agent and its Related Persons its reasonable and customary fees and expenses in connection with any payments made pursuant to Section 2.13(a) (Breakage Costs; Increased Costs; Capital Requirements) and the Borrower agrees to pay to the Administrative Agent the fees in the amounts and on the dates as set forth in any fee agreements with the Administrative Agent and to perform any other obligations contained therein.

Section 2.9 Limitations on Eurodollar Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall be outstanding at any one time.

Section 2.10 Payments and Computations. (a) Each borrowing by the Borrower from the Lenders hereunder, each payment by the Borrower on account of any commitment fee and any reduction of the Term Loan Commitments of the Lenders shall be made pro rata according to the respective Term Loan Percentages of the relevant Lenders.

(b) Each payment (including each prepayment) by the Borrower on account of principal of and interest on the Term Loans shall be made pro rata according to the respective outstanding principal amounts of the Term Loans then held by the Term Loan Lenders. The amount of each optional principal prepayment of the Term Loans pursuant to Section 2.4 shall be applied to the remaining installments as directed by the Borrower and the amount of each mandatory prepayment of Term Loans pursuant to Section 2.5 shall be applied to any installments due within 12 months of such prepayment and then shall be applied to reduce the then remaining installments of the Term Loans pro rata based upon the respective then remaining principal amounts thereof. Amounts prepaid on account of the Term Loans may not be reborrowed.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) All payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 12:00 Noon, New York City time, on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Funding Office, in Dollars and in immediately available funds. The Administrative Agent shall distribute such payments to each relevant Lender promptly upon receipt in like funds as received, net of any amounts owing by such Lender pursuant to Section 9.6. If any payment hereunder (other than payments on the Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

(d) Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon, at a rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this paragraph shall be conclusive in the absence of manifest error. If such Lenders share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days after such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to ABR Loans, on demand, from the Borrower.

(e) Unless the Administrative Agent shall have been notified in writing by the Borrower prior to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is making such payment, and the Administrative Agent may, but shall not be required to, in reliance upon such assumption, make available to the Lenders their respective pro rata shares of a corresponding amount. If such payment is not made to the Administrative Agent by the Borrower within three Business Days after such due date, the Administrative Agent shall be entitled to recover, on demand, from each Lender to which any amount which was made available pursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily average Federal Funds Effective Rate. Nothing herein shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrower.

(f) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.10(e), Section 2.10(f) or Section 9.6, then the Administrative Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender for the benefit of the Administrative Agent to satisfy such Lenders obligations to it under such Section until all such unsatisfied obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender under any such Section, in the case of each of clauses (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (g) Computations of Interests and Fees. (i) Interest and fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to ABR Loans the rate of interest on which is calculated on the basis of the Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Term Loan resulting from a change in the ABR or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of the effective date and the amount of each such change in interest rate.

(ii) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.6(a).

Section 2.11 Inability to Determine Interest Rate. If prior to the first day of any Interest Period:

(a) the Administrative Agent shall have determined in good faith (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or (b) the Administrative Agent shall have received notice from the Required Lenders in respect of the Second Lien Term Facility that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Eurodollar Loans during such Interest Period, then the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the relevant Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans under the Second Lien Term Facility requested to be made on the first day of such Interest Period shall be made as ABR Loans, (y) any Term Loans under the Second Lien Term Facility that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans under the Second Lien Term Facility shall be converted, on the last day of the then-current Interest Period, to ABR Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans under the Second Lien Term Facility shall be made or continued as such, nor shall the Borrower have the right to convert Term Loans under the Second Lien Term Facility to Eurodollar Loans.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 2.12 Requirements of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: (i) shall subject any Secured Party to any Taxes (other than (A) Indemnified Taxes, (B) Other Taxes and (C) Excluded Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit (or participations therein) by, or any other acquisition of funds by, any office of such Lender that is not otherwise included in the determination of the Eurodollar Rate; or (iii) shall impose on such Lender any other condition; and the result of any of the foregoing is to increase the cost to such Lender or such other Secured Party, by an amount that such Lender or other Secured Party deems to be material, of making, converting into, continuing or maintaining Term Loans, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender or such other Secured Party, upon its demand, any additional amounts necessary to compensate such Lender or such other Secured Party for such increased cost or reduced amount receivable. If any Lender or such other Secured Party becomes entitled to claim any additional amounts pursuant to this paragraph, it shall promptly notify the Borrower (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled.

(b) If any Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lenders or such corporations capital as a consequence of its obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lenders or such corporations policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a written request therefor, the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such corporation for such reduction.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) A certificate as to any additional amounts payable pursuant to this Section submitted by any Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. Notwithstanding anything to the contrary in this Section, the Borrower shall not be required to compensate a Lender pursuant to this Section for any amounts incurred more than 180 days prior to the date that such Lender notifies the Borrower of such Lenders intention to claim compensation therefor; provided that, if the circumstances giving rise to such claim have a retroactive effect, then such nine-month period shall be extended to include the period of such retroactive effect. The obligations of the Borrower pursuant to this Section shall survive the termination of this Agreement and the payment of the Term Loans and all other amounts payable hereunder.

(e) Except as explicitly provided for in Section 2.12(a), this Section 2.12 shall not apply to any costs arising in connection with Taxes, which shall be governed solely by the provisions of Section 2.14.

Section 2.13 Breakage Costs; Increased Costs; Capital Requirements. (a) Breakage Costs. The Borrower shall compensate each Lender, upon demand from such Lender to such Borrower (with copy to the Administrative Agent), for all Liabilities (including, in each case, those incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to prepare to fund, to fund or to maintain the Eurodollar Loans of such Lender to the Borrower but excluding any loss of the Applicable Margin on the relevant Term Loans) that such Lender may incur (A) to the extent, for any reason other than solely by reason of such Lender being a Defaulting Lender, a proposed Borrowing, conversion into or continuation of Eurodollar Loans does not occur on a date specified therefor in a Notice of Borrowing or a Notice of Conversion or Continuation or in a similar request made by telephone by the Borrower, (B) to the extent any Eurodollar Loan is paid (whether through a scheduled, optional or mandatory prepayment) or converted to a ABR Loan (including because of Section 2.11) on a date that is not the last day of the applicable Interest Period or (C) as a consequence of any failure by the Borrower to repay Eurodollar Loans when required by the terms hereof. For purposes of this clause (a), each Lender shall be deemed to have funded each Eurodollar Loan made by it using a matching deposit or other borrowing in the London interbank market.

(b) Increased Costs. If at any time any Lender determines that, after the date hereof, the adoption of, or any change in or in the interpretation, application or administration of, or compliance with, any Requirement of Law (other than any imposition or increase of Eurocurrency Reserve Requirements) from any Governmental Authority shall have the effect of increasing the cost to such Lender of making, funding or maintaining any Eurodollar Loan or to agree to do so or of participating, or agreeing to participate, in extensions of credit, , then, upon demand by such Lender (with copy to the Administrative Agent), the Borrower shall pay to the Administrative Agent for the account of such Lender amounts sufficient to compensate such Lender for such increased cost. This Section 2.13(b) shall not apply to any costs arising in connection with any Taxes, which shall be governed exclusively by the provisions of Section 2.12 or Section 2.14.

(c) Compensation Certificate. Each demand for compensation under this Section 2.13 shall be accompanied by a certificate of the Lender claiming such compensation, setting forth the amounts to be paid hereunder, which certificate shall be conclusive, binding and final for all purposes, absent manifest error. In determining such amount, such Lender may use any reasonable averaging and attribution methods.

(d) Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to this Section 2.13 shall not constitute a waiver of such Lenders right to demand such compensation; provided that Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs incurred or reductions suffered more than 180 days prior to the date that such Lender notifies Borrower of the change giving rise to such increased costs or reductions and of such Lenders intention to claim compensation therefor (except that, if the change giving rise to such increased costs or reductions is retroactive, then the 180 day period referred to above shall be extended to include the period of retroactive effect thereof).

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 2.14 Taxes. (a) Payments Free and Clear of Taxes. Each payment by any Loan Party under any Loan Document shall be made without withholding for any Taxes, unless such withholding is required by any law. If any Withholding Agent determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes, then such Withholding Agent may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law. If such Taxes are Indemnified Taxes, then the amount payable by such Loan Party shall be increased as necessary so that, net of such withholding (including such withholding applicable to additional amounts payable under this Section), the applicable Secured Party receives the amount it would have received had no such withholding been made.

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

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

(d) The Loan Parties shall jointly and severally indemnify each Secured Party for any Indemnified Taxes or Other Taxes that are paid or payable by such Loan Party in connection with any Loan Document (including amounts paid or payable under this Section 2.14) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; provided that the Loan Parties shall not be required to indemnify any Secured Party for any loss, cost or expense (including any penalty or interest) to the extent arising out of any failure by the Administrative Agent or such Secured Party to timely pay or file a return relating to an Indemnified Tax or Other Tax if any Loan Party has paid the amount of such Tax to the Administrative Agent or such Secured Party. The indemnity under this Section 2.14(d) shall be paid within 10 days after the Secured Party delivers to the Borrower a certificate stating the amount of any Indemnified Taxes or Other Taxes so paid or payable by such Secured Party and describing the basis for the indemnification claim. Such certificate shall be conclusive of the amount so paid or payable absent manifest error. Such Secured Party shall deliver a copy of such certificate to the Administrative Agent.

(e) Each Lender shall severally indemnify the Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes or Other Taxes, only to the extent that the Loan Parties have not already indemnified the Administrative Agent for such Indemnified Taxes or Other Taxes and without limiting the obligation of the Loan Parties to do so) attributable to such Lender that are paid or payable by the Administrative Agent in connection with any Loan Document and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The indemnity under this Section 2.14(e) shall be paid within 10 days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the Administrative Agent. Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (f) (i) Any Lender that is entitled to an exemption from, or reduction of, any applicable withholding Tax with respect to any payments under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without, or at a reduced rate of, withholding. In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to any withholding (including backup withholding) or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.14(f)(ii)(1) through Section 2.14(f)(ii)(5) below) shall not be required if in the Lenders judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense (or, in the case of a change in a Requirement of Law, any incremental material unreimbursed cost or expense) or would materially prejudice the legal or commercial position of such Lender. Upon the reasonable request of such Borrower or the Administrative Agent, any Lender shall update any form or certification previously delivered pursuant to this Section 2.14(f). If any form or certification previously delivered pursuant to this Section 2.14(f) expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall promptly (and in any event within 10 days after such expiration, obsolescence or inaccuracy) notify such Borrower and the Administrative Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so (ii) Without limiting the generality of the foregoing, if the Borrower is a Domestic Person, any Lender with respect to such Borrower shall, if it is legally eligible to do so, deliver to such Borrower and the Administrative Agent (in such number of copies reasonably requested by such Borrower and the Administrative Agent) on or prior to the date on which such Lender becomes a party hereto, duly completed and executed copies of whichever of the following is applicable: (1) in the case of a U.S. Lender Party, IRS Form W-9 certifying that such U.S. Lender Party is exempt from U.S. federal backup withholding Tax; (2) in the case of a Non-U.S. Lender Party claiming the benefits of an income tax treaty to which the United States is a party (1) with respect to payments of interest under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the interest article of such income tax treaty and (2) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the business profits or other income article of such income tax treaty; (3) in the case of a Non-U.S. Lender Party for whom payments under any Loan Document constitute income that is effectively connected with such Non-U.S. Lender Partys conduct of a trade or business in the United States, IRS Form W-8ECI

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (4) in the case of a Non-U.S. Lender Party claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code both (1) IRS Form W-8BEN and (2) a certificate substantially in the form of Exhibit I (a U.S. Tax Certificate) to the effect that such Non-U.S. Lender Party is not (a) a bank within the meaning of Section 881(c)(3)(A) of the Code, (b) a 10 percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, (c) a controlled foreign corporation described in Section 881(c)(3)(C) of the Code and (d) conducting a trade or business in the United States with which the relevant interest payments are effectively connected; (5) in the case of a Non-U.S. Lender that is not the beneficial owner of payments made under this Agreement (including a partnership or a participating Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms prescribed in clauses (1), (2), (3), (4) and (6) of this paragraph (f)(ii) that would be required of each such beneficial owner or partner of such partnership if such beneficial owner or partner were a Non-U.S. Lender Party; provided, however, that if the Non-U.S. Lender Party is a partnership and one or more of its partners are claiming the exemption for portfolio interest under Section 881(c) of the Code, such Non-U.S. Lender Party may provide a U.S. Tax Certificate on behalf of such partners; or (6) any other form prescribed by law as a basis for claiming exemption from, or a reduction of, U.S. federal withholding Tax together with such supplementary documentation necessary to enable the Borrower or the Administrative Agent to determine the amount of Tax (if any) required by law to be withheld. (iii) If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Withholding Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Withholding Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Withholding Agent as may be necessary for the Withholding Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lenders obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.13(f)(ii), FATCA shall include any amendments made to FATCA after the date of this Agreement.

(g) If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.14 (including additional amounts paid pursuant to this Section 2.14), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 2.14 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid to such indemnifying party pursuant to the previous sentence (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.14(g), in no event will any indemnified party be required to pay any amount to any indemnifying party pursuant to this

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 2.14(g) if such payment would place such indemnified party in a less favorable position (on a net after-Tax basis) than such indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This Section 2.14(g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the indemnifying party or any other Person.

Section 2.15 Replacement of Lenders. The Borrower shall be permitted to replace any Lender that (a) requests reimbursement for amounts owing pursuant to Section 2.12, Section 2.13 (other than break-funding losses) or Section 2.14, (b) becomes a Defaulting Lender, or (c) does not consent to any proposed amendment, supplement, modification, consent or waiver of any provision of this Agreement or any other Loan Document that requires the consent of each of the Lenders or each of the Lenders affected thereby (so long as the consent of the Required Lenders has been obtained), with a replacement financial institution; provided that (i) such replacement does not conflict with any Requirement of Law, (ii) no Event of Default shall have occurred and be continuing at the time of such replacement, (iii) the replacement financial institution shall purchase, at par, all Loans and other amounts owing to such replaced Lender on or prior to the date of replacement, (iv) the replacement financial institution shall be reasonably satisfactory to the Administrative Agent to the extent the assignment would require such consent under Section 10.2 (and any existing Lender shall be deemed to be satisfactory to Administrative Agent), (v) the replaced Lender shall be obligated to make such replacement in accordance with the provisions of Section 10.2 (provided that the Borrower shall be obligated to pay the registration and processing fee referred to therein), (vi) until such time as such replacement shall be consummated, the Borrower shall pay all additional amounts (if any) required pursuant to Section 2.12, Section 2.13 or Section 2.14, as the case may be, and (vii) any such replacement shall not be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender.

Section 2.16 Change of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.12 or Section 2.14 with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Term Loans affected by such event with the object of avoiding the consequences of such event; provided, that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending offices to suffer no economic, legal or regulatory disadvantage, and provided, further, that nothing in this Section shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 2.12 or Section 2.14.

Section 2.17 Extensions of Term Loans (a) Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers (each, an Extension Offer) made from time to time by the Borrower to all Lenders of Term Loans with a like maturity date on a pro rata basis (based on the aggregate outstanding principal amount of the respective Term Loans with a like maturity date) and on the same terms to each such Lender, the Borrower is hereby permitted to consummate from time to time transactions with individual Lenders that accept in their sole discretion the terms contained in such Extension Offers to extend the maturity date of each such Lenders Term Loans and otherwise modify the terms of such Term Loans pursuant to the terms of the relevant Extension Offer (including, without limitation, by increasing the interest rate or fees payable in respect of such Term Loans (and related outstandings) and/or modifying the amortization schedule in respect of such Lenders Term Loans) (each, an Extension, and each group of Term Loans so extended, as well as the original Term Loans (not so extended), being a tranche; any Extended Term Loans shall constitute a separate tranche of Term Loans from the tranche of Term Loans from which they were converted), so long as the following terms are

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document satisfied: (i) no Default or Event of Default shall have occurred and be continuing at the time the offering document in respect of an Extension Offer is delivered to the Lenders, (ii) except as to interest rates, fees, amortization, final maturity date, premium, required prepayment dates and participation in prepayments (which shall, subject to immediately succeeding clauses (iii), (iv) and (v), be set forth in the relevant Extension Offer), the Term Loans of any Term Lender that agrees to an Extension with respect to such Term Loans (an Extending Term Lender) extended pursuant to any Extension (Extended Term Loans) shall have the same terms as the tranche of Term Loans subject to such Extension Offer, (iii) the final maturity date of any Extended Term Loans shall be no earlier than the Term Loan Maturity Date, (iv) the Weighted Average Life to Maturity of any Extended Term Loans shall be no less than 180 days longer than the remaining Weighted Average Life to Maturity of the Term Loan extended thereby, (v) any Extended Term Loans may participate on a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in any voluntary or mandatory repayments or prepayments hereunder, in each case as specified in the respective Extension Offer (and any such mandatory prepayment not accepted by the applicable Extending Term Lenders shall be applied to the non-extended Term Loans being extended), (vii) if the aggregate principal amount of Term Loans (calculated on the face amount thereof) in respect of which Term Lenders shall have accepted the relevant Extension Offer shall exceed the maximum aggregate principal amount of Term Loans, as the case may be, offered to be extended by the Borrower pursuant to such Extension Offer, then the Term Loans of such Term Lenders shall be extended ratably up to such maximum amount based on the respective principal amounts (but not to exceed actual holdings of record) with respect to which such Term Lenders have accepted such Extension Offer and (viii) all documentation in respect of such Extension shall be consistent with the foregoing.

(b) With respect to all Extensions consummated by the Borrower pursuant to this Section, (i) such Extensions shall not constitute voluntary or mandatory payments or prepayments for purposes of Section 2.17 and (ii) each Extension Offer shall specify the minimum amount of Term Loans to be tendered, which shall be with respect to Term Loans an integral multiple of $1,000,000 and an aggregate principal amount that is not less than $50,000,000 (or such lesser minimum amount agreed to by the Administrative Agent and the Borrower). The Administrative Agent and the Lenders hereby consent to the transactions contemplated by this Section (including, for the avoidance of doubt, payment of any interest, fees or premium in respect of any Extended Term Loans on the such terms as may be set forth in the relevant Extension Offer) and hereby waive the requirements of any provision of this Agreement (including, without limitation, Sections 2.4, Section 2.5 and Section 2.10) or any other Loan Document that may otherwise prohibit any such Extension or any other transaction contemplated by this Section.

(c) The consent of the Administrative Agent shall be required to effectuate any Extension. No consent of any Lender shall be required to effectuate any Extension, other than the consent of each Lender agreeing to such Extension with respect to one or more of its Term Loans (or a portion thereof). All Extended Term Loans and all obligations in respect thereof shall be Obligations under this Agreement and the other Loan Documents that are secured by the Collateral on a pari passu basis with all other applicable Obligations under this Agreement and the other Loan Documents. The Lenders hereby irrevocably authorize the Administrative Agent to enter into amendments to this Agreement and the other Loan Documents (an Extension Amendment) with the Borrower as may be necessary in order to establish new tranches or sub-tranches in respect of Term Loans so extended and such technical amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrower in connection with the establishment of such new tranches or sub-tranches, in each case on terms consistent with this Section. Without limiting the foregoing, in connection with any Extensions the respective Loan Parties shall (at their expense) amend (and the Administrative Agent is hereby directed to amend) any Mortgage that has a maturity date prior to the Term Loan Maturity Date so that such maturity date is extended to the then Term Loan Maturity Date (or such later date as may be advised by local counsel to the Administrative Agent).

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) In connection with any Extension, the Borrower shall provide the Administrative Agent at least five Business Days (or such shorter period as may be agreed by the Administrative Agent) prior written notice thereof, and shall agree to such procedures (including, without limitation, regarding timing, rounding and other adjustments and to ensure reasonable administrative management of the credit facilities hereunder after such Extension), if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably to accomplish the purposes of this Section.

ARTICLE 3 CONDITIONS TO TERM LOANS

Section 3.1 Conditions Precedent to Term Loans. The obligation of each Lender to make any Term Loan on the Closing Date is subject to the satisfaction or due waiver of each of the following conditions precedent:

(a) Certain Documents. The Administrative Agent shall have received on or prior to the Closing Date each of the following, each dated the Closing Date unless otherwise agreed by the Administrative Agent: (i) this Agreement duly executed by Holdings and the Borrower and, for the account of each Lender having requested the same by notice to the Administrative Agent and the Borrower received by each at least 3 Business Days prior to the Closing Date (or such later date as may be agreed by the Borrower); (ii) the Guarantee and Security Agreement, executed and delivered by each Group Member; (iii) the Intercreditor Agreement, executed and delivered by Holdings, the Borrower, the Administrative Agent and the First Lien Administrative Agent; (iv) duly executed favorable opinions of counsel to the Loan Parties in New York, Delaware and Indiana each addressed to the Administrative Agent and the Lenders and addressing such matters as the Administrative Agent may reasonably request; (v) a copy of each Constituent Document of each Loan Party that is on file with any Governmental Authority in any jurisdiction, certified (where available) as of a recent date by such Governmental Authority, together with, if applicable, certificates (where available) attesting to the good standing of such Loan Party in the jurisdiction of its organization; (vi) a certificate of the secretary or other officer of each Loan Party in charge of maintaining books and records of such Loan Party certifying as to (A) the names and signatures of each officer of such Loan Party authorized to execute and deliver any Loan Document, (B) the Constituent Documents of such Loan Party attached to such certificate are complete and correct copies of such Constituent Documents as in effect on the date of such certification (or, for any such Constituent Document delivered pursuant to clause (v) above, that there have been no changes from such Constituent Document so delivered) and (C) the resolutions of such Loan Partys Board of Directors approving and authorizing the execution, delivery and performance of each Loan Document to which such Loan Party is a party; and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (vii) a certificate of a Responsible Officer of the Borrower to the effect that (A) each condition set forth in Section 3.1(k) has been satisfied, (B) both the Loan Parties taken as a whole and the Borrower are Solvent after giving effect to the initial Term Loans, the consummation of the Related Transactions, the application of the proceeds thereof in accordance with Section 6.9 and the payment of all estimated legal, accounting and other fees and expenses related hereto and thereto, (C) attached thereto are complete and correct copies of each principal document relating to the Equity Redemption requested by the Administrative Agent and (D) the consummation of the Related Transactions and the funding of the initial Term Loans hereunder and the use of proceeds thereof will not constitute a default (or any event which with due notice or lapse of time or both will be a default) under any material Contractual Obligation of Borrower or any of its Subsidiaries the default under which could reasonably be expected to have a Material Adverse Effect.

(b) Fee and Expenses. The Lenders and the Administrative Agent shall have received all fees required to be paid pursuant to the Fee Letter and hereunder, and the Administrative Agent shall have received payment for all of its reasonable and actual expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel), on or before the Closing Date. All such amounts will be paid with proceeds of Term Loans made on the Closing Date and will be reflected in the funding instructions given by the Borrower to the Administrative Agent on or before the Closing Date.

(d) Ratings. The Borrower shall have obtained a corporate credit rating and corporate family rating, respectively, for itself and its Subsidiaries from Moodys and S&P.

(f) Financial Statements. The Lenders shall have received the financial statements described in Section 4.4 and the Pro Forma Balance Sheet.

(g) Lien Searches. The Administrative Agent shall have received the results of a recent lien search in each of the jurisdictions in which UCC financing statements or other filings or recordations should be made to evidence or perfect security interests in all Collateral of the Loan Parties, and such search shall reveal no liens on any of the Collateral of the Loan Parties, except for Liens permitted by Section 7.2 or liens to be discharged on or prior to the Closing Date.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (h) Filings, Registrations and Recordings. Each document (including any UCC financing statement) required by the Security Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Lenders, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 7.2), shall be in proper form for filing, registration or recordation, to the extent such perfection can be achieved by the filing of a UCC financing statement.

(k) Representations and Warranties; No Defaults. The following statements shall be true on such date, both before and after giving effect to such Term Loan: (i) the representations and warranties set forth in any Loan Document shall be true and correct in all material respects on and as of such date and (ii) no Default shall be continuing.

Section 3.2 Determinations of Initial Borrowing Conditions. For purposes of determining compliance with the conditions specified in Section 3.1, each Lender shall be deemed to be satisfied with each document and each other matter required to be satisfactory to such Lender unless, prior to the Closing Date, the Administrative Agent receives notice from such Lender specifying such Lenders objections and such Lender has not made available its Pro Rata Share of any Borrowing scheduled to be made on the Closing Date.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES

To induce the Lenders and the Administrative Agent to enter into the Loan Documents, each of Holdings and the Borrower (and, to the extent set forth in any other Loan Document, each other Loan Party) represents and warrants to each of them each of the following on and as of each date applicable pursuant to Section 3.1:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 4.2 Term Loan and Related Documents. (a) Power and Authority. The execution, delivery and performance by each Loan Party of the Loan Documents and Related Documents to which it is a party and the consummation of the Related Transactions and other transactions contemplated therein (i) are within such Loan Partys corporate or similar powers and, at the time of execution thereof, have been duly authorized by all necessary corporate and similar action (including, if applicable, consent of holders of its Securities), (ii) do not (A) contravene such Loan Partys Constituent Documents, (B) violate any applicable material Requirement of Law, (C) conflict with, contravene, constitute a default or breach under, or result in or permit the termination or acceleration of, any material Contractual Obligation of any Loan Party or any of its Subsidiaries (including other Related Documents or Loan Documents) other than those that could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and are not created or caused by, or a conflict, breach, default or termination or acceleration event under, any Loan Document or (D) result in the imposition of any Lien (other than a Permitted Lien) upon any property of any Loan Party or any of its Subsidiaries and (iii) do not require any Permit of, or filing with, any Governmental Authority or any consent of, or notice to, any Person, other than (A) with respect to the Loan Documents, the filings required to perfect the Liens created by the Loan Documents, (B) those listed on Schedule 4.2, or those of any members, managers, or directors of a Group Member, in either case which have been, or will be prior to the Closing Date, obtained or made, copies of which have been, or will be prior to the Closing Date, delivered to the Administrative Agent, and each of which on the Closing Date will be in full force and effect, and (C) those that, if not obtained, could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Date, except as set forth on Schedule 4.3, there are no Stock Equivalents with respect to the Stock (or debt securities that are convertible into, or exchangeable for, Stock) of Holdings. Except as set forth on Schedule 4.3, there are no Contractual Obligations or other understandings to which any Group Member (other than SIC, SRAM-SP2 and the SRAM-SP2 Subs) or any Subsidiary of any Group Member is a party with respect to (including any restriction on) the issuance, voting, Sale or pledge of any Stock or Stock Equivalent of any Group Member or any such Subsidiary or joint venture.

Section 4.4 Financial Statements. (a) Each of (i) the audited Consolidated balance sheet of Holdings as at December 31, 2010 and the related Consolidated statements of income, retained earnings and cash flows of Holdings for the Fiscal Year then ended, certified by Group Members Accountants, and (ii) subject to the absence of footnote disclosure and normal year-end audit adjustments, the unaudited Consolidated balance sheets and related Consolidated statements of income and cash flows of Holdings and its subsidiaries, for the Fiscal Quarter ended March 31, 2011, copies of each of which have been furnished to the Administrative Agent, and fairly present in all material respects the Consolidated financial position, results of operations and cash flow of Borrower as at the dates indicated and for the periods indicated and which are prepared, in respect of each such balance sheet income statement, and audited statements of retained earnings and cash flows, in accordance with GAAP.

(b) On the Closing Date (prior to giving effect to the initial Term Loans and the consummation of the Related Transactions), none of Holdings or its Subsidiaries has any material liability or other obligation (including Indebtedness, Guaranty Obligations, contingent liabilities and liabilities for Taxes, long-term leases and unusual forward or long-term commitments) that is not reflected in the Financial Statements referred to in clause (a) above or in the notes thereto and not otherwise permitted by this Agreement.

Section 4.5 No Change. Since December 31, 2010, there has been no development or event that has had or could reasonably be expected to have a Material Adverse Effect.

Section 4.6 Solvency. Both before and after giving effect to (a) the Term Loans made on or prior to the date this representation and warranty is made, (b) the disbursement of the proceeds of such Term Loans, (c) the consummation of the Related Transactions and (d) the payment and accrual of all transaction costs in connection with the foregoing, both the Loan Parties taken as a whole and the Borrower are Solvent.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 4.7 Litigation. There are no pending (or, to the knowledge of any Group Member, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or disputes affecting the Borrower or any of its Subsidiaries with, by or before any Governmental Authority other than those that (a) cannot reasonably be expected to involve the Loan Documents, the Related Documents, the Related Transactions and (b) could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 4.8 Taxes. Each of the Reporting Person and its Subsidiaries has timely filed or caused to be timely filed all federal Tax returns and all other material Tax returns and reports required to have been filed (except for extensions duly obtained) and all such Tax returns, to the knowledge of Holdings and the Borrower, are true and correct in all material respects. Each of the Reporting Person and its Subsidiaries has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Reporting Person or such Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.

Section 4.9 Margin Regulations. The Borrower is not engaged in the business of extending credit for the purpose of, and no proceeds of any Term Loan or other extensions of credit hereunder will be used for the purpose of, buying or carrying margin stock (within the meaning of Regulation U of the Board) or extending credit to others for the purpose of purchasing or carrying any such margin stock, in each case in contravention of Regulation T, U or X of the Board.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Liability, (iii) has received written notice of or otherwise has knowledge of any claim or proceeding or threatened claim or proceeding with respect to any Environmental Liability or Environmental Law, or (iv) has Released Hazardous Materials in a manner or to a location that would reasonably be expected to result in Liability to any Group Member.

Section 4.15 Intellectual Property. Each Group Member owns, licenses or otherwise has the right to use all Intellectual Property that is material to the operations of its businesses, free of all Liens (other than Permitted Liens), which has not expired or been abandoned. To the knowledge of each Group Member, (a) the conduct and operations of the businesses of each Group Member does not infringe, misappropriate, dilute, violate or otherwise impair any Intellectual Property owned by any other Person, (b) each Group Members Intellectual Property is not being infringed by any Person in any material respect, and, (c) no other Person has contested any right, title or interest of any Group Member in, or relating to, any Intellectual Property other than, in each case, as could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. In addition, (x) there are no pending (or, to the knowledge of any Group Member, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or disputes affecting the Intellectual Property of any Group Member, (y) no judgment or order has been rendered by any competent Governmental Authority or arbitrator and no settlement agreement or similar Contractual Obligation has been entered into by any Group Member which would limit, cancel or challenge such Group Members rights in any Intellectual Property, and (z) no Group Member knows or has any reason to know of any valid basis for any claim based on any infringement, misappropriation, dilution, violation or impairment or contest of Intellectual Property rights, other than, in each case, as could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. To the knowledge of each Group Member, each Group Member takes commercially reasonable steps to maintain and protect the Intellectual Property to the extent the failure to so maintain could reasonably be expected to have a Material Adverse Effect.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document such information (including those set forth in any Projections delivered subsequent to the Closing Date and any forecasts, protections or estimates contained in such information) have been prepared in good faith based upon assumptions believed to be reasonable at the time made (it being understood and agreed that financial projections are not a guarantee of financial performance and actual results may differ from financial projections and such differences may be material).

Section 4.19 Security Documents (a) The Guaranty and Security Agreement will, upon execution and delivery thereof and upon registration or the taking of any other perfection steps under applicable laws, be effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein and proceeds and products thereof. In the case of the Pledged Stock described in the Guaranty and Security Agreement, when stock certificates representing such Pledged Stock are delivered to the Administrative Agent (together with a properly completed and signed stock power or endorsement), and in the case of the other Collateral described in the Guaranty and Security Agreement, when financing statements and other filings specified on Schedule 2 thereto as of the Closing Date in appropriate form are filed in the offices specified on Schedule 2 thereto as of the Closing Date, the Liens created by the Guaranty and Security Agreement shall constitute fully perfected Liens on, and security interests in, all right, title and interest of the Loan Parties in such Collateral in which a Lien can be perfected under Article 9 of the New York UCC by filing or possession thereof, as security for the Obligations (as defined in the Guaranty and Security Agreement), in each case prior and superior in right to any other Person (except the holders of the First Priority Obligations and except, in the case of Pledged Stock, Liens arising as a matter of law, and in the case of Collateral other than Pledged Stock, Liens permitted by Section 7.2).

(b) Each Intellectual Property Security Agreement will, upon execution and delivery thereof and upon registration or the taking of any other perfection steps under applicable laws, be effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the United States (i) registered copyrights, (ii) patents and patent applications and (iii) registered trademarks and trademark applications, in each case owned by or exclusively licensed to any Loan Party (to the extent the security interest would not be a breach under a license agreement) and included in the Intellectual Property that constitutes Collateral and described therein, and the proceeds thereof. Upon the filing of each Intellectual Property Security Agreement in the United States Patent and Trademark Office relative to patents and trademarks, and the United States Copyright Office relative to copyrights, together with provision for payment of all requisite fees, then to the extent that Liens may be perfected by such filings, the Lien created by each Intellectual Property Security Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in the U.S. patents and patent applications, U.S. trademark registrations and applications and U.S. copyright registrations, in each case included in the Intellectual Property constitutes Collateral and listed therein, and the proceeds thereof as of the Closing Date, as security for the Obligations (as defined in the Guaranty and Security Agreement), in each case prior and superior in right to any other Person (except Liens permitted by Section 7.2) (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office may be necessary to perfect a lien on U.S. trademark, patent and copyright applications and registrations acquired by the Loan Parties after the Closing Date) and it being further understood that, to the extent that the United States federal trademark, patent and copyright laws are not applicable to the perfection of security interests, the filing of financing statements under Section 6.10(f) shall perfect the Liens granted by the Loan Parties on such Intellectual Property to the extent perfection can be obtained by filing UCC financing statements.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) Upon the execution and delivery of any Mortgage to be executed and delivered pursuant to Section 6.10, such Mortgage shall be effective to create in favor of the Administrative Agent for the benefit of the Secured Parties a legal, valid and enforceable Lien on the mortgaged property described therein and proceeds thereof; and when such Mortgage is filed in the recording office designated by the Borrower, such Mortgage shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such mortgaged property and the proceeds thereof, as security for the Obligations (as defined in the relevant Mortgage), in each case prior and superior in right to any other Person (other than Liens permitted by Section 7.2).

ARTICLE 5

REPORTING COVENANTS

Each of Holdings and the Borrower (and, to the extent set forth in any other Loan Document, each other Loan Party) agrees with the Lenders and the Administrative Agent to each of the following, as long as any Obligation (other than contingent indemnification obligations for which no claim has been made) or any Term Loan Commitment remains outstanding:

Section 5.1 Financial Statements. The Borrower shall deliver to the Administrative Agent each of the following:

(c) Compliance Certificate. Together with each delivery of any Financial Statement pursuant to clause (a) or (b) above, a Compliance Certificate duly executed by a Responsible Officer of the Borrower that, among other things, (i) if delivered together with any Financial Statement pursuant to clause (b) above, shows the calculations used in determining Excess Cash Flow and (ii) states that no Default is continuing as of the date of delivery of such Compliance Certificate or, if a Default is continuing, states the nature thereof and the action that the Borrower proposes to take with respect thereto.

(e) Additional Projections. Not later than 30 days after the end of each Model Year, (i) any significant revisions to the annual forecasts of the Reporting Person and its Subsidiaries for such Model Year and (ii) forecasts prepared by management of the Reporting Person (A) for each Fiscal Quarter in such succeeding Model Year and (B) for each other succeeding Model Year through the Model Year containing the Term Loan Maturity Date, in each case including in such forecasts (x) a projected Model Year Consolidated balance sheet, income statement and statement of cash flows, (y) a statement of all of the material assumptions on which such forecasts are based and (z) substantially the same type of financial information as that contained in the Initial Projections.

Section 5.2 Other Events. The Borrower shall give the Administrative Agent notice of each of the following (which may be made by telephone if promptly confirmed in writing) promptly after any Responsible Officer of any Group Member knows or has reason to know of it: (a)(i) any Default and (ii) any event that could reasonably be expected to have a Material Adverse Effect, specifying, in each case, the nature and anticipated effect thereof and any action proposed to be taken in connection therewith, (b) any event (other than any event involving loss or damage to property) reasonably expected to result in a mandatory payment of the Obligations pursuant to Section 2.5, stating the material terms and conditions of such transaction and estimating the Net Cash Proceeds thereof, (c) the commencement of, or any material developments in, any action, investigation, suit, proceeding, audit, claim, demand, order or dispute with, by or before any Governmental Authority affecting any Group Member or any property of any Group Member that (i) seeks injunctive or similar relief and could reasonably be expected to have a Material Adverse Effect, (ii) in the reasonable judgment of the Borrower, exposes any Group Member to liability in an aggregate amount in excess of $11,500,000 or (iii) if adversely determined could reasonably be expected to have a Material Adverse Effect, (d) the acquisition of any material real property or the entering into any material lease and (e) the occurrence of an ERISA Event or a Foreign Plan Event.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 5.3 Other Information. The Borrower shall provide the Administrative Agent with such other documents and information with respect to the business, property, condition (financial or otherwise), legal, financial or corporate or similar affairs or operations of the Reporting Person or any of its Subsidiaries as the Administrative Agent or any Lender through the Administrative Agent may from time to time reasonably request.

ARTICLE 6 AFFIRMATIVE COVENANTS

Section 6.1 Maintenance of Corporate Existence. Each Group Member shall (a) preserve and maintain its legal existence, except in the consummation of transactions expressly permitted by Sections 7.4 and Section 7.7, and (b) preserve and maintain it rights (charter and statutory), privileges, franchises and Permits necessary or desirable in the conduct of its business, except, in the case of this clause (b), where the failure to do so could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 6.2 Compliance with Laws, Etc. Each Group Member shall comply with all applicable Requirements of Law, Contractual Obligations and Permits, except for such failures to comply that could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 6.3 Payment of Obligations. Each Group Member shall pay or discharge before they become delinquent (a) all material claims, Taxes, assessments, charges and levies imposed by any Governmental Authority and (b) all other lawful claims that, in each case, if unpaid could not reasonably be expected to have a Material Adverse Effect, except, in each case, for those whose amount or validity is being contested in good faith by proper proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Group Member in accordance with GAAP.

Section 6.4 Maintenance of Property. Each Group Member shall maintain and preserve (a) in good working order and condition all of its property necessary in the conduct of its business (ordinary wear and tear and insured casualty excepted) and (b) all rights, permits, licenses, approvals and privileges (including all Permits) and the Patents, Copyrights and Trademarks owned by each Group Member that, in each case, is necessary, used or useful, whether because of its ownership, lease, sublease or other operation or occupation of property or other conduct of its business, and shall make all necessary or appropriate filings with, and give all required notices to, Government Authorities, except for such failures to maintain and preserve the items set forth in clauses (a) and (b) above that could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 6.5 Maintenance of Insurance. Each Group Member shall (a) maintain or cause to be maintained in full force and effect all policies of insurance of any kind with respect to the property and businesses of the Group Members (including policies of life, fire, theft, product liability, public liability, property damage, other casualty, employee fidelity, workers compensation, business

Section 6.6 Keeping of Books. The Group Members shall keep proper books of record and account, in which full, true and correct entries in all material respects shall be made in accordance with GAAP and all other applicable Requirements of Law of all financial transactions and the assets and business of each Group Member.

Section 6.7 Access to Books and Property. Each Group Member shall permit the Administrative Agent accompanied by the Lender and their respective Related Persons, at any reasonable time during normal business hours and with reasonable advance notice (except that, during the continuance of an Event of Default, no such notice shall be required) to (a) visit and inspect the property of each Group Member and examine and make copies of and abstracts from, the corporate (and similar), financial, operating and other books and records of each Group Member (provided, however, that so long as no Event of Default is continuing, not more often than (i) twice per Fiscal Year to the Borrowers corporate headquarters and (ii) once per Fiscal Year to each other property of the Borrower or any Subsidiary (but, so long as no Event of Default is continuing, the Borrower shall only be responsible for the fees, costs and expenses of one individual with respect to any visit made pursuant to this clause (ii), without any limitation on the number of individuals that may attend such visitation), (b) discuss the affairs, finances and accounts of each Group Member with any officer or director of any Group Member and (c) communicate directly with any registered certified public accountants (including the Group Members Accountants) of any Group Member (provided, however, that a representative of Borrower may be present during any such communication and only the Borrower, Administrative Agent and/or its Related Persons may participate in such communications). Subject to the foregoing, each Group Member shall authorize their respective registered certified public accountants (including the Group Members Accountants) to communicate directly with the Administrative Agent and to disclose to the Administrative Agent all financial statements and other documents and information as they might have and the Administrative Agent reasonably requests with respect to any Group Member.

Section 6.8 Environmental. Each Group Member shall comply with, and maintain its real property, whether owned, leased, subleased or otherwise operated or occupied, in compliance with, all applicable Environmental Laws (including by implementing any Remedial Action necessary to achieve such compliance or that is required by orders and directives of any Governmental Authority) except for failures to comply that could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 6.9 Use of Proceeds. The proceeds of the Term Loans shall be used by the Borrower (and, to the extent distributed to them by the Borrower, each other Group Member) solely (a) to consummate the Related Transactions, (b) to repay in full all obligations under the Existing Credit Agreement, (c) to pay fees and expenses incurred in connection with the foregoing and the Loan Documents (the Transaction Costs) and (d) for working capital and general corporate and similar purposes.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 6.10 Additional Collateral and Guaranties. To the extent not delivered to the Administrative Agent on or before the Closing Date (including in respect of after-acquired property and Persons that become Subsidiaries of any Loan Party after the Closing Date or Persons that are required to become Guarantors after the Closing Date but excluding any items covered by Section 6.13), each Group Member shall, promptly, do each of the following, unless otherwise agreed by the Administrative Agent:

(a) deliver to the Administrative Agent such modifications and/or joinders to the terms of the Loan Documents (or, to the extent applicable as determined by the Administrative Agent, such other documents), in each case in form and substance reasonably satisfactory to the Administrative Agent and as the Administrative Agent deems necessary or advisable in order to ensure the following: (i) (A) SIC, if and when it becomes a Reporting Person, (B) each Subsidiary of any Loan Party that has entered into Guaranty Obligations with respect to any Indebtedness of the Borrower and (C) each Wholly Owned Subsidiary of any Loan Party (including SRAM-SP2 and the SRAM-SP2 Subs if and when SIC becomes a Reporting Person) shall guaranty, as primary obligor and not as surety, the payment of the Obligations of the Borrower; and (ii) each Loan Party (including any Person required to become a Guarantor pursuant to clause (i) above) shall effectively grant to the Administrative Agent, for the benefit of the Secured Parties, a valid and enforceable security interest in substantially all of its property, including all of the Stock and Stock Equivalents and other Securities of its Subsidiaries held by it, as security for the Obligations of such Loan Party; provided, however, that (1) Mortgages shall only be required to be delivered pursuant to clause (c) below and (2), unless the Borrower and the Administrative Agent otherwise agree, in no event shall (A) Administrative Agent require the delivery of, or notation of its Lien on, any motor vehicle certificates of title, (B) any Foreign Subsidiary or Advocacy SPE be required to guaranty the payment of any Obligation, (C) any Loan Party or any Group Member, individually or collectively, be required to pledge in excess of 65% of the outstanding Voting Stock of any Foreign Subsidiary, (D) any Loan Party or any Group Member, individually or collectively, be required to pledge any Stock of any Foreign Subsidiary which is not a direct Wholly Owned Subsidiary of Borrower, (E) SIC, SRAM-SP2 or the SRAM-SP2 Subs be required to pledge any Stock; (F) a security interest or Lien be required to be granted on any property of any Foreign Subsidiary or Advocacy SPE as security for any Obligation, (G) the Administrative Agent require the grant by SIC, SRAM-SP2, the SRAM-SP2 Subs, Holdings or any Subsidiary of any security interest or property that is not required to be granted, or require that any such Loan Party take steps with respect to property that are not required to be taken in connection with security interests on similar property, by the terms of any Loan Document to which it is a party, (H) the Administrative Agent require the grant by SIC, SRAM-SP2, the SRAM-SP2 Subs, Holdings or any Subsidiary of any security interest on assets as to which the Administrative Agent reasonably determines (by sending written notice of such determination to Borrower) that the costs of obtaining such security interest or perfection thereof are excessive in relation to the practical benefit to the Lenders of the security interest to be afforded thereby, or (I) any deposit account or securities account be required to be subject to a control agreement.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) with respect to any property acquired after the Closing Date, upon request of the Administrative Agent, (i) deliver to Administrative Agent (i) a Mortgage on any real property (other than real property with respect to which a Group Member would be permitted to grant a Lien to another Person at the time of Administrative Agents request pursuant to Section 7.2(d) or (g)) with a fair market value in excess of $5,000,000 owned by any Loan Party and (ii) use commercially reasonable efforts to deliver to Administrative Agent all Mortgage Supporting Documents relating to a Mortgage delivered pursuant to the preceding clause (i) on any real property (other than real property with respect to which a Group Member would be permitted to grant a Lien to another Person at the time of Administrative Agents request pursuant to Section 7.2(d) or (g)) owned by any Loan Party;

(e) at the Administrative Agents request, deliver to the Administrative Agent legal opinions relating to the matters described in Section 6.10(c) or in connection with a Permitted Acquisition resulting in a new Loan Party which Permitted Acquisition involved an aggregate consideration price of at least $30,000,000, which opinions shall be in form and substance and from counsel reasonably satisfactory to, the Administrative Agent.

Section 6.11 Credit Rating. The Borrower shall at all times use its commercially reasonable efforts to cause a public corporate family and corporate credit rating by S&P and by Moodys to be maintained with respect to the Second Lien Term Facility and Borrower hereunder.

Section 6.12 Quarterly Conference Calls The Borrower shall use its commercially reasonable efforts to host quarterly conference calls with Lenders and certain members of management and to provide opportunity for questions and answers in connection therewith; provided that this Section 6.12 shall no longer be applicable upon consummation of a Qualified IPO.

Section 6.13 Post-Closing Deliveries. Each of Holdings and the Borrower shall, and shall cause each Subsidiary of the Borrower to, (a) deliver to the Administrative Agent each item set forth on Schedule 6.13 in form and substance reasonably satisfactory to the Administrative Agent and (b) perform each action set forth in Schedule 6.13 in a manner reasonably satisfactory to the Administrative Agent, in each case (x) within the period set forth opposite each such item or action on such Schedule and (y) unless otherwise agreed by the Administrative Agent in respect of any such item or action.

Section 7.1 Indebtedness. No Group Member shall, directly or indirectly, incur or otherwise remain liable with respect to or responsible for, any Indebtedness except for the following:

(a) the Obligations and the First Priority Obligations; provided that the aggregate principal amount of First Priority Obligations (including the undrawn amount of any letters of credit issued thereunder) shall not exceed $770,000,000 at any time outstanding;

(b) Indebtedness existing on the date hereof and set forth on Schedule 7.1, together with any Permitted Refinancing of any Indebtedness permitted hereunder in reliance upon this clause (b);

(c) Indebtedness consisting of Capitalized Lease Obligations and purchase money Indebtedness, in each case incurred by any Group Member (other than Holdings, SIC, SRAM-SP2 and the SRAM-SP2 Subs (to the extent it is a Loan Party)) to finance the acquisition, repair, improvement or construction of fixed or capital assets of such Group Member, together with any Permitted Refinancing of any Indebtedness permitted hereunder in reliance upon this clause (c); provided, however, that (i) the aggregate outstanding principal amount of all such Indebtedness does not exceed $23,000,000 at any time and (ii) the principal amount of such Indebtedness does not exceed the cost of the property so acquired or built or of such repairs or improvements financed, whether directly or through a Permitted Refinancing, with such Indebtedness (each measured at the time such acquisition, repair, improvement or construction is made);

(d) Capitalized Lease Obligations arising under Sale and Leaseback Transactions permitted hereunder in reliance upon Section 7.4(b)(ii);

(e) intercompany loans owing to any Group Member (or Parent Company in connection with the Foreign Restructuring Note) and constituting Permitted Investments of such Group Member;

(g) Guaranty Obligations of any Group Member with respect to Indebtedness of any Group Member other than Holdings;

(h) unsecured Indebtedness in respect of promissory notes issued to consultants, employees, officers or directors or former consultants, employees, officers or directors of any Group Member in connection with repurchases of Stock or Stock Equivalents of Holdings or any Parent Company permitted by Section 7.5(c)(iii); provided, that no payments may be made on such notes if a Default is then continuing or would result therefrom;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (j) cash management obligations and other Indebtedness in respect of netting services, overdraft protection and similar arrangements, in each case, in connection with cash management and deposit accounts;

(k) (i) Indebtedness of a Person or Indebtedness attaching to assets of a Person that, in either case, becomes a Loan Party or a Subsidiary of a Loan Party or Indebtedness attaching to assets that are acquired by any Loan Party or a Subsidiary of a Loan Party as the result of a Permitted Acquisition; provided that (x) such Indebtedness existed at the time such Person or at the time such assets were acquired and, in each case, was not created in anticipation thereof, (y) such Indebtedness is not guaranteed in any respect by any Loan Party (other than by any such Person that so becomes a Loan Party), and (z) the aggregate principal amount of all such Indebtedness does not exceed $17,250,000 at any time outstanding in respect of all assets or Persons so acquired during the term of this Agreement (calculated at the time such Person becomes a Loan Party or a Subsidiary of a Loan Party or the consummation of the Permitted Acquisition) and (ii) any Permitted Refinancing in respect thereof;

(l) Earn-Outs in a maximum amount payable not to exceed (i) $11,500,000 in respect of any Permitted Acquisition and (ii) $46,000,000 in respect of all Permitted Acquisitions; provided that no Earn-Outs in connection with a Permitted Acquisition shall be subject to such limitations to the extent that (A) such Earn-Outs are not payable, by their terms, during such times as the Loan Documents remain in effect or (B) such Earn-Outs by their terms are subordinated to the Obligations on terms and conditions reasonably satisfactory to the Administrative Agent (with the following conditions to payment): no Event of Default shall exist at the time of, or after giving effect to any Earn-Out payment;

(n) Indebtedness consisting of a working capital line of credit provided to each of Sandleford Limited in Taiwan and Livisham Limited in Europe, separately, in an aggregate principal amount for both working capital lines combined not to exceed $11,500,000; provided, that (i) no Event of Default shall be continuing at the time such line of credit is entered into, or immediately after giving effect thereto, (ii) no other Group Member (other than the Group Member entering into such working capital line) shall be obligated in respect of such Indebtedness and there shall be no recourse to any assets of any other Group Member and (iii) the Liens granted to the holders of such Indebtedness shall be subordinated to the Liens under the Loan Documents on terms and conditions reasonably satisfactory to the Administrative Agent;

(p) any additional Indebtedness of any Group Member; provided, however, that (i) the aggregate outstanding principal amount of all such Indebtedness shall not exceed $57,500,000 at any time and (ii) any Lien securing such additional Indebtedness is in respect of Indebtedness of a type permitted under Section 7.1(c), Section 7.1(d) and Section 7.1(k) and Liens described under Section 7.2(d) and Section 7.2(e); and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (q) Subordinated Debt so long as (x) no Default or Event of Default shall have occurred and be continuing and (y) both prior to and immediately after giving effect to such Subordinated Debt the Consolidated Leverage Ratio, determined on a Pro Forma Basis, shall not exceed 5:75:1:00.

Section 7.2 Liens. No Group Member shall incur, maintain or otherwise suffer to exist any Lien upon or with respect to any of its property, whether now owned or hereafter acquired, or assign any right to receive income or profits, except for the following:

(a) Liens created pursuant to any Loan Document and Liens securing the First Priority Obligations (subject to the Intercreditor Agreement);

(b) Customary Permitted Liens;

(c) Liens existing on the date hereof and set forth on Schedule 7.2 and any refinancing or replacements of the Indebtedness underlying such Liens to the extent permitted hereunder;

(d) Liens on the property of the Borrower or any of its Subsidiaries (i) securing Indebtedness permitted hereunder in reliance upon Section 7.1(c) or Section 7.1(d); provided, however, that (A) such Liens exist prior to the acquisition of, or attach substantially simultaneously with, or within 90 days after, the acquisition, repair, improvement or construction of, such property financed, whether directly or through a Permitted Refinancing, by such Indebtedness and (B) such Liens do not extend to any property of any Group Member other than the property (and proceeds thereof) acquired or built, or the improvements or repairs, financed, whether directly or through a Permitted Refinancing, by such Indebtedness (or the proceeds thereof or any accessions or additions thereto) or (ii) securing Indebtedness, whether directly or through a Permitted Refinancing, permitted by Section 7.1(k) that consists of Liens on assets other than accounts, inventory and documents, instruments and general intangibles relating thereto; provided that (A) such Lien was not created in contemplation of such acquisition or such Person becoming a Subsidiary and (B) such Lien only covers the assets financed by such Indebtedness (or by the Indebtedness refinanced by such Permitted Refinancing) and does not extend to or cover any other assets or property (other than the proceeds or products thereof or any accessions or additions thereto);

(f) Liens on the property of Sandleford Limited in Taiwan and Livisham Limited in Europe, in each case consisting of accounts, inventory and documents, instruments and general intangibles relating thereto and securing Indebtedness permitted under Section 7.1(n); provided, however, that such Liens are subordinated as described in Section 7.1(n); and

(g) additional Liens on any property of the Borrower or any of its Subsidiaries securing any of their Indebtedness or their other liabilities; provided, however, that the aggregate outstanding principal amount of all such Indebtedness and other liabilities secured by property of the Loan Parties shall not exceed $34,500,000 at any time and, if such Liens secure Indebtedness under Section 7.1(p), the applicable conditions referenced in Section 7.1(p)(ii) are satisfied.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 7.3 Investments. No Group Member shall make or maintain, directly or indirectly, any Investment except for the following:

(a) Investments existing on the date hereof and set forth on Schedule 7.3;

(b) Investments in cash and Cash Equivalents;

(c) (i) endorsements for collection or deposit in the ordinary course of business consistent with past practice, (ii) extensions of trade credit (other than to Affiliates of the Borrower) arising or acquired in the ordinary course of business and (iii) Investments received in settlements in the ordinary course of business of such extensions of trade credit;

(d) Investments made as part of a Permitted Acquisition;

(e) Investments by (i) SIC, SRAM-SP2 or the SRAM-SP2 Subs in Holdings, by SRAM-SP2 in the SRAM-SP2 Subs, by SIC in any Person which has no assets other than Stock in Holdings, or by Holdings in the Borrower, (ii) any Loan Party (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)) in any other Loan Party (other than Holdings, SIC, SRAM SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)), (iii) any Group Member that is not a Loan Party in any Group Member (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)) or in any joint venture, (iv) any Loan Party in any Group Member prior to the Closing Date, and (v) any Loan Party (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)) after the Closing Date in any Group Member that is not a Loan Party or in any joint venture; provided, however, that the aggregate outstanding amount of all Investments permitted pursuant to this clause (v) shall not exceed $34,500,000 at any time; and provided, further, that any Investment consisting of loans or advances to any Loan Party pursuant to clause (iii) above shall be subordinated in full to the payment of the Obligations of such Loan Party on terms and conditions reasonably satisfactory to the Administrative Agent;

(g) Investments by the Borrower or any of its Subsidiaries for which the consideration consists solely of newly issued Stock of Holdings or any Parent Company;

(h) Investments in an amount equal to the Available Basket, so long as (x) no Default or Event of Default shall have occurred and be continuing and (y) both prior to and immediately after giving effect to such Investment the Consolidated Leverage Ratio, determined on a Pro Forma Basis, shall not exceed (a) at any time prior to a Qualified IPO, 6.25:1.00 or (b) following a Qualified IPO, 4:00:1.00;

(i) any additional Investment by the Borrower or any of its Subsidiaries; provided, however, that the aggregate outstanding amount of all such Investments shall not exceed $17,250,000 at any time;

(i) extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods in the ordinary course of business, (ii) Investments under Hedging Agreements otherwise permissible under this Agreement, (iii) Investments in the form of Guaranties otherwise permitted by Section 7.1, (iv) Investments resulting from Sales of property otherwise permissible by Section 7.4;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (j) Investments among the Borrower and its Subsidiaries consisting of the transfer of cash in connection with the management of short-term working capital (or Capital Expenditures) needs and excess liquidity of the Borrower and its Subsidiaries in the ordinary course of business consistent with past practice (it being understood that cash in excess of short-term working capital (or Capital Expenditure) needs will be maintained with one or more Loan Parties);

(k) Investments consisting of the Foreign Restructuring Note;

(l) Investments consisting of the SRAM Cycling Advocacy Donation; and

(m) Investments deemed made in Subsidiaries which are designated as Unrestricted Subsidiaries in an aggregate amount not to exceed $11,150,000.

Section 7.4 Asset Sales. No Group Member shall Sell any of its property (other than cash) or issue shares of its own Stock, except for the following:

(a) In each case to the extent entered into in the ordinary course of business (i) Sales of Cash Equivalents, Sales of inventory, or Sales of property that has become obsolete or worn out or is surplus, and (ii) licenses of Intellectual Property, (iii) Sales and discounts (without recourse) of overdue accounts, but only in connection with the compromise or collection thereof consistent with customary industry practice, (iv) Liens permitted by Section 7.2 and Investments permitted by Section 7.3, (v) so long as no Default is continuing or would result therefrom, sales of non-strategic assets acquired as a part of a Permitted Acquisition which are sold for fair market value payable in cash upon such sale; provided, that the aggregate Net Cash Proceeds received from such sales under this clause (v) in respect of any Permitted Acquisition does not exceed 25% of the consideration payable in connection with such Permitted Acquisition (calculated in accordance with clause (a) of the definition thereof); provided, further, that if such sales in respect of any Permitted Acquisition are proposed to exceed such 25% level, then Administrative Agent shall provide its prior written consent to sales in excess of such 25% level and all Net Cash Proceeds exceeding such 25% level shall be applied against the Obligations in accordance with Section 2.5(e) and (vi) Sales or abandonment of any Intellectual Property no longer determined to be material to the business of any Group Member as determined by such Group Member in its reasonable business judgment;

(c) (i) any Sale of any property (other than owned Stock or Stock Equivalents in any Group Member unless in connection with the Foreign Restructuring or unless the Administrative Agent has provided its prior written consent) by any Group Member (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)) to any other Group Member (other than Holdings, SIC, SRAM- SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)) to the extent any resulting Investment constitutes a Permitted Investment, (ii) any Restricted Payment by any Group Member (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs (to the extent it is a Loan Party)) permitted pursuant to Section 7.5 and (iii) any distribution by Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs of the proceeds of Restricted Payments from any other Group Member to the extent permitted in Section 7.5;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) (i) any issuance by SIC, Holdings, SRAM-SP2 or the SRAM-SP2 Subs of its own Stock or Stock Equivalents, (ii) any issuance by the Borrower of its own Stock to Holdings, (iii) any issuance by any Subsidiary of the Borrower of its own Stock to any Group Member, provided, however, (and in each case, except pursuant to a Qualified IPO) that (A) the proportion of such Stock and of each class of such Stock (both on an outstanding and fully-diluted basis) directly or indirectly held by the Loan Parties, taken as a whole in such Subsidiary, does not change as a result of such Sale or issuance and (B) the Administrative Agent following such issuance continues to have a perfected Lien on all Stock of such Subsidiary owned by the Loan Parties to the extent the Administrative Agent is entitled to a Lien thereon pursuant to the terms of this Agreement, unless otherwise permitted under the terms of this Agreement and (iv) to the extent necessary to satisfy any Requirement of Law in the jurisdiction of incorporation of any Subsidiary of the Borrower, any issuance by such Subsidiary of its own Stock constituting directors qualifying shares or nominal holdings; and

Section 7.5 Restricted Payments. No Group Member (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs) shall directly or indirectly, declare, order, pay, make or set apart any sum for any Restricted Payment except for the following (and Holdings shall not use the proceeds of any Restricted Payment made in reliance under clause (c) below other than as set forth in such clause (c) (but otherwise shall not be restricted from making any Restricted Payment)):

(a) (i) Restricted Payments (A) by Holdings to SIC, SRAM-SP2 or the SRAM-SP2 Subs (B) by any Group Member (other than Holdings) that is a Loan Party to any Loan Party other than Holdings and (C) by any Group Member that is not a Loan Party to any Group Member other than Holdings and (ii) dividends and distributions by any Subsidiary of the Borrower that is not a Loan Party to any holder of its Stock, to the extent made to all such holders ratably according to their ownership interests in such Stock;

(b) dividends and distributions declared and paid on the common Stock of any Group Member ratably to the holders of such common Stock and payable only in common Stock of such Group Member;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (ii) ordinary operating expenses of Holdings and any Parent Company (including SIC, SRAM-SP2 and the SRAM-SP2 Subs); provided, however, that the amount of such cash dividends paid in any Fiscal Year shall not exceed $3,450,000 in the aggregate; (iii) the redemption, purchase or other acquisition or retirement for value of Holdings or any Parent Companys (including SICs, SRAM-SP2s and the SRAM-SP2 Subs) Stock (or Stock Equivalents) from any Person or present or former employee, consultant, director or officer (or the assigns, estate, heirs or current or former spouses thereof) of any Group Member upon the death, disability or termination of employment of such employee, director or officer; provided, however, that the amount of such cash paid in reliance upon this clause (iii) shall not exceed $17,250,000 in the aggregate so long as the aggregate amount paid in any Fiscal Year does not exceed $5,750,000; and (iv) the Equity Redemption; provided, however, that no action that would otherwise be permitted hereunder in reliance upon this clause (c) (other than clause (i), (ii), or (iv) above) shall be permitted if (A) a Default is then continuing or would result therefrom or (B) such action is otherwise prohibited under any Loan Document or under the terms of any Indebtedness (other than the Obligations) of any Group Member;

(d) cash dividends paid by Borrower to Holdings, from the Available Basket, so long as (x) no Default or Event of Default shall have occurred and be continuing and (y) both prior to and immediately after giving effect to such dividend the Consolidated Leverage Ratio, determined on a Pro Forma Basis, shall not exceed (x) at any time prior to a Qualified IPO, 6.25:1.00 or (y) following a Qualified IPO, 4.00:1.00; and

(e) other Restricted Payments which do not exceed $4,600,000 in the aggregate in any Fiscal Year; provided, however, that no such Restricted Payments shall be permitted if an Event of Default is then continuing or would result therefrom.

Section 7.6 Prepayment of Indebtedness. No Group Member shall (x) prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof any Indebtedness (including for the avoidance of doubt obligations under the Foreign Restructuring Note), (y) set apart any property for such purpose, whether directly or indirectly and whether to a sinking fund, a similar fund or otherwise, or (z) make any payment in violation of any subordination terms of any Indebtedness; provided, however, that each Group Member may, to the extent otherwise permitted by the Loan Documents, do each of the following:

(a) (i) prepay the Obligations and the First Priority Obligations, (ii) consummate a Permitted Refinancing as long as no Default has occurred and is continuing and (iii) prepay in full on the Closing Date Indebtedness owing under the Existing Credit Agreement;

(b) prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof (or set apart any property for such purpose) (A) in the case of any Group Member that is not a Loan Party, any Indebtedness owing by such Group Member to any other Group Member (other than Holdings) and (B) otherwise, any Indebtedness owing to any Loan Party (other than Holdings);

(c) make required repayments or redemptions of Indebtedness (other than Indebtedness owing to any Affiliate of the Borrower) but only, in the case of Subordinated Debt, to the extent not prohibited under the terms of the subordination provisions applicable thereto;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) prepay any revolving Indebtedness under any working capital line of credit permitted by Section 7.1(n);

(e) prepay Indebtedness under the Foreign Restructuring Note so long as it is held by, and any such prepayments are made to, the Borrower or any Subsidiary of Borrower which is a Loan Party;

(f) prepay prior to the scheduled maturity thereof any other Indebtedness (other than Subordinated Debt, Earn-Outs and Indebtedness under the Foreign Restructuring Note) so long as (i) no Event of Default is continuing at the time of, or would result after giving effect to, such prepayment and (ii) unused revolver commitments under the First Lien Revolving Facility plus unrestricted cash or Cash Equivalents is in excess of $8,500,000 immediately after giving effect to any such prepayment;

(g) the Borrower may prepay Indebtedness (other than Subordinated Debt, Earn-Outs and Indebtedness under the Foreign Restructuring Note) from the Available Basket in an amount equal to the Available Basket, so long as (x) no Default or Event of Default shall have occurred and be continuing and (y) both prior to and immediately after giving effect to such prepayment the Consolidated Leverage Ratio, determined on a Pro Forma Basis, shall not exceed (x) at any time prior to a Qualified IPO, 6.25:1.00 or (y) following a Qualified IPO, 4.00:1.00.

Section 7.7 Fundamental Changes. Except in connection with the Foreign Restructuring, no Group Member shall (a) merge, consolidate or amalgamate with any Person, (b) liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its property or business, (c) acquire all or substantially all of the Stock or Stock Equivalents of any Person or (d) acquire all or substantially all of the assets of any Person or all or substantially all of the assets constituting any line of business, division, branch, operating division, brand or other unit operation of any Person, in each case except for the following: (x) to consummate any Permitted Acquisition, (y) the merger, consolidation, amalgamation or in connection with the liquidation of any Subsidiary of the Borrower that is a Loan Party with or into any Loan Party or of any Subsidiary that is not a Loan Party with or into any other Subsidiary and (z) the merger, consolidation or amalgamation of any Group Member (other than Holdings) for the sole purpose of changing its State or form of organization; provided, however, that (A) in the case of any merger, consolidation or amalgamation involving the Borrower, the Borrower shall be the surviving Person, (B) in the case of any merger, consolidation or amalgamation involving any other Loan Party, a Loan Party shall be the surviving Person, (C) in the case of any merger, consolidation or amalgamation involving a Loan Party that is a Domestic Subsidiary, such Loan Party that is a Domestic Subsidiary shall be the surviving Person, and (D) in the case of any merger, consolidation or amalgamation involving a Loan Party that is a Foreign Subsidiary (and not involving a Loan Party that is a Domestic Subsidiary), such Loan Party that is a Foreign Subsidiary shall be the surviving Person, and in each such case all actions required to maintain the perfection of the Lien of the Administrative Agent on the Stock or property of such Loan Party shall have been made.

Section 7.8 Change in Nature of Business. (a) No Group Member (other than Holdings, SRAM-SP2, the SRAM-SP2 Subs and any Parent Company) shall carry on any business, operations or activities (whether directly, through a joint venture, in connection with a Permitted Acquisition or otherwise) substantially different from those carried on by the Borrower and its Subsidiaries, taken as a whole, at the date hereof and business, operations and activities reasonably related thereto.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) Holdings, SIC, SRAM-SP2 and the SRAM-SP2 Subs shall not engage in any business, operations or activity, or hold any material property, other than (i) in the case of SIC, related to its status as a public reporting company (if applicable), (ii) in the case of Holdings, holding Stock and Stock Equivalents of the Borrower and Advocacy SPE, and in the case of SIC, holding the Foreign Restructuring Note, and Stock and Stock Equivalents of Holdings, SRAM-SP2 and the SRAM-SP2 Subs, (iii) in the case of SRAM-SP2, holding Stock and Stock Equivalents of Holdings and the SRAM-SP2 Subs, (iv) in the case of the SRAM-SP2 Subs, holding Stock and Stock Equivalents of Holdings, (v) issuing, selling and redeeming its own Stock, (vi) paying Taxes, (vii) holding directors and shareholders meetings, preparing corporate and similar records and other activities required to maintain its separate corporate or other legal structure, (viii) preparing reports to, and preparing and making notices to and filings with, Governmental Authorities and to its holders of Stock and Stock Equivalents or Indebtedness, (ix) receiving, and holding proceeds of, Restricted Payments from the Borrower and its Subsidiaries and distributing the proceeds thereof to the extent not prohibited by Section 7.5, (x) as necessary to consummate any Permitted Acquisition and a Qualified IPO, and (xi) other activities related or incidental to any of the foregoing.

Section 7.9 Transactions with Affiliates. Except as otherwise expressly permitted herein, (1) no Group Member shall enter into any transaction directly or indirectly with, or for the benefit of, any Affiliate of the Borrower that is not a Group Member (including Guaranty Obligations with respect to any obligation of any such Affiliate), and (2) no Loan Party shall enter into any transaction directly or indirectly with, or for the benefit of, any Affiliate of the Borrower that is not a Loan Party (including Guaranty Obligations with respect to any obligation of any such Affiliate), in each case except for (a) transactions in the ordinary course of business on a basis no less favorable to such Group Member (in the case of clause (1) above) or Loan Party (in the case of clause (2) above), as would be obtained in a comparable arms length transaction with a Person not an Affiliate of the Borrower, (b) Restricted Payments, the proceeds of which, if received by Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs, are used in compliance with Section 7.5 and (c) reasonable salaries and other reasonable director or employee compensation to (and expense reimbursement and indemnification arrangements for) officers and directors of any Group Member, (d) Permitted Investments, (e) arrangements in existence on the Closing Date as set forth on Schedule 7.9, (g) issuances of Stock or Stock Equivalents by Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs to an Affiliate and (h) transactions among Group Members that are not Loan Parties to the extent not otherwise prohibited by this Agreement; provided, that in no event shall any Group Member perform or provide any management, consulting, administrative or similar services to or for any Person other than another Loan Party, a Subsidiary of a Loan Party or a customer in the ordinary course of business. Notwithstanding the foregoing, and for avoidance of doubt, this Section 7.9 shall not be deemed to prohibit any Group Member from (i) making donations to non-profit organizations, including World Bicycle Relief, (ii) providing administrative services to World Bicycle Relief, or (iii) paying compensation and providing benefits to F.K. Day while F.K. Day devotes substantial time and attention to World Bicycle Relief if otherwise permitted by the terms of this Agreement.

Section 7.10 Third-Party Restrictions on Indebtedness, Liens, Investments or Restricted Payments. No Group Member shall incur or otherwise suffer to exist or become effective or remain liable on or responsible for any Contractual Obligation limiting the ability of (a) any Subsidiary of the Borrower to make Restricted Payments to, or Investments in, or repay Indebtedness or otherwise Sell property to, any Group Member (other than Holdings, SIC, SRAM-SP2 or the SRAM-SP2 Subs) or (b) any Group Member to incur or suffer to exist any Lien upon any property of any Group Member, whether now owned or hereafter acquired, securing any of its Obligations (including any equal and ratable clause and any similar Contractual Obligation requiring, when a Lien is granted on any property, another Lien to be granted on such property or any other property), except, for each of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document clauses (a) and (b) above, (i) pursuant to the Loan Documents and the Loan Documents as defined in the First Lien Credit Agreement (including any such refinancing permitted therein), (ii) limitations on Liens on and restrictions on Sales of any property whose acquisition, repair, improvement or construction is financed by purchase money Indebtedness, Capitalized Lease Obligations or Permitted Refinancings permitted hereunder in reliance upon Section 7.1(b), Section 7.1(c), Section 7.1(d), Section 7.1(k) and Section 7.1(p) and set forth in the Contractual Obligations governing such Indebtedness, Capitalized Lease Obligations or Permitted Refinancing or Guaranty Obligations with respect thereto, (iii) restrictions contained in any agreement governing the Sale of property permitted pursuant to Section 7.4 so long as such restrictions solely relate to the property that is the subject of such Sale, (iv) pursuant to any agreements governing a working capital facility permitted under Section 7.1(n) so long as such restrictions relate solely to the Foreign Subsidiary party to such agreements; provided, that any such restrictions shall be no more restrictive than the provisions of this Agreement and shall permit all the transactions permitted under this Agreement, and (v) customary restrictions and conditions contained in leases, licenses and other contracts entered into in the ordinary course of business and relating solely to the property that is the subject of such leases, licenses and contracts.

Section 7.11 Modification of Certain Documents. No Group Member shall do any of the following:

(b) waive or otherwise modify any term of any Subordinated Debt to the extent prohibited under the terms of the subordination provisions applicable thereto.

Section 7.12 Accounting Changes; Fiscal Year. No Group Member shall change its (a) accounting treatment or reporting practices, except as required by GAAP or any Requirement of Law, or (b) its fiscal year or its method for determining fiscal quarters or fiscal months.

Section 7.13 Capital Expenditures. No Group Member shall make or commit to make any Capital Expenditure, except Capital Expenditures of the Borrower and its Subsidiaries not exceeding $34,500,000 per Fiscal Year; provided, that (a) up to 50% of any such amount referred to above, if not so expended in the Fiscal Year for which it is permitted, may be carried over for expenditure in the next succeeding Fiscal Year and (b) Capital Expenditures made pursuant to this Section during any Fiscal Year shall be deemed made, first, in respect of amounts carried over from the prior Fiscal Year pursuant to clause (a) above and, second, in respect of amounts permitted for such Fiscal Year as provided above; provided that if the Consolidated Leverage Ratio at any Fiscal Quarter for which audited financial statements are available is less than 3.25:1.00 then this Section 7.17 shall no longer be applicable.

Section 8.1 Definition. Each of the following shall be an Event of Default:

(a) the Borrower shall fail to pay (i) any principal of any Term Loan when the same becomes due and payable or (ii) any interest on any Term Loan, any fee under any Loan Document or any other Obligation (other than those set forth in clause (i) above) and, in the case of this clause (ii), such non-payment continues for a period of 3 Business Days after the due date therefor; or

(c) any Loan Party shall fail to comply with (i) any provision of Section 5.1 (Financial Statements), Section 5.2(a)(i) (Other Events), Section 6.1 (Maintenance of Corporate Existence), Section 6.9 (Use of Proceeds) or Article VII (Negative Covenants) or (ii) any other provision of any Loan Document if, in the case of this clause (ii), such failure shall remain unremedied for 30 days after the earlier of (A) the date on which a Responsible Officer of the Borrower becomes aware of such failure and (B) the date on which notice thereof shall have been given to the Borrower by the Administrative Agent or the Required Lenders; or

(d) (i) any Group Member shall fail to make any payment when due (whether due because of scheduled maturity, required prepayment provisions, acceleration, demand or otherwise) or within any applicable period of cure or grace on any Indebtedness of any Group Member (other than the Obligations or any Hedging Agreement) (and in the case of the First Priority Obligations, default shall be made in the payment by a Borrower of any principal of any loan or any reimbursement of any letter of credit, when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise) and, in each case, such failure relates to Indebtedness having a principal amount of $17,250,000 or more, (ii) any other event shall occur or condition shall exist under any Contractual Obligation relating to any such Indebtedness having a principal amount of $17,250,000 or more (other than the First Priority Obligations), if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness (other than Indebtedness incurred to finance the acquisition or lease of specific assets that becomes due as a result of the voluntary Sale permitted under this Agreement of the assets securing such Indebtedness) or (iii) any such Indebtedness having a principal amount of $17,250,000 or more or the First Priority Obligations shall become or be declared to be due and payable, or be required to be prepaid, redeemed, defeased or repurchased prior to the stated maturity thereof (other than by (a) a regularly scheduled required prepayment or (b) Indebtedness incurred to finance the acquisition or lease of specific assets that becomes due as a result of the voluntary Sale permitted under this Agreement of the assets securing such Indebtedness); or

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (e) (i) any Group Member (other than an Immaterial Subsidiary) shall generally not pay its debts as such debts become due, shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors, (ii) any proceeding shall be instituted by or against any Group Member (other than an Immaterial Subsidiary) seeking to adjudicate it a bankrupt or insolvent or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, composition of it or its debts or any similar order, in each case under any Requirement of Law relating to bankruptcy, insolvency or reorganization or relief of debtors or seeking the entry of an order for relief or the appointment of a custodian, receiver, trustee, conservator, liquidating agent, liquidator, other similar official or other official with similar powers, in each case for it or for any substantial part of its property and, in the case of any such proceedings instituted against (but not by or with the consent of) any Group Member (other than an Immaterial Subsidiary), either such proceedings shall remain undismissed or unstayed for a period of 60 days or more or an order or decree approving or ordering any of the foregoing shall be entered or (iii) any Group Member (other than an Immaterial Subsidiary) shall take any corporate or similar action or any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i) or (ii) above;or

(f) one or more judgments, orders or decrees (or other similar process) shall be rendered against any Group Member (other than an Immaterial Subsidiary) (i)(A) in the case of money judgments, orders and decrees, involving an aggregate amount (excluding amounts adequately covered by insurance payable to any Group Member, to the extent the relevant insurer has not denied coverage therefor) in excess of $17,250,000 or (B) otherwise, that would reasonably be expected to have, in the aggregate, a Material Adverse Effect and (ii)(A) enforcement proceedings (which shall not include the filing of a judgment lien or obtaining a garnishment or similar order so long as no further action is taken in respect thereof) shall have been legally and properly commenced by any creditor upon any such judgment, order or decree or (B) such judgment, order or decree shall not have been vacated or discharged for a period of 30 consecutive days and there shall not be in effect (by reason of a pending appeal or otherwise) any stay of enforcement thereof; or

(g) except pursuant to a valid, binding and enforceable termination or release permitted under the Loan Documents and executed by the Administrative Agent or as otherwise expressly permitted under any Loan Document, (i) any provision of any Loan Document shall, at any time after the delivery of such Loan Document, fail to be valid and binding on, or enforceable against, any Loan Party party thereto, (ii) any Loan Document purporting to grant a Lien to secure any Obligation shall, at any time after the delivery of such Loan Document, fail to create a valid and enforceable Lien (in accordance with, and to the extent permitted by, the laws of the applicable jurisdiction) on any Collateral purported to be covered thereby having a value of at least $5,750,000 for any piece of Collateral or $11,150,000 for all such Collateral purported to be covered thereby or such Lien shall fail or cease to be a perfected Lien (in accordance with, and to the extent permitted by, the laws of the applicable jurisdiction) with the priority purported to be created in the relevant Loan Document or (iii) any subordination provisions applicable to any Subordinated Debt shall, in whole or in part, terminate or otherwise fail or cease to be valid and binding on, or enforceable against, the holders of such Subordinated Debt or (iv) or any Group Member shall state in writing to the Administrative Agent, any Lender or otherwise publicly that any of the events described in clause (i), (ii) or (iii) above shall have occurred; or

(h) an ERISA Event and or a Foreign Plan Event shall have occurred; (ii) a trustee shall be appointed by a United States district court to administer any Pension Plan; (iii) the PBGC shall institute proceedings to terminate any Pension Plan; (iv) any Group Member or any of their respective ERISA Affiliates shall have been notified by the sponsor of a Multiemployer Plan that it has incurred or will be assessed Withdrawal Liability to such Multiemployer Plan and such entity does not have reasonable grounds for contesting such Withdrawal Liability or is not contesting such Withdrawal Liability in a timely and appropriate manner; or (v) any other event or condition shall occur or exist with respect to a Plan, a Foreign Benefit Arrangement, or a Foreign Plan; and in each case in clauses (i) through (v) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect;

Section 8.2 Remedies. During the continuance of any Event of Default, the Administrative Agent may, and, at the request of the Required Lenders, shall, in each case by notice to the Borrower and in addition to any other right or remedy provided under any Loan Document or by any applicable Requirement of Law, do each of the following: (a) declare all or any portion of the Term Loan Commitments terminated, whereupon the Term Loan Commitments shall immediately be reduced by such portion or, in the case of a termination in whole, shall terminate together with any obligation any Lender may have hereunder to make any Term Loan or (b) declare immediately due and payable all or part of any Obligation (including any accrued but unpaid interest thereon), whereupon the same shall become immediately due and payable, without presentment, demand, protest or further notice or other requirements of any kind, all of which are hereby expressly waived by Holdings and the Borrower (and, to the extent provided in any other Loan Document, other Loan Parties); provided, however, that, effective immediately upon the occurrence of the Events of Default specified in Section 8.1(e)(ii), (x) the Term Loan Commitments of each Lender to make Term Loans shall each automatically be terminated and (y) each Obligation (including in each case any accrued all accrued but unpaid interest thereon) shall automatically become and be due and payable, without presentment, demand, protest or further notice or other requirement of any kind, all of which are hereby expressly waived by Holdings and the Borrower (and, to the extent provided in any other Loan Document, any other Loan Party).

ARTICLE 9 THE ADMINISTRATIVE AGENT

Section 9.1 Appointment of Administrative Agent. Each Lender hereby irrevocably designates and appoints the Administrative Agent as the agent of such Lender under this Agreement and the other Loan Documents, and each such Lender irrevocably authorizes the Administrative Agent, in such capacity, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent.

Section 9.2 Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement and the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys in-fact selected by it with reasonable care.

Section 9.3 Reliance and Liability. (a) The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any instrument, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy or email message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including counsel to Holdings or the Borrower),

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders (or, if so specified by this Agreement, all Lenders) as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of the Required Lenders (or, if so specified by this Agreement, all Lenders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Term Loans.

(b) Neither any Administrative Agent nor any of their respective officers, directors, employees, agents, advisors, attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Loan Document (except to the extent that any of the foregoing are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from its or such Persons own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of any Loan Party a party thereto to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party.

Section 9.4 Agent Individually. Each Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with any Loan Party as though such Agent were not an Agent. With respect to its Term Loans made or renewed by it, each Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not an Agent, and the terms Lender and Lenders shall include each Agent in its individual capacity.

Section 9.5 Lender Credit Decision. Each Lender acknowledges that it shall, independently and without reliance upon the Administrative Agent or any Lender or any of their Related Persons or upon any document (including the Disclosure Documents) solely or in part because such document was transmitted by the Administrative Agent or any of its Related Persons, conduct its own independent investigation of the financial condition and affairs of each Loan Party and make and continue to make its own credit decisions in connection with entering into, and taking or not taking any action under, any Loan Document or with respect to any transaction contemplated in any Loan Document, in each case based on such documents and information as it shall deem appropriate. Except for documents expressly required by any Loan Document to be transmitted by the Administrative Agent to the Lenders, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any Loan Party or any Affiliate of any Loan Party that may come in to the possession of the Administrative Agent or any of its Related Persons.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 9.6 Indemnities. The Lenders agree to indemnify each Agent and its officers, directors, employees, affiliates, agents, advisors and controlling persons (each, an Agent Indemnitee) (to the extent not reimbursed by Holdings or the Borrower and without limiting the obligation of Holdings or the Borrower to do so), ratably according to their respective Pro Rata Outstandings in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Term Loan Commitments shall have terminated and the Term Loans shall have been paid in full, ratably in accordance with such Pro Rata Outstandings immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Term Loans) be imposed on, incurred by or asserted against such Agent Indemnitee in any way relating to or arising out of, the Term Loan Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent Indemnitee under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from such Agent Indemnitees gross negligence or willful misconduct. The agreements in this Section shall survive the termination of this Agreement and the payment of the Term Loans and all other amounts payable hereunder.

Section 9.7 Resignation of Administrative Agent. (a) The Administrative Agent may resign as Administrative Agent upon 10 days notice to the Lenders and the Borrower. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the other Loan Documents, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall (unless an Event of Default under Section 8.1(a) or Section 8.1(f) with respect to the Borrower shall have occurred and be continuing) be subject to approval by the Borrower (which approval shall not be unreasonably withheld or delayed), whereupon such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term Administrative Agent shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agents rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Term Loans. If no successor agent has accepted appointment as Administrative Agent by the date that is 10 days following a retiring Administrative Agents notice of resignation, the retiring Administrative Agents resignation shall nevertheless thereupon become effective, and the Lenders shall assume and perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. After any retiring Administrative Agents resignation as Administrative Agent, the provisions of this Article IX and of Section 10.3 shall continue to inure to its benefit.

Section 9.8 Sub-Agents. Each of the parties hereto agrees that the Administrative Agent may retain Persons to act as collateral agents for the Secured Parties for purposes of holding, administering and enforcing Liens on Collateral located outside the United States. Such Persons shall receive all the benefits of expense reimbursement and indemnifications (to the same extent as the Administrative Agent is entitled to reimbursement and indemnifications) set forth in Section 9.6 and Section 10.3 of this Agreement.

Section 9.9 Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless the Administrative Agent has received notice from a Lender, Holdings or the Borrower referring to this Agreement,

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document describing such Default or Event of Default and stating that such notice is a notice of default. In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so specified by this Agreement, all Lenders); provided that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.

Section 9.10 Non-Reliance on Administrative Agent and Other Lenders. Each Lender expressly acknowledges that neither the Administrative Agent nor any of their respective officers, directors, employees, agents, advisors, attorneys-in-fact or affiliates have made any representations or warranties to it and that no act by any Agent hereafter taken, including any review of the affairs of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute any representation or warranty by any Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates and made its own decision to make its Term Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Loan Party or any affiliate of a Loan Party that may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, advisors, attorneys-in-fact or affiliates.

ARTICLE 10 MISCELLANEOUS

Section 10.1 Amendments, Waivers, Etc. Neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 10.1. The Required Lenders and each Loan Party party to the relevant Loan Document may, or, with the written consent of the Required Lenders, the Administrative Agent and each Loan Party party to the relevant Loan Document may, from time to time, (a) enter into written amendments, consents, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, consent, supplement or modification shall (i) forgive or reduce the principal amount or extend the final scheduled date of maturity of any Term Loan, extend the scheduled date of any amortization payment in respect of any Term Loan, reduce the stated rate of any interest or fee payable hereunder (except (x) in connection with the waiver of applicability of any post-default increase in interest rates (which waiver shall be effective with the consent of the Required Lenders) and (y) that

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document any amendment or modification of defined terms used in the financial covenant in this Agreement shall not constitute a reduction in the rate of interest or fees for purposes of this clause (i)) or extend the scheduled date of any payment thereof; (ii) eliminate or reduce the voting rights of any Lender under this Section 10.1 without the written consent of such Lender; (iii) reduce any percentage specified in the definition of Required Lenders, consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Loan Documents, release all or substantially all of the Collateral or release all or substantially all of the Guarantors from their obligations under the Guaranty and Security Agreement, in each case without the written consent of all Lenders; (iv) amend, modify or waive any provision of Section 2.10 without the written consent of the Required Lenders adversely affected thereby; (v) reduce the percentage specified in the definition of Required Lenders without the written consent of all Lenders, or (vii) amend, modify or waive any provision of Section 9.1 or any other provision of any Loan Document that affects the Administrative Agent without the written consent of the Administrative Agent. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the Administrative Agent and all future holders of the Term Loans. In the case of any waiver, the Loan Parties, the Lenders and the Administrative Agent shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.

Notwithstanding anything in this Agreement or any other Loan Document to the contrary, the Borrower may enter Extension Amendments in accordance with Section 2.17.

Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (a) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share in the benefits of this Agreement and the other Loan Documents with the Term Loans and the accrued interest and fees in respect thereof and (b) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders.

In addition, notwithstanding the foregoing, this Agreement may be amended with the written consent of the Administrative Agent, Holdings, the Borrower and the Lenders providing the relevant Replacement Term Loans to permit the refinancing of all or any portion of outstanding Term Loans or any tranche thereof (Refinanced Term Loans) with a replacement term loan tranche hereunder (Replacement Term Loans); provided that (a) the aggregate principal amount of such Replacement Term Loans shall not exceed the aggregate principal amount of such Refinanced Term Loans, (b) the Applicable Margin for such Replacement Term Loans shall not be higher than the Applicable Margin for such Refinanced Term Loans, (c) the weighted average life to maturity of such Replacement Term Loans shall not be shorter than the weighted average life to maturity of such Refinanced Term Loans at the time of such refinancing and (d) all other terms applicable to such Replacement Term Loans shall be substantially identical to, or less favorable to the Lenders providing such Replacement Term Loans than those applicable to such Refinanced Term Loans, except to the extent necessary to provide for covenants and other terms applicable to any period after the latest final maturity of the Term Loans in effect immediately prior to such refinancing.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document provision and such amendment shall become effective without any further action or consent of any other party to this Agreement or any other Loan Document if the same is not objected to in writing by the Required Lenders within five Business Days following receipt of notice thereof. It is understood that posting such amendment electronically on IntraLinks/IntraAgency with notice of such posting by the Administrative Agent to the Required Lenders shall be deemed adequate receipt of notice of such amendment.

Section 10.2 Assignments and Participations; Binding Effect. (a) Binding Effect. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) the Borrower and Holdings may not assign or otherwise transfer any of their rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.

(b) Right to Assign. (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Eligible Assignees, other than a natural person, all or a portion of its rights and obligations under this Agreement (including all or a portion of its Term Loan Commitments and the Term Loans at the time owing to it) with the prior written consent of: (A) the Borrower (such consent not to be unreasonably withheld), provided that no consent of the Borrower shall be required for an assignment to a Lender, an affiliate of a Lender, an Approved Fund or, if an Event of Default under Section 8.1(a) or Section 8.1(e) has occurred and is continuing, any other Person; and provided, further, that the Borrower shall be deemed to have consented to any such assignment unless the Borrower shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof; and (B) the Administrative Agent (such consent not to be unreasonably withheld), provided that no consent of the Administrative Agent shall be required for an assignment of all or any portion of a Term Loan to a Lender, an affiliate of a Lender or an Approved Fund;

(ii) Assignments shall be subject to the following additional conditions: (A) except in the case of an assignment to a Lender, an affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lenders Term Loan Commitments or Term Loans under the Second Lien Term Facility, the amount of the Term Loan Commitments or Term Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000) unless each of the Borrower and the Administrative Agent otherwise consent, provided that (1) no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing and (2) such amounts shall be aggregated in respect of each Lender and its affiliates or Approved Funds, if any; (B) (1) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment, together with a processing and recordation fee of $3,500 and (2) the assigning Lender shall have paid in full any amounts owing by it to the Administrative Agent; and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (C) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its Affiliates and their related parties or their respective securities) will be made available and who may receive such information in accordance with the assignees compliance procedures and applicable laws, including federal and state securities laws; (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) below, from and after the effective date specified in each Assignment the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment, be released from its obligations under this Agreement (and, in the case of an Assignment covering all of the assigning Lenders rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 2.12, Section 2.14, Section 2.16 and Section 10.3). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 10.2 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section. (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Term Loan Commitments of, and principal amount (and stated interest) of the Term Loans owing to, each Lender pursuant to the terms hereof from time to time (the Register). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender (as to its own interest), at any reasonable time and from time to time upon reasonable prior notice. (v) Upon its receipt of a duly completed Assignment executed by an assigning Lender and an assignee, the assignees completed administrative questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a Participant) in all or a portion of such Lenders rights and obligations under this Agreement (including all or a portion of its Term Loan Commitments and the Term Loans owing to it); provided that (i) such Lenders obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lenders rights and obligations under this Agreement. Any agreement pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document such agreement may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that (i) requires the consent of each Lender directly affected thereby pursuant to the proviso to the second sentence of Section 10.1 and (ii) directly affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Section 2.12, Section 2.14 and Section 2.16 (subject to the requirements and limitations therein, including the requirements under Section 2.14(f) (it being understood that the documentation required under Section 2.14(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (i) agrees to be subject to the provisions of Section 2.12 and Section 2.14 as if it were an assignee under paragraph (b) of this Section and (ii) shall not be entitled to receive any greater payment under Section 2.12 or Section 2.14, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from an adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof that occurs after the Participant acquired the applicable participation. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.7(b) as though it were a Lender, provided such Participant shall be subject to Section 10.7(a) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participants interest in the Term Loans or other obligations under this Agreement (the Participant Register); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participants interest in any Term Loan Commitments, Term Loans or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Term Loan Commitment, Term Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

(e) The Borrower, upon receipt of written notice from the relevant Lender, agrees to issue Notes to any Lender requiring Notes to facilitate transactions of the type described in paragraph (d) above.

(f) Notwithstanding the foregoing, any Conduit Lender may assign any or all of the Term Loans it may have funded hereunder to its designating Lender without the consent of the Borrower or the Administrative Agent and without regard to the limitations set forth in Section 10.2(b). Each of Holdings, the Borrower, each Lender and the Administrative Agent hereby confirms that it will not institute against a Conduit Lender or join any other Person in instituting against a Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any state bankruptcy or similar law, for one year and one day after the payment in full of the latest maturing commercial paper note issued by such Conduit Lender; provided, however, that each Lender designating any Conduit

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Lender hereby agrees to indemnify, save and hold harmless each other party hereto for any loss, cost, damage or expense arising out of its inability to institute such a proceeding against such Conduit Lender during such period of forbearance.

(g) Notwithstanding anything to the contrary contained herein, any Lender may assign all or any portion of its Term Loans hereunder to any Person who, after giving effect to such assignment, would be an Affiliated Lender; provided that (i) such assignment is made pursuant to (A) an open market purchase or (B) a Dutch Auction open to all Lenders on a pro rata basis; (ii) the assigning Lender and Affiliated Lender purchasing such Lenders Term Loans shall execute and deliver to the Administrative Agent an assignment agreement substantially in the form of Exhibit J hereto (an Affiliated Lender Assignment and Assumption) in lieu of an Assignment; (iii) at the time of such assignment and after giving effect to such assignment, Affiliated Lenders shall not, in the aggregate, own or hold Term Loans (including participating interests) with an aggregate principal amount in excess of 15% of the principal amount of all Term Loans then outstanding; (iv) each Affiliated Lender shall at each of the time of the initiation of and consummation of such assignment (a) affirm the No MNPI Representation and (b) if it is not able to affirm the No MNPI Representation, such Affiliated Lender will inform the assignor and the assignor will deliver to such Affiliated Lender customary written assurance that it is a sophisticated investor and is willing to proceed with the assignment; and (v) if an Affiliated Lender assigns Term Loans acquired by it in accordance with this Section 10.2(g) such Affiliated Lender shall at the time of assignment of any Term Loans held by it (i) affirm the No MNPI Representation and (b) if it is not able to affirm the No MNPI Representation, the assignee will deliver to such Affiliated Lender customary written assurance that it is a sophisticated investor and is willing to proceed with the assignment; and (vi) the Affiliated Lender shall (A) execute a waiver in form and substance reasonably satisfactory to the Administrative Agent that it shall have no right whatsoever so long as such Person is an Affiliated Lender (1) to vote as a Lender with respect to any amendment, modification, waiver, consent or other such action with respect to any of the terms of this Agreement or any other Loan Document (it being understood that such interest will be deemed voted in the same proportion as the allocation of voting with respect to such matter by those Lenders who are not Affiliated Lenders), provided that, notwithstanding the foregoing, (x) such Affiliated Lender shall be permitted to vote as a Lender if such amendment, modification, waiver, consent or other such action (A) requires the vote of all Lenders or all affected Lenders and all Lenders or all affected Lenders, as the case may be, have given their consent thereto, or (B) disproportionately affects such Affiliated Lender in its capacity as a Lender as compared to other Lenders that are not Affiliated Lenders and (y) no amendment, modification, waiver, consent or other action shall deprive any Affiliated Lender of its share of any payments which the Lenders are entitled to share on a pro rata basis hereunder without consent of such Affiliated Lender, (2) subject to subclause (1) of this paragraph (g), to otherwise vote as a Lender on any matter related to this Agreement or any other Loan Document, (3) to receive advice of counsel to the Administrative Agent or to Lenders other than Affiliated Lenders or to challenge the Lenders

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document attorney-client privilege or (4) to make or bring any claim, in its capacity as a Lender, against the Administrative Agent or any Lender with respect to the duties and obligations of such Persons under the Loan Documents (except with respect to rights expressly retained under subclause (1) of this paragraph (g)), and (B) acknowledge and agree that the Obligations owned by it shall be non-voting under sections 1126 and 1129 of the Bankruptcy Code in the event that any proceeding thereunder shall be instituted by or against any Group Member, or, alternatively, to the extent that the foregoing non-voting designation is deemed unenforceable for any reason, each Affiliated Lender shall vote in such proceedings in the same proportion as the allocation of voting with respect to such matter by those Lenders who are not Affiliated Lenders, except to the extent that any plan of reorganization proposes to treat the obligations held by such Affiliated Lender in a manner that is less favorable in any material respect to such Affiliated Lender than the proposed treatment of similar obligations held by Lenders that are not Affiliated Lenders.

(h) Notwithstanding anything else to the contrary contained in this Agreement, any Lender may assign all or a portion of its Term Loans to any Purchasing Borrower Party in accordance with Section 10.2(b); provided that: (i) the assigning Lender and the Purchasing Borrower Party purchasing such Lenders Term Loans, as applicable, shall execute and deliver to the Administrative Agent an Affiliated Lender Assignment and Assumption in lieu of an Assignment; (ii) such assignment shall be made pursuant to a Dutch Auction open to all Lenders on a pro rata basis; (iii) any Term Loans assigned to any Purchasing Borrower Party shall be automatically and permanently cancelled upon the effectiveness of such assignment and will thereafter no longer be outstanding for any purpose hereunder; (iv) gain from any such purchase shall not increase Consolidated EBITDA; (v) the applicable Purchasing Borrower Party shall at the commencement of such Dutch Auction and at the time of such assignment affirm the No MNPI Representation; and (vi) the aggregate outstanding principal amount of the Term Loans shall be deemed reduced by the full par value of the aggregate principal amount of the Term Loans purchased pursuant to this Section 10.2(h) and each principal repayment installment with respect to the Term Loans shall be reduced pro rata by the aggregate principal amount of Term Loans purchased.

(i) Notwithstanding anything to the contrary contained herein, no Affiliated Lender shall have any right to (i) attend (including by telephone) any meeting or discussions (or portion thereof) among the Administrative Agent or any Lender to which representatives of the Borrower are not then present, (ii) receive any information or material prepared by the Administrative Agent or any Lender or any communication by or among Administrative Agent and one or more Lenders, except to the extent such information or materials have been made available to the Borrower or its representatives (and in any case, other than the right to receive notices of prepayments and other administrative notices in respect of its Term Loans required to be delivered to Lenders pursuant to Section 2), or (iii) make or bring (or participate in, other than as a passive participant in or recipient of its pro rata benefits of) any claim, in its capacity as a Lender, against Administrative Agent or any other Lender with respect to any duties or obligations or alleged duties or obligations of such Agent or any other such Lender under the Loan

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Documents in the absence, with respect to any such Person, of the gross negligence, bad faith (including a material breach of obligations under the Loan Documents) or willful misconduct by such Person and its Related Persons (as determined by a court of competent jurisdiction by final and nonappealable judgment).

Section 10.3 Costs and Expenses. The Borrower agrees (a) to pay or reimburse the Administrative Agent for all its reasonable and actual third party costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including the reasonable fees, disbursements and other charges of external counsel (not to exceed one transaction counsel and one local law firm per each appropriate jurisdiction) to the Administrative Agent and filing and recording fees and expenses, with statements with respect to the foregoing to be submitted to the Borrower prior to the Closing Date (in the case of amounts to be paid on the Closing Date) and from time to time thereafter on a quarterly basis or such other periodic basis as the Administrative Agent shall deem appropriate, (b) to pay or reimburse the Administrative Agent and the Lenders for all their reasonable and actual third party costs and expenses incurred in connection with any restructuring (while an Event of Default is continuing) or work-out (while an Event of Default is continuing) or the enforcement or preservation of any rights under this Agreement, the other Loan Documents and any such other documents, including the reasonable fees and disbursements of counsel (but limited to no more than one primary external counsel and, if applicable, local and regulatory counsel in each appropriate jurisdiction), and one primary external counsel (and, in addition to such firm, any local and regulatory counsel engaged in each appropriate jurisdiction by such firm) as counsel for the Lenders taken as a whole (and in the case of a conflict of interest, one additional counsel to such affected Lenders taken as a whole), (c) to pay, indemnify, and hold each Lender and the Administrative Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other similar Taxes (excluding, in all cases, Excluded Taxes), if any, that may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, and (d) to pay, indemnify, and hold each Lender and the Administrative Agent, their affiliates and their respective affiliates respective officers, directors, employees, agents, advisors and controlling persons (each, an Indemnitee) harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, reasonable and actual third party costs, reasonable and actual third party expenses or reasonable and actual third party disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents and any such other documents, including any of the foregoing relating to the use of proceeds of the Term Loans or the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of any Group Member or any of the of its real property and the reasonable fees and expenses of legal counsel in connection with claims, actions or proceedings by any Indemnitee against any Loan Party under any Loan Document (all the foregoing in this clause (d), collectively, the Indemnified Liabilities), provided, that the Borrower shall have no obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee or from breach in bad faith by an Indemnitee of its obligations under the Loan Documents, and provided, further, that this Section 10.3(d) shall not apply with respect to Taxes. Without limiting the foregoing, and to the extent permitted by applicable law, the Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Subsidiaries to waive, all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee. All amounts due under this Section 10.3 shall be payable not later than 10 Business Days after written demand therefor. Statements payable by the Borrower pursuant to this Section 10.3 shall be submitted to Borrower at Borrowers notice address as set forth in Section 10.8, or to such other Person or address as may be hereafter designated by the Borrower in a written notice to the Administrative Agent. The agreements in this Section 10.3 shall survive the termination of this Agreement and the repayment of the Term Loans and all other amounts payable hereunder. Indemnified matters set forth in this Section shall exclude in all circumstances any liabilities or losses arising from the trading, sale or discount of any Obligations of the Administrative Agent or any Lender.

Section 10.4 Survival. Any indemnification or other protection provided to any Indemnitee pursuant to any Loan Document (including pursuant to Section 2.13 (Breakage Costs; Increased Costs; Capital Requirements), Section 2.14 (Taxes), Article IX (The Administrative Agent), Section 10.3 (Costs and Expenses), Section 9.6 (Indemnities) or this Section 10.4) and all representations and warranties made in any Loan Document and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall (A) survive the assignment of rights by, or replacement of, a Lender, the termination of the Term Loan Commitments and the payment in full, satisfaction or discharge of all other Obligations under the Loan Documents and (B) inure to the benefit of any Person that at any time held a right thereunder (as an Indemnitee or otherwise) and, thereafter, its successors and permitted assigns.

Section 10.5 Limitation of Liability for Certain Damages. In no event shall any Loan Parties or any Indemnitee be liable on any theory of liability for any special, indirect, consequential or punitive damages (including any loss of profits, business or anticipated savings). Each Indemnitee and each Loan Party hereby waives, releases and agrees (and shall cause each other Loan Party to waive, release and agree) not to sue upon any such claim for any special, indirect, consequential or punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor; provided that nothing contained in this sentence shall limit Borrowers indemnity obligations to the extent set forth in Section 10.3.

Section 10.6 Right of Setoff. (a) Except to the extent that this Agreement or a court order expressly provides for payments to be allocated to a particular Lender or to the Lenders under the Second Lien Term Facility, if any Lender (a Benefitted Lender) shall receive any payment of all or part of the Obligations owing to it (other than in connection with an assignment made pursuant to Section 10.2), or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 8.1(e), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of the Obligations owing to such other Lender, such Benefitted Lender shall purchase for cash from the other Lenders a participating interest in such portion of the Obligations owing to each such other Lender, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such collateral ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

Section 10.7 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, addressed as follows in the case of Holdings, the Borrower and the Administrative Agent, and as set forth in an administrative questionnaire delivered to the Administrative Agent in the case of the Lenders, or to such other address as may be hereafter notified by the respective parties hereto:

Holdings: SRAM Holdings, LLC 1333 North Kingsbury, 4th Floor Chicago, Illinois 60642 Attention: Michael Herr Telecopy: (312) 664-8826 Telephone: (312) 664-8800

with a copy to: Lewis, Rice & Fingersh, L.C. 600 Washington Avenue, Suite 2500 St. Louis, Missouri 63101 Attention: Mark C. Winings Telecopy: (314) 612-7840 Telephone: (314) 444-7840

Borrower: SRAM, LLC 1333 North Kingsbury, 4th Floor Chicago, Illinois 60642 Attention: Michael Herr Telecopy: (312) 664-8826 Telephone: (312) 664-8800

with a copy to: Lewis, Rice & Fingersh, L.C. 600 Washington Avenue, Suite 2500 St. Louis, Missouri 63101 Attention: Mark C. Winings Telecopy: (314) 612-7840 Telephone: (314) 444-7840

Administrative 10 South Dearborn Street Agent: Chicago, IL 60603 Attention: Tammy Roehm Telecopy: (312) 361-3100 Telephone: (312) 732-6637

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document provided that any notice, request or demand to or upon the Borrower, the Administrative Agent or the Lenders shall not be effective until received.

Section 10.8 GOVERNING LAW. THIS AGREEMENT, EACH OTHER LOAN DOCUMENT THAT DOES NOT EXPRESSLY SET FORTH ITS APPLICABLE LAW, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO AND THERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

Section 10.9 Submission to Jurisdiction; Waivers. Each of Holdings and the Borrower hereby irrevocably and unconditionally:

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to Holdings or the Borrower, as the case may be at its address set forth in Section 10.8 or at such other address of which the Administrative Agent shall have been notified pursuant thereto; and

(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction;

Section 10.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY) AND FOR ANY

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document COUNTERCLAIM THEREIN. EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THE LOAN DOCUMENTS, AS APPLICABLE, BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10.

Section 10.11 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

Section 10.12 Severability. Any provision of any Loan Document being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of any Loan Document or any part of such provision in any other jurisdiction.

Section 10.13 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this Agreement by facsimile transmission, or PDF format shall be as effective as delivery of a manually executed counterpart hereof.

Section 10.14 Entire Agreement. This Agreement and the Loan Documents embody the entire agreement of the parties and supersede all prior agreements and understandings relating to the subject matter thereof and any prior letter of interest, commitment letter, fee letter, confidentiality and similar agreements involving any Loan Party and any of the Administrative Agent, any Lender or any of their respective Affiliates relating to a financing of substantially similar form, purpose or effect. In the event of any conflict between the terms of this Agreement and any other Loan Document, the terms of this Agreement shall govern (unless such terms of such other Loan Documents are necessary to comply with applicable Requirements of Law, in which case such terms shall govern to the extent necessary to comply therewith).

Section 10.15 Non-Public Information; Confidentiality. Each of the Administrative Agent and each Lender agrees to keep confidential all non-public information provided to it by any Loan Party, the Administrative Agent or any Lender pursuant to or in connection with this Agreement; provided that nothing herein shall prevent the Administrative Agent or any Lender from disclosing any such information (a) to the Administrative Agent, any other Lender or, subject to an agreement to comply with the provisions of this Section, any affiliate thereof, (b) subject to an agreement to comply with the provisions of this Section, to any actual or prospective Eligible Assignee or any direct or indirect counterparty to any Swap Agreement (or any professional advisor to such counterparty), (c) to its employees, directors, agents, attorneys, accountants and other professional advisors or those of any of its affiliates who have been advised of the confidential nature of such information, (d) upon the request or demand of any Governmental Authority, (e) in response to any order of any court or other Governmental

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Authority or as may otherwise be required pursuant to any Requirement of Law, (f) if requested or required to do so in connection with any litigation or similar proceeding relating to this Agreement or any other Loan Document, (g) that has been publicly disclosed, (h) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lenders investment portfolio in connection with ratings issued with respect to such Lender, (i) in connection with the exercise of any remedy hereunder or under any other Loan Document, or (j) if agreed by the Borrower in its sole discretion, to any other Person.

Section 10.16 Patriot Act Notice. Each Lender subject to the USA Patriot Act of 2001 (31 U.S.C. 5318 et seq.) (the Patriot Act) hereby notifies the Borrower that, pursuant to Section 326 thereof, it is required to obtain, verify and record information that identifies the Borrower, including the name and address of the Borrower and other information allowing such Lender to identify the Borrower in accordance with such act.

Section 10.17 Acknowledgements. Each of Holdings and the Borrower hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among Holdings, the Borrower and the Lenders.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 10.18 Releases of Guarantees and Liens. (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Administrative Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender except as expressly required by Section 10.1) , and the Administrative Agent agrees, to take any action requested by the Borrower having the effect of releasing any Collateral or guarantee obligations (i) to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 10.1, (ii) of any Subsidiary which has been designated as an Unrestricted Subsidiary or (iii) under the circumstances described in paragraph (b) below. Without limiting the generality of the foregoing, each Lender irrevocably authorizes Administrative Agent, and Administrative Agent agrees, to release Collateral consisting of Stock of Foreign Subsidiaries upon Borrowers request in connection with the Foreign Restructuring, so long as Administrative Agent is reasonably satisfied that following the Foreign Restructuring it will have a Lien on at least 65% of the Stock of any Foreign Subsidiary which is a direct Wholly Owned Subsidiary of Borrower.

(b) At such time as the Term Loans, the obligations under the Loan Documents (other than obligations under or in respect of Hedging Agreements and contingent obligations for which no claim has been made) shall have been paid in full, the Term Loan Commitments have been terminated, the Collateral shall be released from the Liens created by the Security Documents, and the Security Documents and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Loan Party under the Security Documents shall terminate, all without delivery of any instrument or performance of any act by any Person.

Section 10.19 Conflicts with Intercreditor Agreement. To the extent any obligation of any Loan Party hereunder or under any other Loan Document conflicts or is inconsistent with the terms of the Intercreditor Agreement, the Intercreditor Agreement shall control, and such Loan Party shall not be required to fulfill such obligations. Each Lender hereby acknowledges that it has reviewed the Intercreditor Agreement, authorizes the Administrative Agent to execute and deliver such agreement and acknowledges that such Lender will be bound by the terms thereof.

[SIGNATURE PAGES FOLLOW]

SRAM, LLC, AS BORROWER

By: /s/ Michael R. Herr Name: Michael R. Herr Title: Chief Financial Officer

SRAM HOLDINGS, LLC, AS HOLDINGS

By: /s/ Michael R. Herr Name: Michael R. Herr Title: Chief Financial Officer

By: /s/ Tamara Roehm Name: Tamara Roehm Title: Senior Banker

J.P. MORGAN SECURITIES LLC, as Sole Bookrunner

By: /s/ Gerry Murray Name: Gerry Murray Title: Managing Director

FORM OF ASSIGNMENT

This ASSIGNMENT, dated as of the Effective Date, is entered into between the Assignor and the Assignee (each as defined below).

The parties hereto hereby agree as follows:

Borrower: SRAM, LLC, a Delaware limited liability company (the Borrower)

Administrative Agent: JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the Lenders (in such capacity and together with its successors and permitted assigns, the Administrative Agent)

Credit Agreement: Second Lien Credit Agreement, dated as of June 7, 2011, among the Borrower, SRAM Holdings, LLC, as one of the Guarantors, the Lenders party thereto and the Administrative Agent (as the same may be amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement; capitalized terms used herein without definition are used as defined in the Credit Agreement)

[Trade Date: , 20 ]1

Effective Date: , 20 2

1 Insert for informational purposes only if needed to determine other arrangements between the assignor and the assignee. 2 To be filled out by Administrative Agent upon entry in the Register.

A-1

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Aggregate amount of Aggregate amount of Commitments or principal Commitments or principal amount of Term Loans for all amount of Term Loans Lenders Assigned3 Percentage Assigned4

$ $ . %

[THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK]

3 Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date. The aggregate amounts are inserted for informational purposes only to help in calculating the percentages assigned which, themselves, are for informational purposes only. 4 Set forth, to at least 9 decimals, the Assigned Interest as a percentage of the aggregate Commitment or Loans in the Facility. This percentage is set forth for informational purposes only and is not intended to be binding. The assignments are based on the amounts assigned not on the percentages listed in this column.

A-2

Section 3. Representations, Warranties and Covenants of Assignees. Assignee (a) represents and warrants to Assignor and the Administrative Agent that (i) it has full power and authority, and has taken all actions necessary for Assignee, to execute and deliver this Assignment and to consummate the transactions contemplated hereby, (ii) to the extent indicated above, is an Affiliate or an Approved Fund of the Lender set forth above and (iii) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest assigned to it hereunder and either such Assignee or the Person exercising discretion in making the decision for such assignment is experienced in acquiring assets of such type, (iv) by executing, signing and delivering this Assignment via ClearPar® or any other electronic settlement system designated by the Administrative Agent, the Person signing, executing and delivering this Assignment on behalf of the Assignor is an authorized signer for the Assignor and is authorized to execute, sign and deliver this Agreement, (b) appoints and authorizes the Administrative Agent to take such action as administrative agent and collateral agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto, (c) shall perform in accordance with their terms all obligations that, by the terms of the Loan Documents, are required to be performed by it as a Lender, (d) confirms it has received such documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and shall continue to make its own credit decisions in taking or not taking any action under any Loan Document independently and without reliance upon any Secured Party and based on such documents and information as it shall deem appropriate at the time, (e) acknowledges and agrees that, as a Lender, it may receive material non-public information and confidential information concerning the Loan Parties and their Affiliates and Securities and agrees to use such information in accordance with Section 10.15 of the Credit Agreement, (f) specifies as its applicable lending offices (and addresses for notices) the offices at the addresses set forth beneath its name on the signature pages hereof, (g) shall pay to the Administrative

A-3

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Agent a processing and recordation fee in the amount of $3,500 to the extent such fee is required to be paid under Section 10.2(b) of the Credit Agreement and (h) to the extent required pursuant to Section 2.14(f) of the Credit Agreement, attaches two completed originals of Forms W-8ECI, W-8BEN, W-8EXP, W-8IMY, W-9 or any other applicable required document.

Section 4. Determination of Effective Date; Register. Following the due execution and delivery of this Assignment by Assignor, Assignee and, to the extent required by Section 10.2(b) of the Credit Agreement, the Borrower, this Assignment (including its attachments) will be delivered to the Administrative Agent for its acceptance and recording in the Register. The effective date of this Assignment (the Effective Date) shall be the later of (i) the acceptance of this Assignment by the Administrative Agent and (ii) the recording of this Assignment in the Register. The Administrative Agent shall insert the Effective Date when known in the space provided therefor at the beginning of this Assignment.

Section 7. Miscellaneous. This Assignment is a Loan Document and, as such, is subject to certain provisions of the Credit Agreement, including Sections 1.5 (Interpretation), 10.9 (Submission to Jurisdiction; Waivers) and 10.10 (Waiver of Jury Trial) thereof. On and after the Effective Date, this Assignment shall be binding upon, and inure to the benefit of, the Assignors, Assignees, the Administrative Agent and their Related Persons and their successors and assigns. This Assignment shall be governed by, and be construed and interpreted in accordance with, the law of the State of New York. This Assignment may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this Assignment by facsimile transmission or Electronic Transmission shall be as effective as delivery of a manually executed counterpart of this Assignment.

[SIGNATURE PAGES FOLLOW]

A-4

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

[NAME OF ASSIGNOR] as Assignor

By: Name: Title:

[NAME OF ASSIGNEE] as Assignee

By: Name: Title:

Lending Office for Eurodollar Loans:

[Insert Address (including contact name, fax number and e-mail address)]

Lending Office (and address for notices) for any other purpose:

[Insert Address (including contact name, fax number and e-mail address)]

[SIGNATURE PAGE FOR ASSIGNMENT FOR SRAM, LLCS CREDIT AGREEMENT]

JPMORGAN CHASE BANK, N.A. as Administrative Agent

By: Name: Title:

SRAM, LLC5

By: Name: Title:

5 Include only if required pursuant to Section 10.2(b) of the Credit Agreement.

[SIGNATURE PAGE FOR ASSIGNMENT FOR SRAM, LLCS CREDIT AGREEMENT]

FORM OF TERM LOAN NOTE

Lender: [NAME OF LENDER] New York, New York Principal Amount: $ ,20

FOR VALUE RECEIVED, the undersigned, SRAM, LLC, a Delaware limited liability company (the Borrower), hereby promises to pay to the order of the Lender set forth above (the Lender) the Principal Amount set forth above, or, if less, the aggregate unpaid principal amount of the Term Loans (as defined in the Credit Agreement referred to below) of the Lender to the Borrower, payable at such times and in such amounts as are specified in the Credit Agreement.

The Borrower promises to pay interest on the unpaid principal amount of the Term Loans from the date made until such principal amount is paid in full, payable at such times and at such interest rates as are specified in the Credit Agreement. Demand, diligence, presentment, protest and notice of non-payment and protest are hereby waived by the Borrower.

Both principal and interest are payable in Dollars to JPMorgan Chase Bank, N.A., as Administrative Agent, in accordance with the Credit Agreement, in immediately available funds.

This Note is one of the Notes referred to in, and is entitled to the benefits of, the Second Lien Credit Agreement, dated as of June 7, 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement), among the Borrower, SRAM Holdings, LLC, as one of the Guarantors, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the Lenders. Capitalized terms used herein without definition are used as defined in the Credit Agreement.

The Credit Agreement, among other things, (a) provides for the making of a Term Loan by the Lender to the Borrower in an aggregate amount equal to the Principal Amount set forth above, the indebtedness of the Borrower resulting from such Term Loans being evidenced by this Note and (b) contains provisions for acceleration of the maturity of the unpaid principal amount of this Note upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein.

This Note is a Loan Document, is entitled to the benefits of the Loan Documents and is subject to certain provisions of the Credit Agreement, including Sections 1.5 (Interpretation), 10.9 (Submission to Jurisdiction; Waivers) and 10.10 (Waiver of Jury Trial) thereof.

This Note is a registered obligation, transferable only upon notation in the Register, and no assignment hereof shall be effective until recorded therein.

This Note shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.

[SIGNATURE PAGES FOLLOW]

B-1

SRAM, LLC

By: Name: Title:

[SIGNATURE PAGE FROM PROMISSORY NOTE OF SRAM, LLC FOR THE BENEFIT OF [NAME OF LENDER]]

FORM OF NOTICE OF BORROWING

JPMORGAN CHASE BANK, N.A. as Administrative Agent under the Credit Agreement referred to below

, 20

Attention:

Re: SRAM, LLC (the Borrower)

Reference is made to the Second Lien Credit Agreement, dated as of June 7, 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement), among the Borrower, SRAM Holdings, LLC, as one of the Guarantors, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for such Lenders. Capitalized terms used herein without definition are used as defined in the Credit Agreement.

The Borrower hereby gives you irrevocable notice, pursuant to Section 2.2 of the Credit Agreement of its request of a Borrowing (the Proposed Borrowing) under the Credit Agreement and, in that connection, sets forth the following information: A. The date of the Proposed Borrowing is , 6 (the Funding Date). B. The aggregate principal amount of the Proposed Borrowing of Term Loans is $ , of which $ consists of ABR Loans and $ consists of Eurodollar Loans having an initial Interest Period of months.7

The Borrower hereby certifies that the following statements are true on the date hereof, both before and after giving effect to the Proposed Borrowing and any other Term Loan to be made on or before the Funding Date: (i) the representations and warranties set forth in Article IV of the Credit Agreement and elsewhere in the Loan Documents are true and correct in all material respects on and as of such Funding Date [except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct on and as of such date];8 and (ii) no Default is continuing.

6 For Term Loans, must be the Closing Date. 7 Delete for any Proposed Borrowing after the Closing Date. 8 Insert for Proposed Borrowings after the Closing Date.

C-1

By: Name: Title:

[SIGNATURE PAGE TO NOTICE OF BORROWING DATED , 20 ]

FORM OF NOTICE OF CONVERSION OR CONTINUATION

JPMORGAN CHASE BANK, N.A. as Administrative Agent under the Credit Agreement referred to below

, 20 Attention:

Re: SRAM, LLC (the Borrower)

The Borrower hereby gives you irrevocable notice, pursuant to Section 2.7 of the Credit Agreement of its request for the following: A. a continuation, on , 20 , as Eurodollar Loans having an Interest Period of months of Term Loans in an aggregate outstanding principal amount of $ having an Interest Period ending on the proposed date for such continuation; B. a conversion, on , 20 , to Eurodollar Loans having an Interest Period of months of Term Loans in an aggregate outstanding principal amount of $ ; and C. a conversion, on , 20 , to ABR Loans, of Term Loans in an aggregate outstanding principal amount of $ .

In connection herewith, the Borrower hereby certifies that no Event of Default is continuing on the date hereof, both before and after giving effect to any Term Loan to be made on or before any date for any proposed conversion or continuation set forth above.

SRAM, LLC

By: Name: Title:

FORM OF COMPLIANCE CERTIFICATE

, 20

This certificate is delivered pursuant to Section 5.1(c) of, and in connection with the consummation of the transactions contemplated in, the Second Lien Credit Agreement, dated as of June 7, 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement), among SRAM, LLC (the Borrower), SRAM Holdings, LLC, as one of the Guarantors, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the Lenders (the Administrative Agent). Capitalized terms used herein and not otherwise defined herein are used herein as defined in the Credit Agreement.

The undersigned, a duly authorized Responsible Officer of the Borrower having the name and title set forth below under his signature, hereby certifies, on behalf of the Borrower (and not in his individual capacity) for the benefit of the Secured Parties and pursuant to Section 5.1 of the Credit Agreement that such Responsible Officer of the Borrower is familiar with the Credit Agreement and that, in accordance with each of the following sections of the Credit Agreement, each of the following is true on the date hereof, both before and after giving effect to any Term Loan to be made on or before the date hereof: (a) In accordance with Section 5.1[(a)/(b)] of the Credit Agreement, attached hereto as Annex A are the Financial Statements for the [Fiscal Quarter/Fiscal Year] ended , 20 required to be delivered pursuant to Section 5.1[(a)/(b)] of the Credit Agreement. Such Financial Statements fairly present in all material respects the Consolidated financial position, results of operations and cash flow of the Reporting Person as at the dates indicated therein and for the periods indicated therein and, in respect of the balance sheet and statements of income delivered under Section 5.1(a) of the Credit Agreement, in accordance with GAAP [(subject to the absence of footnote disclosure and normal year-end audit adjustments)]9 [without qualification as to the scope of the audit or as to going concern and without any other similar qualification, together with the certificate from the Group Members Accountants with respect to such Consolidated Financial Statements required to be delivered pursuant to Section 5.1(b) of the Credit Agreement. The examination by the Group Members Accountants in connection with such Financial Statements has been made in accordance with the standards of the United States Public Company accounting Oversight Board (or any successor entity).]10

9 Insert language in brackets only for quarterly reports. 10 Insert language in brackets only for annual certifications.

E-1

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) [In accordance with Section 5.1(c) of the Credit Agreement, attached hereto as Annex B are the calculations used in determining Excess Cash Flow]11. (c) In accordance with Section 5.1(c) of the Credit Agreement, no Default is continuing as of the date hereof[, except as provided for on Annex C attached hereto, with respect to each of which the Borrower proposes to take the actions set forth on Annex C]. (d) [In accordance with Section 5.1(f) of the Credit Agreement, attached hereto as Annex D is a discussion and analysis of the financial condition and results of operations of the Group Members for the portion of the Fiscal Year elapsed on or prior to the date hereof discussing the reasons for any significant variations from the Projections for such period and the figures for the corresponding period in the previous Fiscal Year.]12 (g) [In accordance with Sections 5.1(g) of the Credit Agreement, attached hereto as Annex F are complete and correct copies of each management letter, audit report or similar letter or report received by any Group Member from any independent registered certified public accountant (including the Group Members Accountants) in connection with such Financial Statements or any audit thereof.]13 (h) [Attached hereto as Annex G are calculations setting forth the cash balances and working capital items of the Loan Parties, on the one hand, and the Subsidiaries which are not Loan Parties, on the other hand, as of the end of the Fiscal Quarter ended , 20 .]14

11 Insert bracketed language only for annual reports. 12 Insert bracketed language only if a Qualified IPO has not been consummated. 13 Insert bracketed language only for annual reports. 14 Insert language in brackets only for quarterly reports.

E-2

SRAM, LLC

By: Name: Title:

[SIGNATURE PAGE TO COMPLIANCE CERTIFICATE]

FINANCIAL STATEMENTS

E-4

FINANCIAL CALCULATIONS

(SEE ATTACHED)

E-5

For purposes of calculating Excess Cash Flow, Unfinanced Capital Expenditures is defined as follows: 1. For any Person for any period, the aggregate of all expenditures, whether or not made through the incurrence of Indebtedness, by such Person and its Subsidiaries during such period for the acquisition, leasing (pursuant to a Capital Lease), construction, replacement, repair, substitution or improvement of fixed or capital assets or additions to equipment, in each case required to be capitalized under GAAP on a Consolidated balance sheet of such Person $

To the extent included above and without duplication, less: 2. Interest capitalized during construction

4. Any expenditure made in connection with a Permitted Reinvestment

5. Any expenditure financed with Net Cash Proceeds of equity issuances permitted herein which Borrower is not required to pay to Administrative Agent under this Agreement

6. Total capital expenditures (line 1, minus the sum of lines 2 through 5) $

7. To the extent included above, less: Amounts financed or proposed to be financed through the incurrence of Capitalized Lease Obligations or any long-term Indebtedness other than the Obligations

Unfinanced Capital Expenditures (line 6 minus line 7) $

E-6

For purposes of calculating Excess Cash Flow, Consolidated Cash Interest Expense is defined as follows:

1. For any Person for any period, Consolidated Interest Expense of such Person and its Subsidiaries for such period $

To the extent included in Consolidated Interest Expense and without duplication, less: 2. The amortized amount or write-off or write-down of debt discount or debt issuance costs and commissions, prepayment premiums and other fees and charges associated with Indebtedness (including without limitation net costs (or net gains) under Interest Rate Contracts for such period)

4. Non-cash charges relating to write-ups or write-downs in the book or carrying value of Indebtedness

5. Interest payable in evidences of Indebtedness or by addition to the principal of the related Indebtedness

6. Any other non-cash interest expense

7. To the extent not netted in calculating Consolidated Interest Expense, and without duplication, Consolidated interest income

Consolidated Cash Interest Expense (line 1 minus the sum of lines 2 through 7) $

E-7

The Consolidated Leverage Ratio is defined as follows for any Person as of any date of determination:

1. The average of the sum of the aggregate balance of outstanding Revolving Loans and Swing Loans (as such terms are defined in the First Lien Credit Agreement) as of the last day of each month in the twelve month period (or shorter period commencing on the Closing Date) ended on the date of measurement $

Plus, as of the date of measurement:

2. L/C Obligations (as defined in the First Lien Credit Agreement)

3. Aggregate outstanding principal balance of Term Loans and Term Loans (as defined in the First Lien Credit Agreement)

4. Principal portion of Capitalized Lease Obligations and Indebtedness secured by purchase money Liens

5. Without duplication, all other Indebtedness and Guaranty Obligations included in the definition of Consolidated Total Debt, in each case of such Person and its Subsidiaries on a Consolidated basis

6. Less: The sum of unrestricted Cash and Cash Equivalents as of the day of measurement but not in excess of $7,500,000

7. Consolidated Net Total Debt (sum of lines 1 through 5, minus line 6) $

8. Consolidated EBITDA for the last period of four consecutive Fiscal Quarters ending on such date $

9. Consolidated Leverage Ratio (line 7 divided by line 8 above)

E-8

Consolidated EBITDA is defined as follows with respect to any Person for any period of four consecutive Fiscal Quarters:

1. Consolidated net income (or loss) of such Person and its Subsidiaries for such period $

To the extent included above and without duplication, less:

4. The net income of any other Person arising prior to such other Person becoming or being designated a Subsidiary of such Person or merging or consolidating into such Person or its Subsidiaries $

5. Consolidated Net Income (line 1 minus the sum of lines 2 through 4) $

To the extent included in the calculation of Consolidated Net Income and without duplication, plus:

7. Consolidated Interest Expense15 $

15 For the avoidance of doubt, and without duplication, Consolidated Interest Expense shall, at the election of Borrower, include, to the extent included in the calculation of Consolidated Net Income, all commitment fees and other costs, fees and expenses payable by such Person and its Subsidiaries during such period in order to effect, or because of, the incurrence of any Indebtedness (excluding Transaction Costs), to the extent paid in cash.

E-9

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 8. Any net loss or expense from extraordinary (in accordance with GAAP) and non-recurring or unusual items16, with such non-recurring or unusual items to the extent the nature of such non-recurring or unusual items has been identified with reasonable specificity and disclosed in writing to Administrative Agent and, if in excess of $5,000,000 in any 12 month period, as are acceptable to Administrative Agent (with consent not to be unreasonably withheld). $

9. Any depreciation, depletion and amortization expense17 $

11. Any other non-cash expense, charge or loss for such period, which amount shall not include write-offs, write- downs or reserves with respect to accounts and inventory18 $

16 For the avoidance of doubt and without duplication, such non-recurring and unusual amounts shall, at the election of Borrower, include, to the extent included in the calculation of Consolidated Net Income, severance costs, litigation settlement costs, costs associated with curtailments and modifications to pension and post-retirement employee benefit plans, costs associated with facilities openings or closings and consolidation, relocation or integration costs and other business optimization and restructuring charges and expenses. 17 For the avoidance of doubt and without duplication, such amortization shall, at the election of Borrower, include, to the extent included in the calculation of Consolidated Net Income, the amortization of deferred gains. 18 For the avoidance of doubt and without duplication, non-cash expenditures, charges, losses or gains shall, at the election of Borrower, include, to the extent included in the calculation of Consolidated Net Income, (A) the amount of any non-cash compensation deduction or charge, whether as the result of any grant of Stock or Stock Equivalents to employees, officers, directors or consultants or otherwise, (B) deferred financing costs written off, premiums paid and other net gains or losses in connection with any early extinguishment of Indebtedness (including in connection with the Related Transactions), (C) write-offs, write-downs or write-ups of goodwill or other intangibles, (D) pension adjustments under FAS 87, including changes to pension plan accounting policies, (E) the impact of foreign currency translations and transactions and hedging transactions, and (F) amortization of inventory write up, deferred revenue adjustment or any other non cash adjustments resulting from the application of purchase accounting as required under Statement of Financial Accounting Standards No. 141 or 141R Business Combinations, amortization of intangibles (including, but not limited to, goodwill and the cost of non-competition agreements), fair value adjustments, including earn-outs, transaction expenses and including any non cash charges associated with any impairment analysis required under Statement of Financial Accounting Standards No. 142 Goodwill, and other Intangible Assets.

E-10

14. Any expense reimbursement paid to non-employee directors $

15. The amount of any SRAM Cycling Advocacy Donation $

To the extent included in the calculation of Consolidated Net Income and without duplication, less:

16. Any net gain from extraordinary items (in accordance with GAAP), and non-recurring or unusual items19 $

19 For the avoidance of doubt and without duplication, such non-recurring and unusual amounts shall, at the election of Borrower, include, to the extent included in the calculation of Consolidated Net Income, severance costs, litigation settlement costs, costs associated with curtailments and modifications to pension and post-retirement employee benefit plans, costs associated with facilities openings or closings and consolidation, relocation or integration costs and other business optimization and restructuring charges and expenses.

E-11

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 18. Any other non-cash income or gain20, including any reversal of a charge referred to in line 11 above by reason of a decrease in the value of any Stock or Stock Equivalent but excluding any write-ups or reversals of write-downs or reserves with respect to accounts and inventory $

Consolidated EBITDA (line 5 plus the sum of lines 6 through 15, minus the sum of lines 16 through 18) $

20 For the avoidance of doubt and without duplication, non-cash expenditures, charges, losses or gains shall, at the election of Borrower, include, to the extent included in the calculation of Consolidated Net Income, (A) the amount of any non-cash compensation deduction or charge, whether as the result of any grant of Stock or Stock Equivalents to employees, officers, directors or consultants or otherwise, (B) deferred financing costs written off, premiums paid and other net gains or losses in connection with any early extinguishment of Indebtedness (including in connection with the Related Transactions), (C) write-offs, write-downs or write-ups of goodwill or other intangibles, (D) pension adjustments under FAS 87, including changes to pension plan accounting policies, (E) the impact of foreign currency translations and transactions and hedging transactions, and (F) amortization of inventory write up, deferred revenue adjustment or any other non cash adjustments resulting from the application of purchase accounting as required under Statement of Financial Accounting Standards No. 141 or 141R Business Combinations, amortization of intangibles (including, but not limited to, goodwill and the cost of non-competition agreements), fair value adjustments, including earn-outs, transaction expenses and including any non cash charges associated with any impairment analysis required under Statement of Financial Accounting Standards No. 142 Goodwill, and other Intangible Assets.

E-12

Excess Cash Flow is defined as follows: 1. Consolidated EBITDA for such period $

Without duplication, less:

2. Any scheduled cash principal payment on the Term Loans (as defined in the First Lien Credit Agreement) and the Revolving Loans (as defined in the First Lien Credit Agreement) to the extent paid on the Revolving Credit Termination Date (as defined in the First Lien Credit Agreement) during such period $

3. Any scheduled or other mandatory (other than mandatory prepayments financed with the net cash proceeds of the event giving rise to the mandatory prepayment requirement), or (to the extent permitted by this Agreement) voluntary cash payment made by the Borrower or any of its Subsidiaries during such period on any Capitalized Lease Obligation or other Indebtedness (other than the Loans (as defined in the First Lien Credit Agreement) or Term Loans) (but only, if such Indebtedness may be reborrowed, to the extent such payment results in a permanent reduction in commitments thereof) including Earn-Out payments to the extent such Earn-Outs are Indebtedness $

4. Unfinanced Capital Expenditures made by such Person or any of its Subsidiaries during such period to the extent permitted by this Agreement $

6. Restricted Payments made in cash during such period under and permitted by Section 7.5(c)(i) (but not in duplication of line 9 below), (ii), (iii) and (iv) of the Credit Agreement, 7.5(d) (except to the extent paid with the Available Excess Cash Flow Amount) or 7.5(e) of the Credit Agreement, to the extent not already included in Consolidated EBITDA as a reduction in such calculation $

E-13

8. Any net cash losses from extraordinary items and all amounts added to Consolidated EBITDA arising from (i) line item 8 under the calculation of Consolidated EBITDA, (ii) line item 10 under the calculation of Consolidated EBITDA, (iii) line item 13 under the calculation of Consolidated EBITDA, (iv) line item 14 under the calculation of Consolidated EBITDA, and (v) line item 15 under the calculation of Consolidated EBITDA in the case of any such items in clauses (i) through (v) only to the extent such amounts were paid in cash during such period $

10. Any increase in the Working Capital during such period (measured as the excess of such Working Capital at the end of such period over such Working Capital at the beginning of such period) $

11. Cash expenditures made in respect of Interest Rate Contracts during such period, to the extent not reflected in the determination of Consolidated EBITDA $

Without duplication, plus:

12. Any decrease in the Working Capital during such period (measured as the excess of such Working Capital at the beginning of such period over such Working Capital at the end thereof) $

13. Any amounts deducted (other than non-cash items) in the calculation of Consolidated EBITDA under line item 17 therein $

Excess Cash Flow (line 1 minus the sum of lines 2 through 11 plus lines 12 and 13) $

E-14

CONTINUING DEFAULTS]21

21 Delete if not used in the text of the certificate.

E-15

MANAGEMENT DISCUSSION AND ANALYSIS

E-16

INTERCOMPANY INDEBTEDNESS

E-17

MANAGEMENT LETTERS

E-18

WORKING CAPITAL ITEMS AND CASH BALANCES

E-19

FORM OF COLLATERAL UPDATE CERTIFICATE

, 20

This certificate is delivered pursuant to Section 5.1(d) of, and in connection with the consummation of the transactions contemplated in, the Second Lien Credit Agreement, dated as of June 7, 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement), among SRAM, LLC (the Borrower), SRAM Holdings, LLC, as one of the Guarantors, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the Lenders (the Administrative Agent). Capitalized terms used herein and not otherwise defined herein are used herein as defined in the Credit Agreement.

[Signature Page Follows]

F-1

SRAM, LLC

By: Name: Title:

NOTICE OF CHANGES TO SCHEDULE 6 (INTELLECTUAL PROPERTY) OF THE GUARANTY AND SECURITY AGREEMENT

FORM OF GUARANTY AND SECURITY AGREEMENT

FORM OF INTERCREDITOR AGREEMENT

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is made to the Second Lien Credit Agreement, dated as of June 7, 2011 (as amended, supplemented or otherwise modified from time to time, the Credit Agreement), among SRAM, LLC (the Borrower), SRAM Holdings, LLC, as one of the Guarantors, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the Lenders (the Administrative Agent). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Term Loan(s) (as well as any Note(s) evidencing such Term Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code and (v) the interest payments in question are not effectively connected with the undersigneds conduct of a U.S. trade or business.

IN WITNESS WHEREOF, the undersigned has duly executed this certificate.

[NAME OF LENDER]

By: Name: Title:

Date: , 20

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Term Loan(s) (as well as any Note(s) evidencing such Term Loan(s)) in respect of which it is providing this certificate, (ii) its partners/ members are the sole beneficial owners of such Term Loan(s) (as well as any Note(s) evidencing such Term Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement, neither the undersigned nor any of its partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigneds or its partners/members conduct of a U.S. trade or business.

IN WITNESS WHEREOF, the undersigned has duly executed this certificate.

[NAME OF LENDER]

By: Name: Title:

Date: , 20

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (v) the interest payments in question are not effectively connected with the undersigneds conduct of a U.S. trade or business.

IN WITNESS WHEREOF, the undersigned has duly executed this certificate.

[NAME OF PARTICIPANT]

By: Name: Title:

Date: , 20

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigneds or its partners/members conduct of a U.S. trade or business.

IN WITNESS WHEREOF, the undersigned has duly executed this certificate.

[NAME OF PARTICIPANT]

By: Name: Title:

Date: , 20

FORM OF AFFILIATED LENDER ASSIGNMENT AND ASSUMPTION

The Assignor identified on Schedule 1 hereto (the Assignor) and the Assignee identified on Schedule 1 hereto (the Assignee) agree as follows: 1. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, as of the Effective Date (as defined below), the interest described in Schedule 1 hereto (the Assigned Interest) in and to the Assignors rights and obligations under the Credit Agreement with respect to those credit facilities contained in the Credit Agreement as are set forth on Schedule 1 hereto (individually, an Assigned Facility; collectively, the Assigned Facilities), in a principal amount for each Assigned Facility as set forth on Schedule 1 hereto. 2. The Assignor (a) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document or with respect to the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto, other than that the Assignor has not created any adverse claim upon the interest being assigned by it hereunder and that such interest is free and clear of any such adverse claim and (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower, any of its Affiliates or any other obligor or the performance or observance by the Borrower, any of its Affiliates or any other obligor of any of their respective obligations under the Credit Agreement or any other Loan Document or any other instrument or document furnished pursuant hereto or thereto. 3. The Assignee represents and warrants that (a) it is legally authorized to enter into this Assignment and Assumption; (b) it is an Affiliated Lender pursuant to Section 10.2(g) of the Credit Agreement; and (c) the other terms and conditions with respect to this Assignment and Assumption set forth in Section 10.2(g) of the Credit Agreement have been satisfied. For the avoidance of doubt, Lenders shall not be permitted to assign Revolving Commitments or Revolving Loans to any Affiliated Lender. 4. The Assignee (a) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements delivered pursuant to Section 5.1 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption; (b) agrees that it will, independently and without reliance upon the Assignor, the Agents or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; (c) appoints and authorizes the Administrative Agent to take such action as

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document agent on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (d) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender including its obligations, if any, pursuant to Section 2.14(f) of the Credit Agreement. 5. The effective date of this Assignment and Assumption shall be the Effective Date of Assignment described in Schedule 1 hereto (the Effective Date). Following the execution of this Assignment and Assumption, it will be delivered to the Administrative Agent for acceptance by it and recording by the Administrative Agent pursuant to the Credit Agreement, effective as of the Effective Date (which shall not, unless otherwise agreed to by the Administrative Agent, be earlier than five Business Days after the date of such acceptance and recording by the Administrative Agent). 6. Upon such acceptance and recording, 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 the Effective Date and to the Assignee for amounts which have accrued subsequent to the Effective Date.][to the Assignee whether such amounts have accrued prior to the Effective Date or accrue subsequent to 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.] 7. From and after the Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Assumption, have the rights and obligations of a Lender thereunder and under the other Loan Documents and shall be bound by the provisions thereof and (b) the Assignor shall, to the extent provided in this Assignment and Assumption, relinquish its rights and be released from its obligations under the Credit Agreement. 8. This Assignment and Assumption shall be governed by and construed in accordance with the laws of the State of New York. 9. This Assignment and Assumption may be executed in counterparts, each of which shall be deemed to constitute an original, but all of which when taken together shall constitute one and the same instrument. Delivery of an executed signature page of this Assignment and Assumption by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart thereof.

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Assumption to be executed as of the date first above written by their respective duly authorized officers on Schedule 1 hereto.

to Assignment and Assumption with respect to the Second Lien Credit Agreement, dated as of June 7, 2011 (as amended, supplemented or otherwise modified from time to time, the Credit Agreement), among SRAM, LLC (the Borrower), SRAM Holdings, LLC, as one of the Guarantors, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the Lenders (the Administrative Agent).

Name of Assignor:

Name of Assignee:

(a) Assignee is an Affiliate of: [Name of Lender] (b) Assignee is an Approved Fund administered or managed by: [Name of Lender] [an affiliate of [Name of Lender]] [an entity or an Affiliate of an entity that administers or manages [Name of Lender]]

Effective Date of Assignment:

Principal Amount Commitment Percentage Credit Facility Assigned Assigned Assigned

$ . %

[Name of Assignee] [Name of Assignor]

By: By: Name: Name: Title: Title:

Accepted for Recordation in the Register: Required Consents (if any):

JPMORGAN CHASE BANK, N.A., as Administrative Agent SRAM, LLC, as Borrower

By: By: Name: Name: Title: Title:

JPMORGAN CHASE BANK, N.A., as Administrative Agent

By: Name: Title:

This document constitutes the schedules referenced in Article 4 (the Disclosure Schedules) of that certain Second Lien Credit Agreement (the Agreement), dated as of June 7, 2011, among SRAM, LLC as Borrower, SRAM Holdings, LLC, as one of the Guarantors, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent and forms a part of the representations and warranties set forth in Article 4 of the Agreement. The representations and warranties contained in Article 4 of the Agreement are subject to the exceptions and other information set forth in the Disclosure Schedules. The Disclosure Schedules herein are numbered to correspond to the applicable Section of the Agreement to which the disclosure relates; except any information set forth in one of these Disclosure Schedules will be deemed to apply to each other section or subsection of the Disclosure Schedules to which its relevance is reasonably apparent; provided, further, that, anything in the Agreement to the contrary notwithstanding, the inclusion of an item in these Disclosure Schedules as an exception to a representation or warranty will not be deemed an admission that the item represents a material exception or material fact, event or circumstance or that the item has had or would reasonably be expected to have a Material Adverse Effect. Capitalized terms used herein and not otherwise defined will have the respective meanings ascribed to such terms in the Agreement.

1. Consents by the Holders of Class A Units to the Equity Redemption.

(a) Ownership

Jurisdiction of Shares/Units Shares Entity Organization Authorized Outstanding Ownership SRAM, LLC Delaware, SRAM Holdings, LLC - USA N/A N/A 100% ownership interest

SRAM Holdings, Delaware, No limit, additional Class A Units - 3,640,000 TCP SRAM Holdings, LLC USA units may be issued as LLC - 3,410,823.64063 Class B Units - 5,460,000 allowed under the Operating Class A Units Agreement. Incentive Units 538,238 JPM Mezzanine Capital, 675,000 Incentive Units LLC - 85,264.05451 Class A Units GE Capital Equity Holdings Inc. - 37,871.65913 Class A Units Gleacher Mezzanine Fund II, L.P. - 85,542.62536 Class A Units GMF SRAM Holdings Corp. - 12,923.68854 Class A Units Southern Farm Bureau Life Insurance Company - 7,574.33183 Class A Units SRAM-SP2, Inc. - 5,391,839 Class B Units SRAM International, Inc. - 68,161 Class B Units SRAM Managers, current and former Directors, and employees 539,533 Incentive Units

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Jurisdiction of Shares/Units Shares Entity Organization Authorized Outstanding Ownership Compositech, Inc. Indiana, USA Voting Common Stock Voting Common Borrower - 3,365,750 - 23,500,000 -3,365,750 voting common; 1,442,500 non-voting Non-Voting Common Non-Voting common Stock - 1,500,000 Common - 1,442,500

Livisham Limited Ireland Ordinary Shares Ordinary Shares - Borrower - 10,000 - 100,000 10,000 ordinary shares

Sandleford Limited Ireland Ordinary Shares - Ordinary Shares - Borrower - 7,900 1,000,000 7,900 ordinary shares; 2,100 cumulative preference Cumulative Preference Cumulative shares Shares - 1,000,000 Preference Shares - 2,100

Foshan Shunde China Registered Capital- Paid Up Capital- Borrower- SRAM Bicycle US$435,100.00 US$435,100.00 US$435,100.00 in equity Component interests in the company Company Limited

SRAM Deutschland Germany Total Company Capital Total Capital Borrower - has GmbH - 26,000 Euros Subscribed - subscribed to a capital 26,000 Euros share of 26,000 Euros

SRAM Europe Sales Netherlands 200 shares 40 shares Borrower - 40 shares and Services B.V.

SRAM Hong Kong Hong Kong 1,000 shares 100 shares Borrower - 100 shares Trading Company Ltd.

SRAMPORT - Portugal Registered Share Issued Share Borrower - 97,744.38 Transmissões Capital - 139,633.40 Capital - Euros of share capital Mecânicas LDA Euros 139,633.40 Euros SRAM Deutschland GmbH - 41,889.02 Euros of share capital

Sandleford Limited Taiwan N/A N/A Sandleford Limited Taiwan Branch 100%

SRAM Service France 2 shares 2 shares Livisham Limited 2 France SARL shares

SRAM Australia Pty Australia 1 share 1 share Borrower 1 share Limited

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Jurisdiction of Shares/Units Shares Entity Organization Authorized Outstanding Ownership SRAM Cycling Delaware, N/A N/A SRAM Holdings, LLC - Advocacy LLC USA 100% ownership interest

SRAM Suzhou China Drive Train Co., Ltd.1

(b) Stock Equivalents 1. None.

1 In the process of dissolution.

Street Property Address Lease Agreement Landlord Leasing Entity Colorado 1610 Garden of the Gods Lease Agreement dated 10/16/06 COS Realty, LLC Borrower Springs, CO, Road USA3 Colorado Springs, CO 80907

Chicago, IL 1333 N. Kingsbury Commercial Loft Lease dated 1/19/01, as Everbury Partners, Ltd. Borrower USA Chicago, IL 60642 amended by Amendment #1 to Commercial Loft Lease dated 9/17/07

Spearfish, SD 3100 First Avenue Lease Agreement dated 5/4/11 Cavmar, L.L.C. Borrower USA Spearfish, SD 57783

Germany Romstrasse 1 Lease dated 2/17/98, as amended by ROSEA Grundstcks- SRAM Factory 97424 Schweinfurt Amendment No. 1 dated 1/29/01 and Vermietungsgesellschaft mbH & Co. Deutschland Germany Amendment No. 2 dated 12/16/02. Objeckt Schwwinfurt KG GmbH

German Krumme Gasse 23 Lease effective 3/16/07. Rudolf Schreiter SRAM Apartment 97421 Schweinfurt, Deutschland Germany GmbH

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Street Property Address Lease Agreement Landlord Leasing Entity German Parking Place No. 5 Lease effective 3/16/07 Rudolf Schreiter SRAM Parking Lease Krumme Gasse 23 Deutschland 97421 Schweinfurt, GmbH Germany

San Luis 3050 Broad Street Commercial Lease Agreement dated 4/1/ 3030, Inc. Borrower Obispo, CA, Suite 101 04, as amended by First Lease USA San Luis Obispo, CA Addendum dated 5/20/04, Second Lease (Truvativ) Addendum dated 5/21/07, Third Lease Addendum dated 1/5/08 and Fourth Lease Addendum dated June 25, 2008

Shunde, China Beiha Industrial Village Leases dated 1/24/05 and 11/1/06 Foshan City Shunde District Lunjiao Foshan Lunjiao Road Beihai Asset Management Office Shunde Guangzhu Highway SRAM Shunde, China Bicycle Component Company Limited

Taiwan No 9-1/9-11/11-2/13- Lease dated 5/15/06 Lin Yongsan Sandleford Factory 1/15 Limited Lane 187, Sihu Road (Taiwan Dali City Branch) Taichung County, 412 Taiwan

Taiwan No. 15 Lease dated 5/15/06 Wu Cau Fumei Sandleford Factory Lane 187, Sihu Road Limited Dali City (Taiwan Taichung County 412 Branch) Taiwan

Taiwan Land No. 198-4 Lease dated 7/1/04 Zeng Linluan Sandleford Caohu Sec. Limited Dali City (Taiwan Taichung County 412 Branch) Taiwan

Taiwan Land No. 199-11 Lease dated 6/30/04 Xie Wande Sandleford Caohou Sec. Limited Dali City (Taiwan Taichung County 412 Branch) Taiwan

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Street Property Address Lease Agreement Landlord Leasing Entity Taiwan Land No. 198-5 Lease dated 6/1/05 Lin Qixong Sandleford Caohou Sec. Limited Dali City (Taiwan Taichung County 412 Branch) Taiwan

Taiwan Land No. 180-6/180-4 Lease dated 4/1/05 Cai Suzhen Sandleford Caohou Sec. Limited Dali City (Taiwan Taichung County 412 Branch) Taiwan

Taiwan Land No. 180-5 Lease dated 4/16/05 Huang Shuijin Sandleford Caohou Sec. Limited Dali City (Taiwan Taichung County 412 Branch) Taiwan

Taiwan No. 0087-0000 Lease dated 8/1/08 Lin Song-Fa Sandleford Parking Lot Xihu South Sec. Dali Limited City (Taiwan Taichung County 412 Branch) Taiwan

Taiwan No. 0086-0000 Lease dated 7/1/08 Lin Song-Liang Sandleford Parking Lot Xihu South Sec. Dali Limited City (Taiwan Taichung County 413 Branch) Taiwan

Taiwan #526 Hou Juang Road Lease dated 10/1/05 Tsai, Hsen Shon Sandleford bet Twen Dist. Limited Taichung City (Taiwan Taiwan Branch)

Taiwan No. 1596-1 Chung Shan Lease dated 4/1/07 Jun Cien International (Toyman) Sandleford Factory Road Limited Shen Kang Hsiang, (Taiwan Taichung Hsein 429, Branch) Taiwan

Taiwan No. 1598-8, Chung Shan Lease dated 1/1/09 Li-Sheau Huang (Toyman) Sandleford Factory Road Limited Shen Kang Hsiang, (Taiwan Taichung Hsien 429, Branch) Taiwan

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Street Property Address Lease Agreement Landlord Leasing Entity Taiwan No. 1598, Chung Shan Lease dated 3/1/07 Jun Cien International Sandleford Factory Road (Toyman) Limited Shen Kang Hsiang, (Taiwan Taichung Hsien 429, Branch) Taiwan

Taiwan No. 1598, Chung Shan Lease dated 1/1/09 Jun Cien International Sandleford Factory Road (Toyman) Limited Shen Kang Hsiang, (Taiwan Taichung Hsien 429, Branch) Taiwan

Taiwan No. 1598, Chung Shan Lease dated 3/1/07 Wun Han Chen (Toyman) Sandleford Factory Road Limited Shen Kang Hsiang, (Taiwan Taichung Hsien 429, Branch) Taiwan

Taiwan No. 1598-1, Chung Shan Lease dated 1/1/09 Wun Han Chen (Toyman) Sandleford Factory Road Limited Shen Kang Hsiang, (Taiwan Taichung Hsien 429, Branch) Taiwan (No. 1057 and No. 1598)

Taiwan No. 1600 Chung Shan Lease dated 7/1/07 Hong, Tong Hsin Sandleford Factory Road Limited Shen Kang Hsiang, (Taiwan Taichung Hsien 429, Branch) Taiwan

Taiwan No. 1596 Chung Shan Lease dated 6/1/08 Chang, Jin Tian Sandleford Factory Road (Shoe maker) Limited Shen Kang Hsiang, (Taiwan Taichung Hsien, Branch) Taiwan

Taiwan #469 Hou Juang Road Lease dated 5/1/06 Fuida Co. Sandleford Pei Tun District Limited Taichung 406 (Taiwan Taiwan Branch)

Taiwan #675/676 Jen Teh Tuan Lease dated 4/1/06 Fuida Co. Sandleford Pei Tun District Limited Taichung 406 (Taiwan Taiwan Branch)

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Street Property Address Lease Agreement Landlord Leasing Entity Taiwan No. 1016-000, Shen Tsun Lease dated 5/1/06 Wang, Yi Bon Sandleford Factory Tuan, Limited Shen Kang Hsiang, (Taiwan Taichung Hsien 429, Branch) Taiwan

Taiwan No. 1016-000, Shen Tsun Lease dated 7/1/09 Wang, Yi Bon Sandleford parking lot Tuan, Limited Shen Kang Hsiang, (Taiwan Taichung Hsien 429, Branch) Taiwan

Taiwan No. 1017-000, Shen Tsun Lease dated 5/1/07 Chen, Wei-Tin Sandleford Factory Tuan, Limited Shen Kang Hsiang, (Taiwan Taichung Hsien 429, Branch) Taiwan

Taiwan No. 1017-000, Shen Tsun Lease dated 8/1/07 Chen, Wei-Tin Sandleford parking lot Tuan, Limited Shen Kang Hsiang, (Taiwan Taichung Hsien 429, Branch) Taiwan

Taiwan No. 1381, Chung Shan Lease dated 8/1/07 Lin, Su Yin Sandleford parking lot Road Limited Shen Kang Hsiang, (Taiwan Taichung Hsien 429 Branch) Taiwan

Taiwan No. 1028 Shenkang Lease dated 4/1/10 Yon Jin-Wang, Yon Su Wang Sandleford parking lot Shen Kang Hsiang Limited Taiwan (Taiwan Branch)

Taiwan No. 1028 Shenkang Lease dated 3/1/08 Jin-Jen Jiang Sandleford parking lot Shen Kang Hsiang Limited Taiwan (Taiwan Branch)

Taiwan No. 1027 Shenkang Lease dated 2/1/10 Wang, Lon-Fu Sandleford anodizing Shen Kang Hsiang Limited building Taiwan (Taiwan Branch)

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Street Property Address Lease Agreement Landlord Leasing Entity Taiwan No. 125, Chung Shan Lease dated 8/1/08 Wang, Lon Fu Sandleford parking lot Road Limited Shen Kang Hsiang (Taiwan Taiwan Branch)

Taiwan Portion of First Floor Lease dated 10/1/08 Hsen-Shong Tsai (ADC) Sandleford No. 526 Houzhuang Limited Road (Taiwan Pei Tun District Branch) Taichung 406, Taiwan

Ireland Unit No. 8A Lease dated 7/31/06. Joseph Monaghan, Mary Monaghan, Livisham Property Maritana Gate Paul Monaghan & Derek Monaghan Limited Canada Street Waterford Ireland

Netherlands Paasbosweg 14-16 Lease dated 7/1/10 Bedrijfshuisvesting Evert de Lang BV SRAM Europe Property Nijkerk Sales & Netherlands Services B.V.

France Burospace de Vinci Lease dated 8/1/10 Em2c Promotion SRAM Service Property Batiment Neptune France SARL 50 Voie Albert Einstein Alpespace 73800 Francin France

Australia 6 Macro Court, Rowville Commercial Lease dated 5/1/2011 Kady Investments Pty Ltd SRAM Property Australia Australia Pty Ltd

I. GERMANY

No. Action Delivery Date I.1 Notify account banks of the release of GECCs liens June 30, 2011, or such later date as agreed to by the Administrative Agent in its reasonable discretion

I.2 Return blank notifications of debtors under the assignment of claims to SRAM June 30, 2011, or such later date as agreed Germany or evidence their destruction to by the Administrative Agent in its reasonable discretion

I.3 Notify SRAM Germanys insurers of the release of the insurance assignment and the September 30, 2011, or such later date as re-transfer of the assigned insurance claims back to SRAM Germany agreed to by the Administrative Agent in its reasonable discretion

I.4 De-register the pledges and assignments of SRAM Deutschlands intellectual property December 31, 2011, or such later date as rights agreed to by the Administrative Agent in its reasonable discretion

II. HONG KONG

No. Action Delivery Date II.1 File Form M-2 in respect of the release of the 2008 Debenture June 30, 2011, or such later date as agreed to by the Administrative Agent in its reasonable discretion

II.2 File Form M-2 in respect of the release of the 2010 Debenture June 30, 2011, or such later date as agreed to by the Administrative Agent in its sole discretion

II.3 File Form T10 to request removal of registered particulars of GECCs interest in June 30, 2011, or such later date as agreed SRAM LLCs registered trademark in Hong Kong to by the Administrative Agent in its sole discretion

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document No. Action Delivery Date II.4 Delivery by GECC to ABN Amro Bank N.V. Taipei Branch of notice of release of the June 30, 2011, or such later date as agreed Debenture and obtain acknowledge of receipt of notice from ABN Amro Bank N.V. to by the Administrative Agent in its sole Taipei Branch discretion

III. IRELAND

No. Action Delivery Date III.1 File three Form C-6 release forms with the Register of Mortgages and Charges June 30, 2011, or such later date as agreed to by the Administrative Agent in its sole discretion

IV. PORTUGAL

No. Action Delivery Date IV.1 Delivery by GECC of notarised and apostilled Powers of Attorneys June 17, 2011, or such later date as agreed to by the Administrative Agent in its reasonable discretion

IV.2 Entering into of the Public Deed of termination of Mortgage, Pledges and certain June 19, 2011, or such later date as agreed Powers of Attorneys to by the Administrative Agent in its reasonable discretion

IV.3 File release of Mortgage with the Land Registry Office June 19, 2011, or such later date as agreed to by the Administrative Agent in its reasonable discretion

IV.4 File release of Pledge over Quotas with the Commercial Registry Office June 19, 2011, or such later date as agreed to by the Administrative Agent in its reasonable discretion

IV.5 Delivery by GECC to SRAMPORT of the originals of Notices of Pledge June 19, 2011, or as soon as reasonably practicable after such date

No. Action Delivery Date V.1 Obtain the signature of Mizuho Bank to the Agreement to Cancel Chattel Mortgage July 15, 2011, or such later date as agreed to by the Administrative Agent in its reasonable discretion

V.2 Delivery by GECC to Bank of Taiwan of notice of cancellation of controlled deposit June 30, 2011, or such later date as agreed account agreement to by the Administrative Agent in its reasonable discretion

None

1. SRAM Corporation entered into Non-Compete Agreements with some or all of its stockholders, including certain Affiliates, as a part of the transactions contemplated by that certain Purchase Agreement dated as of August 6, 2008 by and among LB SRAM Holdings, LLC, SRAM Corporation and SRAM-SP2, Inc. 2. SRAM Holding, LLC entered into Indemnification Agreements with one or more members of its Board of Managers. These Indemnification Agreements provide for SRAM Holdings to indemnify such Managers to the fullest extent permitted by law for any claims in which such Managers may be involved arising out of or incidental to the business or activities of or relating to SRAM Holdings. 3. Administration Support Services Agreement, dated October 1, 2008, by and between Sandleford Limited and Sandleford Limited Taiwan Branch. 4. Administrative Support Services Agreement dated October 1, 2008 by and between SRAM, LLC and Forshan Shunde SRAM Bicycle Component Company Ltd. 5. Administrative Support Services Agreement dated October 1, 2008 by and between SRAM, LLC and Livisham Limited. 6. Administrative Support Services Agreement dated October 1, 2008 by and between SRAM, LLC and SRAM Hong Kong Trading Company Ltd. 7. Amendment No. 1 to Research and Development Agreement, dated January 1, 2009, by and between Livisham Ltd. and SRAMPort-Transmissões Mecânicas Lda 8. Dealer Service Direct Support Agreement, dated August 16, 2010, by and between Livisham Limited and SRAM Service France SARL. 9. Dealer Service Direct Support Agreement, dated December 10, 2007, by and between Livisham Limited and SRAM Deutschland GmbH. 10. Dealer Service Direct Support Agreement, dated October 1, 2009, by and between Livisham Limited and SRAM Europe Sales & Service B.V. 11. Intangible Property License Agreement, dated October 1, 2008, by and between SRAM LLC and Livisham Limited. 12. Intangible Property License Agreement, dated October 1, 2008, by and between SRAM LLC and Sandleford Ltd. Taiwan Branch. 13. Intangible Property License Agreement, dated October 1, 2008, by and between SRAM LLC and SRAM Hong Kong Trading Company. 14. Manufacturing Agreement, dated January 1, 2010, by and between Livisham Limited (SRAM Corporation Europe) and SRAM Deutschland GmbH.

INTERCREDITOR AGREEMENT

Intercreditor Agreement (this Agreement), dated as of June 7, 2011, among JPMORGAN CHASE BANK, N.A., as Administrative Agent (in such capacity, with its successors and assigns, and as more specifically defined below, the First Priority Representative) for the First Priority Secured Parties (as defined below), JPMORGAN CHASE BANK, N.A., as Administrative Agent (in such capacity, with its successors and assigns, and as more specifically defined below, the Second Priority Representative) for the Second Priority Secured Parties (as defined below), SRAM, LLC (the Borrower), SRAM Holdings, LLC (Holdings) and each of the other Loan Parties (as defined below) party hereto.

WHEREAS, the Borrower, Holdings, the First Priority Representative and certain financial institutions and other entities are parties to the first lien senior secured First Lien Credit Agreement dated as of the date hereof, and the lenders from time to time party thereto (the Existing First Priority Agreement), pursuant to which such financial institutions and other entities have agreed to make loans and extend other financial accommodations to the Borrower; and

WHEREAS, the Borrower, Holdings, the Second Priority Representative and certain financial institutions and other entities are parties to the second lien senior secured Second Lien Credit Agreement dated as of the date hereof, (the Existing Second Priority Agreement), pursuant to which such financial institutions and other entities have agreed to make loans to the Borrower; and

WHEREAS, the Borrower and Holdings and the Loan Parties have granted to the First Priority Representative security interests in the Common Collateral as security for payment and performance of the First Priority Obligations; and

WHEREAS, the Borrower and Holdings and the Loan Parties have granted to the Second Priority Representative junior security interests in the Common Collateral as security for payment and performance of the Second Priority Obligations;

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained and other good and valuable consideration, the existence and sufficiency of which are expressly recognized by all of the parties hereto, the parties agree as follows:

SECTION 1. Definitions. 1.1. Defined Terms. The following terms, as used herein, have the following meanings:

Additional First Priority Agreement means any agreement permitted to be designated as such by the First Priority Agreement and the Second Priority Agreement.

Additional First Priority Debt has the meaning set forth in Section 9.3(b).

Additional Second Priority Agreement means any agreement permitted to be designated as such by the First Priority Agreement and the Second Priority Agreement.

Additional Second Priority Debt has the meaning set forth in Section 9.3(b).

Bankruptcy Code means the United States Bankruptcy Code (11 U.S.C. §101 et seq.), as amended from time to time.

Business Day means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close.

Borrower has the meaning set forth in the introductory paragraph hereof.

Cash Collateral has the meaning set forth in Section 3.7.

Common Collateral means all assets that are both First Priority Collateral and Second Priority Collateral.

Comparable Second Priority Security Document means, in relation to any Common Collateral subject to any First Priority Security Document, that Second Priority Security Document that creates a security interest in the same Common Collateral, granted by the same Loan Party, as applicable.

DIP Financing has the meaning set forth in Section 5.2.

Enforcement Action means, with respect to the First Priority Obligations or the Second Priority Obligations, the exercise of any rights and remedies with respect to any Common Collateral securing such obligations or the commencement or prosecution of enforcement of any of the rights and remedies with respect to the Common Collateral under, as applicable, the First Priority Documents or the Second Priority Documents, or applicable law, including without limitation the exercise of any rights of set-off or recoupment, and the exercise of any rights or remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction or under the Bankruptcy Code.

Enforcement Notice has the meaning set forth in Section 3.7.

Existing First Priority Agreement has the meaning set forth in the first WHEREAS clause of this Agreement.

Existing Second Priority Agreement has the meaning set forth in the second WHEREAS clause of this Agreement.

First Priority Agreement means the collective reference to (a) the Existing First Priority Agreement, (b) any Additional First Priority Agreement and (c) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, increase, renew, refund, replace (whether upon or after termination or otherwise) or refinance (including by means of sales of debt securities to institutional investors) in whole or in part from time to

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document time the indebtedness and other obligations outstanding under the Existing First Priority Agreement, any Additional First Priority Agreement or any other agreement or instrument referred to in this clause (c) unless such agreement or instrument expressly provides that it is not intended to be and is not a First Priority Agreement hereunder (a Replacement First Priority Agreement). Any reference to the First Priority Agreement hereunder shall be deemed a reference to any First Priority Agreement then extant.

First Priority Collateral means all assets, whether now owned or hereafter acquired by the Borrower, Holdings or any Loan Party, in which a Lien is granted or purported to be granted to any First Priority Secured Party as security for any First Priority Obligation.

First Priority Creditors means each Secured Party as defined in the First Priority Agreement, or any Persons that are designated under the First Priority Agreement as the First Priority Creditors for purposes of this Agreement.

First Priority Documents means the First Priority Agreement, each First Priority Security Document and each First Priority Guarantee.

First Priority Guarantee means any guarantee by any Loan Party of any or all of the First Priority Obligations.

First Priority Lien means any Lien created by the First Priority Security Documents.

First Priority Obligations means (a) with respect to the Existing First Priority Agreement, all Obligations of each Loan Party as defined in the Existing First Priority Agreement and (b) with respect to each other First Priority Agreement, (i) all principal of and interest (including without limitation any Post-Petition Interest) and premium (if any) on all loans made or other indebtedness issued or incurred pursuant to such First Priority Agreement, (ii) all reimbursement obligations (if any) and interest thereon (including without limitation any Post-Petition Interest) with respect to any letter of credit or similar instruments issued pursuant to such First Priority Agreement, (iii) all Specified Swap Agreements, (iv) all Specified Cash Management Agreements and (v) all guarantee obligations, fees, expenses and other amounts payable from time to time pursuant to the applicable First Priority Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding. To the extent any payment with respect to any First Priority Obligation (whether by or on behalf of any Loan Party, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to be paid to a debtor in possession, any Second Priority Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the First Priority Secured Parties and the Second Priority Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.

First Priority Obligations Payment Date means the first date on which (a) the First Priority Obligations (other than those that constitute Unasserted Contingent Obligations) have been paid in full (or cash collateralized or defeased in accordance with the terms of the First Priority Documents), (b) all commitments to extend credit under the First Priority Documents have been terminated, (c) there are no outstanding letters of credit or similar instruments issued under the First Priority Documents (other than such as have been cash collateralized or defeased in accordance with the terms of the First Priority Documents), and (d) the First Priority Representative has delivered a written notice to the Second Priority

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Representative stating that the events described in clauses (a), (b) and (c) have occurred to the satisfaction of the First Priority Secured Parties, which notice shall be delivered by the First Priority Representative promptly after the occurrence of the events described in clauses (a), (b) and (c).

First Priority Representative has the meaning set forth in the introductory paragraph hereof. In the case of any Replacement First Priority Agreement, the First Priority Representative shall be the Person identified as such in such Agreement.

First Priority Secured Parties means the First Priority Representative, the First Priority Creditors and any other holders of the First Priority Obligations.

First Priority Security Documents means the Security Documents as defined in the First Priority Agreement, and any other documents that are designated under the First Priority Agreement as First Priority Security Documents for purposes of this Agreement.

Holdings has the meaning set forth in the introductory paragraph hereof.

Insolvency Proceeding means any proceeding of which any Loan Party is the subject and in respect of bankruptcy, insolvency, winding up, receivership, dissolution or assignment for the benefit of creditors, in each of the foregoing events whether under the Bankruptcy Code or any similar federal, state or foreign bankruptcy, insolvency, reorganization, receivership or similar law.

Loan Party means the Borrower and each direct or indirect subsidiary, affiliate or shareholder (or equivalent) of the Borrower or any of its affiliates that is now or hereafter becomes a party to any First Priority Document or Second Priority Document. All references in this Agreement to any Loan Party shall include such Loan Party as a debtor-in-possession and any receiver or trustee for such Loan Party in any Insolvency Proceeding.

Person means any person, individual, sole proprietorship, partnership, joint venture, corporation, limited liability company, unincorporated organization, association, institution, entity, party, including any government and any political subdivision, agency or instrumentality thereof.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Post-Petition Interest means any interest or entitlement to fees or expenses or other charges that accrues after the commencement of any Insolvency Proceeding, whether or not allowed or allowable in any such Insolvency Proceeding.

Purchase has the meaning set forth in Section 3.7.

Purchase Notice has the meaning set forth in Section 3.7.

Purchase Price has the meaning set forth in Section 3.7.

Purchasing Parties has the meaning set forth in Section 3.7.

Real Property means any right, title or interest in and to real property, including any fee interest, leasehold interest, easement, or license and any other right to use or occupy real property, including any right arising by contract.

Recovery has the meaning set forth in Section 5.5.

Replacement First Priority Agreement has the meaning set forth in the definition of First Priority Agreement.

Second Priority Agreement means the collective reference to (a) the Existing Second Priority Agreement, (b) any Additional Second Priority Agreement and (c) any other credit agreement, loan agreement, note agreement, promissory note, indenture, or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, increase, renew, refund, replace (whether upon or after termination or otherwise) or refinance (including by means of sales of debt securities to institutional investors) in whole or in part from time to time the indebtedness and other obligations outstanding under the Existing Second Priority Agreement, any Additional Second Priority Agreement or any other agreement or instrument referred to in this clause (c). Any reference to the Second Priority Agreement hereunder shall be deemed a reference to any Second Priority Agreement then extant.

Second Priority Collateral means all assets, whether now owned or hereafter acquired by the Borrower, Holdings or any Loan Party, in which a Lien is granted or purported to be granted to any Second Priority Secured Party as security for any Second Priority Obligation.

Second Priority Creditors means the Secured Parties as defined in the Second Priority Agreement, the Second Priority Representatives or any Persons that are designated under the Second Priority Agreement as the Second Priority Creditors for purposes of this Agreement.

Second Priority Documents means each Second Priority Agreement, each Second Priority Security Document and each Second Priority Guarantee.

Second Priority Guarantee means any guarantee by any Loan Party of any or all of the Second Priority Obligations.

Second Priority Lien means any Lien created by the Second Priority Security Documents.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Second Priority Obligations means (a) all Obligations of each Loan Party as defined in the Existing Second Priority Agreement and (b) with respect to each other Second Priority Agreement, (i) all principal of and interest (including without limitation any Post-Petition Interest) and premium (if any) on all loans made or other indebtedness issued or incurred pursuant to such Second Priority Agreement, (ii) all reimbursement obligations (if any) and interest thereon (including without limitation any Post-Petition Interest) with respect to any letter of credit or similar instruments issued pursuant to such Second Priority Agreement, and (iii) all guarantee obligations, fees, expenses and other amounts payable from time to time pursuant to the applicable Second Priority Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding. To the extent any payment with respect to any Second Priority Obligation (whether by or on behalf of any Loan Party, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to be paid to a debtor in possession, any First Priority Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the First Priority Secured Parties and the Second Priority Secured Parties hereunder, be deemed to be reinstated and outstanding as if such payment had not occurred.

Second Priority Representative has the meaning set forth in the introductory paragraph hereof, but shall also include any Person identified as a Second Priority Representative in any Second Priority Agreement other than the Existing Second Priority Agreement.

Second Priority Secured Parties means the Second Priority Representative, the Second Priority Creditors and any other holders of the Second Priority Obligations.

Second Priority Security Documents means the Collateral Documents as defined in the Second Priority Agreement and any documents that are designated under the Second Priority Agreement as Second Priority Security Documents for purposes of this Agreement.

Secured Parties means the First Priority Secured Parties and the Second Priority Secured Parties.

Specified Cash Management Agreement means any agreement providing for treasury, depositary or cash management services, including in connection with any automated clearing house transfers of funds or any similar transactions between any Loan Party and any holder of First Priority Obligations (other than under the Specified Cash Management Agreement), or an affiliate thereof, at the time such transaction was entered into.

Specified Swap Agreement means any Swap Agreement in respect of interest rates or currency exchange rates entered into by any Loan Party and any Person that is holder of First Priority Obligations (other than under the Specified Swap Agreement) or an affiliate thereof, at the time such Swap Agreement is entered into.

Standstill Period has the meaning set forth in Section 3.2.

Surviving Obligations has the meaning set forth in Section 3.7.

Swap Agreement means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates,

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or any of its subsidiaries shall be a Swap Agreement.

Unasserted Contingent Obligations shall mean, at any time, First Priority Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (excluding (a) the principal of, and interest and premium (if any) on, and fees and expenses relating to, any First Priority Obligation and (b) contingent reimbursement obligations in respect of amounts that may be drawn under outstanding letters of credit) in respect of which no assertion of liability (whether oral or written) and no claim or demand for payment (whether oral or written) has been made (and, in the case of First Priority Obligations for indemnification, no notice for indemnification has been issued by the indemnitee) at such time.

Uniform Commercial Code shall mean the Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.

1.2 Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words include, includes and including shall be deemed to be followed by the phrase without limitation. The word will shall be construed to have the same meaning and effect as the word shall. Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Persons successors or permitted assigns, (iii) the words herein, hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Sections shall be construed to refer to Sections of this Agreement and (v) the words asset and property shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 2. Lien Priorities. 2.1 Subordination of Liens. (a) Any and all Liens now existing or hereafter created or arising in favor of any Second Priority Secured Party securing the Second Priority Obligations, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise are expressly junior in priority, operation and effect to any and all Liens on the Common Collateral now existing or hereafter created or arising in favor of the First Priority Secured Parties securing the First Priority Obligations, notwithstanding (i) anything to the contrary contained in any agreement or filing to which any Second Priority Secured Party may now or hereafter be a party, and regardless of the time, order or method of grant, attachment, recording or perfection of any financing statements or other security interests, assignments, pledges, deeds, mortgages and other Liens, or any defect or deficiency or alleged defect or deficiency in any of the foregoing, (ii) any provision of the Uniform Commercial Code or any applicable law or any First Priority Document or Second Priority Document or any other circumstance whatsoever and (iii) the fact that any such Liens in favor of any First Priority Secured Party securing any of the First Priority Obligations are (x) subordinated to any Lien securing any obligation of any Loan Party other than the Second Priority Obligations or (y) otherwise subordinated, voided, avoided, invalidated or lapsed.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) No First Priority Secured Party or Second Priority Secured Party shall object to or contest, or support any other Person in contesting or objecting to, in any proceeding (including without limitation, any Insolvency Proceeding), the validity, extent, perfection, priority or enforceability of any security interest in the Common Collateral granted to the other. Notwithstanding any failure by any First Priority Secured Party or Second Priority Secured Party to perfect its security interests in the Common Collateral or any avoidance, invalidation or subordination by any third party or court of competent jurisdiction of the security interests in the Common Collateral granted to the First Priority Secured Parties or the Second Priority Secured Parties, the priority and rights as between the First Priority Secured Parties and the Second Priority Secured Parties with respect to the Common Collateral shall be as set forth herein.

2.2 Nature of First Priority Obligations. The Second Priority Representative on behalf of itself and the other Second Priority Secured Parties acknowledges that a portion of the First Priority Obligations may represent debt that is revolving in nature and that the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, and that the terms of the First Priority Obligations may be modified, extended or amended from time to time, and that the aggregate amount of the First Priority Obligations may be increased, replaced or refinanced, in each event, without notice to or consent by the Second Priority Secured Parties and without affecting the provisions hereof, but only so long as, except in the case of any DIP Financing, any such obligations are permitted to be incurred pursuant to the Second Priority Documents as in effect on the date of this Agreement. The lien priorities provided in Section 2.1 shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of either the First Priority Obligations or the Second Priority Obligations, or any portion thereof.

2.3 Agreements Regarding Actions to Perfect Liens. (a) The Second Priority Representative on behalf of itself and the other Second Priority Secured Parties agrees that UCC-1 financing statements, patent, trademark or copyright filings or other filings or recordings filed or recorded by or on behalf of the Second Priority Representative with respect to the Common Collateral shall be in form reasonably satisfactory to the First Priority Representative.

(b) The Second Priority Representative agrees on behalf of itself and the other Second Priority Secured Parties that all mortgages, deeds of trust, deeds and similar instruments (collectively, mortgages) now or hereafter filed against Real Property that constitutes Common Collateral in favor of or for the benefit of the Second Priority Representative and the other Second Priority Secured Parties shall be in form reasonably satisfactory to the First Priority Representative and shall contain the following notation: The lien created by this mortgage on the property described herein is junior and subordinate to the lien on such property created by any mortgage, deed of trust or similar instrument now or hereafter granted to the First Priority Representative, and its successors and assigns, in such property, in accordance with the provisions of the Intercreditor Agreement dated as of June 7, 2011 among JPMorgan Chase Bank, N.A., as Administrative Agent for the First Priority Secured Parties, JPMorgan Chase Bank, N.A., as Administrative Agent for the Second Priority Secured Parties, SRAM, LLC, a Delaware limited liability company, as Borrower, SRAM Holdings, LLC, a Delaware limited liability company, and the Loan Parties referred to therein, as amended, modified or supplemented from time to time.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) The First Priority Representative hereby acknowledges that, to the extent that it holds, or a third party holds on its behalf, physical possession of or control (as defined in the Uniform Commercial Code) over Common Collateral pursuant to the First Priority Security Documents, such possession, control is also for the benefit of and on behalf of, and the First Priority Representative or such third party holds such possession, control as bailee and agent for, the Second Priority Representative and the other Second Priority Secured Parties solely to the extent required to perfect their security interest in such Common Collateral (such bailment and agency for perfection being intended, among other things, to satisfy the requirements of Sections 8-301(a)(2) and 9-313(c) of the Uniform Commercial Code). Nothing in the preceding sentence shall be construed to impose any duty on the First Priority Representative (or any third party acting on its behalf) with respect to such Common Collateral or provide the Second Priority Representative or any other Second Priority Secured Party with any rights with respect to such Common Collateral beyond those specified in this Agreement and the Second Priority Security Documents, provided that subsequent to the occurrence of the First Priority Obligations Payment Date, the First Priority Representative shall (i) deliver to the Second Priority Representative, at the Borrowers sole cost and expense, the Common Collateral in its possession or control together with any necessary endorsements to the extent required by the Second Priority Documents (and to the extent not so required, such delivery shall be made to the Borrower) or (ii) direct and deliver such Common Collateral as a court of competent jurisdiction otherwise directs, and provided, further, that the provisions of this Agreement are intended solely to govern the respective Lien priorities as between the First Priority Secured Parties and the Second Priority Secured Parties and shall not impose on the First Priority Secured Parties any obligations in respect of the disposition of any Common Collateral (or any proceeds thereof) that would conflict with prior perfected Liens or any claims thereon in favor of any other Person that is not a Secured Party.

2.4 No New Liens. So long as the First Priority Obligations Payment Date has not occurred, the parties hereto agree that (a) there shall be no Lien, and no Loan Party shall have any right to create any Lien, on any assets of any Loan Party securing any Second Priority Obligation if these same assets are not subject to, and do not become subject to, a Lien securing the First Priority Obligations and (b) if any Second Priority Secured Party shall acquire or hold any Lien on any assets of any Loan Party securing any Second Priority Obligation which assets are not also subject to the first-priority Lien of the First Priority Representative under the First Priority Documents, then the Second Priority Representative, upon demand by the First Priority Representative, will without the need for any further consent of any other Second Priority Secured Party, notwithstanding anything to the contrary in any other Second Priority Document either (i) release such Lien or (ii) assign it to the First Priority Representative as security for the First Priority Obligations (in which case the Second Priority Representative may retain a junior Lien on such assets subject to the terms hereof). To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies available to the First Priority Secured Parties, the Second Priority Representative and the other Second Priority Secured Parties agree that any amounts received by or distributed to any of them pursuant to or as a result of Liens granted in contravention of this Section 2.4 shall be subject to Section 4.1.

SECTION 3. Enforcement Rights. 3.1 Exclusive Enforcement. Until the First Priority Obligations Payment Date has occurred, whether or not an Insolvency Proceeding has been commenced by or against any Loan Party, the First Priority Secured Parties shall have the exclusive right to take and continue any Enforcement Action with respect to the Common Collateral, without any consultation with or consent of any Second Priority

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Secured Party, but subject to the provisos set forth in Sections 3.2 and 5.1. Upon the occurrence and during the continuance of a default or an event of default under the First Priority Documents, the First Priority Representative and the other First Priority Secured Parties may take and continue any Enforcement Action with respect to the First Priority Obligations and the Common Collateral permitted under the First Priority Documents in such order and manner as they may determine in their sole discretion.

3.2 Standstill and Waivers. The Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties, agrees that, until the First Priority Obligations Payment Date has occurred, subject to the proviso set forth in Section 5.1: (a) they will not take or cause to be taken any Enforcement Action; (b) they will not take or cause to be taken any action, the purpose or effect of which is to make any Lien in respect of any Second Priority Obligation pari passu with or senior to, or to give any Second Priority Secured Party any preference or priority relative to, the Liens with respect to the First Priority Obligations or the First Priority Secured Parties; (c) they will not contest, oppose, object to, interfere with, hinder or delay, in any manner, whether by judicial proceedings (including without limitation the filing or commencement of, or the joining in the filing or commencement of, an Insolvency Proceeding) or otherwise, any foreclosure, sale, lease, exchange, transfer or other disposition of the Common Collateral by any First Priority Secured Party or any other Enforcement Action taken (or any forbearance from taking any Enforcement Action) by or on behalf of any First Priority Secured Party; (d) they have no right to (i) direct either the First Priority Representative or any other First Priority Secured Party to exercise any right, remedy or power with respect to the Common Collateral or pursuant to the First Priority Security Documents or (ii) consent or object to the exercise by the First Priority Representative or any other First Priority Secured Party of any right, remedy or power with respect to the Common Collateral or pursuant to the First Priority Security Documents or to the timing or manner in which any such right is exercised or not exercised (or, to the extent they may have any such right described in this clause (d), whether as a junior lien creditor or otherwise, they hereby irrevocably waive such right); (e) they will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against any First Priority Secured Party seeking damages from or other relief by way of specific performance, injunction or otherwise, with respect to, and no First Priority Secured Party shall be liable for, any action taken or omitted to be taken by any First Priority Secured Party with respect to the Common Collateral or pursuant to the First Priority Documents; and (f) they will not seek, and hereby waive any right, to have the Common Collateral or any part thereof marshaled upon any foreclosure or other disposition of the Common Collateral. provided that, notwithstanding the foregoing, any Second Priority Secured Party may exercise its rights and remedies in respect of the Common Collateral under the Second Priority Security Documents or applicable law after the passage of a period of 180 days (the Standstill Period) from the date of delivery of a notice in writing by the Second Priority Representative to the First Priority Representative of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document its intention to exercise such rights and remedies, which notice may only be delivered following the occurrence of and during the continuation of an Event of Default under and as defined in the Second Priority Agreement; provided, further, however, that, notwithstanding the foregoing, in no event shall any Second Priority Secured Party exercise or continue to exercise any such rights or remedies if, notwithstanding the expiration of the Standstill Period, (i) any First Priority Secured Party shall have commenced and be diligently pursuing the exercise of any of its rights and remedies with respect to any of the Common Collateral (prompt notice of such exercise to be given to the Second Priority Representative) or (ii) an Insolvency Proceeding in respect of any Loan Party shall have been commenced; and provided, further, that in any Insolvency Proceeding commenced by or against any Loan Party, the Second Priority Representative and the other Second Priority Secured Parties may take any action expressly permitted by Section 5.

3.3 Judgment Creditors. In the event that any Second Priority Secured Party becomes a judgment lien creditor as a result of its enforcement of its rights as an unsecured creditor, any such judgment lien shall be subject to the terms of this Agreement for all purposes (including in relation to the First Priority Liens and the First Priority Obligations) to the same extent as other Liens securing the Second Priority Obligations are subject to the terms of this Agreement.

3.4 Cooperation. The Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties, agrees that each of them shall take such actions as the First Priority Representative shall reasonably request in writing in connection with the exercise by the First Priority Secured Parties of their rights set forth herein.

3.5 No Additional Rights For the Loan Parties Hereunder. Except as provided in Section 3.6, if any First Priority Secured Party or Second Priority Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, no Loan Party shall be entitled to use such violation as a defense to any action by any First Priority Secured Party or Second Priority Secured Party, nor to assert such violation as a counterclaim or basis for set off or recoupment against any First Priority Secured Party or Second Priority Secured Party. In addition, and without limiting the first sentence of this Section or the provisions of Section 3.6, any Loan Party may enforce any provision of this Agreement with the prior written consent of the First Priority Secured Representative.

3.6 Actions Upon Breach. (a) If any Second Priority Secured Party, contrary to this Agreement, commences or participates in any action or proceeding against any Loan Party or the Common Collateral, such Loan Party, with the prior written consent of the First Priority Secured Representative, may interpose as a defense or dilatory plea the making of this Agreement, and any First Priority Secured Party may intervene and interpose such defense or plea in its or their name or in the name of such Loan Party.

(b) Should any Second Priority Secured Party, contrary to this Agreement, in any way take, attempt to or threaten to take any action with respect to the Common Collateral (including, without limitation, any attempt to realize upon or enforce any remedy with respect to this Agreement), or fail to take any action expressly required by this Agreement to be taken by such Second Priority Secured Party, any First Priority Secured Party (in its own name or in the name of the relevant Loan Party) or the relevant Loan Party may obtain relief against such Second Priority Secured Party by injunction, specific performance and/or other appropriate equitable relief, it being understood and agreed by the Second Priority Representative on behalf of each Second Priority Secured Party that (i) the First Priority Secured

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Parties damages from its actions may at that time be difficult to ascertain and may be irreparable, and (ii) the Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties, hereby waives (to the extent it may lawfully do so) any defense any Second Priority Secured Party may have that the Loan Parties and/or the First Priority Secured Parties cannot demonstrate damage and/or be made whole by the awarding of damages.

3.7 Option to Purchase. (a) The First Priority Representative agrees that it will give the Second Priority Representative written notice (the Enforcement Notice) within five Business Days after commencing any Enforcement Action with respect to Common Collateral (which notice shall be effective for all Enforcement Actions taken after the date of such notice so long as the First Priority Representative is diligently pursuing in good faith the exercise of its default or enforcement rights or remedies against, or diligently attempting in good faith to vacate any stay of enforcement rights of its senior Liens on a material portion of the Common Collateral, including, without limitation, all Enforcement Actions identified in such notice). Any Second Priority Secured Party shall have the option, but in no event the obligation, upon receipt of the Enforcement Notice by the Second Priority Representative, by irrevocable written notice (the Purchase Notice) delivered by the Second Priority Representative to the First Priority Representative no later than five Business Days after receipt by the Second Priority Representative of the Enforcement Notice, to purchase all (but not less than all) of the First Priority Obligations from the First Priority Secured Parties. If the Second Priority Representative so delivers the Purchase Notice, the First Priority Representative shall terminate any existing Enforcement Actions and shall not take any further Enforcement Actions, provided, that the Purchase (as defined below) shall have been consummated on the date specified in the Purchase Notice in accordance with this Section 3.7.

(b) On the date specified by the Second Priority Representative in the Purchase Notice (which shall be a Business Day not less than five Business Days, nor more than ten Business Days, after receipt by the First Priority Representative of the Purchase Notice), the First Priority Secured Parties shall, subject to any required approval of any court or other governmental authority then in effect, sell to the Second Priority Secured Parties electing to purchase pursuant to Section 3.7(a) (the Purchasing Parties), and the Purchasing Parties shall purchase (the Purchase) from the First Priority Secured Parties, the First Priority Obligations; provided, that the First Priority Obligations purchased shall not include any rights of First Priority Secured Parties with respect to indemnification and other obligations of the Loan Parties under the First Priority Documents that are expressly stated to survive the termination of the First Priority Documents (the Surviving Obligations).

(c) Without limiting the obligations of the Loan Parties under the First Priority Documents to the First Priority Secured Parties with respect to the Surviving Obligations (which shall not be transferred in connection with the Purchase), on the date of the Purchase, the Purchasing Parties shall (i) pay to the First Priority Secured Parties as the purchase price (the Purchase Price) therefor the full amount of all First Priority Obligations then outstanding and unpaid (including principal, accrued and unpaid interest at the contract rate, fees, breakage costs, attorneys fees and expenses, and, in the case of any Specified Swap Agreements, the amount that would be payable by the relevant Loan Party thereunder if it were to terminate such Specified Swap Agreements on the date of the Purchase or, if not terminated, an amount determined by the relevant First Priority Secured Party to be necessary to collateralize its credit risk arising out of such Specified Swap Agreements), (ii) furnish cash collateral (the Cash Collateral) to the First Priority Secured Parties in such amounts as the relevant First Priority Secured Parties determine is reasonably necessary to secure such First Priority Secured Parties in connection with any outstanding letters of credit (not to exceed 103% of the aggregate undrawn face amount of such letters of credit), (iii)

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document agree to reimburse the First Priority Secured Parties for any loss, cost, damage or expense (including attorneys fees and expenses) in connection with any fees, costs or expenses related to any checks or other payments provisionally credited to the First Priority Obligations or as to which the First Priority Secured Parties have not yet received final payment and (iv) agree, after written request from the First Priority Representative, to reimburse the First Priority Secured Parties in respect of indemnification obligations of the Loan Parties under the First Priority Documents as to matters or circumstances known to the Purchasing Parties at the time of the Purchase which could reasonably be expected to result in any loss, cost, damage or expense to any of the First Priority Secured Parties, provided that, in no event shall any Purchasing Party have any liability for such amounts in excess of proceeds of Common Collateral actually received by the Purchasing Parties.

(d) The Purchase Price and Cash Collateral shall be remitted by wire transfer in immediately available funds to such account of the First Priority Representative as it shall designate to the Purchasing Parties. The First Priority Representative shall, promptly following its receipt thereof, distribute the amounts received by it in respect of the Purchase Price to the First Priority Secured Parties in accordance with the First Priority Agreement. Interest shall be calculated to but excluding the day on which the Purchase occurs if the amounts so paid by the Purchasing Parties to the account designated by the First Priority Representative are received in such account prior to 12:00 noon, New York City time, and interest shall be calculated to and including such day if the amounts so paid by the Purchasing Parties to the account designated by the First Priority Representative are received in such account later than 12:00 noon, New York City time.

(e) The Purchase shall be made without representation or warranty of any kind by the First Priority Secured Parties as to the First Priority Obligations, the Common Collateral or otherwise and without recourse to the First Priority Secured Parties, except that the First Priority Secured Parties shall represent and warrant: (i) the amount of the First Priority Obligations being purchased, (ii) that the First Priority Secured Parties own the First Priority Obligations free and clear of any Liens and (iii) that the First Priority Secured Parties have the right to assign the First Priority Obligations and the assignment is duly authorized.

(f) For the avoidance of doubt, the parties hereto hereby acknowledge and agree that in no event shall the Second Priority Representative (i) be deemed to be a Purchasing Party for purposes of this Section 3.7, (ii) be subject to or liable for any obligations of a Purchasing Party pursuant to this Section 3.7 or (iii) incur any liability to any First Priority Secured Party or any other Person in connection with any Purchase pursuant to this Section 3.7.

SECTION 4. Application of Proceeds of Common Collateral; Dispositions and Releases of Common Collateral; Inspection and Insurance. 4.1 Application of Proceeds; Turnover Provisions. All proceeds of Common Collateral (including without limitation any interest earned thereon) resulting from the sale, collection or other disposition of Common Collateral in connection with an Enforcement Action, whether or not pursuant to an Insolvency Proceeding, shall be distributed as follows: first to the First Priority Representative for application to the First Priority Obligations in accordance with the terms of the First Priority Documents, until the First Priority Obligations Payment Date has occurred and thereafter, to the Second Priority Representative for application in accordance with the Second Priority Documents. Until the occurrence of the First Priority Obligations Payment Date, any Common Collateral, including without limitation any

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document such Common Collateral constituting proceeds, that may be received by any Second Priority Secured Party in violation of this Agreement shall be segregated and held in trust and promptly paid over to the First Priority Representative, for the benefit of the First Priority Secured Parties, in the same form as received, with any necessary endorsements, and each Second Priority Secured Party hereby authorizes the First Priority Representative to make any such endorsements as agent for the Second Priority Representative (which authorization, being coupled with an interest, is irrevocable).

4.2 Releases of Second Priority Lien. (a) Upon any release, sale or disposition of Common Collateral permitted pursuant to the terms of the First Priority Documents that results in the release of the First Priority Lien on any Common Collateral (excluding any sale or other disposition that is expressly prohibited by the Second Priority Agreement as in effect on the date hereof unless such sale or disposition is consummated (x) in connection with an Enforcement Action, (y) after the institution of any Insolvency Proceeding or (z) by any Loan Party, with the consent of the First Priority Representative, after the occurrence and during the continuance of any Event of Default under, and as defined in, the First Priority Agreement), (i) the Second Priority Lien on such Common Collateral (excluding any portion of the proceeds of such Common Collateral remaining after the First Priority Obligations Payment Date occurs), (and in the case of any release, sale or disposition of all or substantially all of the equity interests or assets of any Loan Party that has guaranteed any Second Priority Obligations, such Loan Partys liability in respect of the Second Priority Obligations) shall be automatically and unconditionally released with no further consent or action of any Person, and (ii) the Second Priority Creditors shall be deemed to have consented under the Second Priority Documents to such release, sale or disposition of such Common Collateral (and in the case of any release, sale or disposition of all or substantially all of the equity interests or assets of any Loan Party that has guaranteed any Second Priority Obligations, the release of such Loan Partys liability in respect of the Second Priority Obligations), and to have waived the provisions of the Second Priority Documents to the extent necessary to permit such release, sale or disposition (and in the case of any release, sale or disposition of all or substantially all of the equity interests or assets of any Loan Party that has guaranteed any Second Priority Obligations, the release of such Loan Partys liability in respect of the Second Priority Obligations).

(b) The Second Priority Representative shall promptly execute and deliver such release documents and instruments and shall take such further actions as the First Priority Representative shall request in writing to evidence any release of the Second Priority Lien or any release of the applicable Loan Party guarantor of the Second Priority Obligations, in each case as provided in paragraph (a) of this Section 4.2. The Second Priority Representative hereby appoints the First Priority Representative and any officer or duly authorized person of the First Priority Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of the Second Priority Representative and in the name of the Second Priority Representative or in the First Priority Representatives own name, from time to time, in the First Priority Representatives sole discretion, for the purposes of carrying out the terms of this Section 4.2, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this Section 4.2, including, without limitation, any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).

4.3 Inspection Rights and Insurance. (a) Any First Priority Secured Party and its representatives may at any time inspect, repossess, remove and otherwise deal with the Common Collateral, and the First Priority Representative may advertise and conduct public auctions or private sales of the Common Collateral, in each case without notice to, the involvement of or interference by any Second Priority Secured Party or liability to any Second Priority Secured Party.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) Proceeds of Common Collateral include insurance proceeds in respect of such Common Collateral and therefore the lien priorities provided in Section 2.1 shall govern the ultimate disposition of casualty insurance proceeds. The First Priority Representative and Second Priority Representative are to be named as additional insureds and loss payees with respect to all insurance policies relating to Common Collateral. Until the First Priority Obligations Payment Date has occurred, the First Priority Representative shall have the sole and exclusive right, as against the Second Priority Representative, to adjust or settle any insurance claims in the event of any covered loss, theft or destruction of Common Collateral to the extent provided for, and in accordance with, the First Priority Agreements. To the extent provided in the applicable First Priority Documents or Second Priority Documents, as the case may be, all proceeds of such insurance shall be remitted to the First Priority Representative or the Second Priority Representative, as the case may be, and each of the Second Priority Representative and First Priority Representative shall cooperate (if necessary) in a reasonable manner in effecting the payment of insurance proceeds in accordance with Section 4.1.

SECTION 5. Insolvency Proceedings. 5.1 Filing of Motions. Until the First Priority Obligations Payment Date has occurred, the Second Priority Representative agrees on behalf of itself and the other Second Priority Secured Parties that no Second Priority Secured Party shall, in or in connection with any Insolvency Proceeding, file any pleadings or motions, take any position at any hearing or proceeding of any nature, or otherwise take any action whatsoever, in each case that (a) violates, or is prohibited by, this Section 5 (or, in the absence of an Insolvency Proceeding, otherwise would violate or be prohibited by this Agreement), (b) asserts any right, benefit or privilege that arises in favor of the Second Priority Secured Parties, in whole or in part, as a result of their interest in the Common Collateral (unless the assertion of such right is expressly permitted by this Agreement) or (c) challenges the validity, priority, enforceability or voidability of any Liens or claims held by the First Priority Representative or any other First Priority Secured Party with respect to the Common Collateral, or the extent to which the First Priority Obligations constitute secured claims or the value thereof under Section 506(a) of the Bankruptcy Code or otherwise; provided that the Second Priority Representative may (i) file a proof of claim in an Insolvency Proceeding and (ii) file any necessary responsive or defensive pleadings in opposition to any motion or other pleadings made by any Person objecting to or otherwise seeking the disallowance of any claims of the Second Priority Secured Parties on the Common Collateral, subject to the limitations contained in this Agreement and only if consistent with the terms and the limitations on the Second Priority Representative imposed hereby.

5.2 Financing Matters. If any Loan Party becomes subject to any Insolvency Proceeding at any time prior to the First Priority Obligations Payment Date, and if the First Priority Representative or the other First Priority Secured Parties desire to consent (or not object) to the use of cash collateral under the Bankruptcy Code or to provide financing to any Loan Party under the Bankruptcy Code or to consent (or not object) to the provision of such financing to any Loan Party by any third party (any such financing, DIP Financing), then the Second Priority Representative agrees, on behalf of itself and the other Second Priority Secured Parties, that each Second Priority Secured Party (a) will be deemed to have consented to, will raise no objection to, nor support any other Person objecting to, the use of such cash collateral or to such DIP Financing, (b) will not request or accept adequate protection or any other relief in connection with the use of such cash collateral or such DIP Financing except as set forth in Section 5.4

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document below, (c) will subordinate (and will be deemed hereunder to have subordinated) the Second Priority Liens (i) to such DIP Financing on the same terms as the First Priority Liens are subordinated thereto (and such subordination will not alter in any manner the terms of this Agreement), (ii) to any adequate protection provided to the First Priority Secured Parties and (iii) to any carve-out agreed to by the First Priority Representative or the other First Priority Secured Parties, and (d) agrees that notice received two calendar days prior to the entry of an order approving such usage of cash collateral or approving such financing shall be adequate notice.

5.3 Relief From the Automatic Stay. Until the First Priority Obligations Payment Date has occurred, the Second Priority Representative agrees, on behalf of itself and the other Second Priority Secured Parties, that none of them will seek relief from the automatic stay or from any other stay in any Insolvency Proceeding or take any action in derogation thereof, in each case in respect of any Common Collateral, without the prior written consent of the First Priority Representative.

5.4 Adequate Protection. The Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties, agrees that, prior to the First Priority Obligations Payment Date, none of them shall object, contest, or support any other Person objecting to or contesting, (a) any request by the First Priority Representative or the other First Priority Secured Parties for adequate protection of its interest in the Common Collateral or any adequate protection provided to the First Priority Representative or the other First Priority Secured Parties, (b) any objection by the First Priority Representative or any other First Priority Secured Parties to any motion, relief, action or proceeding based on a claim of a lack of adequate protection in the Common Collateral or (c) the payment of interest, fees, expenses or other amounts to the First Priority Representative or any other First Priority Secured Party under Section 506(b) or 506(c) of the Bankruptcy Code or otherwise. The Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties, further agrees that, prior to the First Priority Obligations Payment Date, none of them shall assert or enforce any claim under Section 506(b) or 506(c) of the Bankruptcy Code or otherwise that is senior to or on a parity with the First Priority Liens for costs or expenses of preserving or disposing of any Common Collateral. Notwithstanding anything to the contrary set forth in this Section and in Section 5.2(c)(ii), but subject to all other provisions of this Agreement (including, without limitation, Section 5.2(c)(i) and Section 5.3), in any Insolvency Proceeding, (i) if the First Priority Secured Parties (or any subset thereof) are granted adequate protection consisting of additional collateral (with replacement Liens on such additional collateral) and/or superpriority claims in connection with any DIP Financing or use of cash collateral with respect to the Common Collateral, and the First Priority Secured Parties do not object to the adequate protection being provided to the First Priority Secured Parties, then in connection with any such DIP Financing or use of cash collateral the Second Priority Representative, on behalf of itself and any of the Second Priority Secured Parties, may, as adequate protection of their interests in the Common Collateral, seek or accept (and the First Priority Representative and the First Priority Secured Parties shall not object to) adequate protection consisting solely of (x) a replacement Lien on the same additional collateral, subordinated to the Liens securing the First Priority Obligations and such DIP Financing on the same basis as the other Second Priority Liens on the Common Collateral are so subordinated to the First Priority Obligations under this Agreement and/or (y) superpriority claims junior in all respects to the superpriority claims granted to the First Priority Secured Parties; provided, however, that the inability of the Second Priority Secured Parties to receive any such junior replacement Lien or junior superpriority claims shall not affect the agreements and waivers set forth in this Section 5.4; provided, further, that the Second Priority Representative shall have irrevocably agreed, pursuant to Section 1129(a)(9) of the Bankruptcy Code, on behalf of itself and the Second Priority Secured Parties, in any stipulation and/or

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document order granting such adequate protection, that such junior superpriority claims may be paid under any plan of reorganization in any combination of cash, debt, equity or other property having a value on the effective date of such plan equal to the allowed amount of such claims and (ii) in the event the Second Priority Representative, on behalf of itself and the Second Priority Secured Parties, seeks or accepts adequate protection in accordance with clause (i) above and such adequate protection is granted in the form of additional collateral, then the Second Priority Representative, on behalf of itself or any of the Second Priority Secured Parties, agrees that the First Priority Representative shall also be granted a senior Lien on such additional collateral as security for the First Priority Obligations and any such DIP Financing and that any Lien on such additional collateral securing the Second Priority Obligations shall be subordinated to the Liens on such collateral securing the First Priority Obligations and any such DIP Financing (and all Obligations relating thereto) and any other Liens granted to the First Priority Secured Parties as adequate protection, with such subordination to be on the same terms that the other Liens securing the Second Priority Obligations are subordinated to such First Priority Obligations under this Agreement. The Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties, agrees that except as expressly set forth in this Section none of them shall seek or accept adequate protection with respect to their interests in the Common Collateral or any payments of post-petition interest, expenses or other amounts in respect of the Second Priority Obligations, in each case, without the prior written consent of the First Priority Representative.

5.5 Avoidance Issues. If any First Priority Secured Party is required in any Insolvency Proceeding or otherwise to disgorge, turn over or otherwise pay to the estate of any Loan Party any amount (a Recovery), whether received as proceeds of security, enforcement of any right of set-off or otherwise, because such amount was avoided or ordered to be paid or disgorged for any reason, including without limitation because it was found to be a fraudulent or preferential transfer, then the First Priority Obligations shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such payment had not occurred and the First Priority Obligations Payment Date shall be deemed not to have occurred. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto. The Second Priority Representative, on behalf of itself and each of the other Second Priority Secured Parties, agrees that none of them shall be entitled to benefit from any avoidance action affecting or otherwise relating to any distribution or allocation made in accordance with this Agreement, whether by preference or otherwise, it being understood and agreed that the benefit of such avoidance action otherwise allocable to them shall instead be allocated and turned over for application in accordance with the priorities set forth in this Agreement.

5.6 Asset Dispositions in an Insolvency Proceeding. In an Insolvency Proceeding, neither the Second Priority Representative nor any other Second Priority Secured Party shall oppose any sale or disposition of any assets of any Loan Party that is supported by the First Priority Representative (or the requisite First Priority Secured Parties under the First Priority Agreement), and the Second Priority Representative and each other Second Priority Secured Party will be deemed to have consented under Section 363 of the Bankruptcy Code (and otherwise) to any sale or disposition supported by the First Priority Secured Parties and to have released their Liens on such assets.

5.7 Separate Grants of Security and Separate Classification. Each Secured Party acknowledges and agrees that (a) the grants of Liens pursuant to the First Priority Security Documents and the Second Priority Security Documents constitute two separate and distinct grants of Liens and (b) because of, among other things, their differing rights in the Common Collateral, the First Priority

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Obligations and the Second Priority Obligations are fundamentally different from each other and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the First Priority Secured Parties and Second Priority Secured Parties in respect of the Common Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then the Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties, hereby acknowledges and agrees that all distributions shall be made as if there were separate classes of senior and junior secured claims against the Loan Parties in respect of the Common Collateral, with the effect being that, to the extent that the aggregate value of the Common Collateral is sufficient (for this purpose ignoring all claims held by the Second Priority Secured Parties), the First Priority Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of Post-Petition Interest before any distribution is made in respect of the claims held by the Second Priority Secured Parties. The Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties, hereby acknowledges and agrees to turn over to the First Priority Representative amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of the preceding sentence, even if such turnover has the effect of reducing the claim or recovery of the Second Priority Secured Parties.

5.8 No Waivers of Rights of First Priority Secured Parties. Nothing contained herein shall prohibit or in any way limit the First Priority Representative or any other First Priority Secured Party from objecting in any Insolvency Proceeding or otherwise to any action taken by any Second Priority Secured Party not expressly permitted hereunder, including the seeking by any Second Priority Secured Party of adequate protection (except as provided in Section 5.4).

5.9 Other Matters. To the extent that the Second Priority Representative or any Second Priority Secured Party has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code with respect to any of the Common Collateral, the Second Priority Representative agrees, on behalf of itself and the other Second Priority Secured Parties not to assert any of such rights without the prior written consent of the First Priority Representative unless expressly permitted to do so hereunder.

5.10 Effectiveness in Insolvency Proceedings. This Agreement, which the parties hereto expressly acknowledge is a subordination agreement under section 510(a) of the Bankruptcy Code, shall be effective before, during and after the commencement of an Insolvency Proceeding.

SECTION 6. Security Documents. (a) Each Loan Party and the Second Priority Representative, on behalf of itself and the Second Priority Secured Parties, agrees that it shall not at any time execute or deliver any amendment or other modification to any of the Second Priority Documents in violation of this Agreement.

(b) Each Loan Party and the First Priority Representative, on behalf of itself and the First Priority Secured Parties, agrees that it shall not at any time execute or deliver any amendment or other modification to any of the First Priority Documents in violation of this Agreement.

(c) In the event the First Priority Representative enters into any amendment, waiver or consent in respect of any of the First Priority Security Documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any First Priority Security Document or

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document changing in any manner the rights of any parties thereunder, in each case solely with respect to any Common Collateral, then such amendment, waiver or consent shall apply automatically to any comparable provision of the Comparable Second Priority Security Document without the consent of or action by any Second Priority Secured Party (with all such amendments, waivers and modifications subject to the terms hereof); provided that (other than with respect to amendments, modifications or waivers that secure additional extensions of credit and add additional secured creditors and do not violate the express provisions of the Second Priority Agreements), (i) no such amendment, waiver or consent shall have the effect of removing assets subject to the Lien of any Second Priority Security Document, except to the extent that a release of such Lien is permitted or required by Section 4.2, (ii) any such amendment, waiver or consent that materially and adversely affects the rights of the Second Priority Secured Parties and does not affect the First Priority Secured Parties in a like or similar manner shall not apply to the Second Priority Security Documents without the consent of the Second Priority Representative, (iii) no such amendment, waiver or consent with respect to any provision applicable to the rights, interests or obligations of the Second Priority Representative under the Second Priority Documents shall be made without the prior written consent of such Second Priority Representative and (iv) notice of such amendment, waiver or consent shall be given to the Second Priority Representative no later than 30 days after its effectiveness, provided that the failure to give such notice shall not affect the effectiveness and validity thereof.

SECTION 7. Reliance; Waivers; etc. 7.1 Reliance. All extensions of credit under the First Priority Documents made after the date hereof are deemed to have been made or incurred, in reliance upon this Agreement. The Second Priority Representative, on behalf of itself and the Second Priority Secured Parties, expressly waives all notice of the acceptance of and reliance on this Agreement by the First Priority Secured Parties. The Second Priority Documents are deemed to have been executed and delivered and all extensions of credit thereunder are deemed to have been made or incurred, in reliance upon this Agreement. The First Priority Representative, on behalf of itself and the other First Priority Secured Parties, expressly waives all notices of the acceptance of and reliance on this Agreement by the Second Priority Representative and the other Second Priority Secured Parties.

7.2 No Warranties or Liability. The Second Priority Representative and the First Priority Representative acknowledge and agree that neither has made any representation or warranty with respect to the execution, validity, legality, completeness, collectability or enforceability of any First Priority Document or any Second Priority Document. Except as otherwise provided in this Agreement, the Second Priority Representative and the First Priority Representative will be entitled to manage and supervise their respective extensions of credit to any Loan Party in accordance with law and their usual practices, modified from time to time as they deem appropriate.

7.3 No Waivers. No right or benefit of any party hereunder shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of such party or any other party hereto or by any noncompliance by any Loan Party with the terms and conditions of any of the First Priority Documents or the Second Priority Documents.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SECTION 8. Obligations Unconditional. 8.1 First Priority Obligations Unconditional. All rights and interests of the First Priority Secured Parties hereunder, and all agreements and obligations of the Second Priority Secured Parties (and, to the extent applicable, the Loan Parties) hereunder, shall remain in full force and effect irrespective of: (a) any lack of validity or enforceability of any First Priority Document; (b) any change in the time, place or manner of payment of, or in any other term of, all or any portion of the First Priority Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any First Priority Document; (c) prior to the First Priority Obligations Payment Date, any exchange, release, voiding, avoidance or non-perfection of any security interest in any Common Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of all or any portion of the First Priority Obligations or any guarantee or guaranty thereof; or (d) any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the First Priority Obligations, or of any of the Second Priority Representative or any other Second Priority Secured Party, or any Loan Party, to the extent applicable, in respect of this Agreement (other than the occurrence of the First Priority Obligations Payment Date).

8.2 Second Priority Obligations Unconditional. All rights and interests of the Second Priority Secured Parties hereunder, and all agreements and obligations of the First Priority Secured Parties (and, to the extent applicable, the Loan Parties) hereunder, shall remain in full force and effect irrespective of: (a) any lack of validity or enforceability of any Second Priority Document; (b) any change in the time, place or manner of payment of, or in any other term of, all or any portion of the Second Priority Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any Second Priority Document; (c) any exchange, release, voiding, avoidance or non-perfection of any security interest in any Common Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of all or any portion of the Second Priority Obligations or any guarantee or guaranty thereof; or (d) any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the Second Priority Obligations or any First Priority Secured Party in respect of this Agreement.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SECTION 9. Miscellaneous. 9.1 Conflicts. In the event of any conflict between the provisions of this Agreement and the provisions of any First Priority Document or any Second Priority Document, the provisions of this Agreement shall govern. Notwithstanding the foregoing, the parties hereto acknowledge that the terms of this Agreement are not intended to and shall not, as between the Loan Parties and the Secured Parties, negate, impair, waive or cancel any rights granted to, or carry liability or obligation of, any Loan Party in the First Priority Documents and the Second Priority Documents or impose any additional obligations on the Loan Parties (other than as expressly set forth herein).

9.2 Continuing Nature of Provisions. This Agreement shall continue to be effective, and shall not be revocable by any party hereto, until the First Priority Obligation Payment Date shall have occurred subject to the reinstatement as expressly set forth herein. This is a continuing agreement and the First Priority Secured Parties and the Second Priority Secured Parties may continue, at any time and without notice to the other parties hereto, to extend credit and other financial accommodations, lend monies and provide indebtedness to, or for the benefit of, Borrower, Holdings or any Loan Party on the faith hereof.

9.3 Amendments; Waivers. (a) No amendment or modification of any of the provisions of this Agreement shall be effective unless the same shall be in writing and signed by (i) the First Priority Representative (in accordance with the First Priority Agreement) and the Second Priority Representative (in accordance with the Second Priority Agreement) with respect to any amendment or modification, and (ii) the Loan Parties, solely with respect to (x) any amendments or modifications of Sections 3.5, 3.6, 5.2, 5.4, 5.10, 6(a), 6(b), 6(c), 9.1, 9.2, 9.3, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10, 9.11, 9.12, or 9.13, or (y) any amendments or modifications that (I) affect any obligation or right of the Loan Parties hereunder or under the First Priority Documents or the Second Priority Documents or that would impose any additional obligations on the Loan Parties or (II) change the rights of the Loan Parties to refinance the First Priority Obligations or the Second Priority Obligations. In addition, each waiver, if any, with respect to any aspect of this Agreement shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of the other parties to such party in any other respect or at any other time.

(b) It is understood that this Agreement may be amended from time to time at the request of the Borrower, at the Borrowers sole expense, and without the consent of the First Priority Representative, Second Priority Representative, any other First Priority Secured Party or any other Second Priority Secured Party to (i) add other parties holding additional Indebtedness or obligations that constitute First Priority Obligations including, without limitation, in connection with a refinancing or replacement, in whole or in part, of the First Priority Obligations and the Second Priority Obligations (Additional First Priority Debt) or Second Priority Obligations (Additional Second Priority Debt) (or any agent or trustee thereof) in each case to the extent such Indebtedness or obligation is permitted to be incurred by the First Priority Agreement and Second Priority Agreement then extant, (ii) in the case of Additional Second Priority Debt, (1) establish that the Lien on the Common Collateral securing such Additional Second Priority Debt shall be junior and subordinate in all respects to all Liens on the Common Collateral securing any First Priority Obligations and shall share in the benefits of the Common Collateral equally and ratably with all Liens on the Common Collateral securing any Second Priority Obligations, (2) provide to the holders of such Additional Second Priority Debt (or any agent or trustee thereof) the comparable rights and benefits (including any improved rights and benefits that have been consented to

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document by the First Priority Representative for the benefit of all Second Priority Debt) as are provided to the holders of Second Priority Obligations under this Agreement and (3) to establish that Liens on any Second Priority Collateral securing such refinancing or replacement indebtedness shall have the same priority as the Liens on any Second Priority Collateral securing the indebtedness being refinanced or replaced, all on the terms provided for immediately prior to such refinancing or replacement, and (iii) in the case of Additional First Priority Debt, (1) establish that the Lien on the Common Collateral securing such Additional First Priority Debt shall be superior in all respects to all Liens on the Common Collateral securing any Second Priority Obligations and shall share in the benefits of the Common Collateral equally and ratably with all Liens on the Common Collateral securing any First Priority Lien Obligations, (2) provide to the holders of such Additional First Priority Debt (or any agent or trustee thereof) the comparable rights and benefits as are provided to the holders of First Priority Lien Obligations under this Agreement, in each case so long as such modifications do not expressly violate the provisions of any First Priority Agreement or Second Priority Agreement, and (3) to establish that Liens on any First Priority Collateral securing such refinancing or replacement indebtedness shall have the same priority (or junior priority) as the Liens on any First Priority Collateral securing the indebtedness being refinanced or replaced, all on the terms provided for immediately prior to such refinancing or replacement. Any such additional party and each First Priority Representative and Second Priority Representative shall be entitled to conclusively rely on the determination of the Borrower that such modifications do not violate any First Priority Agreement or Second Priority Agreement if such determination is set forth in a certificate signed by a Responsible Officer and an opinion of counsel delivered to such party, the First Priority Representative and the Second Priority Representative. Any amendment to this Agreement that is proposed to be effected without the consent of any First Priority Representative shall be submitted to such First Priority Representative reasonably promptly after the effectiveness of such amendment, and no such First Priority Representative shall be deemed to have knowledge of any such amendment until it receives a copy of such amendment. Any amendment to this Agreement that is proposed to be effected without the consent of any Second Priority Representative shall be submitted to such Second Priority Representative reasonably promptly after the effectiveness of such amendment, and no such Second Priority Representative shall be deemed to have knowledge of any such amendment until it receives a copy of such amendment.

(c) If at any time in connection with or after the discharge of all First Priority Obligations, the Borrower or Holdings enters into any replacement First Priority Agreement secured by all or a portion of the First Priority Collateral on a first-priority basis, then such prior discharge of First Priority Obligations shall automatically be deemed not to have occurred for the purposes of this Agreement, and the obligations under such replacement First Priority Agreement shall automatically be treated as First Priority Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of the First Priority Collateral (or such portion thereof) set forth therein. The termination of the Existing First Priority Agreement in connection with any such replacement shall not be deemed to be the First Priority Obligations Payment Date.

9.4 Information Concerning Financial Condition of the Borrower, Holdings and the Loan Parties. Neither the Second Priority Representative nor the First Priority Representative hereby assumes responsibility for keeping each other informed of the financial condition of the Borrower, of Holdings and of any of the Loan Parties and all other circumstances bearing upon the risk of nonpayment of the First Priority Obligations or the Second Priority Obligations. The Second Priority Representative and the First Priority Representative hereby agree that no party shall have any duty to advise any other party of information known to it regarding such condition or any such circumstances. In the event the Second

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Priority Representative or the First Priority Representative, in its sole discretion, undertakes at any time or from time to time to provide any information to any other party to this Agreement, it shall be under no obligation (a) to provide or update any such information to such other party or any other party on any subsequent occasion, (b) to undertake any investigation not a part of its regular business routine, or (c) to disclose any other information. Neither the First Priority Representative nor the Second Priority Representative shall have any responsibility to monitor or verify the financial condition of the Borrower, of Holdings or of any of the Loan Parties.

9.5 Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of New York.

9.6 Submission to Jurisdiction. (a) The First Priority Representative, on behalf of itself and the other First Priority Secured Parties, and the Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties, and the Loan Parties hereby agree that each First Priority Secured Party, each Second Priority Secured Party and each Loan Party shall irrevocably and unconditionally submit, for itself and its property, to the nonexclusive jurisdiction of the courts of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment with respect to this Agreement, and the First Priority Representative, on behalf of itself and the other First Priority Secured Parties, and the Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties, and the Loan Parties hereby irrevocably and unconditionally agree that all of their respective claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. The First Priority Representative, on behalf of itself and the other First Priority Secured Parties, and the Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties, and the Loan Parties hereby further agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any First Priority Secured Party or Second Priority Secured Party may otherwise have to bring any action or proceeding against any Loan Party or its properties in the courts of any jurisdiction.

(b) Each of the First Priority Representative, on behalf of itself and the other First Priority Secured Parties, the Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties, and the Loan Parties hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so (i) any objection it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in the first sentence of paragraph (a) of this Section and (ii) the defense of an inconvenient forum to the maintenance of such action or proceeding.

(c) Each of the First Priority Representative, on behalf of itself and the other First Priority Secured Parties, the Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties, and the Loan Parties hereby irrevocably consents to service of process in the manner provided for notices in Section 9.7. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 9.7 Notices. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, or sent by overnight express courier service or United States mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or three Business Days after deposit in the United States mail (certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section) shall be as set forth below each partys name on the signature pages hereof, or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.

9.8 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and each of the First Priority Secured Parties and Second Priority Secured Parties and their respective successors and permitted assigns, and nothing herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect of this Agreement or any Common Collateral.

9.9 Headings. Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

9.10 Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

9.11 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by email or telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement shall become effective when it shall have been executed by each party hereto.

9.12 WAIVER OF JURY TRIAL. EACH OF THE FIRST PRIORITY REPRESENTATIVE, ON BEHALF OF ITSELF AND THE OTHER FIRST PRIORITY SECURED PARTIES, THE SECOND PRIORITY REPRESENTATIVE, ON BEHALF OF ITSELF AND THE OTHER SECOND PRIORITY SECURED PARTIES, THE LOAN PARTIES, AND EACH OTHER PARTY HERETO, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

9.13 Additional Loan Parties. Each Person that becomes a Loan Party after the date hereof shall become a party to this Agreement upon execution and delivery by such Person of a Joinder Agreement in the form of Annex 2 to the Guaranty and Security Agreement referred to in the First Priority Agreement.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

JPMORGAN CHASE BANK, N.A., as First Priority Representative for and on behalf of the First Priority Secured Parties

By: /s/ Tamara Roehm Name: Tamara Roehm Title: Senior Banker

Address for Notices: 10 S. Dearborn Chicago, IL 60603

Attention: Tamara Roehm Telecopy No.: (312) 361-3100

JPMORGAN CHASE BANK, N.A., as Second Priority Representative for and on behalf of the Second Priority Secured Parties

By: /s/ Tamara Roehm Name: Tamara Roehm Title: Senior Banker

Address for Notices: 10 S. Dearborn Chicago, IL 60603

Attention: Tamara Roehm Telecopy No.: (312) 361-3100

SRAM, LLC

By: /s/ Michael R. Herr Name: Michael R. Herr Title: Chief Financial Officer

Address for Notices:

Attention: Telecopy No.:

By: /s/ Michael R. Herr Name: Michael R. Herr Title: Chief Financial Officer

Address for Notices:

Attention: Telecopy No.:

EXECUTION VERSION

MASTER TRANSACTION AGREEMENT

THIS MASTER TRANSACTION AGREEMENT (this Agreement) is made and entered into as of June 7th, 2011, by and among SRAM Holdings, LLC, a Delaware limited liability company (the Company), SRAM-SP2, Inc., a Delaware corporation (SRAM-SP2), Trilantic Capital Partners IV L.P., a Delaware limited partnership (Trilantic), TCP SRAM Holdings LLC, a Delaware limited liability company (TCP SRAM Holdings), the Co-Investors set forth on the signature pages hereto, GMF SRAM Holdings Corp., a Delaware corporation (GMF SRAM Holdings), and the Sellers set forth on the signature pages hereto. Each of the parties to this Agreement is referred to herein as a Party and collectively as the Parties.

W I T N E S S E T H:

WHEREAS, TCP SRAM Holdings is the current beneficial owner of 3,410,823.64063 Class A Units of the Company (the Trilantic Units);

WHEREAS, the Co-Investors and GMF SRAM Holdings, are collectively the current beneficial owners of 229,176.35937 Class A Units of the Company, which together with the Trilantic Units represent all of the outstanding Class A Units of the Company;

WHEREAS, each of SRAM-SP2, TCP SRAM Holdings, the Blocker Entities and the Co-Investors and certain other parties are parties to that certain Amended and Restated Limited Liability Company Operating Agreement of the Company, dated as of September 30, 2008 (the 2008 Operating Agreement);

WHEREAS, the Parties wish to engage in the series of transactions set forth herein that will culminate in the direct or indirect acquisition by the Company of all of the outstanding Class A Units (the Recapitalization); and

WHEREAS, upon consummation of the Recapitalization, SRAM-SP2 and the other members of the Company desire to amend and restate the 2008 Operating Agreement and enter into the Second Amended and Restated Limited Liability Company Operating Agreement of SRAM Holdings, LLC, to be dated as of the Closing Date, in the form attached as Exhibit A hereto (the Amended and Restated Operating Agreement).

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document NOW, THEREFORE, in consideration of the foregoing, of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I DEFINITIONS

Section 1.1 Definitions. As used herein, the following terms have the following meanings:

Affiliate means, with respect to any Person (a) any director, manager, partner, executive officer or stockholder or member holding 10% or more of the equity (on a fully-diluted basis) of such Person, (b) any spouse, parent, sibling or descendant of such Person (or a spouse, parent, sibling or descendant of any director, manager, partner or officer of such Person), and (c) 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. The term control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

AIV GP means Trilantic Capital Partners Associates IV (AIV GP) L.P., a Delaware limited partnership.

Blocker Entities means the TCP Blocker Entity and GMF SRAM Holdings.

Class A Units means the ownership units of the Company designated as Class A Units, having the rights and obligations set forth in the 2008 Operating Agreement.

Co-Investors means (a) GE Capital Equity Holdings, Inc., a Delaware corporation, (b) Gleacher, (c) Southern Farm Bureau Life Insurance Company, a Mississippi corporation, and (d) JPM Mezzanine Capital, LLC, a Delaware limited liability company.

Gleacher means Gleacher Mezzanine Fund II, L.P., a Delaware limited partnership.

Governmental Authority means any transnational, U.S. or foreign federal, state or local, governmental authority, department, court, agency, instrumentality or official, including any political subdivision thereof.

Holder has the meaning set forth in Section 3.1.

Holder Releasing Parties means Trilantic, TCP SRAM Holdings, the Co-Investors and the Sellers.

IPO Vehicle means SRAM International Corporation, a Delaware corporation, or such other corporation organized by the SRAM Owners for purposes of conducting an initial public offering of common equity of the Company.

Joinder means that certain Joinder to the 2008 Operating Agreement to be entered into by the TCP Blocker Entity in connection with the transactions contemplated by this Agreement.

Law means, with respect to any Person, any foreign or U.S. federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Liability means any liability, cost, expense, debt or obligation of any kind, character or description, and whether known or unknown, accrued, absolute, contingent or otherwise, and regardless of when asserted or by whom.

Liens means any liens, charges, claims, conditions, restrictions on transfer, rights of first refusal, pledges, mortgages, imperfections of title, security interests, encumbrances, adverse claims or other similar restrictions of any kind.

Loss means any and all Liabilities, losses, diminution in value, damages, claims, costs and expenses, interest, awards, judgments and penalties (including attorneys, accountants and consultants fees and expenses).

Member Consent means the Written Consent of the Members of the Company, dated as of the date hereof and attached as Exhibit B hereto.

Offshore Blocker means LBMB IV SRAM Offshore Blocker L.P., a Cayman Islands exempted limited partnership.

Offshore Holdings means LBMB IV SRAM Offshore Holdings L.P., a Cayman Islands exempted limited partnership.

Onshore AIV means Trilantic Capital Partners IV Onshore AIV (B) LP, a Delaware limited partnership.

Onshore GP means Trilantic Capital Partners Associates IV (AIV GP) L.P., a Delaware limited partnership.

Onshore Holdings means LBMB IV SRAM Onshore Holdings L.P., a Cayman Islands exempted limited partnership.

Outside Termination Date means fourteen (14) days from the date hereof or such later date as TCP SRAM Holdings and the Company may mutually agree.

Person means an individual, corporation, partnership, limited liability company, association, joint venture, trust or other entity or organization of any kind, including a Governmental Authority.

Planned IPO means any initial public offering of shares of common stock of the IPO Vehicle consummated within twenty-four (24) months following the Closing Date.

Sellers means Offshore Holdings, Onshore Holdings, Onshore GP and Gleacher.

SRAM Releasing Parties means the Company and SRAM-SP2.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Tax or Taxes means any and all taxes, assessments, levies, tariffs, duties or other charges or impositions in the nature of a tax (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Authority, including income, estimated income, escheat, severance, gross receipts, profits, business, license, occupation, franchise, capital stock, real or personal property, sales, use, transfer, value added, employment or unemployment, social security, disability, alternative or add-on minimum, customs, excise, stamp, environmental, commercial rent or withholding taxes, and shall include any Liability for the Taxes of any other Person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign law) or as a transferee or successor, by contract, or otherwise.

Tax Return means any return (including any information return), report, statement, schedule, notice, form, election, estimated Tax filing, claim for refund or other document (including any attachments thereto and amendments thereof) filed with or submitted to, or required to be filed with or submitted to, any Governmental Authority with respect to any Tax.

TCP Blocker Entity means TCP IV SRAM Onshore Blocker L.P., a Delaware limited partnership.

TCP Distribution Parties means (a) Onshore AIV, (b) Offshore Blocker, (c) Offshore Holdings and (d) Onshore GP.

Transfer Taxes means any and all transfer, documentary, sales, use, gross receipts, stamp, registration, value added, recording, escrow and other similar Taxes and fees (including any penalties and interest), including recording and escrow fees and any real property or leasehold interest transfer or gains tax and any similar Tax.

ARTICLE II DISTRIBUTIONS; REDEMPTION OF CLASS A UNITS; PURCHASE AND SALE OF THE INTERESTS

Section 2.1 Recapitalization Steps. On the Closing Date, the Parties shall consummate the following transactions in the following order: (a) Onshore GP will cause Offshore Blocker to distribute in-kind an interest in Onshore AIV to Offshore Holdings in full redemption of Offshore Holdings interest in Offshore Blocker, and Onshore Holdings will consummate the debt contribution contemplated by the Debt Contribution Agreement; (b) Offshore Holdings will contribute such interest in Onshore AIV received in the distribution described in Section 2.1(a) to the TCP Blocker Entity in exchange for an interest in the TCP Blocker Entity; (c) TCP SRAM Holdings will make an in-kind distribution of an aggregate of 794,816.24457 Class A Units owned by TCP SRAM Holdings to Onshore AIV in partial redemption of Onshore AIVs interests in TCP SRAM Holdings;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) Onshore GP will cause Onshore AIV to make an in-kind distribution of 716,024.33028 Class A Units received in the distribution described in Section 2.1(c) to TCP Blocker Entity in full redemption of TCP Blocker Entitys interest in Onshore AIV, and immediately thereafter, TCP Blocker Entity will execute and deliver the Joinder to, and thereby become a member of, the Company; (e) Onshore GP will cause Onshore AIV to make an in-kind distribution of 78,791.91429 Class A Units received in the distribution described in Section 2.1(d) to AIV GP and immediately thereafter, AIV GP will contribute such Class A Units to TCP SRAM Holdings in exchange for interests in TCP SRAM Holdings; (f) the Company will cause SRAM, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company, to distribute an aggregate of $575,000,000.00 to the Company; (g) immediately following the distribution described in Section 2.1(f), the Company will distribute an aggregate amount of $459,850,244.28 to, or for the account of, TCP SRAM Holdings and the Co-Investors, as allocated in accordance with Schedule 2.1(g), in full redemption of their respective Class A Units; (h) immediately following the distribution described in Section 2.1(g), the Company will distribute $115,149,755.72 to SRAM- SP2 in redemption of 575,820.29 Class B Units held by SRAM-SP2; (i) immediately following the distribution described in Section 2.1(h), SRAM-SP2 or its designee will purchase from the Sellers, and the Sellers shall sell to SRAM-SP2 or its designee, all of the Sellers right, title, and interest in and to, as applicable, (i) all of the outstanding shares of capital stock of GMF SRAM Holdings (the Shares) and (ii) all of the outstanding general partnership interests and limited partnership interests of the TCP Blocker Entity (the Units, and together with the Shares, the Interests), for an aggregate amount of $115,149,755.72 (the Blocker Purchase Price), to be delivered to, or for the account of, the Sellers, as allocated in accordance with Schedule 2.1(i).

The consummation by each Party of each of the foregoing steps in the order listed shall be a predicate to the obligations of each other Party to consummate any subsequent action required of it under this Section 2.1

Section 2.2 Full and Complete Payment. (a) The Sellers and the Co-Investors hereby direct the payments due to them under Sections 2.1(g) and (i) above, as applicable, be paid to TCP SRAM Holdings for the account of the Sellers and the Co-Investors. Immediately following the Closing, TCP SRAM Holdings shall distribute the amounts paid to it for the account of each Seller and Co-Investor, net of all applicable fees, expenses and reductions agreed to between the Sellers, the Co-Investors and TCP SRAM Holdings, to the appropriate Parties as provided in Section 2.1.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) The Parties acknowledge and agree that following the Closing (i) the amounts set forth in Section 2.1 constitute full and complete payment for the Class A Units, the Interests and all rights and attributes related thereto (including, without limitation, any amounts due in respect of any accrued but unpaid dividends or distributions), and (ii) except for the amounts set forth in Section 2.1, none of TCP SRAM Holdings, the Sellers, the TCP Distribution Parties or the Co-Investors shall be entitled to any other rights, payments, dividends and/or distributions (including Tax distributions), whether in cash or property, from the Company or any other Person in respect of the Class A Units or other interests in or with respect to the Company, whether existing under (x) the Delaware Limited Liability Company Act, as now or hereafter amended, (y) the Companys Certificate of Formation, or (z) the 2008 Operating Agreement (other than Article 15 thereof) or the Amended and Restated Operating Agreement. For the avoidance of doubt, the foregoing shall not preclude any Party from bringing an action for fraud nor shall it release any claim or right of a Party arising under this Agreement nor shall it preclude any payments required pursuant to this Agreement.

Section 2.3 The Closing. The closing of the transactions contemplated by this Agreement (the Closing) shall take place at the offices of Latham & Watkins LLP, 885 Third Avenue, New York NY 10022 at 10:00 A.M. on the business day following the satisfaction or waiver of the last to occur of the closing conditions set forth in Article V hereof or on such other date as is agreed upon by the Parties. The date on which the Closing takes place shall be referred to as the Closing Date.

ARTICLE III REPRESENTATIONS AND WARRANTIES

Section 3.1 Representations and Warranties of TCP SRAM Holdings and the Co-Investors. Each of TCP SRAM Holdings (and Trilantic jointly and severally with and on behalf of TCP SRAM Holdings, but not the Co-Investors), and the Co-Investors (each of TCP SRAM Holdings and the Co-Investors being a Holder and collectively, the Holders), hereby severally represents and warrants to the Company as follows with respect to such respective Holder: (a) Organization. Such Holder is a duly formed, validly existing corporation, partnership or limited liability company, as applicable, in good standing under the Laws of its jurisdiction of incorporation or organization, as applicable. Such Holder has all requisite power and authority to own its properties and assets and to carry on its business as currently conducted. (b) Authority. Such Holder has the requisite power, right and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation by such Holder of the transactions contemplated hereby have been duly authorized and approved by all necessary corporate or other similar action on the part of such Holder. No other further act or proceeding on the part of such Holder is necessary to authorize this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) Enforceability. This Agreement has been duly and validly executed by such Holder and constitutes a legally valid and binding obligation of such Holder enforceable against it in accordance with its terms, except to the extent that such enforceability may be subject to, and limited by, applicable bankruptcy, insolvency, reorganization, moratorium, receivership and similar Laws affecting the enforcement of creditors rights generally, and general equitable principles. (d) No Conflict; Consents and Approvals. The execution, delivery and performance of this Agreement by such Holder, and the consummation by such Holder of the transactions contemplated hereby and compliance with the terms and provisions hereof, does not and will not: (i) conflict with, violate, result in the breach of, or constitute a default under any provision of the organizational documents of such Holder; (ii) conflict with, violate, result in the breach of, constitute a default under, or give rise to any right of acceleration, cancellation or termination of any material right or obligation under, any agreement or other instrument to which such Holder is a party; (iii) create or give rise to any Lien; (iv) violate any Law applicable to such Holder or (v) require such Holder to obtain or make, as the case may be, any consent, approval, authorization, or other order of, action by, filing with or notification to any Person. (e) Title to Class A Units. Such Holder owns the entire beneficial interest in, and has good and indefeasible title to, the Class A Units listed on Schedule 3.1(e) free and clear of all Liens, other than restrictions set forth in the 2008 Operating Agreement and Liens arising under applicable federal and state securities Laws. Other than such Class A Units, neither such Holder nor any of its respective Affiliates owns, or has the right to acquire, any other securities of the Company or any of the Companys subsidiaries. Except pursuant to this Agreement and the 2008 Operating Agreement, there are no commitments, options, contracts or other arrangements whatsoever, whether written or oral, concerning such Class A Units held by such Holder or under which such Holder is or may become obligated to sell, transfer, pledge, assign, convey or otherwise dispose of such Class A Units or any right or interest therein. Upon delivery by the Company to such Holder of the applicable payments set forth in Section 2.1(c), such Holder will transfer to the Company good and indefeasible title to such Class A Units, free and clear of all Liens. (f) Claims. There are no claims, demands, actions, investigations, audits, suits, causes of action, arbitration proceedings or other proceedings pending, or threatened or otherwise being asserted against such Holder, which, directly or indirectly, could reasonably be expected to adversely affect or delay the consummation of the transactions contemplated hereby. (g) Brokers. No agent, broker, investment banker, intermediary, finder or firm acting on behalf of such Holder will be entitled to any brokers or finders fee or any other commission or similar fee, directly or indirectly, from it in connection with the execution of this Agreement or upon consummation of the transactions contemplated hereby.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 3.2 Representations and Warranties of the Sellers and Trilantic. Each of the Sellers (and Trilantic jointly and severally with and on behalf of the TCP Blocker Entity, Offshore Holdings, Onshore Holdings and Onshore GP, but not Gleacher) and Trilantic (on its own behalf) hereby severally represents and warrants to the Company and SRAM-SP2 with respect to itself and each Blocker Entity or TCP Distribution Party in which it directly or indirectly owns any interests, as indicated on Schedule 3.2, as follows:

(a) Organization. (i) Such Seller and Trilantic is a duly formed, validly existing corporation or partnership, as applicable, in good standing under the Laws of its jurisdiction of incorporation or organization, as applicable. Such Seller and Trilantic has all requisite power and authority to own its properties and assets and to carry on its business as currently conducted. (ii) Such Blocker Entity is a duly formed, validly existing corporation or partnership, as applicable, in good standing under the Laws of its jurisdiction of incorporation or organization, as applicable. Such Blocker Entity has all requisite power and authority to own its properties and assets and to carry on its business as currently conducted. True and complete copies of the following have been made available to SRAM-SP2 or its advisors: (i) the organizational documents of such Blocker Entity, each as amended and currently in full force and effect, (ii) the records of such Blocker Entity reflecting the ownership of such Blocker Entity and (iii) the minutes and other records of the meetings and other proceedings (including any actions taken by written consent or otherwise without a meeting) of the stockholders or partners, as applicable, the board of directors (or equivalent body) and the committees of the board of directors (or equivalent body) of such Blocker Entity. Such Blocker Entity is not in default or violation of any provisions of its organizational documents, and such Blocker Entity has not taken any action that is inconsistent in any material respect with any resolution adopted by its stockholders or partnership, board of directors (or equivalent body) or any committee of its board of directors (or equivalent body). (iii) Such Blocker Entity was formed solely for the purpose of acquiring and holding interests directly or indirectly in the Company. Except as set forth in Schedule 3.2(i), such Blocker Entity has not incurred, nor will it incur, any Liabilities of any kind or character, except for (A) Liabilities arising under the 2008 Operating Agreement, (B) Liabilities related to Taxes resulting from the allocation of income of the Company to its members, (C) Liabilities arising under that certain Loan Agreement by and between the TCP Blocker Entity and LBMB IV SRAM Onshore Holdings L.P., dated as of September 9, 2008 (the Loan Agreement) and (D) obligations under this Agreement. Other than the acquisition and ownership of Class A Units, obligations under this Agreement or the Loan Agreement, such Blocker Entity has not engaged in any business activities of any type or kind whatsoever, or entered into any agreements or arrangements with any Person, or become subject to or bound by any obligation or undertaking. At no time has such Blocker Entity owned any assets other than (X) interests in the TCP Distribution Parties and cash attributable to such interests or (Y) Class A Units and, immediately prior to the transaction described in Section 2.1(i), such Blocker Entity will not own any assets other than the Class A Units.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) Authority. Such Seller and Trilantic has the requisite power, right and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation by such Seller, such Blocker Entity, Trilantic and the TCP Distribution Parties of the transactions contemplated hereby have been duly authorized and approved by all necessary corporate or other similar action on the part of such Seller, such Blocker Entity, Trilantic and the TCP Distribution Parties, as applicable. No other or further act or proceeding on the part of such Seller, such Blocker Entity, Trilantic or the TCP Distribution Parties or their respective shareholders or partners, as applicable, is necessary to authorize this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. (c) Enforceability. This Agreement has been duly and validly executed by such Seller and Trilantic and constitutes a legally valid and binding obligation of such Seller enforceable against it in accordance with its terms, except to the extent that such enforceability may be subject to, and limited by, applicable bankruptcy, insolvency, reorganization, moratorium, receivership and similar Laws affecting the enforcement of creditors rights generally, and general equitable principles. (d) No Conflict. The execution, delivery and performance of this Agreement by such Seller and the consummation by such Seller, such Blocker Entity, Trilantic and the TCP Distribution Parties of the transactions contemplated hereby and compliance with the terms and provisions hereof, does not and will not: (i) conflict with, violate, result in the breach of, or constitute a default under any provision of the organizational documents of such Seller, such Blocker Entity, Trilantic or any of the TCP Distribution Parties; (ii) conflict with, violate, result in the breach of, constitute a default under, or give rise to any right of acceleration, cancellation or termination of any material right or obligation under, any agreement or other instrument to which such Seller, such Blocker Entity, Trilantic or any of the TCP Distribution Parties is a party; (iii) create or give rise to any Lien; (iv) violate any Law applicable to such Seller, such Blocker Entity, Trilantic or any of the TCP Distribution Parties; or (v) require such Seller, such Blocker Entity, Trilantic or any of the TCP Distribution Parties to obtain or make, as the case may be, any consent, approval, authorization, or other order of, action by, filing with or notification to any Person. (e) Title to Class A Units. Immediately following the distribution described in Section 2.1(c), such Blocker Entity will own the entire beneficial interest in, and will have good and indefeasible title to, the Class A Units listed on Schedule 3.2(e), free and clear of all Liens, other than restrictions set forth in the 2008 Operating Agreement and Liens arising under applicable federal and state securities Laws. Other than such Class A Units, none of such Seller, such Blocker Entity or any of their respective Affiliates owns, or has the right to acquire, any other securities of the Company or any of the Companys subsidiaries. Except pursuant to this Agreement and the 2008 Operating Agreement, there are no commitments, options, contracts or other arrangements whatsoever, whether

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document written or oral, concerning such Class A Units held by such Seller, such Blocker Entity, Trilantic or any TCP Distribution Party or under which such Seller, such Blocker Entity, Trilantic or any TCP Distribution Party is or may become obligated to sell, transfer, pledge, assign, convey or otherwise dispose of such Class A Units or any right or interest therein. (f) Claims. There are no claims, demands, actions, investigations, audits, suits, causes of action, arbitration or other proceedings pending, or threatened or otherwise being asserted against such Seller, such Blocker Entity, Trilantic or any of the TCP Distribution Parties, which, directly or indirectly, could reasonably be expected to adversely affect or delay the consummation of the transactions contemplated hereby. (g) Brokers. No agent, broker, investment banker, intermediary, finder or firm acting on behalf of such Seller will be entitled to any brokers or finders fee or any other commission or similar fee, directly or indirectly, from it in connection with the execution of this Agreement or upon consummation of the transactions contemplated hereby.

(h) Capitalization of Blocker Entities; Title to Interests. (i) Schedule 3.2 attached hereto sets forth a complete and accurate listing of the authorized, issued and outstanding Interests in such Blocker Entity and the number of Interests held by such Seller, taking into account the transactions contemplated by Sections 2.1(a) and 2.1(b). Such Interests have been duly authorized and validly issued, and such Seller owns the entire beneficial interest in, and holds of record, such Interests. Such Seller has good and indefeasible title to such Interests, free and clear of all Liens, other than restrictions arising under applicable federal and state securities Laws. Other than the Interests, neither such Seller nor any of its respective Affiliates owns, or has the right to acquire, any other securities or interests of such Blocker Entity. Other than the Loan Agreement, there are no commitments, options, contracts or other arrangements whatsoever, whether written or oral, concerning such Interests or under which such Seller is or may become obligated to sell, transfer, pledge, assign, convey or otherwise dispose of such Interests or any right or interest therein. Except for the Interests, no Person holds of record or beneficially any equity or profits interest in such Blocker Entity. (ii) The Interests of such Blocker Entity have not been issued in violation of any purchase option, call, right of first refusal, preemptive, subscription or similar rights under any provision of applicable Law, the organizational documents of such Blocker Entity, or any contract to which such Blocker Entity is subject or by which it is bound. There are no outstanding warrants, options, rights, agreements, convertible or exchangeable securities or other commitments pursuant to which such Blocker Entity is or may become obligated to issue, sell, purchase, return or redeem any such Interests.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (i) Tax Matters. Except as provided on Schedule 3.2(i), such Blocker Entity has duly filed with the appropriate Governmental Authorities all Tax Returns required to be filed (taking into account any extensions of the filing date therefore) by or with respect to it, and all such filed Tax Returns are true, complete and accurate in all material respects. Except as provided on Schedule 3.2(i), such Blocker Entity has paid all Taxes (whether or not shown or reportable on any Tax Return) due and payable by it with respect to all taxable periods including, without limitation, all U.S. federal and state income Taxes payable for all taxable periods ending on or before December 31, 2010 and all estimated income Taxes payable for the first quarter of the 2011 taxable year. Such Blocker Entity has, and at the Closing will have, cash on hand sufficient to pay its estimated income Taxes payable on June 15, 2011 as and when due, based on the information provided by the Company. Except as provided on Schedule 3.2(i), such Blocker Entity is not currently the beneficiary of any extension of time to file any Tax Return or pay any Tax. Except as provided on Schedule 3.2(i), as of the Closing Date, such Blocker Entity will not have any Liability for unpaid Taxes other than federal and state income Taxes attributable to its allocable share of the Companys net taxable income accrued for the second quarter of the 2011 taxable year. Except as provided on Schedule 3.2(i), all Taxes required by Law to be withheld or collected by such Blocker Entity have been duly withheld or collected and timely paid to the proper Governmental Authority. Such Blocker Entity has properly requested, received and retained all necessary exemption certificates and other documentation supporting any claimed exemption or reduction in any withholding Tax. There are no liens for Taxes on any of the assets of such Blocker Entity. There are no deficiencies, assessments or proposed adjustments with respect to any Taxes of such Blocker Entity that remain unpaid or unsettled. There are no ongoing or pending audits, examinations or other administrative or judicial proceedings with respect to such Blocker Entity. Such Blocker Entity has not granted any waiver or extension of any statute of limitations in respect of the assessment or collection of any Tax. Such Blocker Entity has not executed, or had executed on its behalf, any power of attorney currently in force with respect to any matters relating to Taxes. Such Blocker Entity has no Liability for Taxes of any other Person, including under Treasury Regulation 1.1502-6 (or any comparable provision of state, local or foreign law), as successor or transferee, by contract or otherwise, including as a result of the transactions contemplated by this Agreement. No claim has been made by any Governmental Authority in a jurisdiction where such Blocker Entity does not file Tax Returns that it may be subject to taxation in that jurisdiction. Such Blocker Entity is not a party to any Tax sharing, Tax indemnity, Tax allocation or similar agreement other than this Agreement. Such Blocker entity does not have any contractual obligations to indemnify any other Person with respect to Taxes. Such Blocker Entity has not entered into or participated in any reportable transaction within the meaning of Treasury Regulation Section 1.6011-4(b)(2). Such Seller has provided SRAM-SP2 and the Company with true, complete and accurate copies of all Schedule K-1s issued to such Blocker Entity, all Tax Returns filed by such Blocker Entity and all material agreements, rulings, correspondence, notices or other similar communications received from any Governmental Authority relating to Taxes; provided, that certain of such copies were redacted versions. (j) TCP Distribution Parties. Except as set forth in Section 2.1, no other Affiliate of Trilantic will receive a distribution of any equity interests in the Onshore AIV or the Class A Units in connection with the transactions contemplated by Section 2.1 of this Agreement.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 3.3 Representations and Warranties of the Company and SRAM-SP2. Each of the Company and SRAM-SP2 hereby severally represents and warrants to the Holders and the Sellers as follows:

(a) Organization. (i) The Company is a duly organized, validly existing limited liability company, in good standing under the Laws of the State of Delaware. The Company has all requisite power and authority to own its properties and assets and to carry on its business as currently conducted. (ii) SRAM-SP2 is a duly organized, validly existing corporation, in good standing under the Laws of the State of Delaware. SRAM-SP2 has all requisite power and authority to own its properties and assets and to carry on its business as currently conducted. (b) Authority. Each of the Company and SRAM-SP2 has the requisite power, right and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by the Company and SRAM-SP2 and the consummation by such Parties of the transactions contemplated hereby have been duly authorized and approved by all necessary limited liability company or corporate action, as applicable. No other or further act or proceeding on the part of the Company or SRAM-SP2 or their respective managers, members or shareholders is necessary to authorize this Agreement, to perform their respective obligations hereunder and to consummate the transactions contemplated hereby. (c) Enforceability. This Agreement has been duly and validly executed by the Company and SRAM SP-2 and constitutes a legally valid and binding obligation of the Company and SRAM SP-2 enforceable against each of them in accordance with its terms, except to the extent that such enforceability may be subject to, and limited by, applicable bankruptcy, insolvency, reorganization, moratorium, receivership and similar Laws affecting the enforcement of creditors rights generally, and general equitable principles. (d) No Conflict; Consents and Approvals. After giving effect to the Member Consent and the Joinder, the execution, delivery and performance of this Agreement by the Company and SRAM SP-2, the consummation by such Parties of the transactions contemplated hereby, and compliance with the terms and provisions hereof and thereof, does not and will not: (i) conflict with, violate, result in the breach of, or constitute a default under any provision of the organizational documents of the Company or SRAM-SP2; (ii) conflict with, violate, result in the breach of, constitute a default under, or give rise to any right of acceleration, cancellation or termination of any right or obligation of the Company or SRAM-SP2 under, any agreement or other instrument to which the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Company or SRAM-SP2 is a party; (iii) create or give rise to any Lien; (iv) violate any Laws applicable to the Company or SRAM-SP2 or (v) require the Company or SRAM-SP2 to obtain or make, as the case may be, any consent, approval, authorization, or other order of, action by, filing with or notification to any Person. (e) Claims. There are no claims, demands, actions, investigations, audits, suits, causes of action, arbitration or other proceedings pending, or to the knowledge of the Company, threatened or otherwise being asserted, could reasonably be expected to adversely affect or delay the consummation of the transactions contemplated hereby. (f) Brokerage. No agent, broker, investment banker, intermediary, finder or firm acting on behalf of the Company or SRAM-SP2 will be entitled to any brokers or finders fee or any other commission or similar fee, directly or indirectly, from the Company or SRAM-SP2 or in connection with the execution of this Agreement or upon consummation of the transactions contemplated hereby.

Section 3.4 Investment Intent. The Company is acquiring the Class A Units for its own account for investment and without intent to make a public distribution thereof. SRAM-SP2 is acquiring the Interests for its own account for investment and without intent to make a public distribution thereof.

ARTICLE IV COVENANTS

Section 4.1 Tax Receivables Agreement. The Company and SRAM-SP2 acknowledge, covenant and agree that if, in connection with the consummation of the Planned IPO, the direct and/or indirect beneficial owners of the Company (the SRAM Owners) enter into any agreement (a Tax Receivable Agreement) with the IPO Vehicle pursuant to which the SRAM Owners are entitled to receive payments from the IPO Vehicle with respect to the income Tax benefits realized by the IPO Vehicle from deductions or losses attributable to the increase in Tax basis in the assets of the Company resulting directly or indirectly from the Recapitalization (Tax Benefit Payments), each Holder and Seller shall be entitled to their pro rata share (based on the number of Class A Units directly or indirectly held by such Holder or Seller immediately following the distribution described in Section 2.1(e)) of forty percent (40%) of any such Tax Benefit Payments so long as such Holder or Seller, as applicable, executes and becomes a party to the Tax Receivables Agreement on the same terms and conditions as the SRAM Owners (including, without limitation, terms relating indemnification and repayment obligations of the recipients of any Tax Benefit Payments).

Section 4.2 Mutual Release. (a) Releases by the Holder Releasing Parties. (i) Effective upon the Closing, each of the Holder Releasing Parties shall be deemed to have remised, released and forever discharged the Company, SRAM-SP2, their respective Affiliates and their respective partners, members, managers, stockholders, directors, officers and employees, and their respective heirs,

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document representatives, successors and assigns (collectively referred to, for the purposes of the release, as the SRAM Released Parties) of and from any and all claims which the Holder Releasing Parties now have, ever had, or at the Closing may have, or hereafter can, shall or may have, against the SRAM Released Parties, for, upon or by reason of any matter, cause or thing whatsoever related to the Holder Releasing Parties investment in the Company, from the beginning of time through the Closing Date, other than claims that the Holder Releasing Parties (in any capacity) have under this Agreement or claims under Article 15 of the 2008 Operating Agreement (the SRAM Released Parties Excluded Claims) or fraud. As of the Closing Date, each of Trilantic, TCP SRAM Holdings, the Co-Investors and the Sellers expressly acknowledges that it has had, or has had and waived, the opportunity to be advised by independent legal counsel and hereby waives and relinquishes all rights and benefits afforded by Section 1542 of the California Civil Code (and any analogous law of any other state, locality or other jurisdiction) and does so understanding and acknowledging the significance and consequence of such specific waiver, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. (ii) Each of Trilantic, TCP SRAM Holdings, the Co-Investors and the Sellers hereby represents, warrants and covenants to each of the SRAM Released Parties that there has not been and will not be any assignment or other transfer of any right or interest in any claims released pursuant to Section 4.2(a)(i) that it ever had, has or may have against the SRAM Released Parties and hereby agrees, severally, to indemnify and hold each SRAM Released Party harmless from any claims, costs, damages, penalties, fines or other losses directly or indirectly incurred by any of the SRAM Released Parties as a result of any Person asserting any right or interest pursuant to any such purported assignment or transfer of any such right or interest. (iii) Each of Trilantic, TCP SRAM Holdings, the Co-Investors and the Sellers hereby acknowledges and agrees that the releases made herein constitute final and complete releases of the SRAM Released Parties with respect to all claims released pursuant to Section 4.2(a)(i). Each of TCP SRAM Holdings, the Co-Investors and the Sellers expressly acknowledges and agrees that this general release is intended to include in its effect, without limitation, all such claims that such Party does not know or suspect to exist at the time hereof, and this general release contemplates the extinguishment of any and all such claims, other than in each case arising out of fraud.

(b) Releases by SRAM Releasing Parties. (i) Effective upon the Closing, each of the SRAM Releasing Parties shall be deemed to have remised, released and forever discharged TCP SRAM Holdings,

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the Co-Investors and the Sellers and their respective Affiliates (excluding the SRAM Releasing Parties) and their respective partners, members, managers, stockholders, directors, officers and employees agents, and their respective heirs, representatives, successors and assigns (collectively referred to, for the purposes of the release, as the Holder Released Parties) of and from any and all claims which the SRAM Releasing Parties now have, ever had, or at the Closing may have, or hereafter can, shall or may have, against the Holder Released Parties, for, upon or by reason of any matter, cause or thing whatsoever related to the Holder Released Parties investment in the Company, from the beginning of time through the Closing Date, other than claims that the SRAM Releasing Parties (in any capacity) have under this Agreement or under Article 15 of the 2008 Operating Agreement (the Holder Released Parties Excluded Claims) or fraud. As of the Closing Date, the Company and SRAM-SP2 each expressly acknowledges that it has had, or has had and waived, the opportunity to be advised by independent legal counsel and hereby waives and relinquishes all rights and benefits afforded by Section 1542 of the California Civil Code (and any analogous law of any other state, locality or other jurisdiction) and does so understanding and acknowledging the significance and consequence of such specific waiver, which provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. (ii) The Company and SRAM-SP2 each hereby represents, warrants and covenants to each of the Holder Released Parties that there has not been and will not be any assignment or other transfer of any right or interest in any claims released pursuant to Section 4.2(b)(i) that it ever had, has or may have against the Holder Released Parties and hereby agrees to indemnify and hold each Holder Released Party harmless from any claims, costs, damages, penalties, fines or other losses directly or indirectly incurred by any of the Holder Released Parties as a result of any Person asserting any right or interest pursuant to any such purported assignment or transfer of any such right or interest. (iii) The Company and SRAM-SP2 each hereby acknowledges and agrees that the releases made herein constitute final and complete releases of the Holder Released Parties with respect to all claims released pursuant to Section 4.2(b)(i). The Company and SRAM-SP2 expressly acknowledge and agree that this general release is intended to include in its effect, without limitation, all such claims that such Party does not know or suspect to exist at the time hereof, and this general release contemplates the extinguishment of any and all such claims, other than in each case arising out of fraud. (c) The provisions of this Section 4.2 are intended to be for the benefit of, and shall be enforceable by each Person released hereunder, and each such Persons heirs, representatives, successors or assigns, it being expressly agreed that such persons shall be

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document third party beneficiaries of this Section 4.2. The Parties shall not amend the provisions of this Section 4.2 in a manner that would adversely affect any such third party beneficiary without the prior written consent of such third party beneficiary. With respect to any claim by a third party beneficiary under this Section 4.2, no SRAM Releasing Party or any Holder Releasing Party, as applicable, may assert by way of defense, set-off or counterclaim, any claim against, or any costs, damages, penalties, fines or other losses owing by any other SRAM Releasing Party (other than as such may be related to any SRAM Released Party Excluded Claims), any Holder Releasing Party (other than as such may be related to any Holder Released Party Excluded Claims) or any third party beneficiary (other than as such may be related to any SRAM Released Party Excluded Claims or Holder Released Party Excluded Claims, as applicable).

Section 4.3 Public Announcements. No Party shall make any publicity releases, interviews or other disclosure or dissemination of any information concerning this Agreement or its terms, or any Partys performance hereunder, to any Person without the prior written approval of the Company; provided, however, that the Parties agree that following the Closing, TCP SRAM Holdings and the Company may each issue a press release announcing the Closing in form and substance satisfactory to the other Party, subject to such other Partys prior written approval; provided, further, that this Section 4.3 shall not prevent disclosure of such information to any Person so long as such disclosure is limited to, and consistent with, the information included in that certain Registration Statement filed by the IPO Vehicle with the United States Securities and Exchange Commission on May 12, 2011, as amended from time to time (the SRAM S-1); provided, further, that neither the Company nor any of its Affiliates shall file any amendment of or supplement to the SRAM S-1 that changes any disclosure relating to TCP SRAM Holdings, the Co-Investors or GMF SRAM Holdings or any description of the transactions in which TCP SRAM Holdings, the Co- Investors or GMF SRAM Holdings are involved, and of which TCP SRAM Holdings, the Co-Investors and GMF SRAM Holdings and their respective counsel shall not have previously been advised and furnished a copy or to which TCP SRAM Holdings, the Co-Investors, GMF SRAM Holdings and their respective counsel shall reasonably object. Notwithstanding the foregoing, nothing in this Section 4.3, shall prohibit the Company or any of its Affiliates from filing an amendment or supplement to the SRAM S-1 which adds or removes information that counsel to the Company advises is necessary to comply with applicable securities Laws.

Section 4.4 Further Assurances. Each of the Parties shall use its commercially reasonable efforts to (a) take all actions necessary or appropriate to consummate the transactions contemplated by this Agreement and (b) cause the fulfillment at the earliest practicable date of all of the conditions to their respective obligations to consummate the transactions contemplated by this Agreement.

Section 4.5 Tax Matters. (a) Trilantic shall prepare (or cause to be prepared) and timely file all Tax Returns of the TCP Blocker Entity for all taxable periods ending on or before the Closing Date and shall pay all Taxes due with respect thereto, other than any Taxes arising as a result of or with respect to the liquidation (including any transaction treated as a liquidation for Tax purposes) of the TCP Blocker Entity after the Closing, which shall be

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document paid by SRAM-SP2. All such Tax Returns shall be prepared consistent with past practices unless a contrary position is required by applicable Law. The Parties acknowledge that following the Closing, TCP Blocker Entity may liquidate under Section 332 of the Code on the Closing Date, and the effects of such transaction will be included in the taxable period ending on the Closing Date. Subject to the Company providing such information as necessary to prepare such Tax Returns at least thirty-five (35) business days prior to the filing deadline, SRAM-SP2 shall be provided drafts of such Tax Returns no less than twenty (20) business days before the filing deadline to review and comment on each such Tax Return prior to filing. No such Tax Return shall be filed without SRAM-SP2s prior consent, which shall not be unreasonably withheld, conditioned or delayed, provided that if no objection or comment is received by the fifth (5th) business day prior to the filing deadline, SRAM-SP2 shall be deemed to have consented to the filing of such Tax Return. (b) Gleacher shall prepare (or cause to be prepared) and timely file all Tax Returns of GMF SRAM Holdings for all taxable periods ending on or before the Closing Date and shall pay all Taxes due with respect thereto, other than any Taxes arising as a result of or with respect to the liquidation (including any transaction treated as a liquidation for Tax purposes) of GMF SRAM Holdings after the Closing, which shall be paid by SRAM-SP2. All such Tax Returns shall be prepared consistent with past practices unless a contrary position is required by applicable Law. The Parties acknowledge that following the Closing, GMF SRAM Holdings may liquidate under Section 332 of the Code on the Closing Date, and the effects of such transaction will be included in the taxable period ending on the Closing Date. Subject to the Company providing such information as necessary to prepare such Tax Returns at least thirty-five (35) Business Days prior to the filing deadline, SRAM-SP2 shall be provided drafts of such Tax Returns no less than twenty (20) Business Days before the filing deadline to review and comment on each such Tax Return prior to filing. No such Tax Return shall be filed without SRAM-SP2s prior consent, which shall not be unreasonably withheld, conditioned or delayed, provided that if no objection or comment is received by the fifth (5th) business day prior to the filing deadline, SRAM-SP2 shall be deemed to have consented to the filing of such Tax Return. (c) SRAM-SP2 shall prepare (or cause to be prepared) and timely file all Tax Returns of the Blocker Entities for any taxable periods beginning on or before and ending after the Closing Date (Straddle Periods). All such Straddle Period Tax Returns shall be prepared consistent with past practices of the applicable Blocker Entity unless a contrary position is required by applicable Law. Trilantic or Gleacher, as applicable, shall be allowed a reasonable time, and in no event less than 20 Business Days for any income Tax Return, to review and comment on each such Straddle Period Tax Return prior to filing. No Straddle Period Tax Return shall be filed without the prior consent of Trilantic if relating to the TCP Blocker Entity, or Gleacher if relating to GMF SRAM Holdings, which consent shall not be unreasonably withheld, conditioned or delayed; provided that if no objection or comment is received by the fifth (5th) Business Day prior to the filing deadline, Trilantic or Gleacher, as applicable, shall be deemed to have consented to the filing of such Tax Return

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) Trilantic and Gleacher shall cooperate, and shall cause their respective Affiliates, officers, employees, agents, auditors and other representatives to cooperate, with SRAM-SP2 in preparing, executing and filing all Tax Returns relating to the Blocker Entities and in resolving all disputes and audits relating to Taxes of the Blocker Entities. Such cooperation shall include maintaining and making available to SRAM-SP2 all records relating to Taxes of the Blocker Entities and making employees available on a mutually convenient basis to provide additional information or explanation of any materials provided hereunder or to testify at any proceedings relating to Taxes of the Blocker Entities. Trilantic and Gleacher agree (i) to retain all books and records with respect to Tax matters pertinent to the Blocker Entities relating to any taxable period beginning before the Closing Date until the applicable statute of limitations (as may be extended) has expired and to abide by all record retention agreements entered into with any Governmental Authority; (ii) to allow SRAM-SP2 and its representatives, at times and dates mutually acceptable to the parties, to inspect, review and make copies of such records as SRAM-SP2 may deem necessary or appropriate from time to time, such activities to be conducted during normal business hours at SRAM-SP2s expense; and (iii) to give SRAM-SP2 reasonable written notice prior to transferring, destroying or discarding any such books and records and, if SRAM-SP2 so requests, to allow SRAM-SP2 to take possession of such books and records. (e) Any and all Transfer Taxes imposed in connection with the transactions contemplated by this Agreement shall be born by Trilantic and its Affiliates. SRAM-SP2 shall cooperate in timely preparing and filing all Tax Returns and other documentation required to be filed in connection with any such Transfer Taxes.

Section 4.6 Tax Indemnity. (a) Each of Trilantic, Onshore GP, Onshore Holdings and Offshore Holdings (the Trilantic Indemnifying Parties) shall, jointly and severally, indemnify and hold harmless SRAM-SP2 and its Affiliates (including the Blocker Entities after the Closing), and each of their respective officers, directors, employees, agents, successors and assigns (each, a SRAM Indemnified Party) from and against (i) any and all Liability for Taxes of the TCP Blocker Entity for all taxable periods (or portions thereof) ending on or before the Closing Date (Pre-Closing Tax Periods), including any Liability for Taxes related to or arising out of the debt contribution contemplated by the Debt Contribution Agreement, (ii) any and all Liability for Taxes of Onshore GP, Onshore Holdings, and Offshore Holdings or any of their current or past Affiliates, (iii) Transfer Taxes, (iv) any and all Losses arising out of, resulting from or incident to the breach by Trilantic or any of its Affiliates of any covenant contained in Section 4.5 or this Section 4.6 and (v) any and all Losses arising out of, resulting from or incident to the breach or inaccuracy of any representation or warranty made in Section 3.2(i) with respect to the TCP Blocker Entity without regard to any materiality qualification contained therein, except to the extent that any such Losses are otherwise indemnified pursuant to the foregoing clauses (i)(iv). The SRAM Indemnified Parties shall not be entitled to indemnification pursuant to the preceding sentence with respect to any Liability for Taxes or Losses (1) arising from actions taken by the TCP Blocker Entity after the Closing that are inconsistent with past

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document practice of the TCP Blocker Entity or outside the ordinary course of business of the Company and its Subsidiaries or (2) to the extent arising solely from adjustments to the taxable income of the Company or its Subsidiaries, as determined with respect to the TCP Blocker Entity as provided under the 2008 Operating Agreement; provided that for the avoidance of doubt, the merger or conversion of the TCP Blocker Entity with or into a limited liability company following the Closing shall not affect the SRAM Indemnified Parties entitlement to indemnification for Taxes of the TCP Blocker Entity for Pre-Closing Tax Periods, but, provided further, the Trilantic Indemnifying Parties shall have no indemnification obligation for Taxes arising from or with respect to such merger or conversion. The obligations of the Trilantic Indemnifying Parties under this Section 4.6(a) shall terminate as of the later of June 29, 2017 or the termination of Trilantic. (b) Gleacher shall indemnify and hold harmless the SRAM Indemnified Parties from and against (i) any and all Liability for Taxes of GMF SRAM Holdings for Pre-Closing Tax Periods, (ii) any and all Liability for Taxes of Gleacher or any of its Affiliates, (iii) any and all Losses arising out of, resulting from or incident to the breach by Gleacher or any of its current or past Affiliates of any covenant contained in Section 4.5 or this Section 4.6 and (iv) any and all Losses arising out of, resulting from or incident to the breach or inaccuracy of any representation or warranty made in Section 3.2(i) with respect to GMF SRAM Holdings without regard to any materiality qualification contained therein, except to the extent that any such Losses are otherwise indemnified pursuant to the foregoing clauses (i)(iii). The SRAM Indemnified Parties shall not be entitled to indemnification pursuant to the preceding sentence with respect to any Liability for Taxes or Losses arising from actions taken by GMF SRAM Holdings on the Closing Date after the Closing that are inconsistent with past practice of the GMF SRAM Holdings or outside the ordinary course of business of the Company and its Subsidiaries; provided that for the avoidance of doubt, the merger or conversion of GMF SRAM Holdings with or into a limited liability company following the Closing shall not affect the SRAM Indemnified Parties entitlement to indemnification for Taxes of GMF SRAM Holdings for Pre-Closing Tax Periods, but, provided further, Gleacher shall have no indemnification obligation for Taxes arising from or with respect to such merger or conversion. The obligations of Gleacher under this Section 4.6(b) shall terminate as of the later of March 31, 2017 or the termination of Gleacher. (c) In the case of any Straddle Period, (i) all real and personal property Taxes and other Taxes that apply to a period as a whole for the Pre-Closing Tax Period shall be equal to the amount of such Taxes for the entire applicable Straddle Period multiplied by a fraction, the numerator of which is the number of calendar days during the applicable Straddle Period that are in the applicable Pre-Closing Tax Period and the denominator of which is the total number of calendar days in the applicable Straddle Period, and (ii) all other Taxes shall be computed as if such taxable period ended as of the end of the day on the Closing Date. (d) A SRAM Indemnified Party making a claim for indemnification under this Section 4.6 shall promptly give written notice of such claim to Trilantic or Gleacher, as applicable, together with a copy of the Tax Return or other relevant documentation

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document evidencing the Tax Liability or other Loss. The indemnifying party shall pay the amount of such claim to the SRAM Indemnified Party within ten (10) Business Days after written demand is made; provided, in no event shall the indemnifying party be obligated to make any such payment with respect to Taxes earlier than five (5) Business Days before the date on which such Taxes are required to be paid to the relevant Governmental Authority. In the case of any contested Tax, payment of the Tax to the appropriate Governmental Authority shall not be considered to be due earlier than the date a final determination with respect to such Tax liability is made by the appropriate Governmental Authority. (e) If a Governmental Authority shall make any claim relating to Taxes that, if successful, might result in an indemnification payment pursuant to this Section 4.6 (a Tax Claim), the SRAM Indemnified Party shall promptly and in any event no more than fifteen (15) calendar days following receipt of such Tax Claim, give written notice of such Tax Claim to Trilantic or Gleacher, as applicable, together with copies of all notices and communications relating to such Tax Claim; provided, however, the failure of the SRAM Indemnified Party to give such notice shall only relieve the indemnifying party from its indemnification obligations hereunder to the extent it is actually prejudiced by such failure. (f) Trilantic if relating to the TCP Blocker Entity, or Gleacher if relating to GMF SRAM Holdings, shall be entitled, upon written notification to SRAM-SP2 within ten (10) calendar days following receipt of notice of a Tax Claim, to control all proceedings at the indemnifying partys own expense and make all decisions with respect to any Tax Claim relating to a taxable period ending on or before the Closing Date; provided, however, the indemnifying party shall not settle any such Tax Claim without SRAM-SP2s consent, which shall not be unreasonably withheld, conditioned or delayed. SRAM-SP2 and Trilantic if relating to the TCP Blocker Entity, or Gleacher if relating to GMF SRAM Holdings, shall jointly control all proceedings with respect to any Tax Claim relating to a Straddle Period. If Trilantic or Gleacher, as applicable, fails to timely assume in writing to Purchasers the control and defense of any Tax Claim that they are entitled to control pursuant to this Section 4.6(f), then SRAM-SP2 shall thereupon have the right to undertake the control, defense and settlement of such Tax Claim at the indemnifying partys expense; provided, SRAM-SP2 shall not settle any material Tax Claim without the indemnifying partys consent, which shall not be unreasonably withheld, conditioned or delayed. (g) The Sellers (other than Gleacher) will be entitled to any Tax refunds or amounts of credit against Tax that are received or used by the TCP Blocker Entity (or received by SRAM-SP2 or its Affiliates with respect to Taxes paid by the TCP Blocker Entity) that relate to Pre-Closing Tax Periods. SRAM-SP2 will pay over any such refund or the amount of any such credit within ten (10) business days after receipt of such refund or amount of credit. Gleacher will be entitled to any Tax refunds or amounts of credit against Tax that are received by GMF SRAM Holdings (or received by SRAM-SP2 or its Affiliates with respect to Taxes paid by GMF SRAM Holdings) that relate to Pre-Closing Tax Periods. SRAM-SP2 will pay over any such refund or the amount of any such credit within ten (10) business days after receipt of such refund or amount of credit. (h) The parties agree to treat all payments made pursuant to this Section 4.6 as adjustments to the Blocker Purchase Price for Tax purposes, unless otherwise required by applicable Law.

Section 5.1 Conditions to the Companys and SRAM-SP2s Obligations. The obligations of the Company and SRAM-SP2 to consummate the transactions contemplated by this Agreement are subject to the satisfaction of the following conditions as of the Closing Date:

(a) Representations and Warranties. (i) The representations and warranties of the Holders set forth in Section 3.1 shall be true and correct in all material respects (except for any representations or warranties qualified by materiality, which shall be true and correct in all respects) as of the date hereof and as of the Closing Date as though then made on and as of the Closing Date. (ii) The representations and warranties of the Sellers and Trilantic set forth in Section 3.2 shall be true and correct in all material respects (except for any representations or warranties qualified by materiality, which shall be true and correct in all respects) as of the date hereof and as of the Closing Date as though then made on and as of the Closing Date.

(b) Covenants. (i) Each of the Holders shall have performed in all material respects all of the covenants and agreements required to be performed by it under this Agreement at or prior to the Closing. (ii) Each of the Sellers shall have performed in all material respects all of the covenants and agreements required to be performed by it under this Agreement at or prior to the Closing.

(c) Governmental Proceedings. No injunction exists or proceeding has been commenced that is reasonably likely to prevent, delay, make illegal, or otherwise interfere with, the performance of this Agreement or the consummation of any of the transactions contemplated hereby, declare unlawful the transactions contemplated by this Agreement or cause such transactions to be rescinded.

(d) Financing. The Company or its subsidiaries shall have obtained first and second lien bank term financings with minimum net proceeds (exclusive of any revolver borrowings or revolver borrowing capacity) of $790 million.

(e) Consents and Approvals. The Company shall have obtained or made, as applicable, each consent, approval, authorization, or other order of, action by, filing with or notification to any Governmental Authority or third party required to consummate the transactions contemplated hereby.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (f) Closing Deliveries of the Holders. The Holders shall have delivered to the Company each of the following items: (i) a certificate or certificates, duly executed by an authorized officer of TCP SRAM Holdings and each of the Co- Investors, certifying that the conditions under Section 5.1(b)(i) have been satisfied in full; and (ii) all certificates representing the Class A Units, together with duly executed stock powers or assignments separate from certificates reflecting the transactions set forth in Section 2.1, as applicable, with respect thereto.

(g) Closing Deliveries of the Sellers. The Sellers shall have delivered to the Company or SRAM-SP2, as applicable, each of the following items: (i) a certificate or certificates, duly executed by an authorized officer of each of the Sellers, certifying that the conditions under Section 5.1(b)(ii) have been satisfied in full; (ii) the written resignation, effective as of the Closing Date, of the directors and officers of each of the Blocker Entities, as applicable; (iii) any certificates or assignment and assumption agreements, as applicable, representing the Interests, together with duly executed stock powers and assignments separate from certificates, as applicable, with respect thereto; (iv) a Debt Contribution Agreement duly executed by the TCP Blocker Entity and LBMB IV SRAM Onshore Holdings L.P. in form reasonably satisfactory to the Company (the Debt Contribution Agreement) providing for the cancellation of, and discharge of any and all obligations under, that certain Loan Agreement by and between the TCP Blocker Entity and LBMB IV SRAM Onshore Holdings L.P., dated as of September 9, 2008, and all Notes issued thereunder; and (i) a duly authorized and executed certificate from the Blocker Entities consistent with the requirements of Treasury Regulation Section 1.1445-2(c)(3)(i) ; and (v) a duly authorized and executed statement of Onshore AIV consistent with the requirements of Treasury Regulation Section 1.1445-11T(d)(2)(i)..

The Company and SRAM-SP2 may waive any condition specified in this Section 5.1 if it executes a writing so stating at or prior to the Closing; provided that if the Closing is consummated upon such waiver, all such conditions shall be deemed to have been satisfied.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 5.2 Conditions to the Obligations of TCP SRAM Holdings, the Co-Investors and the Sellers. The obligations of TCP SRAM Holdings, the Co-Investors and the Sellers to consummate the transactions contemplated by this Agreement are subject to the satisfaction of the following conditions as of the Closing Date:

(a) Representations and Warranties. (i) The representations and warranties of the Company set forth in Section 3.3 hereof shall be true and correct in all material respects (except for any representations or warranties qualified by materiality, which shall be true and correct in all respects) as of the date hereof and as of the Closing Date as though then made on and as of the Closing Date. (ii) The representations and warranties of SRAM-SP2 set forth in Section 3.3 hereof shall be true and correct in all material respects (except for any representations or warranties qualified by materiality, which shall be true and correct in all respects) as of the date hereof and as of the Closing Date as though then made on and as of the Closing Date.

(b) Covenants. (i) The Company shall have performed in all material respects all of the covenants and agreements required to be performed by it under this Agreement at or prior to the Closing. (ii) SRAM-SP2 shall have performed in all material respects all of the covenants and agreements required to be performed by it under this Agreement at or prior to the Closing.

(d) Consents and Approvals. The Company shall have obtained or made, as applicable, each consent, approval, authorization, or other order of, action by, filing with or notification to any Governmental Authority or third party required to consummate the transactions contemplated hereby.

(e) Closing Deliveries of the Company. The Company shall have delivered, or caused to be delivered, to TCP SRAM Holdings and the Co-Investors each of the following items: (i) a certificate, duly executed by an authorized officer of the Company, certifying that the conditions under Section 5.2(b)(i) have been satisfied in full; and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (ii) a statement of the Company consistent with the requirements of Treasury Regulation Section 1.1445-11T(d)(2)(i).

(f) Closing Deliveries of SRAM-SP2. SRAM-SP2 shall have delivered, or caused to be delivered, to the Sellers a certificate, duly executed by an authorized officer of SRAM-SP2, certifying that the conditions under Section 5.2(b)(ii) have been satisfied in full.

TCP SRAM Holdings, the Co-Investors and the Sellers may waive any condition specified in this Section 5.2 and applicable to such Party if TCP SRAM Holdings, the Co-Investors and the Sellers execute a writing so stating at or prior to the Closing; provided that if the Closing is consummated upon such waiver, all such conditions shall be deemed to have been satisfied.

ARTICLE VI TERMINATION

Section 6.1 Termination. This Agreement may be terminated prior to the Closing of the transactions contemplated hereby as follows: (a) at any time upon the mutual written consent of each of the Parties; or (b) by TCP SRAM Holdings or the Company if the Closing shall not have occurred by the Outside Termination Date; provided, however, that the right to terminate this Agreement under this Section 6.1(b) shall not be available to (i) TCP SRAM Holdings if the failure of TCP SRAM Holdings, a Seller, a Co-Investor or a Blocker Entity to fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date, or (ii) the Company if the failure of the Company or SRAM-SP2 to fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date.

Section 6.2 Effect of Termination. In the event of termination of this Agreement as provided in Section 6.1, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto; provided that (a) any such termination shall not relieve any party from Liability for any bad faith, fraud or for any willful and intentional breach of this Agreement, and (b) the provisions of Section 4.3, this Section 6.2 and Article VII shall remain in full force and effect and survive any termination of this Agreement. For the avoidance of doubt, in the event of termination of this Agreement, the 2008 Operating Agreement shall remain in full force and effect.

Section 7.1 Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal or unenforceable, such provision shall be severed and enforced to the extent possible or modified in such a way as to make it enforceable, and the invalidity, illegality or unenforceability thereof shall not affect the validity, legality or enforceability of the remaining provisions of this Agreement.

Section 7.2 Governing Law; Jurisdiction. This Agreement and the rights and duties of the Parties shall be governed by the Laws of the State of New York without regard to conflict of laws principles. Each Party (i) irrevocably and unconditionally submits to the personal jurisdiction of the state courts of the State of New York and the federal courts of the United States of America, in each case sitting in the Borough of Manhattan in the City of New York (or, if such court lacks subject matter jurisdiction, in any appropriate New York state or federal court), (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) waives any claim of improper venue or any claim that those courts are an inconvenient forum and (iv) agrees that it will not bring any action relating to this Agreement or the transactions contemplated hereby in any court other than as specified in this Section 7.2. The Parties agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 7.4 or in such other manner as may be permitted by applicable Law, shall be valid and sufficient service thereof.

Section 7.3 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE RELATED AGREEMENTS OR UNDER OR IN CONNECTION WITH ANY AMENDMENT, INSTRUMENT, DOCUMENT, OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED AGREEMENT. THE TERMS AND PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.

Section 7.4 Notices. All notices, requests, instructions, claims, demands, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given on the date delivered by hand or by courier service such as Federal Express, or by other messenger (or, if delivery is refused, upon presentment) or upon receipt by electronic transmission (with confirmation), or upon delivery by registered or certified mail (return receipt requested), postage prepaid, to the parties at the following addresses: (a) if to the Company or SRAM-SP2: SRAM Holdings, LLC 1333 N. Kingsbury Street, 4th Floor Chicago, IL 60642

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Fax: (312) 664-8800 Attn: Chief Executive Officer with a copy (which shall not constitute notice) sent simultaneously to: Latham & Watkins LLP 233 South Wacker Drive, Suite 5800 Chicago, IL 60606 Fax: (312) 993-9767 Attn: Mark D. Gerstein (b) if to TCP SRAM Holdings, GMF SRAM Holdings, the Co-Investors or the Sellers, to the addresses set forth on Schedule 7.4(b): with a copy (which shall not constitute notice) sent simultaneously to: Gibson, Dunn & Crutcher LLP 200 Park Avenue New York, NY 10166 Fax: (212) 351-5316 Attn: Steven R. Shoemate or to such other address as either party has provided prior written notice pursuant to this Section 7.4. Notice by telecopy shall be deemed personally delivered upon senders receipt of confirmation, produced by senders fax machine, that transmission was successful.

Section 7.5 Interpretation. As used herein, all pronouns shall include the masculine, feminine, neuter, singular and plural thereof wherever the context and facts require such construction. The headings, titles and subtitles herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. Whenever the words include, includes or including are used in this Agreement, they shall be deemed to be followed by the words without limitation.

Section 7.6 Assignment. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto, and their respective heirs, personal representatives, successors and permitted assigns. Notwithstanding the foregoing, no party hereto may assign any of its rights or obligations under this Agreement without the prior written consent of each of the Parties.

Section 7.7 No Waiver. Any extension or waiver of the obligations herein of any Party shall be valid only if set forth in an instrument in writing referring to this section and signed by the Party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition, of this Agreement. The failure of any Party to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 7.8 Amendments. Neither this Agreement nor any of its terms or provisions may be amended, modified, waived, discharged or terminated, except by a written instrument signed by each of the Parties.

Section 7.9 Expenses. Except as otherwise provided in this Agreement, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement shall be paid by the Party incurring such cost and expenses; provided, that the Company will reimburse TCP SRAM Holdings (or one of its Affiliates designated by it in writing) for costs and expenses incurred in connection with this Agreement up to $30,000.

Section 7.10 Entire Agreement. This Agreement, including the other documents referred to herein which form a part hereof, contains the full agreement among the Parties and any other party that now or hereafter joins in the executions hereof on its subject matters, and supersedes and renders null and void all prior agreements or understandings, whether written or oral, which exist or may have existed between the parties with respect to its subject matters.

Section 7.11 Survival of Representations and Warranties and Covenants. The representations and warranties set forth in Article III and the covenants set forth in Article IV shall survive the Closing.

Section 7.12 Additional Documents. The Parties hereto will, without additional consideration, execute and deliver such further instruments and take such other action as may be reasonably requested by any other Party hereto in order to carry out the purposes of this Agreement and the other documents referred to herein.

Section 7.13 Legal Representation. Each Party has been represented by counsel of its choice in the negotiation of this Agreement. This Agreement shall be deemed to have been drafted by each of the Parties jointly, and no rule of construction shall be invoked respecting the authorship hereof.

Section 7.14 No Third Party Beneficiaries. Except as otherwise set forth in Section 4.2(c), nothing in this Agreement, express or implied, is intended to confer upon any Person other than the Parties any rights or remedies of any nature whatsoever under or by reason of this Agreement or any provision of this Agreement. Except as otherwise set forth in Section 4.2(c), this Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the Parties and their respective successors and permitted assigns.

Section 7.15 Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, and all of which, taken together, shall constitute one and the same instrument. The Parties agree that facsimile or .pdf copies of signatures sent via e-mail will be sufficient, with original signature pages to be supplied and exchanged at a later date.

Signature page follows

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first above written.

SRAM HOLDINGS, LLC

By: /s/ Stanley R. Day, Jr. Name: Stanley R. Day, Jr. Title: Chief Executive Officer

SRAM-SP2, INC.

By: /s/ Stanley R. Day, Jr. Name: Stanley R. Day, Jr. Title: Chief Executive Officer

[Signature Page to Master Transaction Agreement]

By: /s/ James H. Manges Name: James H. Manges Title: Authorized Signatory

TCP SRAM HOLDINGS, LLC

By: /s/ James H. Manges Name: James H. Manges Title: Authorized Signatory

[Signature Page to Master Transaction Agreement]

GE CAPITAL EQUITY HOLDINGS, INC.

By: /s/ Kristine M. Jurczyk Name: Kristine M. Jurczyk Title: Duly Authorized Signatory

GLEACHER MEZZANINE FUND II, L.P.

By: Gleacher Mezzanine II GP, L.P. as general partner

By: /s/ Phillip Krall Name: Phillip Krall Title: Managing Director

SOUTHERN FARM BUREAU LIFE INSURANCE COMPANY

By: /s/ H. Lusky Brown Name: H. Lusky Brown Title: Vice President and Chief Investment Officer

JPM MEZZANINE CAPITAL, LLC

By: /s/ Olof Bergqvist Name: Olof Bergqvist Title: Executive Director

[Signature Page to Master Transaction Agreement]

By: /s/ Phillip Krall Name: Phillip Krall Title: Treasurer

[Signature Page to Master Transaction Agreement]

LBMB IV SRAM ONSHORE HOLDINGS L.P.

By: /s/ James H. Manges Name: James H. Manges Title: Authorized Signatory

LBMB IV SRAM OFFSHORE HOLDINGS L.P.

By: /s/ James H. Manges Name: James H. Manges Title: Authorized Signatory

TRILANTIC CAPITAL PARTNERS ASSOCIATES IV (AIV GP) L.P.

By: /s/ James H. Manges Name: James H. Manges Title: Authorized Signatory

GLEACHER MEZZANINE FUND II, L.P.

By: Gleacher Mezzanine II GP, L.P. as general partner

By: /s/ Phillip Krall Name: Phillip Krall Title: Managing Director

[Signature Page to Master Transaction Agreement]

Entity: Allocation of Distribution: TCP SRAM Holdings $ 425,689,451.50 GE Capital Equity Holdings, Inc. $ 5,982,473.63 Gleacher Mezzanine Fund II, L.P. $ 13,512,914.72 Southern Farm Bureau Life Insurance Company $ 1,196,494.73 JPM Mezzanine Capital, LLC $ 13,468,909.71

Allocation of Blocker Purchase Entity: Price: LBMB IV SRAM Onshore Holdings L.P. $ 62,775,072.64 LBMB IV SRAM Offshore Holdings L.P. $ 50,333,166.35 Trilantic Capital Partners Associates IV (AIV GP) L.P. None Gleacher Mezzanine Fund II, L.P. $ 2,041,516.73

Entity: Number of Class A Units: TCP SRAM Holdings LLC 2,694,799.31035 GE Capital Equity Holdings, Inc. 37,871.65913 Gleacher Mezzanine Fund II, L.P. 85,542.62536 Southern Farm Bureau Life Insurance Company 7,574.33183 JPM Mezzanine Capital, LLC 85,264.05451

Interest in Blocker Entity or TCP Distribution Seller: Party: LBMB IV SRAM Onshore Holdings L.P. TCP IV SRAM Onshore Blocker L.P.; Trilantic Capital Partners IV Onshore AIV (B) L.P.

LBMB IV SRAM Offshore Holdings L.P. TCP IV SRAM Onshore Blocker L.P.; Trilantic Capital Partners IV Onshore AIV (B) L.P.

Trilantic Capital Partners Associates IV (AIV GP) L.P. TCP IV SRAM Onshore Blocker L.P.; Trilantic Capital Partners IV Onshore AIV (B) L.P.

Gleacher Mezzanine Fund II, L.P. GMF SRAM Holdings Corp.

Interest in Blocker Entity or TCP Distribution Trilantic: Party: Trilantic Capital Partners IV L.P. None

Capitalization

Authorized, Issued Blocker and Outstanding Interests Held by Entity Seller Interests Seller TCP IV SRAM LBMB IV SRAM Onshore 25,634.06444 Class A Units 25,634.06444 Class A Units Onshore Blocker L.P. Holdings L.P. TCP IV SRAM LBMB IV SRAM Offshore 20,553.43906 Class B Units 20,553.43906 Class B Units Onshore Blocker L.P. Holdings L.P. GMF SRAM Gleacher Mezzanine Fund II, L.P. 1,000 common shares 1,000 common shares Holdings Corp.

In March 2011, TCP IV SRAM Onshore Blocker L.P. filed Federal, New York State and New York City extensions for the 2010 tax year.

TCP Blocker Entity filed late its Forms 1042 for 2009 and 2010. All taxes shown due on such Tax Returns were paid when such Tax Returns were filed. Additional amounts in respect of interest and potential penalties have not been paid.

TCP Blocker Entity did not determine whether it was required to adjust its interest expense to reflect the application of Section 163(e)(5) of the Internal Revenue Code of 1986, as amended.

Number of Class A Blocker Entity: Units: TCP IV SRAM Onshore Blocker L.P. 716,024.33028 GMF SRAM Holdings Corp. 12,923.68854

Notice Addresses

Trilantic Capital Partners IV L.P.

Address: c/o Trilantic Capital Management LLC 399 Park Avenue, 15th Floor New York, NY 10022 Fax: (646) 368-6984 Attn: James Manges

TCP SRAM Holdings LLC

Address: c/o Trilantic Capital Management LLC 399 Park Avenue, 15th Floor New York, NY 10022 Fax: (646) 368-6984 Attn: James Manges

TRILANTIC CAPITAL PARTNERS ASSOCIATES IV (AIV GP) L.P.

Address: c/o Trilantic Capital Management LLC 399 Park Avenue, 15th Floor New York, NY 10022 Fax: (646) 368-6984 Attn: James Manges

LBMB IV SRAM Onshore Holdings L.P.

Address: c/o Trilantic Capital Management LLC 399 Park Avenue, 15th Floor New York, NY 10022 Fax: (646) 368-6984 Attn: James Manges

TCP IV SRAM Onshore Blocker L.P.

Address: c/o Trilantic Capital Management LLC 399 Park Avenue, 15th Floor New York, NY 10022 Fax: (646) 368-6984 Attn: James Manges

GE Capital Equity Holdings, Inc.

Address: GE Capital, Americas Equity 201 Merritt 7 Norwalk, CT 06856-5201 Attn: Portfolio Manager

Gleacher Mezzanine Fund II, L.P.

Address: Arrowhead Mezzanine LLC 55 Railroad Ave. Greenwich, CT 06830 Fax: (203) 295-3771 Attn: Phillip Krall

Address: Southern Farm Bureau Life Insurance Company PO Box 78 Jackson, MS 39205 Fax: (601) 321-2834 Attn: Dottie Carlisle

JPM Mezzanine Capital, LLC

Address: JPM Mezzanine Capital, LLC 383 Madison Avenue, 9th Floor New York, NY 10179 Fax: (917) 546-2483 Attn: Olof Berqvist

GMF SRAM Holdings Corp.

Address: Arrowhead Mezzanine LLC 55 Railroad Ave. Greenwich, CT 06830 Fax: (203) 295-3771 Attn: Phillip Krall

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

SRAM HOLDINGS, LLC

THE UNITS REFERENCED HEREIN HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. WITHOUT REGISTRATION, THESE SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED AT ANY TIME WHATSOEVER, EXCEPT ON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE BOARD OF THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR THE TRANSFER, OR THE SUBMISSION TO THE BOARD OF THE COMPANY OF OTHER EVIDENCE SATISFACTORY TO THE BOARD TO THE EFFECT THAT ANY TRANSFER WILL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR ANY RULES OR REGULATIONS PROMULGATED THEREUNDER. ADDITIONALLY, ANY SALE OR OTHER TRANSFER OF ANY SUCH UNIT IS SUBJECT TO CERTAIN RESTRICTIONS THAT ARE SET FORTH IN THOSE REGULATIONS AND THE FOLLOWING AGREEMENT.

Page

ARTICLE 1 DEFINITIONS 1

1.1 Definitions 1

1.2 Form of Pronouns; Number; Construction 12

ARTICLE 2 THE COMPANY 12

2.1 Formation 12

2.2 Name 12

2.3 Purpose of the Company 12

2.4 Term 13

2.5 Filings 13

2.6 No State Law Partnership 13

2.7 Seal 13

ARTICLE 3 OFFICES 13

3.1 Registered Office and Registered Agent 13

3.2 Principal Executive Office 13

3.3 Other Offices 14

ARTICLE 4 MEMBERS; LIMITED LIABILITY OF MEMBERS; CLASSES; INTERESTS OF MEMBERS; CERTIFICATES; VOTING RIGHTS; MEETINGS OF MEMBERS 14

4.1 Members; Admission of New Members 14

4.2 Limited Liability 14

4.3 Nature of Ownership; Agreement Is Binding upon Successors 14

4.4 Certificates Evidencing Units 15

4.5 Voting Rights 15

4.6 Place of Meetings 16

4.8 Quorum 16

4.9 Waiver of Notice 17

4.10 Action by Members Without a Meeting 17

4.11 Record Date 17

4.12 Members Are Not Agents 18

4.13 Transactions of Members with the Company 18

4.14 Loans by Members to the Company 18

ARTICLE 5 MANAGEMENT OF THE COMPANY 18

5.1 Board; Designation and Powers of the Board 18

5.2 Board Voting 20

5.3 Current Managers 20

5.4 Agency Authority of Managers 20

5.5 Limited Liability 21

5.6 Resignations 21

5.7 Compensation of Managers 21

5.8 Managers May Engage in Other Activities 21

5.9 Transactions of Managers with the Company 21

5.10 Liability for Certain Acts 21

5.11 Waiver of Fiduciary Duties; Corporate Opportunities 22

5.12 Third Party Reliance 22

5.13 Officers 22

ARTICLE 6 MEETINGS OF THE BOARD 23

6.1 Place of Meetings 23

6.2 Meetings of the Board 23

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6.3 Quorum; Participation in Meetings by Conference Telephone Permitted; Vote Required for Action 23

6.4 Waiver of Notice; Consent to Meeting 24

6.5 Unanimous Action by Board Without a Meeting 24

ARTICLE 7 UNITS; PERCENTAGE INTERESTS 24

7.1 Units 24

7.2 Incentive Units 25

7.3 Percentage Interests 27

ARTICLE 8 CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS 27

8.1 Capital Contributions 27

8.2 Additional Capital Contributions 27

8.3 Capital Accounts 27

ARTICLE 9 ALLOCATION OF PROFITS AND LOSSES 28

9.1 Capital Account Allocations 28

9.2 Regulatory Allocations 28

9.3 Tax Allocations 29

9.4 Other Allocation Rules 30

ARTICLE 10 DISTRIBUTIONS 30

10.1 Distributions 30

10.2 No Right to Receive Certain Distributions 31

10.3 Distributions in Kind 32

10.4 Payments on Behalf of a Member 32

ARTICLE 11 TRANSFER OF UNITS 32

11.1 Transfer of Units 32

11.2 Admission of Substituted Members 34

11.3 Rights of Unadmitted Assignees 34

iii

11.5 Preemptive Rights 36

11.6 IPO; Changes in Business Form 37

11.7 Registration Rights 38

11.8 No Appraisal Rights 43

11.9 Further Restrictions as to Certain Members; Companys Repurchase Option upon Termination of Employment of Incentive Member 43

11.10 43

ARTICLE 12 ACCOUNTING; REPORTING TO AND BY MEMBERS 43

12.1 Books and Records 43

12.2 Methods of Accounting 44

12.3 Delivery to Members and Inspection 44

12.4 Filings 46

12.5 Bank Accounts 46

12.6 Accounting Decisions and Reliance on Others 46

12.7 Confidentiality 46

ARTICLE 13 TAX MATTERS 48

13.1 Tax Returns; Tax Accounting Methods; Tax Elections 48

13.2 Tax Matters Partner 48

ARTICLE 14 DISSOLUTION AND LIQUIDATION 49

14.1 Dissolution 49

14.2 Liquidation of the Company 49

14.3 Assumption of Liabilities 50

14.4 Withdrawal 50

14.5 Winding Up 50

ARTICLE 15 INDEMNIFICATION AND INSURANCE 51

15.1 Right of Indemnification 51

15.2 Advances of Expenses 51

15.3 Other Rights 51

15.4 Insurance and Other Financial Arrangements 52

15.5 Effect of Interest in Transaction 52

15.6 Repeal or Modification 52

15.7 No Third Party Rights 52

ARTICLE 16 POWER OF ATTORNEY 52

16.1 Power of Attorney 52

ARTICLE 17 MISCELLANEOUS 52

17.1 Entire Agreement 52

17.2 Amendments 53

17.3 No Waiver 53

17.4 Third Parties 53

17.5 Severability 53

17.6 GOVERNING LAW 53

17.7 Notices 53

17.8 Titles and Subtitles 54

17.9 Currency 54

17.10 Counterparts 54

17.11 Successors 54

17.12 Remedies 54

17.13 No Action for Partition 54

17.15 No Strict Construction 55

17.16 Waiver of Jury Trial 55

Schedule 1 Names and Addresses of Members

Schedule 2 Ownership of Units; Percentage Interests

Schedule 3 Current Members of the Board of Managers

Schedule 4 Current Officers

Exhibits

Exhibit A Form of Joinder

vii

LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF SRAM HOLDINGS, LLC

THIS SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT (this Agreement) of SRAM HOLDINGS, LLC, a Delaware limited liability company (the Company), dated as of June 7, 2011 (the Effective Date), is entered into by and among the Persons listed on Schedule 1 hereto (as that Schedule may be amended from time to time).

RECITALS

WHEREAS, the Company was originally organized on September 22, 2008 and adopted an operating agreement (the Original LLC Agreement) at that time;

WHEREAS, the Original LLC Agreement was amended and restated on September 30, 2008 (as amended, the 2008 Operating Agreement) to reflect the consummation of the transactions contemplated by that certain Purchase Agreement, dated as of August 6, 2008, by and among LB SRAM Holdings LLC, a Delaware limited liability company (n/k/a TCP SRAM Holdings LLC) (TCP SRAM Holdings), SRAM-SP2, Inc., a Delaware corporation (SRAM-SP2), and SRAM Corporation, an Illinois corporation;

WHEREAS, the Company, SRAM-SP2, TCP SRAM Holdings and certain other former members of the Company and other persons are parties to that certain Master Transaction Agreement, dated as of June 7, 2011, pursuant to which the Company agreed to redeem, directly and indirectly through SRAM-SP2, all of the outstanding Class A units of the Company (the Recapitalization); and

WHEREAS, in connection with the consummation of the Recapitalization, and to provide for the rights and obligations of the Members after giving effect thereto, the requisite voting Members desire to amend and restate the 2008 Operating Agreement in its entirety with this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions contained herein, the parties hereto hereby adopt this Agreement, and hereby agree as follows:

ARTICLE 1 DEFINITIONS

1.1 Definitions. Capitalized terms used in this Agreement shall have the respective meanings set forth below:

2008 Operating Agreement shall have the meaning ascribed to it in the Recitals.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accounting Firm shall mean the independent auditors for the Company selected by the Board.

Act shall mean the Delaware Limited Liability Company Act, Title 6, §§18-101 et seq., as from time to time in effect in the State of Delaware, or any corresponding provision or provisions of any succeeding or successor law of such State.

Additional Capital Contribution shall mean any additional Capital Contributions of a Member to the Company made after the Closing Date.

Additional Unit Notice shall have the meaning ascribed to it in Section 11.5(b).

Additional Units shall have the meaning ascribed to it in Section 11.5(b).

Adjusted Capital Account shall mean, with respect to any Member, the balance in such Members Capital Account as of the end of the relevant Fiscal Period, after giving effect to the following adjustments:

(a) credit to such Capital Account any amount that the Member is treated as being obligated to restore pursuant to Treasury Regulations Section 1.704-1(b)(2)(ii)(c) or is deemed to be obligated to restore pursuant to Treasury Regulations Section 1.704-2(g)(1) or 1.704-2(i)(5); and

(b) debit to such Capital Account the items described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

This definition of Adjusted Capital Account is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

Affiliate shall mean any Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the specified party. Control (including, with correlative meanings, the terms controlled by and under common control with) means the ownership or control of securities possessing at least 50% of the voting power of all outstanding voting securities of a Person or the power otherwise to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting stock or otherwise; provided that neither the Company nor any of its Subsidiaries shall be deemed to be an Affiliate of any party hereto for any purpose hereunder, including the indemnification provisions contained in Article 15 of this Agreement.

Agreed Value shall mean, in the case of any contributions or distributions of property, the Fair Market Value of that property.

Agreement shall have the meaning ascribed to it in the preamble.

Assumed Tax Rate shall mean a percentage as is determined in good faith by the Board from time to time to represent the highest combined marginal U.S. federal, state and local tax rate applicable to any individual or corporation resident in New York, New York taking into account the character of the applicable income and the deductibility of state and local income

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document taxes for U.S. federal income tax purposes, unless a Member provides reasonably satisfactory evidence to the Tax Matters Partner that the tax rate applicable to such Member is higher than the rate applicable to any individual resident of New York, New York (in which case the Assumed Tax Rate for all Members shall be the rate applicable to such Member).

Authorized Incentive Units shall have the meaning ascribed to it in Section 7.1(f).

Board shall mean the Board of Managers of the Company appointed by the Members pursuant to Section 5.1.

Built-In Gain shall mean with respect to any Company property (a) the excess of the Agreed Value of any Contributed Property over its adjusted basis for U.S. federal income tax purposes as of the time of contribution and (b) in the case of any adjustment to the Carrying Value of any Company property pursuant to the definition of Carrying Value as a result of a contribution of property in exchange for Units in the Company, the Unrealized Gain with respect to that property.

Built-In Loss shall mean with respect to any Company property (a) the excess of the adjusted basis for U.S. federal income tax purposes of any Contributed Property over its Agreed Value as of the time of contribution and (b) in the case of any adjustment to the Carrying Value of any Company property pursuant to the definition of Carrying Value as a result of a contribution of property in exchange for Units in the Company, the Unrealized Loss with respect to that property.

Business shall mean the business of the Company and its direct and indirect Subsidiaries.

Capital Account shall mean, with respect to any Member, such Members capital account established and maintained in accordance with the provisions of this Agreement.

Capital Contribution shall mean the contribution of Contributed Property to the Company, and the amount of such contribution shall be the Agreed Value of such Contributed Property net of any indebtedness or other liability assumed by the Company or to which the Contributed Property is subject.

Carrying Value shall mean, with respect to any asset, the assets adjusted basis for U.S. federal income tax purposes, except as follows:

(i) The initial Carrying Value of any Contributed Property shall be its Agreed Value;

(ii) Immediately prior to the occurrence of a Revaluation Event, the Carrying Values of all Company assets shall be adjusted to equal their respective Fair Market Values (but determined without regard to Company liabilities);

(iii) The Carrying Value of any Company asset distributed to any Member shall be adjusted to equal its Fair Market Value on the date of distribution; and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (iv) The Carrying Value of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Section 734(b) of the Code or Section 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph (vi) of the definition of Profit and Loss; provided, however, that Carrying Values shall not be adjusted pursuant to this subparagraph (iv) to the extent the Board determines that an adjustment pursuant to subparagraph (ii) is necessary or appropriate in connection with a Revaluation Event.

If the Carrying Value of an asset has been determined or adjusted pursuant to subparagraphs (i), (ii), or (iv), such Carrying Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of calculating Profit and Loss.

Certificate shall have the meaning ascribed to it in Section 2.1.

Code shall mean the United States Internal Revenue Code of 1986, as amended from time to time.

Common Unit shall mean Units designated as Common Units in the Company, having the rights and obligations specified in this Agreement.

Company shall have the meaning ascribed to it in the preamble.

Company Minimum Gain shall have the meaning given to the term partnership minimum gain in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d).

Company Offered Units shall have the meaning ascribed to in Section 11.5(a).

Compensatory Unit shall have the meaning given the term compensatory partnership interest in proposed Treasury Regulations Section 1.721-1(b)(3) (or any corresponding provisions of succeeding, similar, substitute or final Treasury Regulations) and shall include the Incentive Units that are granted to Executives in connection with the performance of services for the Company or any of its Subsidiaries.

Compensatory Interest Regulations shall mean, when promulgated, the final Treasury Regulations concerning the U.S. federal income tax consequences of the grant and forfeiture of Compensatory Units, and until such final Treasury Regulations are promulgated, means the proposed Treasury Regulations published in the Federal Register (REG-105346-03) on May 24, 2005, by the Treasury Department and the IRS concerning the U.S. federal income tax consequences of the grant and forfeiture of Compensatory Units.

Confidential Information shall have the meaning ascribed to it in Section 12.7(a).

Contributed Property shall mean any money or other property contributed by a Member to the capital of the Company in exchange for Units.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Depreciation shall mean, for each Fiscal Period or other period, an amount equal to the depreciation, amortization (including pursuant to Sections 195, 197 and 709 of the Code) or other cost recovery deduction allowable with respect to an asset for such period for U.S. federal income tax purposes, except that (1) with respect to an asset whose Carrying Value differs from its adjusted basis for U.S. federal income tax purposes and which difference is being eliminated by use of the remedial method as defined in Treasury Regulations Section 1.704-3(d), Depreciation for such period shall be the amount of the book basis recovered for such period under the rules prescribed in Treasury Regulations Section 1.704-3(d)(2), and (2) with respect to any other asset whose Carrying Value differs from its adjusted tax basis at the beginning of such period, Depreciation shall be an amount which bears the same ratio to such beginning Carrying Value as the U.S. federal income tax depreciation, amortization or other cost recovery deduction for such Fiscal Period or other period bears to such beginning adjusted tax basis; provided, however, that if the U.S. federal income tax depreciation, amortization or other cost recovery deduction for such Fiscal Period or other period is zero, Depreciation shall be determined with reference to such beginning Carrying Value using any reasonable method selected by the Board.

Dissolution Event shall have the meaning ascribed to it in Section 14.1.

Distribution shall mean, with respect to any Member, the amount of money or the Fair Market Value of any property other than money distributed to such Member by the Company (net of liabilities assumed by such Member or to which property distributed to such Member is subject). For avoidance of doubt, Distributions include Tax Distributions.

Distribution Shortfall shall have the meaning ascribed to it in Section 10.1(a).

Distribution Threshold shall have the meaning ascribed to it in Section 7.2(b).

Effective Date shall have the meaning ascribed to it in the Recitals.

Electing Member shall have the meaning ascribed to it in Section 11.5(b).

Election Notice shall have the meaning ascribed to it in Section 11.5(b).

Eligible Unit shall mean (i) each outstanding Common Unit and (ii) each Incentive Unit that was outstanding on the Effective Date and (iii) each outstanding Incentive Unit granted after the Effective Date immediately after an amount equal to such Incentive Units Distribution Threshold has been distributed to the Members pursuant to the provisions of Section 10.1(b) (taking into account any Tax Distributions credited against amounts that otherwise would have been distributed thereunder) following the grant of such Incentive Unit.

Excess Income shall have the meaning ascribed to it in Section 10.1(a).

Exchange Act shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Executive shall mean any employee or officer of the Company or any of its Subsidiaries who acquires Incentive Units pursuant to an Incentive Unit Agreement and is or becomes a party to this Agreement.

Fair Market Value shall mean the fair market value of the asset in question, as determined in the good faith judgment of the Board. In the case of Units, Fair Market Value shall mean the amount that would be distributable in respect of such Unit if the assets of the Company as a going concern were sold in an orderly arms length transaction between a single willing buyer and a single willing seller, neither being under any compulsion to buy or sell and each having reasonable knowledge of all relevant facts, and designed to maximize proceeds therefrom, the liabilities of the Company were paid and the net proceeds of the sale then were distributed in accordance with Article 14, as determined in good faith by the Board with due regard to the value implied by any transaction giving rise to the need for a determination of Fair Market Value, in each case without discount for illiquidity or minority interest.

Family Group shall mean, with respect to an individual Member or other Person owning Units, such Person, such Persons spouse and descendants (whether natural, by marriage or adopted) and any trust or other estate planning vehicle solely for the benefit of such Person and/ or such Persons spouse and descendants (whether natural, by marriage or adopted).

Fiscal Period of the Company shall mean the period commencing (i) in the case of the Companys first Fiscal Period, on the date on which the Company is formed under the Act and (ii) thereafter, on the date immediately after the end of the next preceding Fiscal Period, and terminating at, or immediately preceding (as may be appropriate), the earlier of the last day of the Taxable Year or the date of the issuance or redemption of Units or of any other event that results in a change in the Percentage Interests or the determination of the Capital Accounts of the Members.

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

Incentive Member shall mean any Member that holds Incentive Units, in its capacity as a holder of Incentive Units.

Incentive Unit Agreement shall mean each of the Incentive Unit Agreements by and between the Company and certain Persons to whom Incentive Units have or may be issued from time to time, as in effect from time to time.

Incentive Units shall mean Units designated as Incentive Units in the Company, having the rights and obligations specified in this Agreement that have not terminated pursuant to the Incentive Unit Agreement pursuant to which such Unit was issued.

Indemnitee shall have the meaning ascribed to it in Section 15.1.

Initiating Holders shall have meaning ascribed to it in Section 11.7(b)(i).

IPO shall have the meaning ascribed to it in Section 11.6.

Issuance Notice shall have the meaning ascribed to it in Section 11.5(b).

Local Business Day shall have the meaning ascribed to it in Section 17.7.

Managers shall mean the natural persons who are appointed as members of the Board pursuant to Section 5.1, and Manager means any one of them.

Member shall mean any Person that (i) (A) is one of the Members of the Company as of the Effective Date and (1) is listed as such in Schedule 1 hereto or (2) holds Incentive Units and has become a Member pursuant to the terms of this Agreement (including the execution of a Joinder to this Agreement or the 2008 Operating Agreement), or (B) has been admitted to the Company as a Member in accordance with this Agreement, and (ii) has not ceased to be a Member for any reason.

Member Minimum Gain shall have the meaning given the term partner nonrecourse debt minimum gain set forth in Treasury Regulations Section 1.704-2(i)(2), and will be computed as provided in Treasury Regulations Section 1.704-2(i)(3).

Member Nonrecourse Debt shall have the meaning given such term in Treasury Regulations Section 1.704-2(b)(4).

Member Nonrecourse Deductions shall have the meaning given such term in Treasury Regulations Section 1.704-2(i). The amount of Member Nonrecourse Deductions with respect to a Member Nonrecourse Debt for any Fiscal Period equals the excess, if any, of the net increase, if any, in the amount of Member Minimum Gain attributable to such Member Nonrecourse Debt during such Fiscal Period over the aggregate amount of any distributions during such Fiscal Period to the Member that bears the economic risk of loss for such Member Nonrecourse Debt to the extent such distributions are from the proceeds of such Member Nonrecourse Debt and are allocable to an increase in Member Minimum Gain attributable to such Member Nonrecourse Debt determined in accordance with Treasury Regulations Section 1.704-2(i).

Net Cash Flow shall mean the gross cash receipts of the Company during any Fiscal Period, including the proceeds of any borrowing by the Company, less the portion thereof used or reserved during such Fiscal Period to pay expenses, to repay indebtedness, to fund capital improvements and replacements or otherwise to fund cash outlays of the Company, all as determined in good faith by the Board. Net Cash Flow shall not be reduced by depreciation, amortization, cost recovery deductions or similar non-cash allowances, and shall be increased by any reductions of reserves previously established.

New Members shall have the meaning ascribed to it in Section 4.1.

Non-Electing Member shall have the meaning ascribed to it in Section 11.5(b).

Nonrecourse Deductions shall have the meaning given such term in Treasury Regulations Section 1.704-2(b)(1). The amount of Nonrecourse Deductions for any Fiscal Period equals the excess, if any, of the net increase, if any, in the amount of Company Minimum

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Gain attributable to Nonrecourse Liabilities during such Fiscal Period over the aggregate amount of any distributions during such Fiscal Period of proceeds of a Nonrecourse Liability that are allocable to an increase in Company Minimum Gain attributable to Nonrecourse Liabilities, determined in accordance with the provisions of Treasury Regulations Section 1.704-2(c).

Nonrecourse Liability shall have the meaning given such term in Treasury Regulations Section 1.704-2(b)(3).

Original LLC Agreement shall have the meaning ascribed to it in the Recitals.

Participating Distribution Ratio shall mean, with respect to each Member, the ratio (expressed as a percentage) of:

(x) the number of Eligible Units that are Common Units or Incentive Units held by such Member, to

(y) the aggregate number of Eligible Units that are Common Units or Incentive Units held by all the Members

Percentage Interest shall mean, for any Member, at any time of determination, the number of Units held by the Member divided by the number of Units held by all of the Members, expressed as a percentage.

Permitted Transfer shall have the meaning ascribed to it in Section 11.1(b).

Person shall mean a natural person or any partnership (whether general or limited), limited liability company, trust, estate, association, corporation, custodian, nominee or any other individual or entity in its own or any representative capacity or any other entity, in each case, whether domestic or foreign.

Preceding Year shall have the meaning ascribed to it in Section 12.3(g).

Product means any product or service owned, licensed or sold (directly or indirectly) by the Company or any Subsidiary of the Company.

Profit and Loss shall mean, for each Fiscal Period, an amount equal to the Companys U.S. federal taxable income or loss, respectively, under Section 703(a) of the Code (but including in taxable income or loss, for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 702(a) of the Code), with the following adjustments:

(i) any income of the Company exempt from U.S. federal income tax and not otherwise taken into account in computing taxable income or loss will be added to such taxable income or loss;

(ii) any expenditures of the Company described in Section 705(a)(2)(B) of the Code (or treated as expenditures described in Section 705(a)(2)(B) of the Code pursuant to Treasury

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Regulations Section 1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing taxable income or loss will be subtracted from such taxable income or loss;

(iii) in the event the Carrying Value of any Company asset is adjusted in accordance with the definition of Carrying Value, the amount of such adjustment will be taken into account as gain or loss from the disposition of such asset;

(iv) gain or loss resulting from any Disposition of any asset of the Company with respect to which gain or loss is recognized for U.S. federal income tax purposes will be computed by reference to the Carrying Value of the asset disposed of, notwithstanding that the adjusted tax basis of such asset differs from its Carrying Value;

(v) in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there will be taken into account Depreciation for such Fiscal Period;

(vi) to the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734 of the Code is required pursuant to Treasury Regulations Section 1.704- 1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of Units, the amount of such adjustment shall be treated either as an item of gain (if the adjustment increases the basis of the asset) or an item of loss (if the adjustment decreases the basis of the asset) from the disposition of the asset;

(vii) any fees and other expenses incurred by the Company to promote the sale of (or to sell) a Unit that can neither be deducted nor amortized under Section 709 of the Code will be treated as an item of deduction; and

(viii) excluding any items specially allocated under any provision of this Agreement.

Proposed Rules shall have the meaning ascribed to it in Section 7.2(c).

Public Offering shall mean an underwritten public offering and sale of equity securities in the Company pursuant to an effective registration statement under the Securities Act; provided, that a Public Offering shall not include an offering made in connection with (i) a business acquisition or combination pursuant to a registration statement on Form S-4 or any similar form or (ii) an employee benefit plan pursuant to a registration statement on Form S-8 or any similar form.

Recapitalization shall have the meaning ascribed to it in the Recitals.

Related Person shall have the meaning set forth in Section 4.13.

Registrable Securities shall mean (i) Common Units and (ii) any other equity securities of the Company (including securities of a corporation issued pursuant to Section 11.6) issued as a dividend or other distribution with respect to or in exchange for or in replacement of the securities referenced in (i) above.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Registration Expenses shall mean all expenses incurred in effecting any registration pursuant to this Agreement, including, without limitation, all registration, qualification, and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company and one special counsel for the selling Members, blue sky fees and expenses, and expenses of any regular or special audits incident to or required by any such registration and the compensation of regular employees of the Company (which shall be paid in any event by the Company), but shall not include Selling Expenses.

Registration Rights Agreement shall have the meaning ascribed to it in Section 11.6.

Related Documents shall mean the Incentive Unit Agreements.

Revaluation Event shall mean each of the following events: (i) the contribution of money or other property (other than a de minimis amount) by any Person, including an existing Member, to the capital of the Company as consideration for Units; (ii) the issuance of Units (other than a de minimis amount) as consideration for the provision of services to or for the benefit of the Company by any Person, including an existing Member, or by a new Member acting in a member capacity or in anticipation of becoming a member; (iii) the distribution of money or other property (other than a de minimis amount) by the Company to a retiring or continuing Member as consideration for Units; (iv) the liquidation of the Company; or (v) such other times as the Board reasonably determines necessary or advisable in order to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2, and, in the case of (v), to the extent not inconsistent with relevant provisions of applicable law, regulations, administrative rulings, and judicial decisions.

Safe Harbor Election shall have the meaning ascribed to it in Section 7.2(c).

Sale of the Company shall mean the sale of the Company (or any successor thereto), including in one or more series of related transactions to a bona fide purchaser or purchasers on arms length terms, pursuant to which such purchaser or purchasers acquire, directly or indirectly, through one or more intermediaries, (i) equity securities of the Company constituting a majority of the Common Units (whether by merger, consolidation, sale or transfer of the Companys outstanding interests or Units) or (ii) a substantial portion of the assets of the Company and its Subsidiaries on a consolidated basis.

SEC shall mean the Securities and Exchange Commission.

Securities Act shall mean the Securities Act of 1933, as amended.

Selling Expenses shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel for any Member (other than the fees and disbursements of one special counsel to the Members included in Registration Expenses).

SRAM International shall mean SRAM International Holdings, Inc., a Delaware corporation.

SRAM-SP2 shall have the meaning ascribed to it in the Recitals

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Stan Day Affiliates means (a) during the life of Stan Day (i) Stan Day and his spouse, former spouse and lineal descendants and (ii) any trust, corporation, limited liability company or partnership controlled, directly or indirectly, by Stan Day, his spouse, former spouse or lineal descendants and (b) after Stan Days life, (i) his spouse, former spouse, and the heirs and lineal descendants of Stan Day, (ii) any executors, administrators, testamentary trustees, legatees or beneficiaries in respect of Stan Day or Stan Days estate, and (iii) any entity described in clause (a)(ii) of this definition.

Subsidiary shall mean, with respect to any Person, any corporation, limited liability company, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity, a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or control the managing director, general partner or similar controlling Person of such limited liability company, partnership, association or other business entity.

Tax Distribution shall have the meaning ascribed to it in Section 10.1(a).

Tax Matters Partner shall have the meaning ascribed to it in Section 13.2(a).

Taxable Year shall mean the taxable year of the Company, which shall end on December 31 of each year; provided, that, in the case of the Companys final Taxable Year, such Taxable Year shall end on the date on which the winding up of the Company is completed.

TCP SRAM Holdings shall have the meaning ascribed to it in the Recitals.

Transfer shall have the meaning ascribed to it in Section 11.1(a).

Treasury Regulations shall mean the regulations promulgated by the United States Treasury Department under the Code, as amended from time to time.

Unit shall mean, with respect to a Member, any unit of interest in the Company issued to any Member pursuant to this Agreement, representing, subject to the terms of any such unit, such Members ownership interest and rights as a Member in the Company, including the Members right to a share of the Profit and Loss (or items thereof) of the Company, its right to Distributions and to a share of the assets of the Company on liquidation and its right to participate in the management of the business and affairs of the Company, including the right, to the extent a Unit is a Common Unit, to vote on, consent to or otherwise participate in any decision or action of or by the Members granted pursuant to this Agreement or the Act.

Unit Equivalents shall mean securities convertible into or exchangeable for Units.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Unrealized Gain shall mean, with respect to any property of the Company as of the date of determination, the excess of the Fair Market Value of that property as of that date of determination over the Carrying Value of that property as of that date of determination.

Unrealized Loss shall mean, with respect to any property of the Company as of the date of determination, the excess of the Carrying Value of that property as of that date of determination over the Fair Market Value of that property as of that date of determination.

Unvested Incentive Unit means any Incentive Unit that is not a Vested Incentive Unit.

Vested Incentive Unit means any Incentive Unit that has vested pursuant to the terms and conditions of the Incentive Unit Agreement or other document pursuant to which such Incentive Unit was acquired by the initial holder thereof or any other document governing the vesting of such Incentive Unit.

Other capitalized terms defined elsewhere in this Agreement shall have the meanings so given them.

1.2 Form of Pronouns; Number; Construction. Unless the context otherwise requires, as used in this Agreement, the singular number includes the plural and the plural number may include the singular. The use of any gender shall be applicable to all genders. Unless otherwise specified, references to Articles, Sections or subsections are to the Articles, Sections and subsections in this Agreement. Unless the context otherwise requires, the term including shall mean including, without limitation.

ARTICLE 2 THE COMPANY

2.1 Formation. The Company was formed as a limited liability company upon the filing of the Certificate of Formation of the Company with the Secretary of State of the State of Delaware on September 22, 2008 under and pursuant to the provisions of the Act, and the Members agree to continue the Company in existence upon the terms and conditions set forth in this Agreement. The Certificate may be restated by the Company as provided in the Act or amended by the Company with respect to the address of the registered office of the Company in Delaware or the name and address of its registered agent in Delaware. Other additions to or amendments of the Certificate shall be authorized as provided in Section 2.5. The Certificate of Formation, as so amended from time to time, is referred to herein as the Certificate. Any Member who so requests shall have the right to receive from the Company a copy of the Certificate and any amendment thereto.

2.2 Name. The name of the Company is SRAM Holdings, LLC, or such other name or names as the Board may from time to time designate; provided, that the name shall always contain the words Limited Liability Company or LLC.

2.3 Purpose of the Company. The Company is organized for any lawful business, purpose or activity that may be conducted by a limited liability company under the Act. The Company shall have any and all powers that are necessary or desirable to carry out the purposes and business of the Company, to the extent the same may be legally exercised by limited liability

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document companies under the Act. The Company shall carry out the foregoing activities pursuant to the arrangements set forth in this Agreement.

2.4 Term. The term of the Company shall be perpetual from the date of filing of the Certificate with the Secretary of State of the State of Delaware, unless the Company is earlier dissolved in accordance with either the provisions of this Agreement or the Act.

2.5 Filings.

(a) The Board shall take any and all actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware, including the preparation and filing of such amendments to the Certificate and such other assumed name certificates, documents, instruments and publications as may be required by law. (b) The Board shall cause to be taken all actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any other jurisdictions in which the Company engages in business.

2.6 No State Law Partnership. The Members intend that the Company shall not constitute or be treated as a partnership (including, without limitation, a limited partnership) or joint venture, and that no Member shall be a partner or joint venturer of any other Member, for any purpose other than U.S. federal income tax and, if applicable, state and local income tax purposes, and this Agreement shall not be construed to the contrary. The Members intend that the Company shall be treated as a partnership for U.S. federal income tax purposes, and if applicable, state and local income tax purposes, and each Member and the Company shall file all tax returns and shall otherwise take all tax and financial reporting positions in a manner consistent with such treatment. The Members shall not make any election under Treasury Regulations Section 301.7701-3, or any comparable provisions of state or local law, to treat the Company as an entity other than a partnership for U.S. federal, state or local income tax purposes.

2.7 Seal. The Board may adopt a seal of the Company in such form as the Board shall decide.

ARTICLE 3 OFFICES

3.1 Registered Office and Registered Agent. The address of the Companys initial registered office in Delaware shall be 615 South DuPont Highway, City of Dover, County of Kent, Zip Code 19901, and the name of its initial registered agent at such address shall be National Corporate Research, Ltd.

3.2 Principal Executive Office. The principal office and place of business of the Company initially shall be 1333 N. Kingsbury, 4th Floor, Chicago, Illinois 60622. The Board may change the principal office or place of business of the Company from time to time and may

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document cause the Company to establish other offices or places of business in various jurisdictions and appoint agents for service of process in such jurisdictions.

3.3 Other Offices. The Board may at any time cause the Company to establish other business offices within or without the State of Delaware and appoint agents for service of process in jurisdictions without the State of Delaware.

ARTICLE 4 MEMBERS; LIMITED LIABILITY OF MEMBERS; CLASSES; INTERESTS OF MEMBERS; CERTIFICATES; VOTING RIGHTS; MEETINGS OF MEMBERS

4.1 Members; Admission of New Members. Each of the parties to this Agreement, and each Person admitted as a Member of the Company pursuant to this Agreement, shall be a Member of the Company until it ceases to be a Member in accordance with the provisions of this Agreement. Subject to the Boards authority to grant the Authorized Incentive Units, and other than a substituted Member admitted pursuant to Section 11.2, additional Persons may be admitted to the Company as Members (New Members) only upon the approval of the Members holding a majority of the outstanding Common Units and upon such terms and conditions as are established by the Board, which may include the establishment of classes or groups of Members having different relative rights, powers and duties, including rights and powers that are superior or inferior to those of existing Members, or the right to vote as a separate class or group on matters specified by amendment of this Agreement; provided, that any New Member shall be admitted as a New Member only upon such New Members agreement to be bound by the terms and conditions of this Agreement and execution of a joinder substantially in the form attached hereto as Exhibit A. New Members approved in accordance with the foregoing shall be admitted at the time when all conditions to their admission have been satisfied, as determined by the Board, and Schedules 1 and 2 of this Agreement shall be amended or restated accordingly (which schedules shall be maintained by the Secretary of the Company).

4.2 Limited Liability. The liability of each Member shall be limited as set forth in the Act and other applicable law and, except as expressly set forth in this Agreement or required by law, no Member shall be personally liable for any debt, obligation or liability of the Company, whether arising in contract, tort or otherwise, solely by reason of being a Member of the Company. Except as otherwise provided in the Act, by law or expressly in this Agreement, no Member shall have any fiduciary or other duty to another Member with respect to the business and affairs of the Company. Except as required by law, no Member shall have any responsibility to restore any negative balance in its Capital Account or to contribute to or in respect of the liabilities or obligations of the Company or to return Distributions made by the Company.

4.3 Nature of Ownership; Agreement Is Binding upon Successors. The Units held by Members constitute their personal property. No Member has any interest in any specific asset or property of the Company. Subject to the provisions of Article 11, in the event of the death or legal disability of any Member, the executor, trustee, administrator, guardian, conservator or other legal representative of such Member shall be bound by the provisions of this Agreement. Subject to the provisions of Article 11, if a Member that is not a natural person is dissolved or terminated, the successor of such Member shall be bound by the provisions of this Agreement.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 4.4 Certificates Evidencing Units. The Company may, at the discretion of the Board, issue to any or all Members of the Company certificates signed on behalf of the Board by its officers, representing the Units held by such Member, which signatures may be facsimiles. If a certificate is worn out or lost, it may be renewed on production of the worn out certificate or on satisfactory proof of its loss, together with such indemnity as may be reasonably required by the Board. Any certificate for Units shall be imprinted with legends substantially in the following form: THE UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS CONTAINED IN THE LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF ISSUER OF SUCH SECURITIES (THE COMPANY). A COPY OF SUCH LIMITED LIABILITY COMPANY AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.

4.5 Voting Rights.

(a) Except as specifically provided herein or otherwise required by applicable law, (i) each Common Unit shall carry the right to one (1) vote on all matters to be voted on by the Members of the Company and (ii) the Incentive Units shall be non-voting Units and shall not entitle the holders thereof to vote on any matters to be voted on by the Members of the Company. When a quorum is present, the affirmative vote of the majority of Common Units voting together as a single class held by Members (whether present in person or represented by proxy) entitled to vote on the matter shall be the act of the Members, unless the subject matter is one upon which by express provision of the Act or this Agreement requires the consent (i) of a greater majority or (ii) of a specific Member or Members in which two cases such express provision shall govern and control the decision of such question.

(b) Only Persons who are listed as being Members holding Common Units on the records of the Company on the record date as provided in Section 4.11 shall be entitled to receive notice of and to vote at such meeting, and such day shall be the record date for such meeting. Any Member entitled to vote on any matter may cast part of its votes in favor of the proposal and refrain from exercising the remaining votes or vote against the proposal (other than

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document for election or removal of a Manager in accordance with the terms of this Agreement), but if the Member fails to specify the Units that such Member is voting affirmatively, it will be conclusively presumed that the Members approving vote is with respect to all votes that such Member is entitled to cast. Such vote may be by voice or by ballot; provided, that all votes for election or removal of a Manager in accordance with the terms of this Agreement must be by ballot upon demand made by a Member at any meeting at which such election or removal is to be considered and before the voting begins.

(c) Without limiting the preceding provisions of this Section 4.5, no Person shall be entitled to exercise any voting rights as a Member until such Person:

(i) shall have been admitted as a Member, and

(ii) shall have made in full any Capital Contribution required of such Person.

(d) Members who are not holders of Common Units shall have no right to consent to or vote on any matter under this Agreement or under the Act.

(e) Except as otherwise expressly provided in this Agreement, Members (in their capacities as such) shall not participate in the control or management of the business of the Company.

4.6 Place of Meetings. All meetings of the Members shall be held at any place within or without the State of Delaware which may be designated by the Board. In the absence of such designation, Members meetings shall be held at the principal executive office of the Company. Notwithstanding the foregoing, the Board or those Members entitled to call a meeting of the Members may request that any such meeting be held by telephonic conference call.

4.7 Meetings of Members. Meetings of the Members for the purpose of taking any action permitted to be taken by the Members may be called by the Board, by Members entitled to cast not less than a majority of Common Units at the meeting. Upon request in writing that a meeting of Members be called for any proper purpose upon which Members are entitled to vote hereunder, the Board forthwith shall cause notice to be given to the Members entitled to vote that a meeting will be held at a time requested by the person or persons calling the meeting, not less than five (5) nor more than sixty (60) days after receipt of the request. Except in special cases where other express provision is made by statute, written notice of such meetings shall be given to each Member entitled to vote not less than five (5) business days nor more than sixty (60) days before the meeting. Such notices shall state:

(a) either the place of such meeting or that such meeting is telephonic and the date and hour of the meeting; and

(b) those matters that the Board or Members, at the time of the mailing of the notice, intend to present for action by the Members.

4.8 Quorum. The presence at any meeting in person (including by telephone, if applicable) or by proxy of Members holding not less than a majority of the Common Units

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document entitled to vote at such meeting shall constitute a quorum for the transaction of business. If, however, such quorum will not be present at any meeting of the Members, the Members entitled to vote at such meeting will have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until Members representing a quorum are present or represented.

4.9 Waiver of Notice. The actions of any meeting of Members, however called and noticed, and wherever held, shall be as valid as if taken at a meeting duly held after regular call and notice, if a quorum be present either in person (including by telephone, if applicable) or by proxy, and if, either before or after the meeting, each Person entitled to vote, present in person (including by telephone, if applicable) or by proxy, signs (including by facsimile) a written waiver of notice or a consent to the holding of the meeting, or an approval of the minutes thereof. The waiver of notice, consent or approval need not specify either the business to be transacted or the purpose of any regular or special meeting of Members. All such waivers, consents or approvals shall be filed with the Companys records and made a part of the minutes of the meeting. Attendance of a Member at a meeting (including by telephone, if applicable) shall also constitute a waiver of notice of and presence at such meeting, except when the Member objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters required to be included in the notice but not so included, if such objection is expressly made at the meeting.

4.10 Action by Members Without a Meeting. Any action which, under any provision of the Act or the Certificate or this Agreement, may be taken at a meeting of the Members, may be taken without a meeting, and without notice, if a consent in writing, setting forth the action so taken, is signed by Members having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Members entitled to vote thereon were present and voted. All such consents shall be filed with the Board and shall be maintained in the Companys records; provided, that a copy of any such consent is provided to each Member entitled to vote with respect to such matter no less than three (3) business days prior to its effectiveness.

4.11 Record Date. The Board may fix a time in the future as a record date for the determination of the Members entitled to notice of and to vote at any meeting of Members to receive any report and to receive distributions. The record date so fixed shall be not more than sixty (60) days nor less than fifteen (15) days prior to the date of any meeting, nor more than sixty (60) days prior to any other event for the purposes of which it is fixed. When a record date is so fixed, only Members of record at the close of business on that date are entitled to notice of and to vote at any such meeting, to give consent without a meeting, to receive any report, to receive a distribution or to exercise the rights, as the case may be, notwithstanding any transfer of any interests on the books of the Company after the record date, except as otherwise provided by the Act or in the Certificate or this Agreement. If the Board does not so fix a record date for determining Members entitled to notice of or to vote at a meeting of Members, the record date shall be deemed to be at the close of business on the business day immediately preceding the day on which notice is given or, if notice is waived, at the close of business on the business day immediately preceding the day on which the meeting is held.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 4.12 Members Are Not Agents. Pursuant to Article 5, the management of the Company is vested in the Board. The Members shall have no power to manage or participate in the management of the Company, or bind or act on behalf of the Company in any way, except as expressly authorized by the Act, this Agreement or the Certificate. No Member, acting solely in the capacity of a Member, is an agent of the Company nor does any Member, unless expressly and duly authorized in writing to do so by the Board, have any power or authority to bind or act on behalf of the Company in any way, to pledge its credit, to execute any instrument on its behalf or to render it liable for any purpose.

4.13 Transactions of Members with the Company. Subject to any limitations set forth in this Agreement and with approval of the Board, a Member, its, his or her Family Group, Affiliates or any of their respective shareholders, partners, employees or direct or indirect members (each, a Related Person) may lend money to and transact other business with the Company. Any such transaction shall be carried out on an arms length basis unless otherwise approved by the Members holding a majority of the Common Units. A Related Person shall have the same rights and obligations with respect thereto as a Person that is not a Related Person.

4.14 Loans by Members to the Company. Subject to any limitations set forth in this Agreement, funds required by the Company may be financed through borrowings from the Members or their Affiliates or from commercial lending sources, as the Board and the lending party may agree from time to time, at prevailing market rates and upon customary terms and conditions for such loans. No Member shall be obligated to lend money to the Company. Any loan by a Member to the Company shall be separately entered on the books of the Company as a loan to the Company and not as a Capital Contribution and shall bear interest at such rate as may be agreed upon by the Company and the lending Member.

ARTICLE 5 MANAGEMENT OF THE COMPANY

5.1 Board; Designation and Powers of the Board.

(a) Subject to the provisions of the Act and any limitations in the Certificate and this Agreement as to action required to be authorized or approved by the Members, the business and affairs of the Company shall be managed and all of its powers shall be exercised by or under the direction of the Board. All actions, decisions, consents, determinations and elections made or taken by the Board in accordance with this Article 5 shall be binding on all of the Members. Except as otherwise expressly provided in this Agreement, the Members shall not participate in the management or control of the business and affairs of the Company, and shall have no right, power or authority to act for or on behalf of, or otherwise bind, the Company. The Board shall be comprised of five (5) natural persons (each, a Manager), which number may be increased or decreased from time to time upon a resolution of the Board and the consent of the Members holding a majority of the outstanding Common Units.

(b) Each Member shall vote all of his or its Common Units and all other voting securities of the Company over which such Member has voting control, and shall take all other necessary or desirable actions within such Members control (whether in such Members capacity as a holder of Units, Member, Manager, director, member of a board committee or

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document officer of the Company or otherwise, and including attendance in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings), and the Company and its Subsidiaries shall take all necessary or desirable actions within their control (including, without limitation, calling special board and Member meetings), so that the provisions of Section 5.1(a) are effected and that:

(i) The following persons will be elected to the board:

(A) three (3) representatives shall be designated by the Members holding a majority of the Common Units; and

(B) two (2) representatives shall be designated by the Stan Day Affiliates; provided, however, that if the Stan Day Affiliates cease to directly or indirectly hold 5% of the total Units, all Managers shall be designated by the Members holding a majority of the Common Units.

(ii) Any Manager required to be elected as described in Section 5.1(b)(i) shall be removed from the Board (with or without cause) at the written request of the Person or Persons that have the right to designate such Manager under Section 5.1(b)(i), but only upon such written request and under no other circumstances.

(iii) In the event that any Manager required to be elected as described in Section 5.1(b)(i) ceases to serve as a Manager or a member of any committee thereof during such representatives term of office, the resulting vacancy on the Board or such committee shall be filled by a representative designated by the Persons that have the right to designate such Manager under Section 5.1(b)(i). If the Persons having the right to designate such Manager under Section 5.1(b)(i) fail to so designate another Manager, then such Managers position shall remain vacant until such time as the Persons entitled to elect such Manager elect to fill such vacancy.

(c) The Board may elect one Manager as Chairman of the Board to conduct meetings of the Board and oversee the administration of the Board.

(d) Decisions of the Board shall be made in accordance with the voting procedures set forth in Section 5.2. In addition to the powers and authorities expressly conferred by this Agreement upon the Board, except with respect to certain responsibilities assigned to the Tax Matters Partner, all day-to-day management and operating decisions and determinations relating to the operations of the Company in the ordinary course of business shall be made by the Board or the officers appointed pursuant to Section 5.13. Without prejudice to such general powers, it is hereby expressly declared that the Board shall have the following powers:

(i) to appoint and remove the officers, agents and employees of the Company, prescribe their duties and fix their compensation;

(ii) To borrow money and incur indebtedness on behalf of the Company and to cause to be executed and delivered therefor, in the Companys name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document evidences of debt in security therefor; including notes and mortgages permitting the lender to enforce a judgment against the Company;

(iii) to issue the Authorized Incentive Units and, subject to compliance with the terms and conditions of any equity incentive plan approved by the Holders of a majority of the Common Units, determine the terms and conditions governing the issuance of Incentive Units;

(iv) to designate committees of the Board of not less than two Managers and to prescribe the manner in which proceedings of such committees shall be conducted;

(v) to acquire real and personal property, arrange financing and enter into contracts;

(vi) to file, prosecute, defend or settle litigation, administrative or regulatory proceedings or alternate dispute resolution proceedings;

(vii) to make all other arrangements and do all things which are necessary or convenient to the conduct, promotion or attainment of the business purposes or activities of the Company;

(viii) to retain and change the Accounting Firm, if any;

(ix) to approve all operating and capital expenditure budgets and annual business plans;

(x) to authorize a Sale of the Company or an IPO;

(xi) to appoint a Chairman of the Board from among the Managers; and

(xii) to direct officers of the Company to do any of the foregoing.

5.2 Board Voting. Each Manager present at any meeting of the Board (whether in person, telephonically or otherwise) or each Manager signing any written resolution or consent of the Board or authorizing any other action of the Board shall have the right to exercise one (1) vote in the aggregate at any such meeting or in respect of such resolution, consent or action. Except as otherwise stated in this Agreement, decisions of the Board shall be made by a majority of the votes cast.

5.3 Current Managers. The names and addresses of the Managers appointed to the Board from and after the Effective Date until removal, replacement, resignation or otherwise pursuant to this Article 5, and the Chairman of the Board, are as set forth in Schedule 4.

5.4 Agency Authority of Managers. With the prior consent of the Board (which may be in the form of a blanket authorization), any Manager or officer of the Company may sign contracts on behalf of the Company and endorse checks, drafts and other evidences of indebtedness made payable to the order of the Company.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 5.5 Limited Liability. Except as expressly set forth in this Agreement or required by law, no Manager shall be personally liable for any debt, obligation, or liability of the Company, whether arising in contract, tort or otherwise, solely by reason of being a Manager of the Company.

5.6 Resignations. Any Manager may resign effective upon giving written notice to the Board, which notice shall be effective upon delivery, unless the notice specifies a later time for the effectiveness of such resignation. A successor to such Manager shall be designated by the Member(s) that designated the resigning Manager.

5.7 Compensation of Managers. Managers who are not employees of the Company or any of its Subsidiaries shall be entitled to such other compensation for their services as Managers as the Board shall approve. Managers who are not employees of the Company shall be reimbursed by the Company for all reasonable out-of-pocket expenses incurred by them in their capacity as a Manager of the Company, in accordance with the Companys standard reimbursement policies, including expenses incurred in connection with attendance at meetings of the Board or its committees or other Company events which a Manager attends at the request of Company management.

5.8 Managers May Engage in Other Activities. Subject to the terms of any employment or consulting agreement between any Manager and the Company, Managers who are not employees of the Company or any of its Subsidiaries are not obligated to devote all of their time or business efforts to the affairs of the Company; provided that the Managers shall devote such time, effort and skill as is necessary for the proper operation of the Company and the Business and provided, further, that no Manager who is an employee of the Company or any of its Subsidiaries, while serving as a Manager of the Company, may in any manner compete with the Company or the Business except in their capacity as an officer, director or employee of any Subsidiary of the Company (provided that ownership of two percent (2%) or less of any entity whose securities have been registered under the Securities Act or Section 12 of the Exchange Act shall not be deemed to violate this Section 5.8). Subject to the foregoing, the Managers may have other business interests and may engage in other activities in addition to those related to the Company. Neither the Company nor any Member shall have the right, by virtue of this Agreement, to share or participate in such other investments or activities of any Manager or to the income derived therefrom.

5.9 Transactions of Managers with the Company. Subject to the approval of the Board and the Members holding a majority of the Common Units, a Manager, directly or through his or her Affiliate, may lend money to and transact other business with the Company. Such Manager has the same rights and obligations with respect thereto as a Person who is not a Member or Manager.

5.10 Liability for Certain Acts. Except as set forth in Section 5.11 below, the Managers shall exercise their business judgment in managing the business operations and affairs of the Company. Unless fraud, deceit, gross negligence, willful misconduct or embezzlement shall be proven by a court of competent jurisdiction, after exhaustion of all appeals therefrom, the Managers shall not be liable or obligated to the Members for any mistake of fact or judgment or for the doing of any act or for the failure to do any act by the Managers in conducting the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document business operations and affairs of the Company. The Managers do not, in any way, guarantee the return of any Members Capital Contribution or a profit for the Members from the operation of the Company. The Managers are not responsible to any Member for the loss of his, her or its investment in the Company or a loss in operations of the Company unless the result shall have been a result of fraud, deceit, gross negligence, willful misconduct or embezzlement by such Managers. The Managers shall incur no liability to the Company or to any of the Members as a result of engaging in any other business or venture.

5.11 Waiver of Fiduciary Duties; Corporate Opportunities. To the full extent permitted by the Delaware Limited Liability Company Act, all Members and Managers hereby waive any and all fiduciary duties that, absent such waiver, may be implied by law or equity.

5.12 Third Party Reliance. Third parties dealing with the Company shall be entitled to rely conclusively upon the power and authority of the Board as set forth herein. Any Person dealing with the Company may rely upon a certificate or resolution signed by the entire Board, as to:

(a) the identity of any Manager or officer of the Company;

(b) the existence or nonexistence of any fact or facts which constitute conditions precedent to acts by any Managers, which is in any manner germane to the affairs of the Company;

(d) any act or failure to act by the Company; or

(e) any other matter whatsoever involving the Company or any Member.

5.13 Officers. The Board may in its discretion determine that the Company shall have officers. The names of the officers of the Company from and after the Effective Date until removal, replacement, resignation or otherwise pursuant to this Article are as set forth in Schedule 3. The following provisions of this Section shall apply with respect to officers:

(a) The officers of the Company may, but need not, include a Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, Vice President, Secretary and Treasurer and other officers appointed by the Board. Any number of offices may be held by the same person. Officers may, but need not, be Managers and/or Members;

(b) each officer of the Company shall be chosen by the Board and shall serve at the pleasure of the Board and may be removed by the Board, with or without cause, subject to applicable contractual obligations;

(c) any vacancy in any office because of death, resignation, removal, disqualification or other cause shall be filled by the Board;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) the terms and condition of employment and the responsibilities of the officers of the Company shall be fixed from time to time by the Board;

(e) except as required by law, no officer shall be personally liable for any debt, obligation or liability of the Company, whether arising in contract, tort or otherwise, solely by reason of being an officer of the Company; and

(f) nothing contained in this Section 5.13 shall affect or be construed as affecting the terms of any contract of employment between the Company and any officer.

ARTICLE 6 MEETINGS OF THE BOARD

6.1 Place of Meetings. Meetings of the Board shall be held at any place within or without the State of Delaware that has been designated from time to time by the Board. In the absence of such designation, meetings of the Board shall be held at the principal executive office of the Company. Notwithstanding the foregoing, the Board or any Manager entitled to call a meeting of the Board may request that any such meeting be held by telephonic conference call.

6.2 Meetings of the Board.

(a) The Board shall meet from time to time as the Board may determine for the purpose of organization and consideration of any business that may properly be brought before the meeting, but shall meet not less frequently than quarterly.

(b) Meetings of the Board may be called for any purpose or purposes at any time by any of (i) the Chairman of the Board or a majority of the Managers Notice of the time and place of meetings (or whether such meeting shall be telephonic) shall be delivered personally or by telephone to each Manager, or sent by mail, e-mail or facsimile transmission, charges prepaid, addressed to such Manager at his or her address as it appears upon the records of the Company or, if it is not so shown on the records and is not readily ascertainable, at the place at which the meetings of the Board are regularly held. In case such notice is mailed, it shall be deposited in the United States mail at least ten (10) days prior to the time of the holding of the meeting. In case such notice is sent by facsimile transmission, it shall be transmitted by the person giving the notice by electronic means to the Manager at least three (3) business days prior to the time of the holding of the meeting. In case such notice is delivered personally, by telephone, or by e-mail, as above provided, it shall be so delivered at least two (2) business days prior to the time of the holding of the meeting. Any notice given personally, by telephone, or by e-mail may be communicated to either the Board or to a person at the office of the Company whom the person giving the notice has reason to believe will promptly communicate it to the Board. The Company has the responsibility to deliver to each Manager any notice received by the Company as described in the preceding sentence. Such deposit in the mail, delivery to a common carrier, transmission by electronic means or delivery, personally or by telephone, as above provided, shall be due, legal and personal notice to the Board. The notice need not specify the purpose of the meeting.

6.3 Quorum; Participation in Meetings by Conference Telephone Permitted; Vote Required for Action. Physical or telephonic presence of Manager(s) with the right to exercise a

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document majority of votes in the aggregate at a meeting of the Board constitutes a quorum for the transaction of business. Managers may participate in a meeting through use of conference telephone or similar communications equipment, so long as all Managers participating in such meeting can communicate with and hear one another. Every resolution, consent, act or decision done or made by a majority of the votes by Manager(s) present at a meeting of the Board duly held at which a quorum is present shall be regarded as the act of the Board. A meeting of the Board at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of Managers, provided, that any action taken is approved by at least the requisite number of Managers of the required quorum for such meeting. Manager(s) who have the right to exercise a majority of the votes present may adjourn any meeting of the Board to another time and place. If the meeting is adjourned for more than twenty-four (24) hours, notice of any adjournment to another time or place (other than adjournments until the time fixed for the next regular meeting of the Board, as to which no notice is required) shall be given prior to the time of the adjourned meeting to the Managers who were not present at the time of the adjournment.

6.4 Waiver of Notice; Consent to Meeting. Notice of a meeting of the Board need not be given to any Manager who signs a waiver of notice or a consent to holding the meeting, whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such Manager. All such waivers, consents and approvals shall be filed with the Companys records and made a part of the minutes of the meeting.

6.5 Unanimous Action by Board Without a Meeting. Any action required or permitted to be taken by the Board may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by every then-acting Manager of the Company. Such written consent or consents shall be filed with the minutes of the proceedings of the Board.

ARTICLE 7 UNITS; PERCENTAGE INTERESTS

7.1 Units.

(a) The Members interests in the Company are divided into and represented by the Units, each having the rights and obligations specified in this Agreement, as it may be amended from time to time. The Secretary of the Company shall maintain schedules that set forth the identity of the Members from time to time, their respective mailing addresses and the Units held by them.

(b) Effective upon consummation of the Recapitalization and the execution and adoption of this Agreement, all outstanding Class A Units and Class B Units of the Company, as defined in the 2008 Operating Agreement, shall be converted into and reclassified as Common Units. At such time, each Class B Unit shall be converted into one Common Unit and each Class A Unit shall be converted into such number of Common Units having an equivalent Fair Market Value as determined by the Board. The number and class of Units held by each Member holding Common Units after giving effect to the conversion and reclassification is set out in Schedule 2. Incentive Units under the 2008 Operating Agreement shall continue to be classified as Incentive Units for all purposes under this Agreement upon consummation of the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Recapitalization and the aggregate number of outstanding Incentive Units is listed on Schedule 2. Subject to the terms of this Agreement, including, without limitation, Section 11.5, the Board may issue additional Common Units and Incentive Units for such purposes and in exchange for such Capital Contributions as it shall deem necessary or desirable. Subject to the terms of this Agreement, including, without limitation, Section 11.5, the Board may create and issue any other class or classes of Units or other equity interests in the Company for such purposes and in exchange for such consideration as it shall deem necessary or desirable, which Units or other equity interests in the Company may have rights and obligations that are different from, and superior or inferior to, those of the Common Units and Incentive Units.

(c) A Member may own one or more classes of Units. Except as provided herein, the ownership of a Unit of one class shall not affect the rights or obligations of a Member with respect to Units of other classes. Any reference to the holder of a class of Units shall be deemed to refer to such holder only to the extent of the Units of the relevant class held by the Member, unless the context clearly requires otherwise.

(d) Except with the prior approval of the Board and the Members holding a majority of the Common Units, Units of one class may not be converted into or exchanged for Units of any other class.

(e) Any Incentive Unit that is repurchased or cancelled by the Company pursuant to the terms of any Incentive Unit Agreement or otherwise, shall no longer be deemed to be outstanding for any purpose under this Agreement.

(f) Pursuant to the Incentive Unit Agreements and upon approval by the Board, and in accordance with any equity incentive plan approved by the Holders of a majority of the Common Units, the Company may issue Incentive Units (the Authorized Incentive Units).

7.2 Incentive Units.

(a) The Company and each Member agree to treat each Incentive Unit granted to an Incentive Member pursuant to the Incentive Unit Agreement as a separate profits interest within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343. In accordance with Rev. Proc. 2001-43, 2001-2 CB 191, the Company shall treat each Incentive Member as the owner of its Incentive Units from the date such Incentive Units are granted, and shall file its IRS Form 1065, and issue appropriate Schedules K-1, to such Incentive Member, allocating to such Incentive Member its distributive share of all items of income, gain, loss, deduction and credit associated with such Incentive Units as if they were Vested Incentive Units. Each Incentive Member agrees to take into account such distributive share in computing its U.S. federal income tax liability for the entire period during which it holds such Incentive Units. The Company and each Member agrees not to claim a deduction (as wages, compensation or otherwise) for the fair market value of any Incentive Unit issued to a Incentive Member, either at the time of the grant of the Incentive Unit or at the time the Incentive Unit becomes a Vested Incentive Unit. The undertakings contained in this Section 7.2(a) shall be construed in accordance with Section 4 of Rev. Proc. 2001-43. Each Incentive Member who receives an Unvested Incentive Unit agrees to timely and properly make an election under Section 83(b) of the Code with respect to each

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Unvested Incentive Unit received and promptly to provide a copy of such election to the Company. The provisions of this Section 7.2(a) shall apply regardless of whether or not the Incentive Member files an election pursuant to Section 83(b) of the Code with respect to such Incentive Units.

(b) Each Incentive Unit shall have a Distribution Threshold set forth in the Incentive Members Incentive Unit Agreement, and the Incentive Member will be eligible to receive Distributions with respect thereto to the extent provided in Section 10.1. Distribution Threshold shall mean, with respect to each Incentive Unit, an amount of Distributions specified by the Board at the time of its issuance, which amount shall not be less than the amount of Distributions that would be distributed to the Members under Section 10.1(b) (taking into account any Tax Distributions credited against amounts that otherwise would have been distributed thereunder) if, immediately prior to the issuance of such Incentive Unit, all the assets of the Company were sold for their respective Fair Market Values, the liabilities of the Company were paid in full, and the remaining proceeds were distributed in accordance with Section 10.1. A Members Distribution Threshold shall be adjusted automatically to take into account any additional Capital Contributions made to the Company by a Member. The intent of this Section 7.2(b) is to ensure that all Incentive Units issued qualify as profits interests under Rev. Proc. 93-27 and Rev. Proc. 2001-43, and this Section 7.2(b) and the other provisions of this Agreement shall be interpreted and applied consistently therewith.

(c) The Board may elect to cause the Company to make an election to value any Incentive Units issued by the Company as compensation for services to the Company at liquidation value (the Safe Harbor Election), as the same may be permitted pursuant to or in accordance with the finally promulgated successor rules to proposed Treasury Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the Proposed Rules). Upon such election, the Board shall cause the Company to make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election.

(d) Any such Safe Harbor Election shall be binding on the Company and on all of the Members with respect to all transfers of Incentive Units thereafter made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Board as permitted by the Proposed Rules or any applicable rule.

(e) Each Member (including each Incentive Member to whom an Incentive Unit is granted in connection with the performance of services), by signing this Agreement (or a counterpart hereto), hereby agrees to comply with all requirements of the Safe Harbor Election with respect to all Incentive Units granted while the Safe Harbor Election remains effective.

(f) The Board shall file or cause the Company to file all returns, reports and other documentation as may be required to perfect and maintain the Safe Harbor Election with respect to grants of Incentive Units covered by such Safe Harbor Election.

(g) The Board is hereby authorized and empowered, without further vote or action of the Members, to amend this Agreement as necessary to comply with the Proposed Rules or any rule, in order to provide for a Safe Harbor Election and the ability to maintain or

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document revoke the same, and shall have the authority to execute any such amendment by and on behalf of each Member. Any undertakings by the Members necessary to enable or preserve a Safe Harbor Election may be reflected in such amendments and to the extent so reflected shall be binding on each Member, respectively.

(h) Each Member agrees to cooperate with the Board to perfect and maintain any Safe Harbor Election, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Board.

(i) Without limitation of any other provision herein, no disposition of any Incentive Units in the Company by a Member shall be effective unless prior to such disposition, the transferee, assignee or intended recipient of such Unit shall have agreed in writing to be bound by the provisions of this Section 7.2, in form satisfactory to the Board.

7.3 Percentage Interests. The Percentage Interests of the Members holding Common Units, and Members holding Incentive Units in the aggregate, as of the Effective Date, are set out in Schedule 2 (which schedule shall be maintained by the Secretary of the Company). Schedule 2 shall be amended from time to time upon the issuance or redemption of Units in accordance with this Agreement to reflect modifications to the Percentage Interests of the Members.

ARTICLE 8 CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS

8.1 Capital Contributions. Except as otherwise provided in this Agreement, no Member shall have any right to withdraw any portion of its Capital Contributions or Capital Account or to receive any particular asset in liquidation of the Company or otherwise.

8.2 Additional Capital Contributions.

(a) Except as otherwise provided herein, no Member shall be required to make any additional Capital Contributions to the Company.

(b) Subject to the provisions in this Agreement, the Board may permit Members to make additional Capital Contributions in cash or in property. Upon the making of an additional Capital Contribution by an existing Member, or upon the admission of a new Member in accordance with this Agreement and the Act, such Member or Members shall acquire such number and class of Units or other equity interests in the Company as the Board shall determine to be consistent with such contribution and shall receive a credit to its Capital Account for such additional Capital Contribution.

(c) Subject to the provisions in this Agreement, the Board may issue new Units in, and admit new Members to, the Company for such consideration as it determines, and the Fair Market Value of such consideration shall be deemed to be the new Members initial Capital Contribution to the Company.

8.3 Capital Accounts.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (a) A separate capital account (Capital Account) shall be established for each Member and shall be maintained in all respects in accordance with Section 704 of the Code and the Treasury Regulations, including Treasury Regulations Section 1.704-1(b) promulgated thereunder. Without limiting the foregoing, a Members Capital Account shall be increased by (i) the amount of the Capital Contributions made by such Member to the Company and (ii) allocations of Profit and other items of income or gain to such Member under this Agreement, and shall be reduced by (iii) the amount of the Distributions (not including any guaranteed payment under Section 707(c) of the Code) made to such Member by the Company and (iv) allocations of Loss and other items of deduction or loss to such Member under this Agreement.

(b) Except as may be required by the Act or any other applicable law, no Member shall be required to restore or pay to the Company or to any other Member any deficit or negative balance that may exist in such Members Capital Account, whether upon liquidation of the Company or otherwise.

ARTICLE 9 ALLOCATION OF PROFITS AND LOSSES

9.1 Capital Account Allocations. Except as otherwise required by Section 9.2, Profit and Loss of the Company shall be allocated to the Members as of the close of business on the last day of any Fiscal Period in a manner that, after taking into account all Capital Contributions and Distributions during such Fiscal Period, causes, to the extent possible, the Capital Account balances of each Member to equal the amount such Member would receive as a distribution if all assets of the Company as of such date were sold for cash equal to their Carrying Values (assuming for this purpose only that the Carrying Value of an asset that secures a nonrecourse liability for purposes of Treasury Regulations Section 1.1001-2 is no less than the amount of such liability that is allocated to such asset in accordance with Treasury Regulations Section 1.704-2(d)(2)), all the Companys liabilities were satisfied to the extent required by their terms and the net proceeds were distributed pursuant to Section 10.1(b), reduced by such Members share of Company Minimum Gain, as determined pursuant to Treasury Regulations Section 1.704-2(g) and Member Minimum Gain, as determined pursuant to Treasury Regulations Section 1.704-2(i)(5), in each case, as of the end of such Fiscal Period.

9.2 Regulatory Allocations. Notwithstanding Section 9.1, the following special allocations shall be made in the following order and priority:

(a) Minimum Gain Chargeback. If there is a net decrease in Company Minimum Gain during any Fiscal Period, each Member shall be specially allocated items of Company income and gain for such Fiscal Period (and, if necessary, subsequent Fiscal Periods) in proportion to, and to the extent of, an amount equal to such Members share of the net decrease in Company Minimum Gain determined in accordance with Treasury Regulations Section 1.704-2(g)(2). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be so allocated to each Member pursuant thereto. The items to be allocated will be determined in accordance with Treasury Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 9.2(a) is intended to comply with the minimum

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document gain chargeback requirement in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

(b) Member Minimum Gain Chargeback. If there is a net decrease in Member Minimum Gain attributable to Member Nonrecourse Debt during any Fiscal Period, determined in accordance with Treasury Regulations Section 1.704-2(i)(3), then, except as provided in Treasury Regulations Section 1.704-2(i)(4), each Member who has a share of the Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(5), shall be allocated items of income and gain for such Fiscal Period (and, if necessary, subsequent Fiscal Periods) in an amount equal to such Members share of the net decrease in Member Minimum Gain. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be so allocated to each Member pursuant thereto. The items to be allocated will be determined in accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 9.2(b) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(i) and shall be interpreted consistently therewith.

(c) Qualified Income Offset. In the event any Member unexpectedly receives any adjustment, allocation or distribution described in Treasury Regulations Section 1.704- 1(b)(2)(ii)(d)(4), (5) or (6), such Member shall be specially allocated items of income and gain (consisting of a pro rata portion of each item of income and gain) in an amount and in the manner sufficient to eliminate any deficit in such Members Adjusted Capital Account as quickly as possible; provided, that an allocation pursuant to this Section 9.2(c) shall be made only if and to the extent that such Member would have a deficit in such Members Adjusted Capital Account after all other allocations provided in this Article 9 have been tentatively made as if this Section 9.2(c) were not a part of this Agreement. This Section 9.2(c) is intended to be a qualified income offset as that term is used in Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

(d) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any Fiscal Period shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i)(1).

(e) Nonrecourse Deductions. Nonrecourse Deductions for each Fiscal Period shall be allocated among the Members in proportion to their respective Participating Distribution Ratios.

(f) Grant and Forfeiture of Compensatory Units. Upon the grant and forfeiture of a Compensatory Unit, the Companys items of income, gain, loss and deduction, including any Unrealized Gain and Unrealized Loss, shall be allocated among the Members and the Capital Accounts of the Member shall be adjusted as provided in the Compensatory Interest Regulations.

9.3 Tax Allocations.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (a) Except as otherwise provided in this Section 9.3, the Company shall allocate each item of income, gain, loss, deduction and credit, as determined for U.S. federal income tax purposes, in the same manner as such item was allocated for purposes of maintaining the Members Capital Accounts.

(b) The Company, for U.S. federal income tax purposes, shall allocate items of income, gain, loss, depreciation, cost recovery and amortization deductions attributable to any Capital Contribution with a Built-In Gain or Built-In Loss pursuant to Section 704(c) of the Code using any method permissible under Section 704(c) of the Code and the Treasury Regulations promulgated thereunder, as determined by the Board. Similar allocations shall be made in the event that the Carrying Value of Company properties subject to depreciation, cost recovery or amortization are adjusted pursuant to the definition of Carrying Value upon the issuance of Units in the Company. If an existing Member acquires additional Units, such allocations shall apply only to the extent of its additional Units. No allocation under Section 704(c) of the Code shall be charged or credited to a Members Capital Account.

(c) To the extent contemplated by the Compensatory Interest Regulations, the Company, for U.S. federal income tax purposes, shall specially allocate items of income, gain, loss, deduction and credit among the Members.

9.4 Other Allocation Rules.

(a) Notwithstanding the foregoing, if during any Fiscal Period there is a change in any Members Percentage Interest or Participating Distribution Ratio, as a result of the transfer of Units, the admission of a new Member or otherwise, the Members agree that their allocable shares of Profit and Loss, and each item thereof, for the Fiscal Period shall be determined under any method determined by the Board to be permissible under Section 706 of the Code and the Treasury Regulations thereunder to take into account such Members varying interests.

(b) The Members are aware of the income tax consequences of the allocations made by this Article 9 and hereby agree to be bound by the provisions of this Article 9 in reporting their shares of the Companys income and loss for income tax purposes, except to the extent otherwise required by law.

ARTICLE 10 DISTRIBUTIONS

10.1 Distributions.

(a) Tax Distributions. Notwithstanding Section 10.1(b), to the extent a Member receives or is estimated to receive allocations of net taxable income and gain (including, without limitation, allocations of income pursuant to Section 9.3(b)) for a Fiscal Period (or a portion thereof) that when added to the net taxable income and gain from all prior Fiscal Periods exceeds net taxable deductions and losses previously allocated to such Member in all prior Fiscal Periods (Excess Income), but has not otherwise received aggregate corresponding Distributions of Net Cash Flow pursuant to Section 10.1 (taking into account all prior Distributions, including, without limitation, Distributions in previous Fiscal Periods and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Distributions pursuant to this Section 10.1(a)) sufficient to pay (i) the greater of the U.S. federal income tax or U.S. federal alternative minimum income tax, plus (ii) the greater of the state and local income tax or state and local alternative minimum income tax, on such Members Excess Income (including any estimate thereof) based on the Assumed Tax Rate (Distribution Shortfall), the Company shall distribute to the Members a sufficient amount of Net Cash Flow (limited to the amount thereof) to satisfy such Distribution Shortfall for each Member (Tax Distribution). Tax Distributions shall be made quarterly (15 days prior to the due date) in an amount necessary for the payment of U.S. federal estimated or income tax (as applicable) in amounts sufficient to satisfy the U.S. federal, state and local estimated and income tax obligations of the Members (calculated based on the Assumed Tax Rate and the Companys estimate of the taxable income that will be allocated to such Members for the current Fiscal Period). In the event that Net Cash Flow is insufficient to satisfy the Tax Distribution requirements of this Section 10.1(a) when payable, such deficiency shall be satisfied as soon as Net Cash Flow exists. Any Tax Distribution paid to a Member under this Section 10.1(a) after the Effective Date shall be treated as a preliminary Distribution of future amounts due to such Member under Section 10.1(b)(ii) and any future Distributions due to such Member under Section 10.1(b)(ii) shall be adjusted so that, to the greatest extent possible, aggregate Distributions are according to the Section 10.1(b) priorities. Amounts distributed to satisfy estimated tax payments shall be taken into account in computing subsequent Tax Distributions hereunder.

(b) When the Company elects to makes a Distribution in accordance with the terms of this Agreement, the Company shall make Distributions to the Members, including Distributions in kind pursuant to Section 10.3, in the order and manner set forth in this Section 10.1(b):

(i) to all of the Members in proportion to their respective balances in their Capital Accounts on the Effective Date after giving effect to the Recapitalization until the aggregate cumulative amount of Distributions made pursuant to this Section 10.1(b)(i) equals the aggregate amount of all of the Members Capital Accounts on the Effective Date after giving effect to the Recapitalization; and

(ii) to all of the Members in proportion to their respective Participating Distribution Ratios.

10.2 No Right to Receive Certain Distributions. Notwithstanding Section 10.1, if at the time any Distribution is made in respect of any Incentive Unit pursuant to Section 10.1(b) while such Incentive Unit is an Unvested Incentive Unit, then the amount of such Distribution shall be withheld from the holder of such Unvested Incentive Unit until the earlier to occur of (i) the time at which such Unvested Incentive Unit becomes a Vested Incentive Unit, whereupon the amount so withheld shall be promptly paid by the Company to such holder without interest and (ii) the time at which such Unvested Incentive Unit is no longer eligible for vesting, whereupon the amount so withheld shall be distributed to the other Members pursuant to Section 10.1 or retained by the Company and held or used for any purpose, as the Board may direct. Distributions withheld from a holder pursuant to this Section 10.2 will nonetheless be deemed to have been received by such holder for purposes of Section 10.1(b).

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 10.3 Distributions in Kind. The Board may direct that property of the Company be distributed in kind (pro rata among all Members participating in such distribution based on the amount distributed to such Members pursuant to Section 10.1 in such distribution). When property of the Company is distributed in kind, the Company shall treat such Distribution as a distribution of Net Cash Flow equal to the Fair Market Value of such property (net of any liabilities assumed by the Members or to which such property is subject).

10.4 Payments on Behalf of a Member. All amounts withheld pursuant to the Code or any provision of any state, local or foreign law with respect to any payment, distribution or allocation to the Company or the Members shall be treated as amounts paid or distributed, as the case may be, to the Member with respect to whom such amount was withheld and shall be treated as a preliminary distribution of future amounts of Distributions due to such Member under the provisions of Section 10.1(b) and any future Distributions due to such Member under Section 10.1(b) shall be adjusted so that, to the greatest extent possible, aggregate Distributions are according to the Section 10.1(b) priorities. The Company is authorized to withhold from payments and distributions, or with respect to allocations to the Members, and to pay over to any governmental authority any amount required to be so withheld pursuant to the Code or any provisions of any other federal, state, local or foreign law.

ARTICLE 11 TRANSFER OF UNITS

11.1 Transfer of Units.

(a) No Member, shall sell, exchange, transfer, assign, make a gift of, pledge, encumber, hypothecate, alienate or otherwise dispose of (whether directly or indirectly, with or without consideration and whether voluntarily or involuntarily or by operation of law) in whole or in part (each a Transfer), his, her or its Units (including, for purpose of this Article 11, all Units then issuable upon conversion or exercise of Unit Equivalents) to any Person (other than the Company), including another Member, except as expressly provided in Sections 11.1(b) and 11.4 (which are subject to Section 11.1(d)). Any Transfer or purported Transfer of any Unit not made in accordance with this Article 11 shall be void ab initio.

(b) Subject always to Sections 11.1(c), 11.1(d) and 11.1(e) and except for any Transfer pursuant to Section 11.4 which shall not be covered by this Section 11.1(b), a Member may Transfer all or a portion of his, her or its Units only with the consent of the Board, not to be unreasonably withheld; provided, that any Transfer permitted by this Section 11.1(b) shall not release the Member or such other Person from his, her or its obligations to the Company without the prior written approval of the Board. Any such Transfer approved by the Board pursuant to this Section 11.1(b) shall be referred to herein as a Permitted Transfer.

(i) Except in the case of an involuntary Transfer of Units or a Transfer of Units by operation of law, the transferor and transferee shall execute and deliver to the Company such documents and instruments of conveyance as may be necessary or appropriate to

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document effect such Transfer, including execution of a joinder substantially in the form attached hereto as Exhibit A, agreeing to be bound by the terms and conditions of this Agreement. In the case of an involuntary Transfer of Units or a Transfer of Units by operation of law, the Transfer shall be confirmed by presentation to the Company of legal evidence of such Transfer, in form and substance satisfactory to counsel to the Company. In all cases, the Company shall be reimbursed by the transferor and/or transferee for all costs and expenses (including attorneys fees and expenses) that it reasonably incurs in connection with such Transfer;

(ii) The transferor and transferee shall furnish the Company with the transferees taxpayer identification number, sufficient information to determine the transferees initial tax basis in the Units transferred, and any other information reasonably necessary to permit the Company to file all required U.S. federal and state tax returns and other legally required information, statements or returns. Without limiting the generality of the foregoing, the Company shall not be required to make any distribution otherwise provided for in this Agreement with respect to any transferred interest until it has received such information; and

(iii) Except in the case of an involuntary Transfer of Units or a Transfer of Units by operation of law, either (A) such Transfer and/or Units shall be registered under the Securities Act, and any applicable state securities laws, or (B) such Transfer shall be exempt from all applicable registration requirements and will not violate any applicable laws regulating the Transfer of securities.

(d) Notwithstanding anything to the contrary herein, no Transfer of Units shall be permitted, nor shall any transferee become a beneficial owner of Units pursuant to a Transfer, if such Transfer would cause (i) the Company to be treated as a publicly traded partnership within the meaning of Section 7704 of the Code; (ii) the Company to have more than 100 members (as determined either for purposes of Section 7704 of the Code, including the look- through rule in Treasury Regulations Section 1.7704-1(h)(3), or for purposes of the Investment Company Act of 1940, as amended); (iii) noncompliance by the Company with any applicable law, including any applicable securities laws; or (iv) any effect on the Companys existence or qualification as a limited liability company under the Act.

(e) Notwithstanding anything to the contrary herein, no Transfer of Units or Transfer of equity interests in any Member (including SRAM-SP2) shall be permitted without the consent of the Members holding a majority of the Common Units, nor shall any transferee become a beneficial owner of Units (or any equity interests in any Member (including SRAM-SP2)) pursuant to such a Transfer, if such Transfer (i) is to a Person that the Board determines in good faith is a competitor engaged in the Business or any aspect or portion thereof, or (ii) is a Transfer of an Unvested Incentive Unit.

(f) Notwithstanding anything to the contrary contained in this Section 11.1 or elsewhere in this Agreement, no transferee in any Permitted Transfer (but excluding transferees that were Members immediately prior to such a Transfer, who automatically shall become Members with respect to any additional Units they so acquire) shall become a Member in respect of the interest so transferred unless such transferee is admitted as a Member pursuant to Section 11.2 below.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (g) Following the Transfer of any Unit permitted under this Section 11.1, the transferee of such Unit (i) shall be treated as having made all of the Capital Contributions made by, and received all of the allocations and Distributions received by, the transferor in respect of such Unit (and other items properly attributable to the Transferred Unit also shall pass to the transferee) and (ii) shall have the rights and obligations of a holder of such Unit so long as such transferee owns such Unit. No transferee of a Unit may further Transfer such interest without complying with the provisions of this Section 11.1.

(h) Subject to the proviso in Section 11.1(b) above, any Member who Transfers all of the Units or other equity securities of the Company owned by it in accordance with this Section 11.1 thereupon will cease to be a Member.

11.2 Admission of Substituted Members. Subject to the other provisions of this Article 11, a transferee of Units may be admitted to the Company as a substituted Member only upon satisfaction of each of the conditions set forth in this Section 11.2:

(a) Members holding a majority of the Common Units consent to such admission, which consent may be given or withheld by any Member in such Members sole and absolute discretion; provided, that such consent shall be deemed to be given by each Member with respect to any transfer that satisfies (b) and (c) and, if applicable, (d) below.

(b) The Unit with respect to which the transferee is being admitted was acquired by means of a Permitted Transfer.

(c) The transferee of the Unit shall, by execution of a joinder substantially in the form attached hereto as Exhibit A, agree to be bound by the terms and conditions of this Agreement.

(d) Except in the case of an involuntary Transfer of Units or a Transfer of Units by operation of law, if required by the Board, the transferee (other than a transferee that was a Member prior to the Transfer) shall deliver to the Company evidence of the authority of such Person to become a Member and to be bound by all of the terms and conditions of this Agreement, and the transferee and transferor shall each execute and deliver such other instruments as the Board reasonably deems necessary or appropriate to effect such Transfer, including amendments to the Certificate or any other instrument filed with the State of Delaware or any other state or governmental authority.

11.3 Rights of Unadmitted Assignees. Any Person that acquires a Unit but that is not admitted as a substituted Member pursuant to Section 11.2 hereof shall be entitled only to allocations and distributions with respect to such Unit in accordance with this Agreement, and shall have no right to any information or accounting of the affairs of the Company, shall not be entitled to inspect the books or records of the Company, and shall not have any of the rights of a Member under the Act or this Agreement.

11.4 Sale of the Company.

(a) If a Sale of the Company is structured as a direct sale of Units (whether by merger, consolidation, reorganization or otherwise) and is approved by the Board, each Member

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document or other Person owning Units shall consent to and raise no objections (and shall cause each of its Affiliates to so consent and not to raise any objection) to the Sale of the Company, the process pursuant to which the Sale of the Company was arranged or the structure pursuant to which the Sale of the Company is to be consummated. If the Sale of the Company is structured as a merger or consolidation, each Member or other Person owning Units shall (and shall cause each of its Affiliates to) waive any dissenters rights, appraisal rights or similar rights in connection with such merger or consolidation. If the Sale of the Company is structured as a direct or indirect sale of Units (whether by merger, consolidation, reorganization or otherwise), each Member or other Person owning Units shall waive (and shall cause each of its Affiliates to waive) all minority shareholders statutory rights of dissolution, if any. Without limiting the generality of the foregoing:

(i) If the Sale of the Company is structured as a direct sale of Units (whether by merger, consolidation, reorganization or otherwise), each Member or other Person owning Units shall sell (and shall cause each of its Affiliates to sell) all of his or its Units and rights to acquire Units and all equity securities of any Subsidiary of the Company held by such Member or other Person on the terms and conditions approved by Members holding a majority of the Common Units. Each Member participating in such Sale of the Company (regardless of whether selling Units or interests in the Member) shall receive the same form of consideration and the same portion of the aggregate net consideration as such holder would have received if the Company sold all of its assets, paid all of its liabilities and such aggregate net consideration were distributed by the Company to the Members pursuant to Section 10.1(b), without regard to any tax consequences to any Member as a result hereof

(ii) If the Sale of the Company is structured as a sale of the Companys assets, each Member or other Person owning Units (A) shall sell (and shall cause each of its Affiliates to sell) all equity securities of any Subsidiary of the Company held by such Member or other Person on the terms and conditions contemplated by the Sale of the Company, and (B) will take (and shall cause each of its Affiliates to take) all actions necessary to cause a liquidation of the Company and each of its Subsidiaries following the consummation of such Sale of the Company.

(b) In addition to and without limiting the generality of the foregoing, in connection with a Sale of the Company, each Member or other Person owning Units will take all other necessary and desirable actions as directed by the Board in connection with the consummation of any Sale of the Company, including:

(i) executing the applicable purchase agreement and other related transaction documents and making (and so long as all of the other Persons participating in such sale are providing the same (or greater) representations, warranties and indemnities on a basis consistent with the percentage and type of security interest being sold), representations, warranties and indemnities regarding such Persons ownership of Units, including (x) the power and authority of such Person to enter into and consummate such sale and (y) providing the purchaser with good and marketable title to the securities being sold by such Person, free and clear of all liens created by such Person; and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (ii) providing indemnification with respect to the breach of any representations, warranties or covenants regarding the Company (without regard to whether such representations, warranties or covenants are made by the Company itself or any other Person participating in such sale, but only so long as all of the Persons participating in such sale are providing the same (or greater) indemnification) contained in the documents governing such sale on a basis consistent with the percentage and type of security or interest being sold.

(c) In connection with any Sale of the Company, each Member or other Person owning Units and receiving consideration in such Sale of the Company shall pay its pro rata share (based on the proportion of the total consideration received in such Sale of the Company by all Persons participating in such sale) of all expenses incurred by the Company in connection with such Sale of the Company and if any escrow arrangement is required in connection with such Sale of the Company, each Member or other Person shall fund its pro rata share (based on the proportion of the total consideration received in such Sale of the Company by all Persons participating in such sale of such escrow).

(d) If the Company enters into any negotiation or transaction for which Rule 506 promulgated by the SEC (or any similar rule then in effect) may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), each Member or other Person owning Units that is not an accredited investor (within the meaning of Rule 501(a) promulgated by the SEC) will, at the request of the Board appoint a purchaser representative (as such term is defined in Rule 501 promulgated by the SEC) approved by the Board (as the case may be), and such Member or other Person will be responsible for the fees of the purchaser representative so appointed.

11.5 Preemptive Rights.

(a) Subject to subsection (b) below, if the Company proposes to issue any Units or any Unit Equivalents after the date hereof (Company Offered Units), then the Company will offer to sell each Member holding Common Units a number of such Company Offered Units so that the Participating Distribution Ratio of such Member holding Common Units immediately after the issuance of such Company Offered Units (and assuming the purchase of such Company Offered Units) would be equal to the Participating Distribution Ratio of such Member holding Common Units immediately prior to such issuance of Company Offered Units.

(b) The Company shall give each Member holding Common Units at least ten (10) days prior written notice of any proposed issuance, which notice shall disclose in reasonable detail the proposed terms (including price per Company Offered Unit) and conditions of such issuance (the Issuance Notice). Each Member holding Common Units will be entitled to purchase its share of Company Offered Units as determined above at the same price, on the same terms (including, if more than one type of Company Offered Unit is issued, the same proportionate mix thereof) and at the same time as the Company Offered Units are issued, by delivery of irrevocable written notice to the Company of such election within ten (10) days after delivery of the Issuance Notice (the Election Notice). If any Member holding Common Units has elected to purchase any Company Offered Units (an Electing Member), the sale of such Company Offered Units shall be consummated as soon as practicable (but in any event within

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document sixty (60) days) after the delivery of the Election Notice; provided, that an Election Notice may be conditioned upon the closing of the sale of all of the Company Offered Units. If any Member holding Common Units has declined to purchase any Company Offered Units (a Non- Electing Member), then the Company shall offer to each Electing Member its pro rata portion of the Company Offered Units that the Non- Electing Member has declined to purchase (the Additional Units) based on the Percentage Interest of each Electing Member by delivery of a notice indicating the number of Additional Units available for purchase (the Additional Unit Notice). If any Electing Member elects to purchase any Additional Units, such purchase shall be consummated as soon as practicable (but in any event within thirty (30) days) after the delivery of the Additional Unit Notice.

(c) The provisions of Section 11.5(a) and (b) shall not apply to any issue or sale of (i) the Authorized Incentive Units, or (ii) Units or Unit Equivalents upon the conversion or exchange of any Units outstanding as of the Effective Date or otherwise issued in conformity with the terms of this Agreement, including pursuant to Section 11.6 below, or in connection with any split, reverse split, recapitalization, reclassification, combination or similar reorganization or other transaction affecting the Units.

11.6 IPO; Changes in Business Form. At any time, upon the approval of the Board, the Company may pursue, initiate and consummate an initial public offering pursuant to which the Company (or an entity created pursuant to clauses (i)-(iii) below) sells shares of its equity securities to the public pursuant to a registration statement under the Securities Act (an IPO). The Members acknowledge that the Board may, in furtherance of such an IPO, based upon tax, market and such other conditions as the Board shall deem appropriate at the time, (i) cause the Company to convert into a corporate form or otherwise undergo a recapitalization or reorganization effected by means of a merger or otherwise; (ii) require or effect a Transfer of all of the Units, or assets of the Company, to a corporation to be formed for the purpose of conducting the business of the Company, and in connection with such Transfer cause all the Units of the Company to be converted into or exchanged for shares of common stock of such corporation; and/or (iii) create an UPCO structure by causing the formation of an UPCO, having UPCO use some or all of the proceeds of an IPO to purchase some or all Units and causing some or all of the outstanding Units to be convertible into, or exchangeable for, common stock of UPCO; provided, that no holder of Common Units shall be treated disproportionately generally vis a vis other holders of Common Units in connection with such actions set forth in clauses (i)-(iii). In the event such an IPO is initiated, all Members agree, as applicable, to take, and to cause their representative Managers to take, all commercially reasonable actions necessary or desirable to evaluate, pursue, initiate and consummate such IPO in accordance with the direction of the Board, including hiring advisors, conducting analysis, expending funds, entering into agreements, amending this Agreement and converting or exchanging their Units into shares of capital stock as contemplated by clauses (i)-(iii) above. Each Member or other Person owning Units, if applicable, shall consent to and raise no objections (and shall cause each of its Affiliates to so consent and not to raise any objection) to such an IPO. In addition to and without limiting the generality of the foregoing, in connection with such an IPO, each Member or other Person owning Units will take all other necessary and desirable actions as directed by the Board in connection with the consummation of any such IPO, including, without limitation, executing an underwriting agreement and cooperating with the Company in any blue sky or securities law filings. In connection with any such IPO, the Company may enter into a

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document registration rights agreement providing for customary registration rights on the terms, and with such holders of Registrable Securities, as shall be determined by the Board and the Members holding a majority of the Common Units at such time in their discretion, notwithstanding anything set forth in Section 11.7 below (the Registration Rights Agreement). For the avoidance of doubt, such Registration Rights Agreement shall replace and supersede the rights set forth in Section 11.7 below in their entirety.

11.7 Registration Rights.

(a) Company Registration.

(i) Company Registration. Subject to Section 11.6 above, if the Company shall determine to conduct a Public Offering (other than an IPO conducted pursuant to Section 11.6), the Company will:

(A) promptly give written notice of the proposed registration to all holders of Registrable Securities; and

(B) use its commercially reasonable efforts to include in such registration (and any related qualification under blue sky laws or other compliance), except as set forth in Section 11.7(a)(ii) below, and in any underwriting involved therein, all of such Registrable Securities as are specified in a written request or requests made by any holder or holders of Registrable Securities received by the Company within twenty (20) days after such written notice from the Company is delivered. Such written request may specify all or a part of such holders Registrable Securities.

(ii) Underwriting. The right of any Member to registration pursuant to this Section 11.7(a) shall be conditioned upon such Members participation in such underwriting and the inclusion of such Members Registrable Securities in the underwriting to the extent provided herein. All Members proposing to distribute their securities through such underwriting shall (together with the Company) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by the Company. Notwithstanding any other provision of this Section 11.7(a), if the underwriters advise the Company in writing that marketing factors require a limitation on the number of shares to be underwritten, the underwriters may (subject to the limitations set forth below) limit the number of Registrable Securities to be included in, the registration and underwriting. The Company shall so advise all holders of securities requesting registration, and the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated, as follows: (i) first, to the Company for securities being sold for its own account, and (ii) second, to the Members requesting to include Registrable Securities in such registration statement based on the pro rata percentage of Registrable Securities held by such Members. If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall also be excluded therefrom by written notice from the Company or the underwriter. The Registrable Securities or other securities so excluded shall also be withdrawn from such registration.

(b) Registration on Form S-3.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (i) Request for Form S-3 Registration. After its IPO, subject to Section 11.6 above, the Company shall use its commercially reasonable efforts to qualify and remain qualified for registration on Form S-3 or any comparable or successor form or forms. After the Company has qualified for the use of Form S-3, in addition to the rights contained in the foregoing provisions of this Section 11.7 and subject to the conditions set forth in this Section 11.7(b), if the Company shall receive from a holder or holders of Registrable Securities (the Initiating Holders) a written request that the Company effect any registration on Form S-3 or any similar short form registration statement with respect to all or part of the Registrable Securities (such request shall state the number of shares of Registrable Securities to be disposed of and the intended methods of disposition of such shares by such holder or holders), the Company will take the following actions:

(A) promptly give written notice of the proposed registration to all holders of Registrable Securities; and

(B) as soon as practicable, file and use its commercially reasonable efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and to permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities joining in such request as are specified in a written request received by the Company within twenty (20) days after such written notice from the Company is mailed or delivered.

(ii) Limitations on Form S-3 Registration. The Company shall not be obligated to effect, or take any action to effect, any such registration pursuant to this Section 11.7(b):

(A) If the holders of Registrable Securities, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) on Form S-3 at an aggregate price to the public of less than $500,000 or

(B) If, in a given twelve-month period, the Company has effected two (2) such registrations in such period.

(iii) Underwriting. If the holders of Registrable Securities requesting registration under this Section 11.7(b) intend to distribute the Registrable Securities covered by their request by means of an underwriting, the right of any holder of Registrable Securities to include all or any portion of its Registrable Securities in a registration pursuant to this Section 11.7(b) shall be conditioned upon such Members participation in an underwriting. If the Company shall request inclusion in any registration pursuant to this Section 11.7(b) of securities being sold for its own account, the Initiating Holders shall, on behalf of all Holders, offer to include such securities in the underwriting and such offer shall be conditioned upon the participation of the Company in such underwriting. The Company shall (together with all Holders and other persons proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document underwriter or underwriters selected for such underwriting by the Company, which underwriters are reasonably acceptable to a majority-in- interest of the Initiating Holders. Notwithstanding any other provision of this Section 11.7(a), if the underwriters advise the Company and the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, the shares that may be so included shall be allocated as follows: (i) first, among all Members requesting to include Registrable Securities based on the pro rata percentage of Registrable Securities held by such Members and (ii) second, to the Company, which the Company may allocate only for its own account. If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded therefrom by written notice from the Company, the underwriter or the Initiating Holders. The securities so excluded shall also be withdrawn from registration.

(c) Expenses of Registration. All Registration Expenses incurred in connection with registrations pursuant to Sections 11.7(a) and (b) shall be borne by the Company (exclusive of underwriting discounts, taxes and commissions); provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 11.7(b) if the registration request is subsequently withdrawn at the request of the holders of a majority of the Registrable Securities to be registered or because a sufficient number of Members shall have withdrawn so that the minimum offering conditions set forth in Section 11.7(b)(ii) are no longer satisfied (in which case all participating Members shall bear such expenses pro rata among each other based on the number of Registrable Securities requested to be so registered); provided further, however, that if at the time of such withdrawal, the Members have learned of a material adverse change in the condition, business or prospects of the Company from that known to the Members at the time of their request and have withdrawn the request with reasonable promptness following disclosure by the Company of such material adverse change, then the Members shall not be required to pay any of such expenses. All Selling Expenses relating to securities registered on behalf of the Members shall be borne by the holders of securities included in such registration pro rata among each other on the basis of the number of Registrable Securities so registered.

(d) Registration Procedures. In the case of each registration effected by the Company pursuant to Section 11.7, the Company will keep each holder of Registrable Securities advised in writing as to the initiation of each registration and as to the completion thereof. At its expense, the Company will use its best efforts to:

(i) Keep such registration effective for a period ending on the earlier of the date which is one hundred twenty (120) days from the effective date of the registration statement or such time as the holder or holders have completed the distribution described in the registration statement relating thereto.

(ii) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in subsection (i) above;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (iii) Furnish such number of prospectuses, including any preliminary prospectuses, and other documents incident thereto, including any amendment of or supplement to the prospectus, as a holder from time to time may reasonably request;

(iv) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdiction as shall be reasonably requested by the holders; provided, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.

(v) Notify each seller of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing, and following such notification promptly prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing;

(vi) Provide a transfer agent and registrar for all Registrable Securities registered pursuant to such registration statement and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

(vii) Cause all such Registrable Securities registered hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed;

(viii) In connection with any underwritten offering pursuant to a registration statement filed pursuant to this Section 11.7, enter into an underwriting agreement in form reasonably necessary to effect the offer and sale of the equity securities; and

(ix) Use its commercially reasonable best efforts to furnish, at the request of any Member requesting registration of Registrable Securities pursuant to this Section 11.7, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Section 11.7, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (x) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters and (y) a letter dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (e) Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the SEC that may permit the sale of the restricted securities to the public without registration, the Company agrees to use its commercially reasonable efforts to:

(i) Make and keep public information regarding the Company available as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after ninety (90) days following the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public; and

(ii) File with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at any time after it has become subject to such reporting requirements.

(f) Limitations on Subsequent Registration Rights. From and after the date hereof, except as set forth in Section 11.6 above, the Company shall not, without the prior written consent of Members holding a majority of the Common Units, enter into any agreement with any holder or prospective holder of any securities of the Company that would allow such holder or prospective holder: (a) to demand registration of their securities, or (b) to exercise other registration rights that are pari passu or senior to those granted hereunder.

(g) Indemnification.

(i) To the extent permitted by law, the Company will indemnify and hold harmless each Member, each of its officers, directors, partners, members, stockholders, legal counsel, and accountants and each person controlling such Member within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification, or compliance has been effected pursuant to this Section 11.7, and each underwriter, if any, and each person who controls within the meaning of Section 15 of the Securities Act any underwriter, against all expenses, claims, losses, damages, and liabilities (or actions, proceedings, or settlements in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any prospectus, offering circular, or other document (including any related registration statement, notification, or the like) incident to any such registration, qualification, or compliance, (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any violation (or alleged violation) by the Company of the Exchange Act, any state securities laws or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any offering covered by such registration, qualification, or compliance, and the Company will reimburse each such Member, each of its officers, directors, partners, members, stockholders, legal counsel, and accountants and each person controlling such Member, each such underwriter, and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability, or action as such expenses are incurred; provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability, or action arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by such Member, any of such Members officers, directors, partners, members, stockholders, legal counsel or accountants, any person controlling such Member, such

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document underwriter or any person who controls any such underwriter and stated to be specifically for use therein.

(ii) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the provisions in clause (i) above, the provisions in the underwriting agreement shall control to the extent of such inconsistency.

11.8 No Appraisal Rights. No Member or other Person owning Units shall be entitled to any appraisal rights with respect to such Persons Units, whether individually or as part of any class or group of holders, in the event of a merger, consolidation or other transaction involving the Company or its securities unless such rights are expressly provided herein or by the agreement of merger, agreement of consolidation or other document effectuating such transaction.

11.9 Further Restrictions as to Certain Members; Companys Repurchase Option upon Termination of Employment of Incentive Member.

(a) In addition to the restrictions set forth in Section 11.1, no Incentive Member (and, in each case, no Person acquiring such Incentive Members Vested Incentive Units in any Permitted Transfer) shall Transfer any interest in any Incentive Units held by such Incentive Member, except that such Incentive Member (and, in each case, any Person acquiring such Incentive Members Vested Incentive Units in any Permitted Transfer) may Transfer any such interest in any such Vested Incentive Units held by them (i) pursuant to Section 11.1(b) (ii) pursuant to Section 11.4 and (iii) to the Company.

(b) Upon the termination of employment of any Member or Executive holding Incentive Units, the Company may elect to purchase all or any portion of the Incentive Units held by such Member or Executive (or any Person that has acquired such Incentive Units in any Permitted Transfer) on the terms and conditions set forth in such Members or Executives Incentive Unit Agreement.

(c) Notwithstanding anything herein to the contrary, all repurchases of Incentive Units shall be subject to applicable restrictions contained in the Act and the Companys debt financing agreements. In the event that any such restrictions prohibit the repurchase of Incentive Units that the Company is otherwise entitled to make, the Company shall be entitled, by delivery of written notice to the Member(s) holding the applicable Incentive Units given within one hundred eighty (180) days after termination of employment, to defer such rights until all such restrictions have ceased, in which event the provisions of this Section 11.9 shall become effective as though termination of employment occurred on the date of such cessation.

ARTICLE 12 ACCOUNTING; REPORTING TO AND BY MEMBERS

12.1 Books and Records. The books and records of the Company, including the Schedules hereto, shall be kept at the principal offices of the Company. The books and records for any taxable year shall be retained until such taxable year has been closed under U.S. federal

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document and state income tax laws, by the running of the statute of limitations or otherwise. The Company shall, upon reasonable prior notice and during normal business hours, make available to each Member holding Common Units or its representatives or designees, for purposes reasonably related to the interest of that Person as a Member, all properties, assets, books of account, records, contracts and other documents of the Company and any other material reasonably requested by the inspecting Member, for inspection and, in the case of books of account, records, contracts and other documents, copying at the inspecting Members cost, and shall use its best efforts to make available to the inspecting Member the accountants, officers and employees of the Company for interviews to verify any information furnished or to enable the inspecting Member otherwise to review the Company and its operations. Without limiting the foregoing, the Company shall provide access to the facilities, systems and books and records of the Company to the extent reasonably considered necessary by the accountants and internal audit departments of the inspecting Member. The Company shall maintain at its principal executive office all of the following:

(a) a current list of the full name and last known business or residence address of each Member set forth in alphabetical order, together with the Capital Contributions, Capital Accounts and number and class of Units of each Member;

(b) a current list of the full name and business or residence address of each Manager;

(c) a copy of the Certificate and any and all amendments thereto, together with executed copies of any powers of attorney pursuant to which the Certificate or any amendments thereto have been executed;

(d) copies of the Companys U.S. federal, state and local income tax or information returns and reports, if any, and any tax returns or reports filed by or on behalf of the Company in any other jurisdiction, for the six (6) most recent taxable years;

(e) a copy of this Agreement and any and all amendments thereto, together with executed copies of any powers of attorney pursuant to which this Agreement or any amendments thereto have been executed; and

(f) copies of the audited financial statements of the Company, if any.

12.2 Methods of Accounting.

(a) The Company shall cause to be prepared with respect to each Fiscal Year financial statements based on GAAP.

(b) In addition, the Company shall maintain such records and accounts as are necessary to compute (i) the Profit or Loss of the Company (and individual items of income, gain, deduction and loss for Capital Account purposes) and the Capital Accounts of the Members and (ii) the taxable income or loss of the Company (and individual items of income, gain, deduction and loss for tax purposes).

12.3 Delivery to Members and Inspection.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (a) Upon the request of any Member holding Common Units for purposes reasonably related to the interest of that Person as a Member, the Board shall promptly deliver to the requesting Member, at the expense of the Company, a copy of the information required to be maintained under Section 12.1(a) through (f), and a copy of this Agreement.

(b) Each Member holding Common Units and each Manager has the right, upon reasonable request, for purposes reasonably related to the interest of the Person as a Member or Manager, to:

(i) inspect and copy during normal business hours any of the Company records described in Sections 12.1; and

(ii) obtain from the Board, promptly after their becoming available, a copy of the Companys U.S. federal, state and local income tax or information returns.

(c) The Board shall be responsible for the preparation of financial reports of the Company and for the coordination of financial matters of the Company with the Companys accountants. As soon as reasonably practicable after the end of each quarter and each Fiscal Year, the Board shall cause each Member holding Common Units to be furnished with a copy of a profit and loss statement of the Company for each such period, and a balance sheet of the Company as of the last day of such period.

(d) Any inspection or copying by a Member under this Section 12.3 may be made by that Person or that Persons agent or attorney.

(e) (i) Each Member acknowledges that the information required to be delivered to such Member or that such Member has the right to obtain, inspect or copy pursuant to this Article XII shall be deemed Confidential Information.

(ii) Notwithstanding anything else contained in this Agreement (including the other provisions of this Section 12.3(e)), each Member (and its employees, representatives or other agents) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure (as such terms are used in Sections 6011, 6111 and 6112 of the Code and the Treasury Regulations promulgated thereunder) of its investment in the Company and any transactions entered into by the Company and all materials of any kind (including opinions or other tax analyses) that are provided to such Member relating to such tax treatment and tax structure; provided, that no Member or its employees, representatives or agents shall disclose any information for which nondisclosure is reasonably necessary in order to comply with United States securities laws. The Members understand and agree that this authorization to disclose such tax treatment and tax structure is not intended to permit disclosure of any other information including (i) any portion of any materials to the extent not related to the tax treatment or tax structure of the Company or transactions entered into by the Company, (ii) the identities of any Member or other potential investor in the Company, (iii) the existence or status of any negotiations, (iv) any pricing, valuation or financial information (except to the extent such pricing, valuation or financial information is related to the tax treatment or tax structure of the Company or the transactions entered into by it) or (v) any other term or detail not

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document relevant to the tax treatment or the tax structure of the Company or the transactions entered into by it.

(f) Any Member holding only Incentive Units shall be entitled to information concerning the Company only as provided in the discretion of the Board.

(g) To assist direct and indirect Members to make timely requests for extensions of the time in which to file their income tax returns, the Company shall use its reasonable best efforts to transmit by March 15th of each year, but in no event later than March 31st of each year, to each Person that was a Member in the immediately preceding year (the Preceding Year), a good faith estimate of the income or loss and expenses of the Company for the Preceding Year, providing a break-down of income and losses between ordinary and capital and the percentage of each item so reported that is treated as United States source and the percentage of each item so reported that is treated as foreign source, in each case, for U.S. federal income tax purposes. Such estimates shall be based on the information available when they are prepared; accordingly, the final allocations that will appear on Schedules K-1 issued to the Members for such Preceding Year may vary significantly from the earlier good faith estimates. In all events, the Company shall deliver to each of the Members a final Schedule K-1 for the Preceding Year no later than June 30 of each year, and such K-1 shall also provide, with respect to each item listed on the Schedule K-1, the percentage of such item that is treated as United States source and the percentage of such item that is treated as foreign source, in each case, for U.S. federal income tax purposes.

12.4 Filings. The Board, at the Companys expense, shall cause to be prepared and timely filed any required reporting or filing requirements imposed by any governmental agency or authority. The Board, at the Companys expense, shall also cause to be prepared and timely filed, with appropriate U.S. federal and state regulatory and administrative bodies, amendments to or restatements of the Certificate and all reports required to be filed by the Company with those entities under the Act or other then current applicable laws, rules and regulations.

12.5 Bank Accounts. The Board shall maintain the funds of the Company in one or more separate bank accounts in the name of the Company and shall not permit the funds of the Company to be commingled in any fashion with the funds of any other Person.

12.6 Accounting Decisions and Reliance on Others. All decisions as to accounting matters, except as otherwise specifically set forth herein, shall be made by the Board. The Board may rely upon the advice of the Companys accountants as to any such matter.

12.7 Confidentiality.

(a) Confidentiality Obligation. During the term of this Agreement and thereafter, each Member shall, and shall cause its Affiliates to, maintain in confidence and use only for purposes of the Business, this Agreement and the Related Documents, all Confidential Information. Confidential Information means all information, materials and processes relating to the Company or any of its Subsidiaries obtained by a Member at any time (whether prior to or after the date hereof) pursuant to or otherwise in connection with this Agreement or any of the Related Documents and any of the transactions contemplated by any of the foregoing in any

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document format whatsoever (whether orally, visually, in writing, electronically or in any other form) and shall include, but not be limited to, economic and business information or data, business plans, computer software, information relating to employees, vendors, customers, products, financial performance and projections, processes, strategies, systems and real estate and data resulting from or directly related to the Products. Each Member shall exercise the same care and safeguards with respect to Confidential Information as is used to maintain the confidentiality of its own information of like character, but will, at a minimum, use reasonable care.

(b) Permitted Disclosure to Related Parties. To the extent it is reasonably necessary or appropriate to fulfill its obligations or to exercise its rights under this Agreement or the Related Documents, any Member may disclose Confidential Information, which it is otherwise obligated under this Section 12.7 not to disclose, to its Subsidiaries, Affiliates, consultants and other agents, on a need-to-know basis, on the condition that such Persons agree to keep the Confidential Information confidential to the same extent as such disclosing party is required to keep the Confidential Information confidential; provided, that the disclosing Member shall remain liable with respect to any breach of this Section 12.7 by any such Subsidiaries, Affiliates, consultants and other agents.

(c) Permitted Disclosure to Unrelated Parties. Notwithstanding Sections 12.7(a) or 12.7(b), a Member may disclose such Confidential Information to the extent that the such Member is legally compelled (by oral questions, interrogatories, request for information or documents, subpoena, civil investigative demand or similar process) to disclose any of the Confidential Information; provided, that in connection with any such disclosure, (1) a disclosing Member shall only disclose such Confidential Information as is required to be disclosed in connection with the foregoing, (2) to the extent reasonably practicable, a disclosing Member shall provide the other Members with prompt and advance written notice of any such intended disclosure so that such other Member have a reasonable opportunity to limit such disclosure, or (if applicable, and to the extent reasonable practicable) seek a protective order or other appropriate remedy to prevent such disclosure and (3) a disclosing Member shall use its reasonable efforts to seek confidential treatment (consistent with the terms hereof) by the Person to whom such disclosure is made. The parties acknowledge that money damages would not be a sufficient remedy for any breach of the provisions of this Section 12.7 and that the non-breaching Members shall be entitled to equitable relief in a court of law in the event of, or to prevent, a breach or threatened breach of this Section 12.7.

(d) Non-Confidential Information. The obligation not to disclose Confidential Information shall not apply to any part of such Confidential Information that (i) is or becomes patented, published, or otherwise part of the public domain other than by acts of a Member in contravention of this Agreement; (ii) is disclosed to a Member by a third party, unless such Confidential Information was obtained by such third party directly or indirectly from a Member on a confidential basis; (iii) prior to disclosure under this Agreement, was already in the possession of the disclosing Member, unless such Confidential Information was obtained directly or indirectly from the another Member on a confidential basis; or (iv) is independently acquired or developed by a disclosing Member other than by acts of a Member in contravention of this Agreement.

13.1 Tax Returns; Tax Accounting Methods; Tax Elections. The Tax Matters Partner shall cause the U.S. federal and any required state or local income tax returns of the Company to be prepared and filed on behalf of the Company, and it shall cause copies of such returns to be furnished to each of the Members. The Tax Matters Partner shall select such tax accounting methods and, except as provided in Section 2.6 or as determined by the Board pursuant to Section 9.3(b), shall cause such income tax elections to be made on behalf of the Company as the Tax Matters Partner determines, in its reasonable discretion, to be in the best interest of the Company. Subject to the requirements of Section 11.6, the Members intend that the Company shall be treated as a partnership for U.S. federal, state and local income tax purposes and shall take all reasonable actions, including the amendment of this Agreement and the execution of other documents, but without changing the economic relationships created by, or the essential terms of, this Agreement, as may be reasonably required to qualify for and receive treatment as a partnership for U.S. federal income tax purposes. The Tax Matters Partner may cause the Company to make all elections required or permitted to be made by the Company under the Code and not otherwise expressly provided for in this Agreement, in the manner that the Tax Matters Partner determines will be most advantageous to the Company.

13.2 Tax Matters Partner. SRAM-SP2 is hereby appointed and shall serve as the tax matters partner of the Company (the Tax Matters Partner) as defined in Section 6231(a)(7) of the Code. The Tax Matters Partner shall (i) furnish to each Member affected by an audit of Company income tax returns a copy of each notice or other communication received from the IRS or applicable state authority, and (ii) keep such Members informed of any administrative or judicial proceeding, as required by Section 6223(g) of the Code.

(b) The Company shall not be obligated to pay any fees or other compensation to the Tax Matters Partner in its capacity as such. However, the Company shall reimburse the out-of-pocket expenses (including outside attorneys and other outside professional fees) incurred by the Tax Matters Partner in such capacity. The cost of any adjustments to a Member and the cost of any resulting audits or adjustments of a Members tax return shall be borne solely by the affected Member.

(c) The Company shall indemnify and hold harmless the Tax Matters Partner from and against any loss, liability, damage, cost or expense (including attorneys and accountants fees) sustained or incurred as a result of any act or decision concerning Company tax matters and within the scope of such Members responsibilities as Tax Matters Partner, so long as such act or decision was not the result of gross negligence, fraud, or bad faith by the Tax Matters Partner. The Tax Matters Partner shall be entitled to rely on the advice of outside legal counsel and accountants as to the nature and scope of its responsibilities and authority as Tax Matters Partner, and any act or omission of the Tax Matters Partner pursuant to such advice in no event shall subject the Tax Matters Partner to liability to the Company or any Member.

14.1 Dissolution. The Company shall be dissolved and its affairs wound up upon the first to occur of the following (each, a Dissolution Event):

(a) upon the written consent of the Board and the Members holding a majority of the outstanding Common Units;

(b) upon the sale or other disposition of all or substantially all of the assets of the Company in one transaction or a series of related transactions; or

(c) upon entry of a decree of judicial dissolution under Section 18-802 of the Act, unless the Company is continued as permitted under the Act.

No other event or occurrence shall cause a Dissolution Event or, if it does, the Members shall continue the Company.

14.2 Liquidation of the Company. Upon a Dissolution Event the Member or Members mutually designated by a the Board shall act as liquidator(s). The liquidator(s) shall proceed diligently to wind up the affairs of the Company and make final Distributions as provided herein and in the Act. The costs of liquidation shall be borne as a Company expense. Until the final winding up of the Company, the liquidator(s) shall continue to operate the Companys properties with all of the power and authority of the Board, subject to the power of the Board to remove and replace such liquidator(s). The steps to be accomplished by the liquidator(s) are as follows:

(a) As promptly as possible after a Dissolution Event and again after final winding up of the Company, the liquidator(s) shall cause a proper accounting to be made by a recognized firm of certified public accountants of the Companys assets, liabilities and operations through the last day of the calendar month in which the Dissolution Event occurs or the final liquidation is completed, as applicable.

(b) The liquidator(s) shall cause the Companys property to be liquidated as promptly as is consistent with obtaining the Fair Market Value thereof.

(c) The liquidator(s) shall distribute the proceeds of such liquidation and any other assets of the Company (subject to any requirement under the Act) in the following order of priority:

(i) first, to payment of all of the debts, liabilities and obligations of the Company (including all expenses incurred in liquidation);

(ii) second, to the establishment of adequate reserves for the payment and discharge of all debts, liabilities and obligations of the Company, including contingent, conditional or unmatured liabilities, in such amount and for such term as the liquidator(s) may reasonably determine;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (iii) third, any remaining proceeds of liquidation, and any assets that are to be distributed in kind, shall be distributed to the Members in accordance with Section 10.1(b), as promptly as practicable, but in any event within the time required by Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2).

(d) The liquidator(s) shall use all reasonable efforts to reduce the assets of the Company to cash and to distribute cash upon liquidation to the Members. Subject to the foregoing, if any assets of the Company are not reduced to cash, then the liquidator(s) (i) shall hire independent recognized appraisers to appraise the value of the non-cash assets of the Company (the cost of such appraisal to be considered an expense of the Company), (ii) shall allocate, in accordance with Section 9.1, any unrealized gain or loss determined by such appraisal to the Members Capital Accounts as though the non-cash assets had been sold on the date of distribution and (iii) shall, after giving effect to any such adjustment, treat the distribution of such non-cash assets as equivalent to a distribution of cash in the amount determined by the appraisal of such assets. No Member shall have any right to any specific assets of the Company except as otherwise herein specifically provided. In making distributions of non-cash assets under this Section 14.2, such assets may be distributed unequally among the Members only to the extent necessary to avoid any Member receiving an asset that it is prohibited from holding or that could result in adverse tax consequences to such Member, provided, that such unequal distribution shall not affect the aggregate amount of distributions to any Member.

(f) Each of the Members shall be furnished with a statement prepared by, or under the supervision of, the liquidator(s), which shall set forth the assets and liabilities of the Company as of the date of complete liquidation.

(g) As soon as possible following application of the proceeds of liquidation and any assets that are to be distributed in kind, any Member (or any other appropriate representative of the Company) shall execute a certificate of dissolution in the form prescribed by the Act and shall file the same with the Secretary of State of the State of Delaware.

14.3 Assumption of Liabilities. No party hereto shall incur, or be deemed to incur, any liabilities or obligations as a result of the dissolution of the Company in accordance with the provisions set forth in this Article 14.

14.4 Withdrawal. Except in connection with a transfer of Units in accordance with this Agreement, no Member shall withdraw or resign from the Company without the prior written consent of the Board (which consent may be withheld in its sole discretion) and no Member shall be subject to expulsion from the Company except as expressly agreed by the Board. Neither the withdrawal, resignation, expulsion or admission of any Member nor any other circumstance, action or condition shall permit any early termination or dissolution of the Company, which, except as provided in Section 14.1, shall not be wound up or liquidated and which shall continue unaffected.

14.5 Winding Up. Except as provided by law, upon dissolution, each Member shall look solely to the assets of the Company for the return of its Capital Contribution. If the property and assets of the Company after the payment of all debts and liabilities of the Company

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document are insufficient to return the Capital Contributions of any Member, such Member shall have no recourse against any other Member.

14.6 Deemed Contribution and Distribution. Notwithstanding any other provision of this Article 14, in the event that the Company is liquidated within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g) but no Dissolution Event has occurred, the assets of the Company shall not be liquidated, the debts and other liabilities of the Company shall not be paid or discharged, and the affairs of the Company shall not be wound up. Instead, solely for U.S. federal income tax purposes, the Company shall be deemed to have contributed all of its assets and liabilities to a new limited liability company, and then deemed to liquidate by distributing interests in the new limited liability company to the Members.

ARTICLE 15 INDEMNIFICATION AND INSURANCE

15.1 Right of Indemnification. The Company shall indemnify and hold harmless any Member, Manager, officer, employee, agent and Affiliate thereof (individually, in each case, an Indemnitee) to the fullest extent permitted by law from and against any and all losses, claims, demands, costs, damages, liabilities (joint or several), expenses of any nature (including attorneys fees and disbursements), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which the Indemnitee may be involved or threatened to be involved, as a party or otherwise, arising out of or incidental to the business or activities of or relating to the Company, regardless of whether the Indemnitee continues to be a Member, a Manager, officer or any Affiliate thereof at the time any such liability or expense is paid or incurred; provided, that this provision shall not eliminate or limit the liability of an Indemnitee (i) for any breach of the Indemnitees duty of loyalty to the Company or its Members, (ii) for acts or omissions which involve fraud or intentional misconduct or a knowing violation of law or (iii) for any transaction from which the Indemnitee received any improper personal benefit.

15.2 Advances of Expenses. Expenses incurred by an Indemnitee in defending any claim, demand, action, suit or proceeding subject to this Article 15 shall, from time to time, upon request by the Indemnitee and approval by the Board, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined in a judicial proceeding or a binding arbitration that such Indemnitee is not entitled to be indemnified as authorized in this Article 15.

15.3 Other Rights. The indemnification provided by this Article 15 shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, vote of the Board or Members as a matter of law or equity, or otherwise, both as to an action in the Indemnitees capacity as a Member, a Manager, an officer, an employee, an agent or any Affiliate thereof, and as to an action in another capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns, and administrators of the Indemnitee.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 15.4 Insurance and Other Financial Arrangements. The Company as directed by the Board may purchase and maintain insurance or make other financial arrangements on behalf of any Person who is or was a Member, Manager, officer, employee or agent of the Company, or is or was serving at the request of the Company as a Manager, Member, shareholder, director, officer, partner, trustee, employee or agent of any other Person, joint venture, trust, or other enterprise for any liability asserted against him or her and expenses incurred by him or her in his or her capacity as a Manager, Member, director, officer, employee or agent, or arising out of his or her status as such, whether or not the Company has the authority to indemnify him or her against such liability and expenses.

15.5 Effect of Interest in Transaction. An Indemnitee shall not be denied indemnification in whole or in part under this Article 15 or otherwise by reason of the fact that the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted or not expressly prohibited by the terms of this Agreement.

15.6 Repeal or Modification. Any repeal or modification of this Article 15 by the Members of the Company shall not adversely affect any right of a Manager, Member, officer, employee, agent or Affiliate of the Company existing hereunder at the time of such repeal or modification.

15.7 No Third Party Rights. The provisions of this Article 15 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons.

ARTICLE 16 POWER OF ATTORNEY

16.1 Power of Attorney. Each of the undersigned does hereby constitute and appoint any officer of the Company acting at the express direction of the Board with full power to act without the others, as his true and lawful representative and attorney-in-fact, in his name, place and stead, to make, execute, sign, acknowledge and deliver or file (i) the Certificate, (ii) any amendment to, modification to, restatement of or cancellation of the Certificate, (iii) all instruments, documents and certificates that may from time to time be required by any law to effectuate, implement and continue the valid and subsisting existence of the Company and (iv) all instruments, documents and certificates that may be required to effectuate the dissolution and termination of the Company; provided, that the foregoing have been approved in accordance with this Agreement and applicable law. The powers of attorney granted herein shall be deemed to be coupled with an interest, shall be irrevocable and shall survive the physical or legal incapacity of a Member.

ARTICLE 17 MISCELLANEOUS

17.1 Entire Agreement. This Agreement, and the schedules and exhibits hereto, constitutes the entire agreement among the Members with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, representations, and understandings

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document of the parties, and shall be deemed effective on the date hereof upon execution hereof. No party hereto shall be liable or bound to the other in any manner by any warranties, representations or covenants with respect to the subject matter hereof except as specifically set forth herein.

17.2 Amendments. This Agreement, including the schedules and exhibit hereto (other than Schedules 1 and 2), may be amended only by the affirmative vote of the Members holding a majority of the outstanding Common Units; provided, that no amendment that would have a disproportionately adverse impact on any Member relative to the other Members can be effected without the consent of such Member.

17.3 No Waiver. No consent or waiver, express or implied, by the Company or a Member to or of any breach or default by any Member in the performance by such Member of his or its obligations under this Agreement shall constitute a consent to or waiver of any similar breach or default by that or any other Member. Failure by the Company or a Member to complain of any act or omission to act by any Member, or to declare such Member in default, irrespective of how long such failure continues, shall not constitute a waiver by the Company or such Member of his or its rights under this Agreement.

17.4 Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto, and their respective successors and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.

17.5 Severability. If one or more provisions of this Agreement are held by a proper court to be unenforceable under applicable law, portions of such provisions, or such provisions in their entirety, to the extent necessary and permitted by law, shall be severed herefrom, and the balance of this Agreement shall be enforceable in accordance with its terms.

17.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF DELAWARE AND THE ACT, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.

17.7 Notices. Unless otherwise provided in this Agreement, any notice or other communication herein required or permitted to be given shall be in writing and shall be given by electronic communication, hand delivery, registered or certified mail, with proper postage prepaid, return receipt requested, or courier service regularly providing proof of delivery, addressed to the party hereto as provided as follows:

(a) all communications intended for the Company shall be sent to its principal executive office; and

(b) all communications intended for a Member shall be sent to the address of such Member set forth in Schedule 1, or such other address as such Member shall have provided to the Company for such purpose by notice served in accordance with this Section 17.7.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document All notices shall be sent as aforesaid or at any other address of which any of the foregoing shall have notified the others in any manner prescribed in this Section 17.7.

For all purposes of this Agreement, a notice or communication will be deemed effective:

(a) if delivered by hand or sent by courier, on the day it is delivered unless (i) that day is not a day upon which commercial banks are open for business in the city specified (a Local Business Day) in the address for notice provided by the recipient, or (ii) if delivered after the close of business on a Local Business Day, then on the next succeeding Local Business Day,

(b) if sent by facsimile transmission, on the date transmitted, provided oral or written confirmation of receipt is obtained by the sender, unless the transmission and confirmation date is not a Local Business Day, in which case on the next succeeding Local Business Day,

17.8 Titles and Subtitles. The titles of the sections and paragraphs of this Agreement are for convenience only and are not to be considered in construing this Agreement.

17.9 Currency. Unless otherwise specified, all currency amounts in this Agreement refer to the lawful currency of the United States of America.

17.10 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and shall become effective when there exist copies hereof which, when taken together, bear the authorized signatures of each of the parties hereto. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

17.11 Successors. Except as otherwise provided herein, this Agreement shall inure to the benefit of and be binding upon the Members and their legal representatives, heirs, successors and permitted assigns.

17.12 Remedies. Except as expressly provided in this Agreement, any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically and to recover damages by reason of any breach of any provision of this Agreement. One or more successive actions may be brought, either in the same action or in separate actions, as often as is deemed advisable, until all of the obligations to such Person are paid and performed in full.

17.13 No Action for Partition. No Member or other owner of Units will have any right to maintain any action for partition with respect to the property of the Company.

17.14 Business Days. If any time period for giving notice or taking action under this Agreement expires on a day which is a Saturday, Sunday or holiday in New York City, NY, the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document time period will be automatically extended to the business day immediately following such Saturday, Sunday or holiday.

17.15 No Strict Construction. The parties to this Agreement have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties to this Agreement, and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

17.16 Waiver of Jury Trial. The Members hereby waive, to the extent permitted by applicable law, trial by jury in any litigation in any court with respect to, in connection with, or arising out of this Agreement or the validity, protection, interpretation or enforcement thereof. The Members agree that this Section 17.16 is a specific and material aspect of this Agreement and acknowledge that the parties would not enter into this Agreement if this Section were not part of this Agreement.

* * * * *

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, each of the following Members of SRAM HOLDINGS, LLC hereby execute this Second Amended and Restated Limited Liability Company Operating Agreement as of the day and year first written above.

SRAM-SP2, INC.

By: Name: Stanley R. Day, Jr. Title: Chief Executive Officer

SRAM INTERNATIONAL HOLDINGS, INC.

By: Name: Stanley R. Day, Jr. Title: Chief Executive Officer

SRAM-SP3, LLC

By: Name: Stanley R. Day, Jr. Title: Chief Executive Officer

SRAM-SP4, LLC

By: Name: Stanley R. Day, Jr. Title: Chief Executive Officer

[Signature Page to SRAM Holdings LLC Second Amended and Restated Agreement]

SCHEDULE 1

NAMES AND ADDRESSES OF MEMBERS

Name of Member Address SRAM-SP2, INC. 1333 N. Kingsbury, 4th Floor Chicago, IL 60622 Attn: Stanley R. Day, Jr. Fax: 312-664-8826

SRAM INTERNATIONAL HOLDINGS, INC. 1333 N. Kingsbury, 4th Floor Chicago, IL 60622 Attn: Stanley R. Day, Jr. Fax: 312-664-8826

SRAM-SP3, LLC 1333 N. Kingsbury, 4th Floor Chicago, IL 60622 Attn: Stanley R. Day, Jr. Fax: 312-664-8826

SRAM-SP4, LLC 1333 N. Kingsbury, 4th Floor Chicago, IL 60622 Attn: Stanley R. Day, Jr. Fax: 312-664-8826

Schedules Page 1

SCHEDULE 2

Ownership of Units; Percentage Interests

Percentage Name of Member Common Units Incentive Units Interest SRAM-SP2, INC. 4,816,018.71 0 80.2 %

SRAM INTERNATIONAL HOLDINGS, INC. 68,161.00 0 1.1 %

SRAM-SP3, LLC 10,208.851510 0 0.2 %

SRAM-SP4, LLC 565,611.438490 0 9.4 %

INCENTIVE UNITS; AGGREGATE 0 538,238.00 9.1 %

Schedules Page 2

SCHEDULE 3

Members of the Board of Managers (as of June 7, 2011)

Name Address

Stanley R. Day, Jr.* c/o SRAM Holdings, LLC 333 N. Kingsbury, 4th Floor Chicago, IL 60622 Fax: 312-664-8826

Frederick K. Day c/o SRAM Holdings, LLC 333 N. Kingsbury, 4th Floor Chicago, IL 60622 Fax: 312-664-8826

Gidon Cohen c/o SRAM Holdings, LLC 333 N. Kingsbury, 4th Floor Chicago, IL 60622 Fax: 312-664-8826

Jack Smith c/o SRAM Holdings, LLC 333 N. Kingsbury, 4th Floor Chicago, IL 60622 Fax: 312-664-8826

Charles C. Moore c/o SRAM Holdings, LLC 333 N. Kingsbury, 4th Floor Chicago, IL 60622 Fax: 312-664-8826

Schedules Page 3

Schedules Page 4

SCHEDULE 4

Officers (as of June 7, 2011)

President and Chief Executive Officer Stan Day

Chief Financial Officer Mike Herr

Secretary Brian Benzer

Schedules Page 5

FORM OF JOINDER TO LIMITED LIABILITY COMPANY OPERATING AGREEMENT

THIS JOINDER to the Seconded Amended and Restated Limited Liability Company Operating Agreement, dated as of June 7, 2011 by and among SRAM HOLDINGS, LLC, a Delaware limited liability company (the Company), and certain Members of the Company, as amended from time to time (the Agreement), is made and entered into as of [ ] by and between the Company and [ ] (Holder). Capitalized terms used herein but not otherwise defined shall have the meanings set forth in the Agreement.

WHEREAS, Holder has acquired certain Units and the Agreement and the Company requires Holder, as an owner of Units, to become a party to the Agreement, and Holder agrees to do so in accordance with the terms hereof.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Joinder hereby agree as follows: 1. Agreement to be Bound. Holder hereby agrees that upon execution of this Joinder, it shall become a party to the Agreement and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Agreement as though an original party thereto and shall be deemed a Member for all purposes thereof. 2. Successors and Assigns. Except as otherwise provided herein, this Joinder shall bind and inure to the benefit of and be enforceable by the Company and its successors and assigns and Holder and any subsequent holders of Units and the respective successors and assigns of each of them, so long as they hold any Units. 3. Notices. For purposes of Section 17.7 of the Agreement, all notices, demands or other communications to the Holder shall be directed to:

[Name] [Address] [Facsimile Number] 4. GOVERNING LAW. THIS JOINDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND THE ACT, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE. 5. Counterparts. This Joinder may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document instrument, and shall become effective when there exist copies hereof which, when taken together, bear the authorized signatures of each of the parties hereto. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. 6. Waiver of Jury Trial. The Company and Holder hereby waive, to the extent permitted by applicable law, trial by jury in any litigation in any court with respect to, in connection with, or arising out of this Joinder or the validity, protection, interpretation or enforcement hereof. The Company and Holder agree that this section is a specific and material aspect of this Joinder and would not enter into this Joinder if this section were not part of this Joinder. 7. Descriptive Headings. The descriptive headings of this Joinder are inserted for convenience only and do not constitute a part of this Joinder.

* * * * *

SRAM HOLDINGS, LLC

By: Name: Title:

[HOLDER]

By:

RESOLUTIONS FOR CONSIDERATION AT A MEETING OF THE BOARD OF MANAGERS OF SRAM HOLDINGS, LLC

Approval of Recapitalization WHEREAS, SRAM, LLC, a Delaware limited liability company and wholly-owned subsidiary of SRAM Holdings, LLC, a Delaware limited liability company (the Company), plans to enter into certain financing facilities, including a first-lien term loan facility in the principal amount of $605 million and a revolving loan facility in the principal amount of up to $50 million, pursuant to a credit agreement dated on or about June 7, 2011 (the First Lien Credit Agreement) among the Company, SRAM, LLC, JPMorgan Chase Bank, N.A. as Administrative Agent and Collateral Agent (as defined in the First Lien Credit Agreement), the L/C Issuers (as defined in the First Lien Credit Agreement), and the Lenders party thereto from time to time (the Lenders) and the other agents party thereto, and a second-lien term loan facility in the principal amount of $185 million, pursuant to a credit agreement dated on or about June 7, 2011 (the Second Lien Credit Agreement and, together with the First Lien Credit Agreement, the Credit Agreement Transactions) among the Company, SRAM, LLC, JPMorgan Chase Bank, N.A. as Administrative Agent and Collateral Agent (as defined in the Second Lien Credit Agreement), the L/C Issuers (as defined in the Second Lien Credit Agreement), and the Lenders party thereto from time to time;

WHEREAS, as part of the Recapitalization (as defined below), TCP SRAM Holdings LLC, a Delaware limited liability company (TCP SRAM), will engage in a series of distributions with its affiliates whereby certain Class A Units of the Company (the Class A Units) indirectly owned by TCP IV SRAM Onshore Blocker L.P., a Delaware limited partnership (the TCP Blocker) will be transferred to the TCP Blocker (such transfers being referred to herein as the Permitted Transfers);

WHEREAS, in connection with the completion of the Permitted Transfers, the TCP Blocker will execute a joinder to become a Voting Member (as defined in the 2008 Amended and Restated Limited Liability Company Operating Agreement (the 2008 Operating Agreement)) of the Company;

WHEREAS, in connection with the Credit Agreement Transactions, the Board of Managers of the Company (the Board) deems it advisable and in the interests of the Company and its members that the Company use a portion of the proceeds from the Credit Agreement Transactions to effect the repurchase or redemption by the Company and its affiliates of all of the Class A Units held by TCP SRAM, the TCP Blocker, GMF SRAM Holdings Corp., a Delaware corporation (the GMF Blocker), and each of GE Capital Equity Holdings, Inc., a Delaware corporation, Gleacher Mezzanine Fund II, L.P., a Delaware limited partnership, Southern Farm Bureau Life Insurance Company, a Mississippi corporation, and JPM Mezzanine Capital, LLC, a Delaware limited liability company (collectively, the Co-Investors), through a series of transactions that will culminate in the direct or indirect acquisition of all of the outstanding Class A Units (the Recapitalization);

WHEREAS, as part of the Recapitalization, the Company will cause SRAM, LLC to distribute an aggregate amount of $575 million plus an amount equal to certain transaction expenses not to exceed $2 million (to be determined by the proper officers) to the Company (the SRAM, LLC Distribution);

WHEREAS, as part of the Recapitalization, and immediately following the SRAM, LLC Distribution, the Company will distribute an aggregate amount of $461,891,750.00 to, or for the account

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document of TCP SRAM and the Co-Investors to repurchase, and in full redemption of, their respective Class A Units (the TCP SRAM Distribution);

WHEREAS, as part of the Recapitalization, and immediately following the TCP SRAM Distribution, the Company will distribute an aggregate amount of $113,108,250.00 to SRAM-SP2, Inc., a Delaware corporation, in redemption of Class B Units of the Company held by SRAM-SP2, Inc. equal in value to such amount (the SP2 Distribution and, together with the SRAM, LLC Distribution and the TCP SRAM Distribution, the Recapitalization Distributions);

WHEREAS, in connection with the Recapitalization Distributions, the Board must determine that at the time of the Recapitalization Distributions, after giving effect to the Credit Agreement Transactions and the Recapitalization Distributions, the fair value of the assets of the Company exceed the liabilities of the Company, other than liabilities to the Members (as defined in the 2008 Operating Agreement) on account of their Company interests and liabilities for which the recourse of creditors is limited to specified property of the Company, except that the fair value of property that is subject to a liability for which the recourse of creditors is limited is included in the assets of the Company only to the extent that the fair value of that property exceeds that liability, in accordance with Section 18-607 of the Delaware Limited Liability Company Act, as amended (the Act);

WHEREAS, the Board has been provided and reviewed the audited consolidated financial statements of the Company and its consolidated subsidiaries for the year ended December 31, 2010 and the preliminary unaudited consolidated financial statements for the three months ended March 31, 2011 (the Financial Statements);

WHEREAS, the Board has been provided and has reviewed a Report of the Chief Financial Officer of the Company (the CFO Report) as to the fair value of the present assets of the Company and the aggregate current value of the total liabilities of the Company after giving effect to the Credit Agreement Transactions and the Recapitalization Distributions;

WHEREAS, the Board has consulted with the officers of the Company as to fair value of the present assets of the Company and the aggregate current value of the total liabilities of the Company after giving effect to the Credit Agreement Transactions and the Recapitalization Distributions (the Officer Discussions);

WHEREAS, as part of the Recapitalization, and immediately following the Recapitalization Distributions, SRAM-SP2, Inc. will acquire the interests in the TCP Blocker and the GMF Blocker;

WHEREAS, the transactions contemplated by the Recapitalization, including the Permitted Transfer and the Recapitalization Distributions, shall be effected pursuant to the terms of a Master Transaction Agreement to be entered into by and among the Company, SRAM-SP2, Inc., TCP SRAM, Trilantic Capital Partners IV L.P., the Co-Investors, the GMF Blocker, the partners of the TCP Blocker, and the shareholder of the GMF Blocker, in substantially the form of Exhibit A attached hereto (the Master Transaction Agreement);

WHEREAS, in connection with the transactions contemplated by the Recapitalization, immediately following consummation of the transactions contemplated by the Master Transaction Agreement, SRAM-SP2, Inc. will engage in a series of mergers with the TCP Blocker and the GMF Blocker such that SRAM-SP3, LLC, a Delaware limited liability company and wholly owned subsidiary of SRAM-SP2, Inc., and SRAM-SP4, LLC, a Delaware limited liability company and wholly owned subsidiary of SRAM-SP2, Inc., will acquire the Class A Units held by TCP Blocker and GMF Blocker (the Post Recapitalization Transfers);

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document WHEREAS, in connection with the completion of the Post Recapitalization Transfers, SRAM-SP3, LLC and SRAM-SP4, LLC will become members of the Company; and

WHEREAS, in connection with the transactions contemplated by the Recapitalization, immediately following consummation of the transactions contemplated by the Master Transaction Agreement, the Company will amend and restate the 2008 Operating Agreement to create a single class of common units and to eliminate the corporate governance and liquidity rights of the Class A Unit holders, which agreement shall be in substantially the form of Exhibit B attached hereto (the Amended and Restated Operating Agreement).

NOW, THEREFORE, BE IT HEREBY RESOLVED, the Board has determined after giving effect to the Credit Agreement Transactions and the Recapitalization Distributions, based on, inter alia, (a) the CFO Report (b) the Financial Statements, (c) the Officer Discussions and (d) such other materials and information relevant to the determination of the fair value of the assets and liabilities of the Company, that the fair value of the assets of the Company exceed the liabilities of the Company, other than liabilities to the Members on account of their Company interests and liabilities for which the recourse of creditors is limited to specified property of the Company, except that the fair value of property that is subject to a liability for which the recourse of creditors is limited is included in the assets of the Company only to the extent that the fair value of that property exceeds that liability, in accordance with Section 18-607 of the Act;

FURTHER RESOLVED, that, as part of the Recapitalization, the Permitted Transfers be, and hereby are, authorized and approved for all purposes and in all respects;

FURTHER RESOLVED, that, subject to the requisite approval of the Voting Members, the Recapitalization as described in the Master Transaction Agreement, including the Recapitalization Distributions, be, and hereby are, in all respects authorized and approved, and that the Master Transaction Agreement (in the form attached hereto, and with such changes thereto as the proper officers of the Company deem necessary or appropriate), be, and hereby is, authorized and approved for all purposes and in all respects;

FURTHER RESOLVED, that, subject to the requisite approval of the Voting Members, the Amended and Restated Operating Agreement (in the form attached hereto, and with such changes thereto as the proper officers of the Company deem necessary or appropriate), be, and hereby is, authorized and approved for all purposes and in all respects;

FURTHER RESOLVED, that the Post Recapitalization Transfers be, and hereby are, authorized and approved for all purposes and in all respects; and

FURTHER RESOLVED, that the execution, delivery and performance by the Company of each of the Master Transaction Agreement and Amended and Restated Operating Agreement (in each case in the form attached hereto and with such changes thereto as the proper officers of the Company deem necessary or appropriate), and the consummation of the transactions contemplated thereby, be, and they hereby are, authorized and approved for all purposes and in all respects.

General FURTHER RESOLVED, that the proper officers of the Company for the purposes of these resolutions shall be Stanley R. Day, Jr., Michael Herr, Brian W. Benzer or any other officer of the Company as may be designated in writing by Stanley R. Day, Jr.;

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document FURTHER RESOLVED, that the proper officers of the Company shall be, and each of them hereby is, authorized, empowered and directed to prepare, execute, deliver, acknowledge, attest, file and record (or cause to be prepared, executed, delivered, acknowledged, attested, filed and recorded) on behalf of the Company such agreements, instruments, applications, statements, certificates and other documents, to seek such authorizations and approvals, and to take (or cause to be taken) such other actions as such officers, or any of them, shall deem necessary, appropriate or advisable in order to carry out the purpose of each of the foregoing resolutions and the intent thereof, including all things incidental thereto and any modifications of the allocation of the amounts of the distributions between the TCP SRAM Distribution and the SP2 Distribution that are consistent with the purpose of these resolutions and the Companys books and records, and that the execution of any agreement, instrument, application, statement, certificate or other document, or the taking of any such action, by any such officers shall be conclusive evidence of the due authorization thereof by the Company;

FURTHER RESOLVED, that the proper officers of the Company be, and each of them hereby is, in the name and on behalf of the Company, authorized and directed to take such further action and to execute such documents as may be necessary or appropriate to carry out the foregoing resolutions; and

FURTHER RESOLVED, that any document heretofore executed and any action heretofore taken by any director or any proper officer of the Company in furtherance of the business of the Company otherwise permitted under or contemplated by these resolutions be, and each of them hereby is, ratified, confirmed and approved for all purposes and in all respects.

SRAM INTERNATIONAL CORPORATION CODE OF BUSINESS CONDUCT AND ETHICS

INTRODUCTION Purpose This Code of Business Conduct and Ethics contains general guidelines for conducting the business of the Company consistent with the highest standards of business ethics. To the extent this Code requires a higher standard than required by commercial practice or applicable laws, rules or regulations, we adhere to these higher standards. Employees are required to familiarize themselves with Company policies that relate to their work.

This Code applies to all of our directors, officers and employees. We refer to all persons covered by this Code as Company employees or simply employees. We also refer to our chief executive officer and our chief financial officer as our principal financial officers.

The Company has a simple and straightforward policy on the rules of conduct and behavior that are expected from employees and agents when they are conducting Company business. It is a commitment to do what is right, obey all laws, behave with integrity and honesty, treat people fairly, respect diversity, accept accountability, communicate openly and always behave in a way that is above reproach. Each employee is required to maintain these high ethical standards at all times and no employee of the Company should feel that a compromising or unethical situation is justified by any possible business result. Anyone who violates these rules of conduct and behavior could be subject to criminal or civil penalties and/or be subject to corrective action up to and including discharge from the Company.

All employees and agents are expected to apply the highest ethical standards and observe all laws and regulations applicable to the Companys business. No employee or agent has the authority to require or approve any action that would break the law or violate ethical standards. Employees or agents should avoid situations where anyone engages in activities that would accomplish indirectly for the Company what the Company could not legally or ethically do directly.

Seeking Help and Information This Code is not intended to be a comprehensive rulebook and cannot address every situation that our employees may face. In the event any employee feels uncomfortable about a situation or has any doubts about whether it is consistent with the Companys ethical standards, he or she should seek help. We encourage our employees to contact their supervisors for help first. If a supervisor cannot answer a particular question or if an employee does not feel comfortable contacting his or her supervisor, such employee should contact the Human Resources Department.

Reporting Violations of the Code All employees have a duty to report any known or suspected violation of this Code, including any violation of the laws, rules, regulations or policies that apply to the Company. If an employee knows of or suspects a violation of this Code, he or she should immediately report the conduct to his or her supervisor. The supervisor will contact the Human Resources Department, which will work with the employee and the supervisor to investigate the matter. If the employee does not feel comfortable reporting the conduct to a supervisor or does not get a satisfactory response, the employee may contact the Human Resources Department directly.

All reports of known or suspected violations involving the accuracy of the Companys financial reports and related matters should be reported either directly to the Audit Committee or the Human Resources Department.

All reports of known or suspected violations of the law or this Code will be handled sensitively and with discretion. Each supervisor, the Human Resources Department, the Audit Committee and the Company will

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document protect each employees confidentiality to the extent possible, consistent with law and the Companys need to investigate the matter.

It is Company policy that any employee who violates this Code will be subject to appropriate discipline, which may include termination of employment. This determination will be based upon the facts and circumstances of each particular situation. An employee accused of violating this Code will be given an opportunity to present his or her version of the events at issue prior to any determination of appropriate discipline. Employees who violate the law or this Code may expose themselves to substantial civil damages, criminal fines and prison terms. The Company may also face substantial fines and penalties and many incur damage to its reputation and standing in the community. The conduct of each employee, as a representative of the Company, if it does not comply with the law or with this Code, can result in serious consequences for both the employee and the Company.

Policy Against Retaliation The Company strictly prohibits retaliation against an employee who, in good faith, seeks help or reports known or suspected violations. Any reprisal or retaliation against an employee because the employee, in good faith, sought help or filed a report will be subject to disciplinary action, including potential termination of employment.

Waivers of the Code Waivers of this Code will be granted only in extraordinary circumstances. Waivers of this Code for employees may be made only by our principal financial officers. Any waiver of this Code for our directors, executive officers or other principal financial officers may be made only by our Board of Directors or the appropriate committee of our Board of Directors. Any waivers of this Code will be disclosed to the Audit Committee. Any waiver approved for our directors or executive officers and the reason for the waiver will be promptly disclosed to the Companys stockholders, in accordance with applicable laws, rules and regulations (including the rules of NASDAQ or any stock exchange on which the Companys shares may be listed or traded).

CONFLICTS OF INTEREST Identifying Potential Conflicts of Interest A conflict of interest can occur when an employees private interest interferes, or appears to interfere, with the interests of the Company as a whole. Employees are expected to avoid any private interest that influences their ability to act in the interests of the Company or that makes it difficult to perform their work objectively and effectively. Conflicts of interest may also arise if an employee (or any family member of an employee) receives improper personal benefits as a result of his or her position with the Company.

Disclosure of Conflicts of Interest The Company requires that employees disclose any situations that reasonably would be expected to give rise to a conflict of interest. If an employee suspects that they have a conflict of interest, or something that others could reasonably be perceived as a conflict of interest, the employee must report it to his or her supervisor or the Human Resources Department. The supervisor and the Human Resources Department will work with the employee to determine whether they have a conflict of interest and, if so, how best to address it. Conflicts of interest may only be waived as described in Waivers of the Code above.

Prohibition of Loans The Company is prohibited from, directly or indirectly, making a loan to an executive officer or director of the Company or guaranteeing any loan or obligation on behalf of an executive officer or director.

COMPANY RECORDS Accurate and reliable records are crucial to our business. Our records are the basis of our earnings statements, financial reports and guide our business decision-making and strategic planning. Company records

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document include booking information, payroll, timecards, travel and expense reports, e-mails, accounting and financial data, measurement and performance records, electronic data files and all other records maintained in the ordinary course of our business.

All Company records must be complete, accurate and reliable in all material respects. Undisclosed or unrecorded funds, payments or receipts are inconsistent with our business practices and are prohibited. Our employees are responsible for understanding and complying with our record keeping policy. Each employee should ask his or her supervisor if they have any questions.

ACCURACY OF FINANCIAL REPORTS AND OTHER PUBLIC COMMUNICATIONS Both federal law and our policies require the disclosure of accurate and complete information regarding the Companys business, financial condition and results of operations. Inaccurate, incomplete or untimely reporting will not be tolerated and can severely damage the Company and result in legal liability. All employees have the responsibility to ensure that the Company presents full, fair, accurate, timely and understandable disclosure in the its periodic reports and other public communications.

The Companys principal financial officers and other employees working in the Accounting Department have a special responsibility to ensure that all of our financial disclosures are full, fair, accurate, timely and understandable. These employees must understand and strictly comply with generally accepted accounting principles and all standards, laws and regulations for accounting and financial reporting of transactions, estimates and forecasts.

COMPLIANCE WITH LAWS AND REGULATIONS Each employee has an obligation to comply with all laws, rules and regulations applicable to the Companys operations. These include, without limitation, laws covering bribery and kickbacks, copyrights, trademarks and trade secrets, information privacy, illegal political contributions, antitrust prohibitions, foreign corrupt practices, offering or receiving gratuities, environmental hazards, employment discrimination or harassment, occupational health and safety, false or misleading financial information or misuse of corporate assets. Each employee is expected to understand and comply with all laws, rules and regulations that apply to his or her job position. If any doubt exists about whether a course of action is lawful, each employee should seek advice from his or her supervisor or the Human Resources Department.

CONCLUSION This Code of Business Conduct and Ethics contains general guidelines for conducting the business of the Company consistent with the highest standards of business ethics. If any employee has any questions about these guidelines, they should please contact their supervisor or the Human Resources Department. We expect all Company employees to adhere to these standards.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exhibit 23.2 Consent of Independent Registered Public Accounting Firm We hereby consent to the use in this Registration Statement on Form S-1 of SRAM International Corporation of our report dated May 11, 2011 relating to the consolidated financial statements of SRAM Holdings, LLC, and of our report dated June 23, 2011 relating to the financial statement of SRAM International Corporation, both of which appear in such Registration Statement. We also consent to the reference to us under the heading Experts in such Registration Statement.

/s/ PricewaterhouseCoopers LLP Chicago, Illinois

June 23, 2011

CONSENT

The undersigned hereby consents to being named in Amendment No. 1 to the registration statement on Form S-1 (Registration No. 333-174140) and in all subsequent amendments and post-effective amendments or supplements thereto and in any registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act (the Registration Statement) of SRAM International Corporation, a Delaware corporation (the Company), as an individual to become a director of the Company and to the inclusion of his biographical information in the Registration Statement.

IN WITNESS WHEREOF, this Consent is signed and dated as of the 16th day of June, 2011.

/s/ Michael A. Smith Name: Michael A. Smith

CONSENT

IN WITNESS WHEREOF, this Consent is signed and dated as of the 16th day of June, 2011.

/s/ Thomas E. Bergmann Name: Thomas E. Bergmann