10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 26, 2011

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             .

Commission File Number: 001-15181

FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	04-3363001
(State or other jurisdiction of incorporation or organization)	(I.R.S.Employer Identification No.)

3030 Orchard Parkway

San Jose, California 95134

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (408)822-2000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x     No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x     No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Large Accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares outstanding of each of the issuer’s classes of common stock as of the close of business on June 26, 2011:

Title of Each Class	Number of Shares
Common Stock	127,682,724

FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC. AND SUBSIDIARIES

INDEX

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets as of June 26, 2011 and December 26, 2010		3
	Consolidated Statements of Operations for the Three and Six Months Ended June 26, 2011 and June 27, 2010		4
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 26, 2011 and June 27, 2010		5
	Consolidated Statements of Cash Flows for the Six Months Ended June 26, 2011 and June 27, 2010		6
	Notes to Consolidated Financial Statements (Unaudited)		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		29
Item 4.	Controls and Procedures		29
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		30
Item 1A.	Risk Factors		31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		42
Item 6.	Exhibits		42
Signature			43

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions)

	June 26,			December 26,
	2011			2010
ASSETS		(Unaudited	)
Current assets:
Cash and cash equivalents	$	435.7		$	404.6
Short-term marketable securities		0.2			0.1
Accounts receivable, net of allowances of $ 29.8 and $ 26.9 at June 26, 2011 and December 26, 2010, respectively		162.4			156.4
Inventories		253.4			232.7
Deferred income taxes, net of allowances		16.7			13.2
Other current assets		38.9			36.1
Total current assets		907.3			843.1
Property, plant and equipment, net		722.9			689.3
Deferred income taxes, net of allowances		18.3			15.5
Intangible assets, net		74.8			69.7
Goodwill		169.4			164.8
Long-term securities		31.6			30.3
Other assets		37.0			36.4
Total assets		1,961.3		$	1,849.1
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	—		$	3.8
Accounts payable		158.1			139.0
Accrued expenses and other current liabilities		132.1			139.2
Total current liabilities		290.2			282.0
Long-term debt, less current portion		300.1			316.9
Deferred income taxes		36.1			33.0
Other liabilities		40.7			38.5
Total liabilities		667.1			670.4
Commitments and contingencies (Note 11)
Temporary equity - deferred stock units		1.9			2.4
Stockholders’ equity:
Common stock		1.3			1.3
Additional paid-in capital		1,471.7			1,432.4
Accumulated deficit		(99.1	)		(187.5	)
Accumulated other comprehensive loss		(4.5	)		(5.6	)
Less treasury stock (at cost)		(77.1	)		(64.3	)
Total stockholders’ equity		1,292.3			1,176.3
Total liabilities, temporary equity and stockholders’ equity	$	1,961.3		$	1,849.1

See accompanying notes to unaudited consolidated financial statements.

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FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share and percent data)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 26,			June 27,			June 26,			June 27,
	2011			2010			2011			2010
Total revenue	$	433.2		$	409.6		$	846.2		$	787.6
Cost of sales		272.5			266.3			533.5			522.7
Gross margin		160.7			143.3			312.7			264.9
Gross margin %		37.1	%		35.0	%		37.0	%		33.6	%
Operating expenses:
Research and development		39.9			29.1			76.8			57.5
Selling, general and administrative		58.3			56.0			113.4			108.3
Amortization of acquisition-related intangibles		4.7			5.6			10.3			11.2
Restructuring and impairments		2.9			—			5.4			2.4
Total operating expenses		105.8			90.7			205.9			179.4
Operating income		54.9			52.6			106.8			85.5
Other expense, net		3.3			2.6			4.4			5.0
Income before income taxes		51.6			50.0			102.4			80.5
Provision for income taxes		6.7			6.2			14.0			14.1
Net income	$	44.9		$	43.8		$	88.4		$	66.4
Net income per common share:
Basic	$	0.35		$	0.35		$	0.70		$	0.53
Diluted	$	0.34		$	0.34		$	0.67		$	0.52
Weighted average common shares:
Basic		127.9			125.2			127.0			125.0
Diluted		131.7			128.1			131.3			128.3

See accompanying notes to unaudited consolidated financial statements.

4

FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 26,			June 27,			June 26,			June 27,
	2011			2010			2011			2010
Net income	$	44.9		$	43.8			88.4		$	66.4
Other comprehensive income, net of tax:
Net change associated with hedging transactions		0.5			(0.1	)		0.4			1.7
Net amount reclassified to earnings for hedging		(0.4	)		(1.6	)		(0.4	)		(0.9	)
Net change associated with fair value of securities		0.5			(2.2	)		1.1			0.7
Net change associated with pension transactions		—			(2.4	)		—			(2.4	)
Comprehensive income	$	45.5		$	37.5		$	89.5		$	65.5

See accompanying notes to unaudited consolidated financial statements.

5

FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Six Months Ended
	June 26,			June 27,
	2011			2010
Cash flows from operating activities:
Net income	$	88.4		$	66.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		75.6			79.7
Non-cash stock-based compensation expense		13.0			11.2
Non-cash interest income		(0.2	)		(0.3	)
Non-cash financing expense		0.5			0.8
Non-cash write-off of deferred financing fees		2.1			—
Loss on disposal of property, plant, and equipment		0.5			0.1
Deferred income taxes, net		(5.6	)		2.9
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net		(6.0	)		(39.1	)
Inventories		(20.4	)		(21.6	)
Other current assets		(2.0	)		0.3
Current liabilities		—			51.5
Other assets and liabilities, net		3.9			(10.8	)
Net cash provided by operating activities		149.8			141.1
Cash flows from investing activities:
Maturity of marketable securities		0.1			0.1
Capital expenditures		(88.1	)		(50.9	)
Purchase of molds and tooling		(1.4	)		(0.6	)
Acquisitions, net of cash acquired		(16.5	)		0
Net cash used in investing activities		(105.9	)		(51.4	)
Cash flows from financing activities:
Repayment of long-term debt		(320.6	)		(27.6	)
Borrowing from Revolving Credit Facility		300.0			—
Proceeds from issuance of common stock and from exercise of stock options		35.2			0.2
Purchase of treasury stock		(12.8	)		(17.6	)
Shares withheld for employees taxes		(9.4	)		0
Debt financing costs		(5.2	)		(0.8	)
Net cash used in financing activities		(12.8	)		(45.8	)
Net change in cash and cash equivalents		31.1			43.9
Cash and cash equivalents at beginning of period		404.6			415.8
Cash and cash equivalents at end of period	$	435.7		$	459.7

See accompanying notes to unaudited consolidated financial statements.

6

FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Basis of Presentation

The accompanying interim consolidated financial statements of Fairchild Semiconductor International, Inc. (the company) have been prepared in conformity with accounting principles generally accepted in the United States of America, consistent in all material respects with those applied in the company’s Annual Report on Form 10-K for the year ended December 26, 2010. The interim financial information is unaudited, but reflects all normal adjustments, which are, in the opinion of management, necessary to provide a fair statement of results for the interim periods presented. The financial statements should be read in conjunction with the financial statements in the company’s Annual Report on Form 10-K for the year ended December 26, 2010. Certain amounts for prior periods have been reclassified to conform to the current presentation. The results for the interim periods are not necessarily indicative of the results of operations that may be expected for the full year.

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, investments, intangible assets, and other long-lived assets, legal contingencies, and assumptions used in the calculation of income taxes and customer incentives, among others. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The company adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity and foreign currency markets, and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

Note 2 – Financial Statement Details

	June 26, 2011		December 26, 2010
	(In millions)
Inventories, net
Raw materials		44.0	$	40.9
Work in process		134.0		121.1
Finished goods		75.4		70.7
		253.4	$	232.7
	June 26, 2011		December 26, 2010
	(In millions)
Property, plant and equipment
Land and improvements	$	24.0	$	24.0
Buildings and improvements		342.9		339.2
Machinery and equipment		1,736.5		1,679.6
Construction in progress		141.9		112.9
Total property, plant and equipment		2,245.3		2,155.7
Less accumulated depreciation		1,522.4		1,466.4
	$	722.9	$	689.3

7

	June 26, 2011		December 26, 2010
	(In millions)
Accrued expenses and other current liabilities
Payroll and employee related accruals	$	73.0	$	86.5
Taxes payable		27.7		23.0
Restructuring and impairments		12.0		11.0
Other		19.4		18.7
	$	132.1	$	139.2

	Six Months Ended
	June 26, 2011			June 27, 2010
	(in millions)
Other expense, net
Interest expense	$	3.4		$	6.0
Interest income		(1.3	)		(1.4	)
Other (income) expense, net		2.3			0.4
Other expense, net	$	4.4		$	5.0

Note 3 – Computation of Net Income per Share

Basic net income per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential future issuances of common stock relating to potentially dilutive securities. There is no dilution when a net loss exists. Potentially dilutive common equivalent securities consist of stock options, performance units (PUs), deferred stock units (DSUs) and restricted stock units (RSUs). In calculating diluted earnings per share, the dilutive effect of stock options is computed using the average market price for the respective period using the treasury share method. Certain potential shares of the company’s outstanding stock options were excluded because they were anti-dilutive, but could be dilutive in the future. The following table sets forth the computation of basic and diluted earnings per share.

	Three Months Ended				Six Months Ended
	June 26, 2011		June 27, 2010		June 26, 2011		June 27, 2010
	(In millions, except per share data)
Basic:
Net income	$	44.9	$	43.8	$	88.4	$	66.4
Weighted average shares outstanding		127.9		125.2		127.0		125.0
Net income per share	$	0.35	$	0.35	$	0.70	$	0.53
Diluted:
Net income	$	44.9	$	43.8	$	88.4	$	66.4
Basic weighted average shares outstanding		127.9		125.2		127.0		125.0
Assumed exercise of common stock equivalents		3.8		2.9		4.3		3.3
Diluted weighted average common and common equivalent shares		131.7		128.1		131.3		128.3
Net income per share	$	0.34	$	0.34	$	0.67	$	0.52
Anti-dilutive common stock equivalents, non-vested stock, DSUs, RSUs, and PUs		4.3		11.0		4.6		12.0

8

Note 4 – Supplemental Cash Flow Information

	Six Months Ended
	June 26, 2011		June 27, 2010
	(In millions)
Cash paid for:
Income taxes, net	$	15.1	$	7.7
Interest	$	2.5	$	4.9

Note 5 – Fair Value

Fair Value of Financial Instruments. In accordance with the requirements of the Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), the company groups its financial assets and liabilities measured at fair value on a recurring basis in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

• Level 1 – Valuation is based upon quoted market price for identical instruments traded in active markets.

• Level 2 – Valuation is based on quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

• Level 3 – Valuation is generated from model-based techniques that use significant assumptions not observable in the market. Valuation techniques include use of discounted cash flow models and similar techniques.

In accordance with the requirements of the Fair Value Measurements and Disclosures Topic of the FASB ASC, it is the company’s policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements. When available, the company uses quoted market prices to measure fair value. If market prices are not available, the fair value measurement is based on models that use primarily market based parameters including interest rate yield curves, option volatilities and currency rates. In certain cases where market rate assumptions are not available, the company is required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument. Changes in the underlying assumptions used, including discount rates and estimates of future cash flows could significantly affect the results of current or future values. The results may not be realized in an actual sale or immediate settlement of an asset or liability.

The assets and liabilities measured at fair value on a recurring basis include securities and derivatives. Financial instruments classified as Level 1 are securities traded on an active exchange as well as U.S. Treasury, and other U.S. government and agency-backed securities that are traded by dealers or brokers in active over-the-counter markets. Derivatives are classified as Level 2 financial instruments. The only financial instruments classified as Level 3 are auction rate securities.

The fair value of securities is based on quoted market prices at the date of measurement, except for auction rate securities. The auction rate security market is no longer active and as a result there is no observable market data for these assets. Fair value estimates are based on judgments regarding current economic conditions, liquidity discounts and interest rate risks. These estimates involve significant uncertainties and judgments and cannot be determined with precision. As a result such calculated fair value estimates may not be realizable in a current sale or immediate settlement of the instrument. In addition, changes in the underlying assumptions used in the fair value measurement technique, including discount rates, liquidity risks and estimates of future cash flows could significantly affect these fair value estimates.

A discounted cash flow (DCF) calculation is performed to determine the estimated fair value of the auction rate securities. The assumptions used in preparing the DCF model included estimates for the amount and timing of future interest and principal payments and the rate of return required by investors to own these securities in the current environment. In making these assumptions, relevant factors that were considered included: the formula applicable to each security which defines the interest rate paid to investors in the event of a failed auction; forward projections of the interest rate benchmarks specified in such formulas; the likely timing of principal repayments; the probability of full repayment considering guarantees by third parties and additional credit enhancements provided through other means. The estimate of the rate of return required by investors to own these securities also considers the current reduced liquidity for auction rate

9

securities. Inputs for DCF calculations are based upon publicly available data as well as the company’s own estimates. The primary unobservable input to the valuation was the maturity assumption which ranged from four to ten years depending on the individual auction rate security. The maturity assumptions were based on the terms of the underlying instrument and the potential for restructuring the auction rate security.

All of the company’s derivatives are traded in over-the-counter markets where quoted market prices are not readily available. For those derivatives, the company measures fair value using prices obtained from the counterparties with whom the company has traded. The counterparties price the derivatives based on models that use primarily market observable inputs, such as yield curves and option volatilities. Accordingly, the company classifies these derivatives as Level 2.

The company is exposed to credit-related losses in the event of non-performance by counterparties to hedging instruments. The counterparties to all derivative transactions are major financial institutions with investment grade credit ratings. However, this does not eliminate the company’s exposure to credit risk with these institutions. This credit risk is generally limited to the unrealized gains in such contracts should any of these counterparties fail to perform as contracted. The company considers the risk of counterparty default to be minimal.

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of June 26, 2011.

	Fair Value Measurements
	Total			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(In millions)
Foreign Currency Derivatives
Assets	$	3.4			—	$	3.4			—
Liabilities		(1.1	)		—		(1.1	)		—
	$	2.3		$	—	$	2.3		$	—
Securities
Marketable securities	$	2.5		$	2.5		—			—
Auction rate securities		29.3			—		—			29.3
	$	31.8		$	2.5	$	—		$	29.3

10

The following table summarizes the changes in level 3 securities measured at fair value on a recurring basis for the six months ended June 26, 2011.

	Auction Rate Securities
	(In millions)
Balance at beginning of period	$	28.0
Total realized and unrealized gains or (losses)
Included in net income		—
Included in OCI		1.1
Accretion of impairments included in net income		0.2
Sales		—
Purchases, issuances and settlements		—
Balance at end of period	$	29.3

Long term debt is carried at amortized cost. However, the company is required to estimate the fair value of long term debt under the Financial Instrument Topic of the FASB ASC. The fair value of the term loan was determined utilizing current trading prices obtained from indicative market data. The carrying amount of the new revolving facility is considered approximate fair value as the company entered into the new revolving facility during the second quarter of 2011. See Note 12 for more information on the new credit facility.

	June 26, 2011				December 26, 2010
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
	(In millions)
Long-Term Debt:
Revolving Credit Facility	$	300.0	$	300.0
Term Loan					$	320.7	$	316.7

Note 6 – Derivatives

Derivatives. The company uses derivative instruments to manage exposures to changes in foreign currency exchange rates and interest rates. In accordance with the requirements of the Derivatives and Hedging Topic of the FASB ASC, the fair value of these hedges is recorded on the balance sheet. For the fair value of derivatives, see Note 5.

Foreign Currency Derivatives. The company uses currency forward and combination option contracts to hedge a portion of its forecasted foreign exchange denominated revenues and expenses. The company monitors its foreign currency exposures to maximize the overall effectiveness of its foreign currency hedge positions. Currencies hedged include the euro, Japanese yen, Philippine peso, Malaysian ringgit, Korean won and Chinese yuan. The company’s objectives for holding derivatives are to minimize the risks using the most effective methods to eliminate or reduce the impacts of these exposures. The maturities of the cash flow hedges are 12 months or less.

Changes in the fair value of derivative instruments related to time value are included in the assessment of hedge effectiveness. Hedge ineffectiveness, determined in accordance the Derivatives and Hedging Topic of the FASB ASC, did not have a material impact on earnings for the three and six months ended June 26, 2011 and June 27, 2010. No cash flow hedges were derecognized or discontinued during the three and six months ended June 26, 2011 and June 27, 2010.

Derivative gains and losses included in accumulated other comprehensive income (AOCI) are reclassified into earnings at the time the forecasted transaction is recognized. The company estimates that $2.3 million of net unrealized derivative gains included in AOCI will be reclassified into earnings within the next twelve months.

The company also uses currency forward and combination option contracts to offset the foreign currency impact of balance sheet translation. These derivatives have one month terms and the initial fair value, if any, and the subsequent gains or losses on the change in fair value are reported in earnings within the same income statement line as the impact of the foreign currency translation.

11

Interest Rate Derivatives. The company’s variable-rate debt exposes the company to variability in interest payments due to changes in interest rates. The company used a forward interest rate swap to mitigate the interest rate risk on a portion of its variable-rate borrowings in order to manage fluctuations in cash flows resulting from changes in interest rates on variable-rate debt. This hedge expired on December 31, 2009.

Effectiveness of this hedge was calculated by comparing the fair value of the derivative to a hypothetical derivative that would be a perfect hedge of floating rate debt. The value of the hedge at inception was zero and any ineffectiveness during the life of the swap was immaterial.

Derivative gains and losses included in AOCI were reclassified into earnings at the time the forecasted transaction was recognized. The amounts were reclassified into interest expense as a yield adjustment in the same period in which the related interest on the floating-rate debt obligations affect earnings.

The tables below show the notional principal and the location and amounts of the derivative fair values in the consolidated balance sheet as of June 26, 2011 and December 26, 2010 as well as the location of derivative gains and losses in the statement of operations for the six months ended June 26, 2011 and June 27, 2010. Pursuant to the Derivatives and Hedging Topic of the FASB ASC, the company nets the fair value of all derivative financial instruments with counterparties for which a master netting arrangement is utilized. The notional principal amounts for these instruments provide one measure of the transaction volume outstanding as of the end of the period and do not represent the amount of the company’s exposure to credit or market loss. The estimates of fair value are based on applicable and commonly used pricing models using prevailing financial market information as of June 26, 2011 and December 26, 2010. Although the following table reflects the notional principal and fair value of amounts of derivative financial instruments, it does not reflect the gains or losses associated with the exposures and transactions that these financial instruments are intended to hedge. The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures will depend on actual market conditions during the remaining life of the instruments.

The following tables present derivatives designated as hedging instruments under the Derivatives and Hedging Topic of the FASB ASC.

	As of June 26, 2011									As of December 26, 2010
	Balance Sheet Classification	Notional Amount		Fair Value			Amount of Gain (Loss) Recognized In AOCI			Balance Sheet Classification	Notional Amount		Fair Value			Amount of Gain (Loss) Recognized In AOCI
	(In millions)									(In millions)
Derivatives in Cash Flow Hedges
Foreign exchange contracts
Derivatives for forecasted revenues	Current assets	$	—	$	—		$	—		Current assets	$	41.9	$	0.8		$	0.8
Derivatives for forecasted revenues	Current liabilities		56.8		(1.1	)		(1.1	)	Current liabilities	$	12.0	$	(0.2	)		(0.2	)
Derivatives for forecasted expenses	Current assets		92.9		3.4			3.4		Current assets		110.3		1.8			1.8
Derivatives for forecasted expenses	Current liabilities		10.2		(0.0	)		(0.0	)	Current liabilities		—		—			—
Total foreign exchange contract derivatives		$	159.9	$	2.3		$	2.3			$	164.2	$	2.4		$	2.4

	For the Six Months Ended June 26, 2011							For the Six Months Ended June 27, 2010
	Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income			Amount of Gain (Loss) Reclassified from AOCI			Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income			Amount of Gain (Loss) Reclassified from AOCI
Derivatives in Cash Flow Hedges
Foreign Currency contracts	Revenue	$	(2.4	)	$	(2.4	)	Revenue	$	0.7		$	0.7
Foreign Currency contracts	Expenses		2.8			2.8		Expenses		2.0			2.0
Interest Rate contract	Interest Expense		—			—		Interest Expense		(1.8	)		(1.8	)
		$	0.4		$	0.4			$	0.9		$	0.9

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	Gain (Loss) Recognized in OCI for Derivative Instruments (1)
	Six Months Ended June  26, 2011
Foreign exchange contracts	$	—

(1) This amount is inclusive of both realized and unrealized gains and losses recognized in OCI.

The following tables present derivatives not designated as hedging instruments under Derivatives and Hedging Topic of the FASB ASC.

	As of June 26, 2011						As of December 26, 2010
	Balance Sheet Classification	Notional Amount		Fair Value			Balance Sheet Classification	Notional Amount		Fair Value
	(In millions)						(In millions)
Derivatives Not Designated as Hedging Instruments
Foreign Exchange Contracts	Current assets	$	—	$	—		Current assets	$	—	$	—
Foreign Exchange Contracts	Current liabilities		25.6		(0.0	)	Current liabilities		20.7		(0.0	)
Total derivatives, net		$	25.6	$	(0.0	)		$	20.7	$	(0.0	)

	For the Six Months Ended June 26, 2011				For the Six Months Ended June 27, 2010
	Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income			Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income
	(In millions)
Derivatives Not Designated as Hedging Instruments
Foreign Exchange Contracts	Revenue	$	(0.2	)	Revenue	$	0.1
Foreign Exchange Contracts	Expenses		0.8		Expenses		0.4
Net gain (loss) recognized in income		$	0.6			$	0.5

Note 7 – Securities

The company invests excess cash in marketable securities consisting primarily of money markets, commercial paper, corporate notes and bonds, and U.S. government securities. While the company still holds auction rate securities, the company no longer actively invests in them.

All of the company’s securities are classified as available-for-sale. In accordance with the Investments – Debt and Equity Securities Topic of the FASB ASC, available-for-sale securities are carried at fair value with unrealized gains and losses included as a component of AOCI within stockholders’ equity, net of any related tax effect, if such gains and losses are considered temporary. Realized gains and losses on these investments are included in interest income and expense. Declines in value judged by management to be other-than-temporary and credit related are included in impairment of investments in the statement of operations. The noncredit component of impairment is included in AOCI. For the purpose of computing realized gains and losses, cost is identified on a specific identification basis. There were no material realized gains or losses on sales of securities in the first six months of 2011 or 2010.

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Securities are summarized as of June 26, 2011:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Short-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	0.2	$	—	$	—		$	0.2
Total marketable securities	$	0.2	$	—	$	—		$	0.2
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Long-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	1.7	$	0.3				$	2.0
Corporate debt securities		0.3							0.3
Auction rate securities		35.6				(6.3	)		29.3
Total securities	$	37.6	$	0.3	$	(6.3	)	$	31.6

In aggregate, the auction rate securities have been in an unrealized loss position for a year. The continued unrealized loss is attributable to the ongoing volatility in the global equities markets and uncertainty in the credit markets primarily from European debt situation and other global economic uncertainty. However, the company does not intend to sell or believe it is more likely than not that the company would be required to sell the securities before a recovery of the amortized cost basis of the investment. In addition, as a result of the continued performance of the issue and its’ insurance guarantee, the company considers this decrease in fair value to be temporary in nature.

Securities are summarized as of December 26, 2010:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Short-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	0.1	$	—	$	—		$	0.1
Total marketable securities	$	0.1	$	—	$	—		$	0.1
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Long-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	1.9	$	0.1	$	—		$	2.0
Corporate debt securities		0.3		—		—		$	0.3
Auction rate securities		35.3				(7.3	)		28.0
Total securities	$	37.5	$	0.1	$	(7.3	)	$	30.3

The following table presents the amortized cost and estimated fair market value of available-for-sale securities by contractual maturity as of June 26, 2011.

	Amortized Cost		Market Value
	(In millions)
Due in one year or less	$	0.2	$	0.2
Due after one year through three years		0.4		0.4
Due after three years through ten years		1.2		1.4
Due after ten years	$	36.0	$	29.8
	$	37.8	$	31.8

As of June 26, 2011, auction rate securities with a market value of $29.3 million are included in the table above in contractual maturities due after ten years. The company’s auction rate securities are composed of approximately $17.1 million of securities that are structured obligations of special purpose reinsurance entities associated with life insurance companies and $12.2 million of corporate debt securities issued by a special purpose financial services corporation that offers credit risk protection through writing credit derivatives. The company continues to accrue and receive interest on these securities based on a contractual rate.

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In the fourth quarter of 2008, the company concluded that the impairment of its auction rate securities was other-than-temporary and recognized a loss of $19.0 million in the income statement. However, the company does not intend to sell or believe it is more likely than not that the company would be required to sell the securities before a recovery of the amortized cost basis of the investment. In the second quarter of 2009, based on the requirements of the Investments – Debt and Equity Securities Topic of the FASB ASC, the company analyzed the $19.0 million other-than-temporary loss that was recognized in the income statement in the fourth quarter of 2008 to determine the noncredit component. It was determined that $15.5 million of the loss was attributable to credit loss. As a result, in the second quarter of 2009, a cumulative adjustment of the remaining $3.5 million, which was attributable to changes in interest rates, was reclassified from retained earnings to AOCI. There is no portion of other-than-temporary impairment related to credit loss currently included in AOCI.

The following table presents a roll forward of the amount related to credit losses recognized in earnings during the six months ended June 26, 2011.

	Credit Losses Recognized in Earnings
	(In millions)
Balance at beginning of period	$	14.5
Accretion of impairments included in net income		(0.2	)
Balance at end of period	$	14.3

Note 8 – Segment Information

The company is currently organized into three reportable segments. The organization is an application based structure which corresponds with the way the company manages the business. The majority of the company’s activities are aligned into two focus areas; MCCC, which focuses on handset, computing and multimedia applications, and PCIA, which focuses on power supply and motor control solutions. Each of these segments has a relatively small set of leading customers, common technology requirements and similar design cycles. The Standard Discrete and Standard Linear (SDT) business is managed separately as a third segment. As of the first day of fiscal 2011, the infrared group was moved from PCIA to SDT. Prior year numbers have been restated to reflect this change which was not material to reported amounts.

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The following table presents selected operating segment financial information for the three and six months ended June 26, 2011 and June 27, 2010.

	Three Months Ended						Six Months Ended
	June 26, 2011			June 27, 2010			June 26, 2011			June 27, 2010
				(In millions)
Revenue and operating income:
MCCC
Total revenue	$	166.1		$	168.8		$	328.1		$	324.9
Operating income		32.7			41.2			68.6			73.2
PCIA
Total revenue		224.4			190.6			434.3			369.7
Operating income		66.0			51.7			124.6			94.8
SDT
Total revenue		42.7			50.2			83.8			93.0
Operating income		8.8			10.3			17.7			18.1
Corporate
Restructuring and impairments expense		(2.9	)		0.0			(5.4	)		(2.4	)
Stock-based compensation expense		(8.0	)		(5.9	)		(13.0	)		(11.7	)
Selling, general and administrative expense		(41.4	)		(43.1	)		(85.0	)		(83.2	)
Other (1)		(0.3	)		(1.6	)		(0.7	)		(3.3	)
Total consolidated
Total revenue		433.2			409.6			846.2			787.6
Operating income		54.9			52.6			106.8			85.5
Other expense, net		3.3			2.6			4.4			5.0
Income before income taxes	$	51.6		$	50.0		$	102.4		$	80.5

(1) Other primarily consists of accelerated depreciation related to the planned closure of the Mountaintop facility.

Note 9 – Goodwill and Intangible Assets

The following table presents a summary of acquired intangible assets.

		As of June 26, 2011					As of December 26, 2010
	Period of Amortization	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
		(In millions)
Identifiable intangible assets:
Developed technology	2 - 15 years	$	250.7	$	(207.1	)	$	238.9	$	(199.0	)
Customer base	8 - 10 years		81.6		(67.2	)		81.6		(65.9	)
Core technology	10 years		15.7		(2.1	)		13.1		(1.6	)
In Process R&D	indefinite lived		2.8		—			1.8		—
Covenant not to compete	5 years		30.4		(30.4	)		30.4		(30.4	)
Assembled workforce	5 years		1.0		(1.0	)		1.0		(0.9	)
Process technology	5 years		1.6		(1.4	)		1.6		(1.2	)
Patents	4 years		5.9		(5.7	)		5.9		(5.6	)
Trademarks and tradenames	1 year		25.2		(25.2	)		25.2		(25.2	)
Subtotal			414.9		(340.1	)		399.5		(329.8	)
Goodwill			169.4		—			164.8		—
Total		$	584.3	$	(340.1	)	$	564.4	$	(329.8	)

As a result of the TranSiC acquisition in the first quarter of 2011, the company added $15.4 million of intangible assets, $2.6 million to Core Technology, $1.0 million to In Process R&D, and $11.8 million to Developed Technology. See Footnote 13 for further details on the TranSiC acquisition.

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The following table presents the carrying value of goodwill by reporting unit.

	MCCC		PCIA			SDT			Total
	(In millions)
Balance as of December 26, 2010
Goodwill	$	164.8	$	148.8		$	54.5		$	368.1
Accumulated Impairment Losses		—		(148.8	)		(54.5	)		(203.3	)
	$	164.8	$	—		$	—		$	164.8
TranSiC acquisition	$	—	$	4.3		$	—		$	4.3
Other tax acquisition adjustment		0.3		—			—			0.3
Balance as of June 26, 2011
Goodwill	$	165.1	$	153.1		$	54.5		$	372.7
Accumulated Impairment Losses		—		(148.8	)		(54.5	)		(203.3	)
	$	165.1	$	4.3		$	—		$	169.4

During the first quarter of 2011, goodwill of $4.3 million was recorded as a result of the company’s acquisition of TranSiC. See Footnote 13 for further details. In addition, a tax adjustment was recorded for $0.3 million.

The following table presents the estimated amortization expense for intangible assets for the remainder of 2011 and for each of the five succeeding fiscal years.

Estimated Amortization Expense:	(In millions)
Remaining Fiscal 2011		9.4
Fiscal 2012		18.0
Fiscal 2013		15.5
Fiscal 2014		7.6
Fiscal 2015		5.2
Fiscal 2016		5.5

Note 10 – Restructuring and Impairments

During the three and six months ended June 26, 2011, the company recorded restructuring and impairment charges, net of releases, of $2.9 million and $5.4 million, respectively. The detail of these charges is presented in the summary table below.

During the three and six months ended June 27, 2010, the company recorded restructuring and impairment charges, net of releases, of $0 and $2.4 million, respectively. The net amount of $0 recorded during the second quarter is comprised of a $2.4 million restructuring expense reversal as well as charges of $1.3 million in employee separation costs, $0.5 million of fab closure costs and $0.2 million in releases associated with the 2009 Infrastructure Realignment Program and $0.8 million in employee separation costs associated with the 2010 Infrastructure Realignment Program. The charges in the first quarter include $1.6 million of employee separation costs, $0.6 million of fab closure costs and $0.2 million in releases associated with the 2009 Infrastructure Realignment Program as well as $0.4 million in employee separation costs associated with the 2010 Infrastructure Realignment Program.

The 2011 Infrastructure Realignment Program includes costs for organizational changes in the company’s supply chain management group, the website technology group, and both the PCIA and MCCC groups. The 2010 Infrastructure Realignment Program includes costs to simplify and realign some activities within the MCCC segment, costs for the continued refinement of the company’s manufacturing strategy, and costs associated with centralizing the company’s accounting functions. The 2009 Infrastructure Realignment Program includes costs associated with the planned closure of the Mountaintop, Pennsylvania manufacturing facility and the four-inch manufacturing line in Bucheon, South Korea, both of which were announced in the first quarter of 2009. The 2009 Program also includes charges for a smaller worldwide cost reduction plan to further right-size our company and remain financially healthy.

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The following table presents a summary of the activity in the company’s accrual for restructuring and impairment costs for the quarterly periods ended March 27, 2011 and June 26, 2011 (in millions).

	Accrual Balance at 12/26/2010		New Charges		Cash Paid			Reserve Release			Non-Cash Items		Accrual Balance at 3/27/2011
2008 Infrastructure Realignment Program:
Lease Impairment Costs		0.7		—		(0.2	)		—			—		0.5
2009 Infrastructure Realignment Program:
Employee Separation Costs		8.1		0.6		(0.3	)		—			—		8.4
Fab Closure Costs		—		0.2		(0.2	)		—			—		—
2010 Infrastructure Realignment Program:		.
Employee Separation Costs		2.2		1.0		(1.5	)		—			—		1.7
2011 Infrastructure Realignment Program:
Employee Separation Costs		—		0.7		(0.7	)		—			—		—
	$	11.0	$	2.5	$	(2.9	)	$	—		$	—	$	10.6
	Accrual Balance at 3/27/2011		New Charges		Cash Paid			Reserve Release			Non-Cash Items		Accrual Balance at 6/26/2011
2008 Infrastructure Realignment Program:
Lease Impairment Costs		0.5		—		(0.2	)		—			—		0.3
2009 Infrastructure Realignment Program:
Employee Separation Costs		8.4		0.5		—			(0.1	)		—		8.8
Fab Closure Costs		—		0.3		(0.3	)		—			—		—
2010 Infrastructure Realignment Program:
Employee Separation Costs		1.7		0.9		(0.3	)		—			—		2.3
2011 Infrastructure Realignment Program:
Employee Separation Costs		—		1.3		(0.7	)		—			—		0.6
	$	10.6		3.0		(1.5	)		(0.1	)		0.0	$	12.0

Payouts associated with the 2008 lease impairment will be made on a regular basis and will be complete by the fourth quarter of 2011. The consolidation of the South Korea fabrication processes and the planned closure of the Mountaintop facility are expected to be completed by the end of 2012.

Note 11 – Contingencies

Patent Litigation with Power Integrations, Inc. There are four outstanding proceedings with Power Integrations.

POWI 1: On October 20, 2004, the company and our wholly owned subsidiary, Fairchild Semiconductor Corporation, were sued by Power Integrations, Inc. in the U.S. District Court for the District of Delaware. Power Integrations alleged that certain of the company’s pulse width modulation (PWM) integrated circuit products infringed four Power Integrations U.S. patents, and sought a permanent injunction preventing the company from manufacturing, selling or offering the products for sale in the U.S., or from importing the products into the U.S., as well as money damages for past infringement.

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The trial in the case was divided into three phases. In the first phase of the trial that occurred in October of 2006, a jury returned a verdict finding that thirty-three of the companies PWM products willfully infringed one or more of seven claims asserted in the four patents and assessed damages against the company. The company voluntarily stopped U.S. sales and importation of those products in 2007 and has been offering replacement products since 2006. Subsequent phases of the trial conducted during 2007 and 2008 focused on the validity and enforceability of the patents. In December of 2008, the judge overseeing the case reduced the jury’s 2006 damages award from $34 million to approximately $6.1 million and ordered a new trial on the issue of willfulness. The new trial was held in June of 2009 and then in January of 2011 the court awarded Power Integrations final damages in the amount of $12.2 million. We have challenged the final damages award, willfulness finding, injunction, and other issues on appeal. As a result of the appeal, the company may be required to post a bond or provide other security in an amount equal to the final damages award for the duration of the appeal process.

POWI 2: On May 23, 2008, Power Integrations filed another lawsuit against the company, Fairchild Semiconductor Corporation and our wholly owned subsidiary System General Corporation in the U.S. District Court for the District of Delaware, alleging infringement of three patents. Of the three patents claimed in this lawsuit, two are patents that were asserted against the company and Fairchild Semiconductor Corporation in the October 2004 lawsuit described above. As mentioned below, the majority of the claims asserted in the first lawsuit from these two patents have now received final rejections from the patent office, and the third patent has also received preliminary rejections. The company believes that it has strong defenses against Power Integrations’ claims and intends to vigorously defend this second lawsuit.

On October 14, 2008, Fairchild Semiconductor Corporation and System General Corporation filed a patent infringement lawsuit against Power Integrations in the U.S. District Court for the District of Delaware, alleging that certain PWM integrated circuit products infringe one or more claims of three U.S. patents owned by System General. The lawsuit seeks monetary damages and an injunction preventing the manufacture, use, sale, offer for sale or importation of Power Integrations products found to infringe the asserted patents.

Both lawsuits have been consolidated and will be heard together in Delaware District Court. The trial is currently scheduled for spring of 2012.

POWI 3: On November 4, 2009, Power Integrations, Inc. filed a complaint for patent infringement against the company and two of the company’s subsidiaries in the United States District Court for the Northern District of California alleging that several of our products infringe three of Power Integrations’ patents. One of those patents has since been dropped from the case. The company intends to put on a vigorous defense against these claims. In the same lawsuit we have filed counterclaims against Power Integrations, alleging Power Integrations’ products infringe certain claims of one of our patents.

Reexaminations: Parallel to the above federal court proceedings, the company also petitioned the U.S. Patent and Trademark Office (USPTO) for reexamination of all unexpired patents claims asserted in POWI 1 and POWI 2 (those being all asserted claims from three of the four patents asserted in POWI 1 (the fourth patent has expired) and all of the patent claims asserted in POWI 2). Of the claims asserted in the four patents from POWI 1 and POWI 2, Power Integrations has amended or cancelled a majority of those at issue.

POWI 4: On February 10, 2010 Fairchild and System General filed a lawsuit in Suzhou, China against four Power Integrations entities and seven vendors. The lawsuit claims that Power Integrations violates four Fairchild/System General patents. Fairchild is seeking an injunction against the Power Integrations products and over $17.0 million in damages. Power Integrations is currently seeking to invalidate the Fairchild/System General patents in proceedings before the Chinese patent office.

Fairchild Semiconductor Corporation v. Cadeka Microcircuits, LLC. Fairchild filed this lawsuit against a competitor for misappropriation of trade secrets, tortuous interference with contract and breach of contract. The competitor filed counterclaims alleging breach of contract, unjust enrichment and other claims. The case is pending in Colorado Larimer County District Court and will likely proceed to trial in late 2011 or early 2012. Fairchild is vigorously prosecuting and defending this case.

Other Legal Claims. From time to time the company is involved in legal proceedings in the ordinary course of business. The company believes that there is no such ordinary-course litigation pending that could have, individually or in the aggregate, a material adverse effect on our business, financial condition, results of operations or cash flows. Legal costs are expensed as incurred.

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The company has analyzed the potential litigation outcomes from current litigation in accordance with the Contingency Topic of the FASB ASC. The company estimates the loss contingency by undertaking a process to determine an estimate of the possible loss or range of losses. For cases where the company believes it is probable that a loss has occurred, the company believes the range of possible losses is approximately $13.0 to $30.0 million. Based upon assessments of the potential liabilities using analysis of claims and historical experience in defending and/or resolving these claims, the company has recorded reserves for potential litigation outcomes of $14.7 million as of June 26, 2011. For cases where the company believes it is reasonably possible that a loss has occurred, the company believes the range of possible losses is approximately zero to $5.0 million. The company has recorded no reserves for potential litigation outcomes for reasonably possible losses.

Note 12 – Long-Term Debt

Long-term debt consists of the following at:

	June 26, 2011		December 26, 2010
	(In millions)
Revolving Credit Facility borrowings	$	300.0	$	—
Term Loan	$	—	$	320.7
Other	$	0.1	$	—
Total debt		300.1		320.7
Current portion of long-term debt		—		(3.8	)
Long-term debt, less current portion	$	300.1	$	316.9

On May 20, 2011, the company entered into a new senior secured revolving credit facility (Credit Facility.) Proceeds from the Credit Facility and an additional $18.8 million in cash were used to extinguish all outstanding obligations under the previous credit facility, which consisted of a term loan and an undrawn revolving credit facility which were scheduled to mature in June of 2013 and June of 2012, respectively. The Credit Facility consists of a $400.0 million revolving loan agreement, of which $300.0 million was drawn as of June 26, 2011. In addition, the new Credit Facility includes an incremental revolving commitment that enables the company to increase the size of the facility in an aggregate amount not to exceed $150 million. The maturity date of the Credit Facility is May 20, 2016. The company incurred cash charges of $5.2 million related to this financing, all of which was deferred and will be amortized over the term of the debt. Additionally, the company wrote off $2.1 million of the remaining deferred financing fees related to the prior facility.

Under the Credit Facility, borrowing may be in the form of either Eurocurrency Loans or Alternate Base Rate (ABR) loans. Eurocurrency Loans accrue interest at the London Interbank Offered Rate (LIBOR) plus 1.75%. The ABR is the highest of JP Morgan Chase Bank prime rate, the federal funds effective rate plus  ¹/2 of 1 percent, or adjusted LIBOR, as defined by the credit agreement, plus 1%. ABR loans accrue interest at the ABR rate plus 0.75%. The company also pays a commitment fee of 0.35% per annum on the unutilized commitments. There are also outstanding letters of credit under the Credit Facility totaling $1.3 million. These outstanding letters of credit reduce the amount available under the Credit Facility to $98.7 million. Borrowings under the Credit Facility are secured by a pledge of common stock of the company’s first tier domestic subsidiaries and 65% of the stock of the company’s first tier foreign subsidiaries. The payment of principal and interest on the Credit Facility is fully and unconditionally guaranteed by Fairchild Semiconductor International, Inc. and each of its domestic subsidiaries.

The Credit Facility includes restrictive covenants that place limitations on the company’s ability to consolidate, merge, or enter into acquisitions, create liens or pay dividends, or make similar restricted payments, sell assets, invest in capital expenditures, and incur indebtedness. It also places limitations on the company’s ability to modify its certificate of incorporation and bylaws, or enter into shareholder agreements, voting trusts or similar arrangements. In addition, the affirmative covenants in the Credit Facility also require the company’s financial performance to comply with certain financial measures, as defined by the credit agreement. These financial covenants require us to maintain a minimum interest coverage ratio of 3.0 to 1.0 and a maximum leverage ratio of 3.25 to 1.0. It defines the interest coverage ratio as the ratio of cumulative four quarter trailing consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) to consolidated cash interest expense and defines the maximum leverage ratio as the ratio of total consolidated debt to the cumulative four quarter trailing consolidated EBITDA. Consolidated EBITDA, as defined by the credit agreement excludes restructuring, non-cash equity compensation and other certain adjustments. At June 26, 2011, the company was in compliance with these covenants.

20

Note 13 – Acquisitions and Divestitures

On March 15, 2011, the company completed the acquisition of TranSiC, a silicon carbide power transistor company for $17.4 million. The acquisition provides the company with bipolar silicon carbide technology with demonstrated efficiencies and strong performance advantages over MOSFET and JFET technology. As part of the acquisition, the company also acquired a team of experienced silicon carbide engineers and scientists, and multiple patents in silicon carbide technology. Products using this technology will be sold as discrete solutions and as part of our smart power modules. No pro forma results of operations are presented because the disclosures are not material.

Note 14 – Subsequent Events

The company has evaluated subsequent events and did not identify any events that required disclosure.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Except as otherwise indicated in this Quarterly Report on Form 10-Q, the terms “we,” “our,” the “company,” “Fairchild” and “Fairchild International” refer to Fairchild Semiconductor International, Inc. and its consolidated subsidiaries, including Fairchild Semiconductor Corporation, our principal operating subsidiary. We refer to individual subsidiaries where appropriate.

Overview

We entered 2011 as a different company than we were just a few years ago. Over the last 5 years we have sharpened our product and end market focus which has enabled us to deepen our application knowledge and provide innovative solutions to our customers. As we invested in new technologies, we reduced our exposure to less differentiated, more mature products. In addition to improvements in our technology and product focus, we have redesigned our supply chain and operations processes to support strong growth. In 2011, our major focus is to drive sales higher while continuing our gross margin progression as we take advantage of the strong industrial, automotive and appliance demand for high voltage products and to increase market share for our mobile analog and latest MOSFET solutions.

We strive to keep inventory as lean as possible while maintaining customer service. We prefer to maintain maximum flexibility by adjusting internal inventories in response to higher demand before adding more inventory to our distribution channels. We continue to manage our production output to maintain channel inventories within a target range of 7.5 to 8.5 weeks. At the end of the second quarter internal inventories were at $ 253.4 million, an increase of $20.7 million over the end of 2010; however days of internal inventory remained fairly flat.

The Mobile, Computing, Consumer and Communication (MCCC) group’s main focus is to supply the mobile, computing, consumer and communication end market segments with innovative power and signal path solutions including our low voltage metal oxide semiconductor field effect transistors (MOSFETs), Power Management integrated circuits (IC’s,) Mixed Signal Analog and Logic products. We seek to deliver exceptional product performance by optimizing silicon processes and application specific design to satisfy specific requirements for our customers. This enables us to deliver solutions with greater energy efficiency and smaller footprint than is commonly available. We expect a steady acceleration of new product sales especially for solutions addressing the handset and ultraportable market.

The Power Conversion, Industrial, and Automotive (PCIA) group’s focus is to capitalize on the growing demand for greater energy efficiency in power supplies, consumer electronics, battery chargers, electric motors, industrial electronics and automobiles. We are a leader in power factor correction, low standby power consumption designs, innovative switching techniques and power module technology that enable greater efficiency and better performance. Improving the efficiency of our customers’ products is vital to meeting new energy efficiency regulations. Effectively managing the power conversion and initial voltage regulation in power supplies is one of the greatest opportunities we have to improve overall system efficiency. We believe the growing global focus on energy efficiency will continue to drive growth in this product line.

Standard Discrete and Standard Linear (SDT) products are core building block components for many electronic applications. This segment is moving to a more simplified and focused operating model to make the selling and support of these products easier and more profitable. The right operational structure and part portfolio should enable our standard products group to continue to generate solid cash flow with minimal investment.

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Results of Operations

The following table summarizes certain information relating to our operating results as derived from our unaudited consolidated financial statements.

	Three Months Ended								Six Months Ended
	June 26, 2011				June 27, 2010				June 26, 2011				June 27, 2010
	(Dollars in millions)
Total revenue	$	433.2	100.0	%	$	409.6	100.0	%	$	846.2	100.0	%	$	787.6	100.0	%
Gross margin		160.7	37.1	%		143.3	35.0	%		312.7	37.0	%		264.9	33.6	%
Operating expenses:
Research and development		39.9	9.2	%		29.1	7.1	%		76.8	9.1	%		57.5	7.3	%
Selling, general and administrative		58.3	13.5	%		56.0	13.7	%		113.4	13.4	%		108.3	13.8	%
Amortization of acquisition-related intangibles		4.7	1.1	%		5.6	1.4	%		10.3	1.2	%		11.2	1.4	%
Restructuring and impairments		2.9	0.7	%		—				5.4	0.6	%		2.4	0.3	%
Total operating expenses		105.8	24.4	%		90.7	22.1	%		205.9	24.3	%		179.4	22.8	%
Operating income		54.9	12.7	%		52.6	12.8	%		106.8	12.6	%		85.5	10.9	%
Other expense, net		3.3	0.8	%		2.6	0.6	%		4.4	0.5	%		5.0	0.6	%
Income before income taxes		51.6	11.9	%		50.0	12.2	%		102.4	12.1	%		80.5	10.2	%
Provision for income taxes		6.7	1.5	%		6.2	1.5	%		14.0	1.7	%		14.1	1.8	%
Net income	$	44.9	10.4	%	$	43.8	10.7	%	$	88.4	10.4	%	$	66.4	8.4	%

Adjusted net income, adjusted gross margin, and free cash flow are also included in the table below. These are non-GAAP financial measures and should not be considered a replacement for GAAP results. We present adjusted results because we use them as additional measures of our operating performance. We believe the adjusted information is useful to investors because it illuminates underlying operational trends by excluding certain significant non-recurring or otherwise unusual transactions. Our criteria for adjusted results may differ from methods used by other companies and may not be comparable and should not be considered as alternatives to net income or loss, gross margin, or other measures of consolidated operations and cash flow data prepared in accordance with US GAAP as indicators of our operating performance or as alternatives to cash flow as a measure of liquidity.

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	Three Months Ended										Six Months Ended
	June 26, 2011					June 27, 2010					June 26, 2011					June 27, 2010
	(Dollars in millions )
Non GAAP measures
Adjusted net income	$	54.6				$	51.3				$	105.9				$	83.1
Adjusted gross margin		161.0		37.2	%		144.2		35.2	%		313.2		37.0	%		267.0		33.9	%
Free cash flow		39.3					54.5					61.7					90.2
Reconciliation of Net Income to Adjusted Net Income
Net income		44.9					43.8					88.4					66.4
Adjustments to reconcile net income to adjusted net income:
Restructuring and impairments		2.9					—					5.4					2.4
Gain on sale of equity investment							—										—
Net impairment/gain on equity investments							—										—
Gain associated with debt buyback							—										—
Accelerated depreciation on assets related to fab closure		0.3					0.9					0.5					2.2
Goodwill impairment charge
Write off of deferred financing fees		2.1										2.1
Impairment of investments
Charge for litigation
Inventory release associated with fab closure		—					—										(0.1	)
Amortization of acquisition-related intangibles		4.7					5.6					10.3					11.2
Associated net tax effects of the above and other acquisition-related intangibles		(0.3	)				1.0					(0.8	)				1.0
Adjusted net income	$	54.6				$	51.3				$	105.9				$	83.1
Reconciliation of Gross Margin to Adjusted Gross Margin
Gross margin		160.7					143.3					312.7					264.9
Adjustments to reconcile gross margin to adjusted gross margin:
Accelerated depreciation on assets related to fab closure		0.3					0.9					0.5					2.2
Inventory release associated with fab closure		—					—					—					(0.1	)
Adjusted gross margin	$	161.0				$	144.2				$	313.2				$	267.0
Reconciliation of Operating Cash Flow to Free Cash Flow
Cash provided by operating activities	$	93.1				$	87.6				$	149.8				$	141.1
Capital expenditures		(53.8	)				(33.1	)				(88.1	)				(50.9	)
Free cash flow	$	39.3				$	54.5				$	61.7				$	90.2

Total Revenue. Total revenue in the second quarter and first six months of 2011 increased by $23.6 million and $58.6 million or approximately 6% and 7%, respectively, on fewer overall unit sales when compared to the same periods in 2010. The increase in average selling prices was driven by an improvement in product mix.

Geographic revenue information is based on the customer location within the indicated geographic region. The following table presents, as a percentage of sales, geographic sales for the U.S., Other Americas, Europe, China, Taiwan, Korea and Other Asia/Pacific (which for our geographic reporting purposes includes Japan and Singapore) for the three months ended June 26, 2011. The increase in other Asia/Pacific revenue was driven by increased demand in our Japan sales region after the earthquake and tsunami.

	Three Months Ended						Six Months Ended
	June 26, 2011			June 27, 2010			June 26, 2011			June 27, 2010
U.S.		11	%		12	%		11	%		11	%
Other Americas		2			3			2			3
Europe		14			13			14			13
China		34			33			34			33
Taiwan		14			15			14			16
Korea		11			13			11			13
Other Asia/Pacific		14			11			14			11
Total		100	%		100	%		100	%		100	%

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Gross Margin. In the second quarter and first six months of 2011 gross margin dollars increased by $17.4 million and $47.8 million and gross margin percent improved from 35.0% to 37.1 % and 33.6% to 37.0%, respectively, as compared to the same periods in 2010. The increase in gross margin is due to increased revenue from higher average selling prices and improvements in product mix as we continue to divest our product portfolio of lower margin products. This was partially offset by an increase in currency, commodity prices, and labor costs in 2011.

Adjusted Gross Margin. In the second quarter and first six months of 2011 adjusted gross margin dollars increased by $16.8 million and $46.2 million and adjusted gross margin percent improved from 35.2% to 37.2% and 33.9% to 37.0%, respectively, as compared to the same periods in 2010 for the reasons listed above. Adjusted gross margin does not include the accelerated depreciation due to the planned closure of the Mountaintop facility. See reconciliation of gross margin to adjusted gross margin above.

Operating Expenses. Research and development (R&D) expenses increased during the second quarter and first six months of 2011 as compared to the same periods in 2010 as a result of increased investment in R&D programs and resources, including costs associated with the design center in Irvine, California that was purchased in the third quarter of 2010, the acquisition of a MEMs business in December 2010, and the Transic acquisition in the first quarter of 2011. These increases were offset slightly by decreases in variable compensation expenses. Selling expenses increased but were down as a percentage of revenue from 8% in 2010 to 7% in 2011. The increase in selling expense was driven by increased spending on payroll, travel, and advertising which was offset in part by a reduction in variable compensation. General and administrative (G&A) expenses were up slightly but were flat as a percentage of revenue. The increase was driven primarily by increases in equity compensation which were partially offset by decreases in variable compensation.

Restructuring and Impairment. During the three and six months ended June 26, 2011, the company recorded restructuring and impairment charges, net of releases, of $2.9 million and $5.4 million, respectively. The second quarter charges include $0.5 million of employee separation costs, $0.3 million of fab closure costs, and $0.1 million of reserve releases associated with the 2009 Infrastructure Realignment Program as well as $0.9 million in employee separation costs associated with the 2010 Infrastructure Realignment Program and $1.3 million in employee separation costs associated with the 2011 Infrastructure Realignment Program. First quarter charges include $0.6 million of employee separation costs and $0.2 million of fab closure costs associated with the 2009 Infrastructure Realignment Program as well as $1.0 million in employee separation costs associated with the 2010 Infrastructure Realignment Program and $0.7 million in employee separations costs associated with the 2011 Infrastructure Realignment Program.

During the three and six months ended June 27, 2010, we recorded restructuring and impairment charges, net of releases, of $0 and $2.4 million, respectively. The net amount of $0 recorded during the second quarter is comprised of a $2.4 million restructuring expense reversal as well as charges of $1.3 million in employee separation costs, $0.5 million of fab closure costs and $0.2 million in releases associated with the 2009 Infrastructure Realignment Program and $0.8 million in employee separation costs associated with the 2010 Infrastructure Realignment Program. The charges in the first quarter include $1.6 million of employee separation costs, $0.6 million of fab closure costs and $0.2 million in releases associated with the 2009 Infrastructure Realignment Program as well as $0.4 million in employee separation costs associated with the 2010 Infrastructure Realignment Program.

The 2011 Infrastructure Realignment Program includes costs for organizational changes in our supply chain management group, changes to our website technology organization, as well as costs for some organization changes in the PCIA segment. The 2010 Infrastructure Realignment Program includes costs to simplify and realign some of the activities within the MCCC and PCIA segments, costs for the continued refinement of our manufacturing strategy and costs to centralize several of our accounting functions.

The closure of the Mountaintop, Pennsylvania manufacturing facility and the four-inch manufacturing line in Bucheon, South Korea was announced in the first quarter of 2009 and the charges associated with those programs are included in the 2009 Infrastructure Realignment Program. The 2009 Infrastructure Realignment Program also includes charges for a smaller worldwide cost reduction plan to further right-size our company and remain financially healthy. While we had originally anticipated that this closure would be completed in 2010, we extended the Mountaintop closure until the end of 2012 to better support strong customer demand and our significant pipeline of new products.

Once the planned closure of the Mountaintop facility and the consolidation of South Korea fabrication process are complete we expect to achieve annualized cost savings ranging from $20 to $25 million from the 2008 baseline. We anticipate that the financial impact of higher revenues as a result of extending the Mountaintop closure will more than offset the cost savings delayed from continuing to operate the facility. We expect to transfer the majority of Mountaintop’s manufacturing capacity to other Fairchild facilities and support similar revenue levels upon closure.

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Other Expense, net.

The following table presents a summary of other expense, net for the three months ended June 26, 2011 and March 28, 2010.

	Three Months Ended						Six Months Ended
	June 26, 2011			June 27, 2010			June 26, 2011			June 27, 2010
	(In millions)
Other expense, net
Interest expense	$	1.7		$	3.0		$	3.4		$	6.0
Interest income		(0.6	)		(0.7	)		(1.3	)		(1.4	)
Other (income) expense, net		2.2			0.3			2.3			0.4
Other expense, net	$	3.3		$	2.6		$	4.4		$	5.0

Interest expense. Interest expense in the second quarter and first six months of 2011 decreased $1.3 million and $2.6, respectively, when compared to the same periods in 2010, primarily due to lower debt balances.

Interest income. Interest income in the second quarter and first six months of 2011 remained fairly flat when compared to the same periods in 2010.

Other (income) expense, net. Other expense in the second quarter and first six months of 2011 increased $1.9 million. The increase was caused by the $2.1 million write off of deferred financing fees associated with the pay down of our term loan in the second quarter of 2011.

Income Taxes. Income tax provision in the second quarter and first six months of 2011 was $6.7 million and $14.0 million on income before taxes of $51.6 million and $102.4 million, respectively, as compared to income tax provisions of $6.2 million and $14.1 million on income before taxes of $50.0 million and $80.5 million, respectively, for the same periods of 2010. The effective tax rate for the second quarter and first six months of 2011 was 13.0% and 13.7% compared to 12.4% and 17.5%, respectively, for the comparable periods of 2010. The change in effective tax rate is primarily due to shifts of income and loss among jurisdictions with differing tax rates. In the first six months of 2011, the valuation allowance on our deferred tax assets decreased by $9.0 million. The overall decrease did not impact our results of operations.

In accordance with the Income Taxes Topic in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), deferred taxes have not been provided on undistributed earnings of foreign subsidiaries which are reinvested indefinitely. Certain non-U.S. earnings, which have been taxed in the U.S. but earned offshore, have and continue to be part of our repatriation plan. As of June 26, 2011, we have recorded a deferred tax liability of $1.4 million, with no impact to the consolidated statement of operations as we have a full valuation allowance against our net U.S. deferred tax assets.

Free Cash Flow. Free cash flow is a non-GAAP financial measure. To determine free cash flow, we subtract capital expenditures from cash provided by operating activities. Free cash flow decreased approximately $28.5 million in the first six months of 2011 when compared to the same period in 2010. The decrease was mainly due to an increase in capital expenditures and a decrease in accrued liabilities related to variable compensation payments in the first quarter of 2011. Capital expenditures were $37.2 million higher in the first six months of 2011. This increase was partially offset by increased net income and favorable changes in our working capital accounts. See free cash flow reconciliation in the results of operations section above.

25

Reportable Segments.

The following tables present comparative disclosures of revenue and gross margin of our reportable segments.

	Three Months Ended
	June 26, 2011											June 27, 2010
	Revenue		% of total			Gross Margin %			Operating Income (loss)			Revenue		% of total			Gross Margin %			Operating Income (loss)
	(Dollars in millions)
MCCC	$	166.1		38.3	%		37.2	%	$	32.7		$	168.8		41.2	%		38.4	%	$	41.2
PCIA		224.4		51.8	%		39.7	%		66.0			190.6		46.5	%		36.6	%		51.7
SDT		42.7		9.9	%		26.4	%		8.8			50.2		12.3	%		23.8	%		10.3
Corporate (1)		—		—			—			(52.6	)		—		—			—			(50.6	)
Total	$	433.2		100.0	%		37.1	%	$	54.9		$	409.6		100.0	%		35.0	%	$	52.6
	Six Months Ended
	June 26, 2011											June 27, 2010
	Revenue		% of total			Gross Margin %			Operating Income (loss)			Revenue		% of total			Gross Margin %			Operating Income (loss)
	(Dollars in millions)
MCCC	$	328.1		38.8	%		38.3	%	$	68.6		$	324.9		41.3	%		37.0	%	$	73.2
PCIA		434.3		51.3	%		38.6	%		124.6			369.7		46.9	%		35.3	%		94.8
SDT		83.8		9.9	%		26.1	%		17.7			93.0		11.8	%		23.0	%		18.1
Corporate (1)		—		—						(104.1	)		—		—			—			(100.6	)
Total	$	846.2		100.0	%		37.0	%	$	106.8		$	787.6		100.0	%		33.6	%	$	85.5

(1) The three and six months ended June 26, 2011 includes $8.0 million and $13.0 million of stock-based compensation expense, $2.9 million and $5.4 million of restructuring and impairments expense, $0.3 million and $0.7 million of other costs which primarily consist of accelerated depreciation related to the closure of the Mountaintop facility, and $41.4 million and $85.0 million of SG&A expenses, respectively. The three and six months ended June 27, 2010 includes $5.9 million and $11.7 million of stock-based compensation expense, $0.0 million and $2.4 million of restructuring and impairments expense, $1.6 million and $3.3 million of other costs which primarily consist of accelerated depreciation related to the closure of the Mountaintop facility, and $43.1 million and $83.2 million of SG&A expenses, respectively.

MCCC revenue decreased $2.7 million or approximately 2% in the second quarter of 2011 when compared to the same period in 2010. Revenue increased $3.2 or approximately 1% in the first six months of 2011, compared to the first six months of 2010. The revenue decrease in the second quarter was driven by a decrease in the number of units sold, which was partially offset by higher average selling prices. The revenue increase in the first six months was driven by higher average selling prices which offset the 8% decrease in the number of units sold over 2010. The improvement in average selling prices was driven by improved product mix in the Mobile Solutions group within MCCC, primarily in logic and switch products. This pricing improvement was driven by application specific solutions for mobile customers and the demand for USB and multimedia switch solutions. Gross margin dollars decreased $3.2 million in the second quarter of 2011 compared to the same period in 2010 driven by the decrease in revenue. Gross margin dollars increased $5.7 million in the first six months of 2011 when compared to the same period in 2010 attributable to increased revenue and the introduction of new products at higher gross margins.

MCCC had operating income of $32.7 million and $68.6 million for the second quarter and six months of 2011, respectively, as compared to $41.2 million and $73.2 million in the same period of 2010. Operating income decreased as a result of decreased gross margin in the second quarter and increased R&D expenses in both the second quarter and first six months of 2011. The increase in R&D resulted from an increased investment in R&D programs focused primarily on MPS, signal conditioning and switch products as well as additional spending as a result of the MEMS company we acquired during the fourth quarter of 2010 and the design center we purchased in the third quarter of 2010.

PCIA revenue increased $33.8 million and $64.6 million or approximately 18% and 17% in the second quarter and first six months of 2011, respectively, as compared to the same periods in 2010. Revenue was higher in the auto, high voltage and optoelectronics product lines due to higher average selling prices driven by sales of our smart power modules, high voltage MOSFETS and IGBT’s as well as strong demand for our electronic power steering modules, and ignition IGBT products. Increased unit sales in the auto and optoelectronics groups were offset by a reduction in unit sales in the high voltage group. This increased revenue in auto, high voltage and opto was partially offset by a slight decrease in power conversion revenues driven by the weakness in the display market. Gross margin increased $19.5 million and $17.8 million in second quarter and first six months of 2011, as compared to the same periods in 2010. Increased gross margin was driven by higher revenue, improved product mix, and a customs duty settlement offset by an unfavorable impact from a strengthening of the Korean Won and the Taiwan Dollar.

26

PCIA had operating income of $66.0 million and $124.6 million for the second quarter and six months of 2011, respectively, as compared to $51.7 million and $94.8 million in the same period of 2010. Increased operating income was mainly attributed to higher gross margin as mentioned above. The increase was partially offset by higher R&D and SG&A expenses as a result of increased investment in R&D programs, the acquisition of Transic in the first quarter of 2011, as well as increased headcount, travel, and an unfavorable impact from a strengthening of the Korean Won and Taiwan Dollar.

SDT revenue decreased $7.5 million and $9.2 million or approximately 15% and 10% in the second quarter and first six months of 2011, respectively, as compared to the same periods in 2010. An increase in average selling prices was offset by a decrease in the numbers of units sold as we strategically target a richer portfolio of products with higher selling prices. Gross margin dollars were lower by $1.3 million and $0.1 million in second quarter and first six months of 2011, as compared to the same periods in 2010. However, gross margin percent increased from 23.8% to 26.4% and 23.0% to 26.1%, respectively, for the second quarter and first six months of 2011 compared to 2010. Increased gross margin percent was driven by strategic mix management as lower margin products continue to be mixed out in order to support top tier customers and best utilize available manufacturing capacities.

SDT had operating income of $8.8 million and $17.7 million for the second quarter and six months of 2011, respectively, as compared to $10.3 million and $18.1 million in the same period of 2010. The decrease in operating income was due to lower gross margin dollars. Operating expenses were up slightly in the second quarter and the first six months of 2011 resulting from higher selling expenses.

Liquidity and Capital Resources

Our main sources of liquidity are our cash flows from operations, cash and cash equivalents and revolving credit facility. As of June 26, 2011, $171.4 million of our $435.7 million cash and cash equivalents balance is located in the United States. We believe that funds generated from operations, together with existing cash and funds from our revolving credit facility will be sufficient to meet our cash needs over the next twelve months.

We entered into a new senior secured revolving credit facility (Credit Facility) in May of 2011. The Credit Facility consists of a $400.0 million revolving loan agreement of which $300 million was drawn as of June 26, 2011. After adjusting for outstanding letters of credit, we had $98.7 million available under the Credit Facility. This revolving borrowing capacity is available for working capital and general corporate purposes, including acquisitions. We had additional outstanding letters of credit of $2.4 million that do not fall under the senior credit facility. We also had $3.2 million of undrawn credit facilities at certain of our foreign subsidiaries. These outstanding amounts do not impact available borrowings under the senior credit facility.

The Credit Facility includes restrictive covenants that place limitations on our ability to consolidate, merge, or enter into acquisitions, create liens or pay dividends, or make similar restricted payments, sell assets, invest in capital expenditures, and incur indebtedness. It also places limitations on our ability to modify our certificate of incorporation and bylaws, or enter into shareholder agreements, voting trusts or similar arrangements. In addition, the affirmative covenants in the Credit Facility also require our financial performance to comply with certain financial measures, as defined by the credit agreement. These financial covenants require us to maintain a minimum interest coverage ratio of 3.0 to 1.0 and a maximum leverage ratio of 3.25 to 1.0. It defines the interest coverage ratio as the ratio of the cumulative four quarter trailing consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) to consolidated cash interest expense and defines the maximum leverage ratio as the ratio of total consolidated debt to the cumulative four quarter trailing consolidated EBITDA. Consolidated EBITDA, as defined by the credit agreement excludes restructuring, non-cash equity compensation and other certain adjustments.

At June 26, 2011, we were in compliance with these covenants and we expect to remain in compliance with the covenants. This expectation is subject to various risks and uncertainties discussed more thoroughly in Item 1A, and include, among others, the risk that our assumptions and expectations about business conditions, expenses and cash flows for the remainder of the year may be inaccurate.

While our senior credit facility places restrictions on the payment of dividends, it does not restrict the subsidiaries of Fairchild Semiconductor Corporation, except to a limited extent, from paying dividends or making advances to Fairchild Semiconductor Corporation. As a result, we believe that funds generated from operations, together with existing cash and funds from our senior credit facility will be sufficient to meet our debt obligations, operating requirements, capital expenditures and research and development funding needs over the next twelve months. In the first six months 2011, our capital expenditures totaled $88.1 million.

27

We frequently evaluate opportunities to sell additional equity or debt securities, obtain credit facilities from lenders or restructure our long-term debt to further strengthen our financial position. The sale of additional equity securities could result in additional dilution to our stockholders. Additional borrowing or equity investment may be required to fund future acquisitions.

During the first six months of 2011, our cash provided by operating activities was $149.8 million compared to $141.1 million in the same period of 2010. The following table presents a summary of net cash provided by operating activities during the first six months of 2011 and 2010.

	Six Months Ended
	June 26, 2011			June 27, 2010
Net income (loss)	$	88.4		$	66.4
Depreciation and amortization		75.6			79.7
Non-cash stock-based compensation		13.0			11.2
Deferred income taxes, net		(5.6	)		2.9
Other, net		2.9			0.6
Change in other working capital accounts		(24.5	)		(19.7	)
Net cash provided by operating activities		149.8			141.1

Cash provided by operating activities increased $8.7 million during the first six months of 2011 as compared to the same period of 2010 as the $22.0 million increase in net income was offset by unfavorable changes in our working capital and deferred income tax accounts.

Cash used in investing activities during the first six months of 2011 totaled $105.9 million compared to $51.4 million for the same period of 2010. The increase in the use of cash is the result of higher capital expenditures as well as the $16.5 million cost for our TranSiC acquisition, net of cash acquired, in the first quarter of 2011. Our capital expenditures during the first six months of 2011 were $88.1 million compared to $50.9 million in the same period in 2010.

Cash used in financing activities totaled $12.8 million in the first six months of 2011 compared to $45.8 million in the same period of 2010. In 2011, we received $35.2 million in proceeds from the exercise of stock options which partially offset our debt payments and purchases of treasury stock. There were minimal proceeds from stock options in 2010.

As of June 26, 2011 and December 26, 2010, we have not recorded any net unrecognized tax benefits.

Liquidity and Capital Resources of Fairchild International, Excluding Subsidiaries

Fairchild Semiconductor International, Inc. is a holding company, the principal asset of which is the stock of its sole subsidiary, Fairchild Semiconductor Corporation. Fairchild Semiconductor International, Inc. on a stand-alone basis had no cash flow from operations and has no cash requirements for the next twelve months.

Forward Looking Statements

This quarterly report contains “forward-looking statements” as that term is defined in Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by the use of forward-looking terminology such as “we believe,” “we expect,” “we intend,” “may,” “will,” “should,” “seeks,” “approximately,” “plans,” “estimates,” “anticipates,” or “hopeful,” or the negative of those terms or other comparable terms, or by discussions of our strategy, plans or future performance. All forward-looking statements in this report are made based on management’s current expectations and estimates, which involve risks and uncertainties, including those described below and more specifically in the Risk Factors section. Among these factors are the following: current economic uncertainty, including disruptions in the credit markets, as well as future economic conditions; changes in demand for our products; changes in inventories at our customers and distributors; changes in regional or global economic or political conditions (including as a result of terrorist attacks and responses to them); technological and product development risks, including the risks of failing to

28

maintain the right to use some technologies or failing to adequately protect our own intellectual property against misappropriation or infringement; availability of manufacturing capacity; the risk of production delays; the inability to attract and retain key management and other employees; risks related to warranty and product liability claims; risks inherent in doing business internationally; changes in tax regulations or the migration of profits from low tax jurisdictions to higher tax jurisdictions; availability and cost of raw materials; competitors’ actions; loss of key customers, including but not limited to distributors; order cancellations or reduced bookings; changes in manufacturing yields or output; and significant litigation. Factors that may affect our operating results are described in the Risk Factors section in the quarterly and annual reports we file with the Securities and Exchange Commission. Such risks and uncertainties could cause actual results to be materially different from those in the forward-looking statements. Readers are cautioned not to place undue reliance on the forward-looking statements.

Recently Issued Financial Accounting Standards

In June 2011, the FASB issued Accounting Standards Update No. 2011-05 (ASU 2011-05), Comprehensive Income: Presentation of Comprehensive Income. This standard increases the prominence of other comprehensive income in the financial statements. Under the standard, an entity will have the option to present the components of net income and comprehensive income in either one or two consecutive statements. The standard eliminates the option to present other comprehensive income in the statement of changes in equity. This statement is effective for fiscal years and interim periods beginning after December 15, 2011. The adoption of ASU 2011-05 will not impact our consolidated financial statements as we already present a separate statement of comprehensive income following the income statement.

In May 2011, the FASB issued Accounting Standards Update No. 2011-04 (ASU 2011-04), Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRS. This update was issued concurrently with IFRS 13, Fair Value Measurements, to provide largely identical guidance about fair value measurement and disclosure requirements. The new standard does not extend the use of fair value but provides guidance about how fair value should be applied where it is already required or permitted under IFRS or US GAAP. This statement is effective for fiscal years beginning after December 15, 2011. The adoption of ASU 2011-04 is not expected to have a material effect on our consolidated financial position and results of operations and statements of cash flows.

In December 2010, the FASB issued Accounting Standards Update No. 2010-29 (ASU 2010-29), Business Combinations: Disclosure of Supplementary Pro Forma Information for Business Combinations. The amendments in this update address the diversity in the interpretation of pro forma revenue and earnings disclosure requirements for business combinations. This statement is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The adoption of ASU 2010-29 did not have a material effect on our consolidated financial statements.

In December 2010, the FASB issued Accounting Standards Update No. 2010-28 (ASU 2010-289), Intangibles: When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts . The amendments in this modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. This statement is effective for fiscal years beginning after December 15, 2010. The adoption of ASU 2010-28 will not have a material effect on our consolidated financial position and results of operations and statements of cash flows.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Reference is made to Part II, Item 7A, Quantitative and Qualitative Disclosure about Market Risk, in Fairchild Semiconductor International’s annual report on Form 10-K for the year ended December 26, 2010 and under the subheading “Quantitative and Qualitative Disclosures about Market Risk” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on page 52 of the Form 10-K. There were no material changes in the information we provided in our Form 10-K during the period covered by this Quarterly Report.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to assure, as much as is reasonably possible, that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is communicated to management and recorded, processed, summarized and disclosed within the specified time periods. As of the end of the period covered by this report, our chief executive officer (CEO) and chief financial officer (CFO), with the participation of our management, have evaluated the effectiveness of our disclosure controls and procedures. Based on the evaluation, our CEO and CFO concluded that as of June 26, 2011, our disclosure controls and procedures are effective.

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Inherent Limitations on Effectiveness of Controls

The company’s management, including the CEO and CFO, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events. There can be no assurance that any control system will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate if conditions change or compliance with policies or procedures deteriorates.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the second three months of 2011 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

There are four outstanding proceedings with Power Integrations.

POWI 1: On October 20, 2004, we and our wholly owned subsidiary, Fairchild Semiconductor Corporation, were sued by Power Integrations, Inc. in the U.S. District Court for the District of Delaware. Power Integrations alleged that certain of our pulse width modulation (PWM) integrated circuit products infringed four Power Integrations U.S. patents, and sought a permanent injunction preventing us from manufacturing, selling or offering the products for sale in the U.S., or from importing the products into the U.S., as well as money damages for past infringement.

The trial in the case was divided into three phases. In the first phase of the trial that occurred in October of 2006, a jury returned a verdict finding that thirty-three of our PWM products willfully infringed one or more of seven claims asserted in the four patents and assessed damages against us. We voluntarily stopped U.S. sales and importation of those products in 2007 and have been offering replacement products since 2006. Subsequent phases of the trial conducted during 2007 and 2008 focused on the validity and enforceability of the patents. In December of 2008, the judge overseeing the case reduced the jury’s 2006 damages award from $34 million to approximately $6.1 million and ordered a new trial on the issue of willfulness. The new trial was held in June of 2009 and then in January of 2011 the court awarded Power Integrations final damages in the amount of $12.2 million. We have challenged the final damages award, willfulness finding, injunction, and other issues on appeal. As a result of the appeal, we may be required to post a bond or provide other security in an amount equal to the final damages award for the duration of the appeal process.

POWI 2: On May 23, 2008, Power Integrations filed another lawsuit against us, Fairchild Semiconductor Corporation and our wholly owned subsidiary System General Corporation in the U.S. District Court for the District of Delaware, alleging infringement of three patents. Of the three patents claimed in this lawsuit, two are patents that were asserted against us and Fairchild Semiconductor Corporation in the October 2004 lawsuit described above. As mentioned below, the majority of the claims asserted in the first lawsuit from these two patents have now received final rejections from the patent office, and the third patent has also received preliminary rejections. We believe we have strong defenses against Power Integrations’ claims and intend to vigorously defend this second lawsuit.

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On October 14, 2008, Fairchild Semiconductor Corporation and System General Corporation filed a patent infringement lawsuit against Power Integrations in the U.S. District Court for the District of Delaware, alleging that certain PWM integrated circuit products infringe one or more claims of three U.S. patents owned by System General. The lawsuit seeks monetary damages and an injunction preventing the manufacture, use, sale, offer for sale or importation of Power Integrations products found to infringe the asserted patents.

Both lawsuits have been consolidated and will be heard together in Delaware District Court. The trial is currently scheduled for spring of 2012.

POWI 3: On November 4, 2009, Power Integrations, Inc. filed a complaint for patent infringement against us and two of our subsidiaries in the United States District Court for the Northern District of California alleging that several of our products infringe three of Power Integrations’ patents. One of those patents has since been dropped from the case. We intend to put on a vigorous defense against these claims. In the same lawsuit we have filed counterclaims against Power Integrations, alleging Power Integrations’ products infringe certain claims of one of our patents.

Reexaminations: Parallel to the above federal court proceedings, we also petitioned the U.S. Patent and Trademark Office (USPTO) for reexamination of all unexpired patents claims asserted in POWI 1 and POWI 2 (those being all asserted claims from three of the four patents asserted in POWI 1 (the fourth patent has expired) and all of the patent claims asserted in POWI 2). Of the claims asserted in the four patents from POWI 1 and POWI 2, Power Integrations has amended or cancelled a majority of those at issue.

POWI 4: On February 10, 2010 Fairchild and System General filed a lawsuit in Suzhou, China against four Power Integrations entities and seven vendors. The lawsuit claims that Power Integrations violates four Fairchild/System General patents. Fairchild is seeking an injunction against the Power Integration products and over $17.0 million in damages. Power Integrations is currently seeking to invalidate the Fairchild/System General patents in proceedings before the Chinese patent office.

Fairchild Semiconductor Corporation v. Cadeka Microcircuits, LLC. We filed this lawsuit against a competitor for misappropriation of trade secrets, tortuous interference with contract and breach of contract. The competitor filed counterclaims alleging breach of contract, unjust enrichment and other claims. The case is pending in Colorado Larimer County District Court and will likely proceed to trial in late 2011 or early 2012. We are vigorously prosecuting and defending this case.

Other Legal Claims. From time to time we are involved in legal proceedings in the ordinary course of business. We believe that there is no such ordinary-course litigation pending that could have, individually or in the aggregate, a material adverse effect on our business, financial condition, results of operations or cash flows.

We have analyzed the potential litigation outcomes from current litigation in accordance with the Contingency Topic of the FASB ASC. We estimate the loss contingency by undertaking a process to determine an estimate of the possible loss or range of losses. For cases where we believe it is probable that a loss has occurred, we believe the range of possible losses is approximately $13.0 to $30.0 million. Based upon assessments of the potential liabilities using analysis of claims and historical experience in defending and/or resolving these claims, the company has recorded reserves for potential litigation outcomes of $14.7 million as of June 26, 2011. For cases where we believe it is reasonably possible that a loss has occurred, we believe the range of possible losses is approximately zero to $5.0 million. We have recorded no reserves for potential litigation outcomes for reasonably possible losses.

Item 1A. Risk Factors

A description of the risk factors associated with our business is set forth below. We review and update our risk factors each quarter. The description set forth below includes any changes to and supersedes the description of the risk factors associated with our business previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 26, 2010. The risks described below are not the only ones facing us. Additional risks not currently known to us or that we currently believe are immaterial also may impair our business operations and financial condition.

The price of our common stock has fluctuated widely in the past and may fluctuate widely in the future.

Our common stock is traded on The New York Stock Exchange and significantly increased in value during 2010. Additionally, our stock has experienced and may continue to experience significant price and volume fluctuations that could adversely affect its market price without regard to our operating performance. We believe that factors such as quarterly fluctuations in financial results, earnings below analysts’ estimates and financial performance and other activities of other publicly traded companies in the semiconductor industry could cause the price of our common stock to fluctuate substantially. In addition, our common stock, the stock market in general and the market for shares of

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semiconductor industry-related stocks in particular have experienced extreme price fluctuations which have often been unrelated to the operating performance of the affected companies. Similar fluctuations in the future could adversely affect the market price of our common stock.

We maintain a backlog of customer orders that is subject to cancellation, reduction or delay in delivery schedules, which may result in lower than expected revenues.

We manufacture products primarily pursuant to purchase orders for current delivery or to forecast, rather than pursuant to long-term supply contracts. The semiconductor industry is occasionally subject to double booking and rapid changes in customer outlooks or unexpected build ups of inventory in the supply channel as a result of shifts in end market demand and macro economic conditions. Accordingly, many of these purchase orders or forecasts may be revised or canceled without penalty. As a result, we must commit resources to the manufacture of products without binding purchase commitments from customers. Even in cases where our standard terms and conditions of sale or other contractual arrangements do not permit a customer to cancel an order without penalty, we may from time to time accept cancellations to maintain customer relationships or because of industry practice, custom or other factors. Our inability to sell products after we devote significant resources to them could have a material adverse effect on both our levels of inventory and revenues. While we currently believe our inventory levels are appropriate for the current economic environment, continued global economic uncertainty may result in lower than expected demand. While we anticipate increasing demand in many of our markets, lower demand than anticipated may impact our customers’ target inventory levels. During 2010 we successfully lowered channel inventory and we continue to carefully manage our inventory in 2011; however our current business forecasting is still qualified by the risk that our backlog may deteriorate as a result of customer cancellations.

Downturns in the highly cyclical semiconductor industry or changes in end user market demands could reduce the profitability and overall value of our business, which could cause the trading price of our stock to decline or have other adverse effects on our financial position.

The semiconductor industry is highly cyclical, and the value of our business may decline as a result of market response to this cyclicality. As we have experienced in the past, uncertainty in global economic conditions may continue to negatively affect us and the rest of the semiconductor industry, by causing us to experience backlog cancellations, higher inventory levels and reduced demand for our products. We may experience renewed, possibly severe and prolonged, downturns in the future as a result of this cyclicality. Even as demand increases following such downturns, our profitability may not increase because of price competition and supply shortages that historically accompany recoveries in demand. In addition, we may experience significant fluctuations in our profitability as a result of variations in sales, product mix, end user markets, the costs associated with the introduction of new products, and our efforts to reduce excess inventories that may have built up as a result of any of these factors. The markets for our products depend on continued demand for consumer electronics such as personal computers, cellular telephones, tablet devices, digital cameras, and automotive, household and industrial goods. Deteriorating global economic conditions may cause these end user markets to experience decreases in demand that could adversely affect our business and future prospects.

Our failure to execute on our cost reduction initiatives and the impact of such initiatives could adversely affect our business.

We continue to take cost reduction initiatives to keep pace with the evolving economic and competitive conditions. These actions include plans to streamline and consolidate wafer manufacturing by closing our wafer manufacturing facility in Pennsylvania, closing our four-inch manufacturing line in South Korea and converting to 8 inch wafers in Salt Lake City, Utah, Bucheon, South Korea and South Portland, Maine. Additionally, we initiated several insourcing programs to replace higher-cost outside subcontractors with internal manufacturing, we lowered our materials costs and implemented workforce reductions in an effort to simplify operations, improve productivity and reduce costs.

We cannot guarantee that we will successfully implement any of these actions, or if these actions and other actions we may take will help reduce costs. Because restructuring activities involve changes to many aspects of our business, the cost reductions could adversely impact productivity and sales to an extent we have not anticipated. Even if we fully execute and implement these activities and they generate the anticipated cost savings, there may be other unforeseeable and unintended factors or consequences that could adversely impact our profitability and business.

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We may not be able to develop new products to satisfy changing customer demands or we may develop the wrong products.

Our success is largely dependent upon our ability to innovate and create revenues from new product introductions. Failure to develop new technologies, or react to changes in existing technologies, could materially delay development of new products and lead to decreased revenues and a loss of market share to our competitors. The semiconductor industry is characterized by rapidly changing technologies and industry standards, together with frequent new product introductions. Our financial performance depends on our ability to identify important new technology advances and to design, develop, manufacture, assemble, test, market and support new products and enhancements on a timely and cost-effective basis. While new products often command higher prices and higher profit margins, we may not successfully identify new product opportunities and develop and bring new products to market or succeed in selling them for use in new customer applications in a timely and cost-effective manner. Products or technologies developed by other companies may render our products or technologies obsolete or noncompetitive. Many of our competitors are larger, older and more established companies with greater engineering and research and development resources than us. If we fail to identify a fundamental shift in technologies or in our product markets such failure could have material adverse effects on our competitive position within the industry. In addition, to remain competitive, we must continue our efforts to reduce die sizes, develop new packages and improve manufacturing yields. We cannot assure you that we can accomplish these goals.

If some original equipment manufacturers do not design our products into their equipment, our revenue may be adversely affected.

We depend on our ability to have OEMs, or their contract manufacturers, choose our products. Frequently, an OEM will incorporate or specifically design our products into the products it produces. In such cases the OEM may identify our products, with the products of a limited number of other vendors, as approved for use in particular OEM applications. Without “design wins,” we may only be able to sell our products to customers as a secondary source, if at all. If an OEM designs another supplier’s product into one of its applications, it is more difficult for us to achieve future design wins for that application because changing suppliers involves significant cost, time, effort and risk for the OEM. Even if a customer designs in our products, we are not guaranteed to receive future sales from that customer. We may be unable to achieve these “design wins” because of competition or a product’s functionality, size, electrical characteristics or other aspect of its design or price. Additionally, we may be unable to service expected demand from the customer. In addition, achieving a design win with a customer does not ensure that we will receive significant revenue from that customer and we may be unable to convert design into actual sales.

We depend on demand from the consumer, original equipment manufacturer, contract manufacturing, industrial, automotive and other markets we serve for the end market applications which incorporate our products. Reduced consumer or corporate spending due to increased energy and commodity prices or other economic factors could affect our revenues.

If we provide revenue, margin or earnings per share guidance, it is generally based on certain assumptions we make concerning the health of the overall economy and our projections of future consumer and corporate spending. If our projections of these expenditures are inaccurate or based upon erroneous assumptions, our revenues, margins and earnings per share could be adversely affected. For example, beginning in the third quarter and continuing into the fourth quarter of 2008, we observed progressively weakening order rates which we attributed to uncertainty and deterioration of global economic conditions. While order rates and profitability improved throughout 2010, we cannot be certain that a change in consumer demand will not have an adverse effect on our business.

Our failure to protect our intellectual property rights could adversely affect our future performance and growth.

Failure to protect our intellectual property rights may result in the loss of valuable technologies. We rely on patent, trade secret, trademark and copyright law to protect such technologies. These laws are subject to legislative and regulatory change or through changes in court interpretations of those laws and regulations. For example, there have been recent developments in the laws and regulations governing the issuance and assertion of patents in the U.S., including modifications to the rules governing patent prosecution. There have also been court rulings on the issues of willfulness, obviousness and injunctions, that may affect our ability to obtain patents and/or enforce our patents against others. Some of our technologies are not covered by any patent or patent application. With respect to our intellectual property generally, we cannot assure you that:

• the patents owned by us or numerous other patents which third parties license to us will not be invalidated, circumvented, challenged or licensed to other companies; or

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• any of our pending or future patent applications will be issued within the scope of the claims sought by us, if at all.

In addition, effective patent, trademark, copyright and trade secret protection may be unavailable, limited or not applied for in some countries. We cannot assure that we will be able to effectively enforce our intellectual property rights in every country in which our products are sold or manufactured.

We also seek to protect our proprietary technologies, including technologies that may not be patented or patentable, in part by confidentiality agreements and, if applicable, inventors’ rights agreements with our collaborators, advisors, employees and consultants. We cannot assure you that these agreements will not be breached, that we will have adequate remedies for any breach or that such persons or institutions will not assert rights to intellectual property arising out of such research. We have non-exclusive licenses to some of our technology from National Semiconductor, Infineon, Samsung Electronics and other companies. These companies may license such technologies to others, including our competitors or may compete with us directly. In addition, National Semiconductor and Infineon have limited royalty-free, worldwide license rights to some of our technologies. If necessary or desirable, we may seek licenses under patents or intellectual property rights claimed by others. However, we cannot assure you that we will obtain such licenses or that the terms of any offered licenses will be acceptable to us. The failure to obtain a license from a third party for technologies we use could cause us to incur substantial liabilities and to suspend the manufacture or shipment of products or our use of processes requiring the technologies.

Our failure to obtain or maintain the right to use some technologies may negatively affect our financial results.

Our future success and competitive position depend in part upon our ability to obtain or maintain proprietary technologies used in our principal products. From time to time we are required to defend against claims by competitors and others of intellectual property infringement. Claims of intellectual property infringement and litigation regarding patent and other intellectual property rights are commonplace in the semiconductor industry and are frequently time consuming and costly. From time to time, we may be notified of claims that we may be infringing patents issued to other companies. Such claims may relate both to products and manufacturing processes. We may engage in license negotiations regarding these claims from time to time. Even though we maintain procedures to avoid infringing others’ rights as part of our product and process development efforts, it is impossible to be aware of every possible patent which our products may infringe, and we cannot assure you that we will be successful in our efforts to avoid infringement claims. Furthermore, even if we conclude our products do not infringe another’s patents, others may not agree. We have been and are involved in lawsuits, and could become subject to other lawsuits, in which it is alleged that we have infringed upon the patent or other intellectual property rights of other companies. For example, since October 2004, we have been in litigation with Power Integrations, Inc. See Item 3, Legal Proceedings. Our involvement in this litigation and future intellectual property litigation, or the costs of avoiding or settling litigation by purchasing licenses rights or by other means, could result in significant expense to our company, adversely affecting sales of the challenged products or technologies and diverting the efforts and attention of our technical and management personnel, whether or not such litigation is resolved in our favor. We may decide to settle patent infringement claims or litigation by purchasing license rights from the claimant, even if we believe we are not infringing, in order to reduce the expense of continuing the dispute or because we are not sufficiently confident that we would eventually prevail. In the event of an adverse outcome as a defendant in any such litigation, we may be required to:

• pay substantial damages;

• indemnify our customers for damages they might suffer if the products they purchase from us violate the intellectual property rights of others;

• stop our manufacture, use, sale or importation of infringing products;

• expend significant resources to develop or acquire non-infringing technologies;

• discontinue manufacturing processes; or

• obtain licenses to the intellectual property we are found to have infringed.

We cannot assure you that we would be successful in such development or acquisition or that such licenses would be available under reasonable terms. Any such development, acquisition or license could require the expenditure of substantial time and other resources.

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We may not be able to consummate future acquisitions or successfully integrate acquisitions into our business.

We have made numerous acquisitions of various sizes since we became an independent company in 1997 and we plan to pursue additional acquisitions of related businesses. The costs of acquiring and integrating related businesses, or our failure to integrate them successfully into our existing businesses, could result in our company incurring unanticipated expenses and losses. In addition, we may not be able to identify or finance additional acquisitions or realize any anticipated benefits from acquisitions we do complete.

We are constantly evaluating acquisition opportunities and consolidation possibilities and are frequently conducting due diligence or holding preliminary discussions with respect to possible acquisition transactions, some of which could be significant.

If we acquire another business, the process of integrating an acquired business into our existing operations may result in unforeseen operating difficulties and may require us to use significant financial resources on the acquisition that may otherwise be needed for the ongoing development or expansion of existing operations. Some of the risks associated with acquisitions include:

• unexpected losses of key employees, customers or suppliers of the acquired company;

• conforming the acquired company’s standards, processes, procedures and controls with our operations;

• coordinating new product and process development;

• hiring additional management and other critical personnel;

• inability to realize anticipated synergies;

• negotiating with labor unions; and

• increasing the scope, geographic diversity and complexity of our operations.

In addition, we may encounter unforeseen obstacles or costs in the integration of other businesses we acquire.

Possible future acquisitions could result in the incurrence of additional debt, contingent liabilities and amortization expenses related to intangible assets, all of which could have a material adverse effect on our financial condition and operating results.

We may face risks associated with dispositions of assets and businesses.

From time to time we may dispose of assets and businesses in an effort to grow our more profitable product lines. When we do so, we face certain risks associated with these exit activities, including but not limited the risk that we will disrupt service to our customers, the risk of inadvertently losing other business not related to the exit activities, the risk that we will be unable to effectively continue, terminate, modify and manage supplier and vendor relationships, and the risk that we may be subject to consequential claims from customers or vendors as a result of eliminating, or transferring the production of affected products or the renegotiation of commitments related to those products.

We depend on suppliers for timely deliveries of raw materials of acceptable quality. Production time and product costs could increase if we were to lose a primary supplier or if we experience a significant increase in the prices of our raw materials. Product performance could be affected and quality issues could develop as a result of a significant degradation in the quality of raw materials we use in our products.

Our manufacturing processes use many raw materials, including silicon wafers, gold, copper lead frames, mold compound, ceramic packages and various chemicals and gases. Our manufacturing operations depend upon our ability to obtain adequate supplies of raw materials on a timely basis. Our results of operations could be adversely affected if we were unable to obtain adequate supplies of raw materials in a timely manner or if the costs of raw materials increased significantly. If the prices of these raw materials rise significantly we may be unable to pass on our increased operating expenses to our customers. This could result in decreased profit margins for the products in which the materials are used. Results could also be adversely affected if there is a significant degradation in the quality of raw materials used in our

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products, or if the raw materials give rise to compatibility or performance issues in our products, any of which could lead to an increase in customer returns or product warranty claims. Although we maintain rigorous quality control systems, errors or defects may arise from a supplied raw material and be beyond our detection or control. For example, some phosphorus-containing mold compound received from one supplier and incorporated into our products in the past resulted in a number of claims for damages from customers. We purchase some of our raw materials such as silicon wafers, lead frames, mold compound, ceramic packages and chemicals and gases from a limited number of suppliers on a just-in-time basis. From time to time, suppliers may extend lead times, limit supplies or increase prices due to capacity constraints or other factors. We subcontract a minority of our wafer fabrication needs, primarily to Taiwan Semiconductor Manufacturing Company, Advanced Semiconductor Manufacturing Corporation, Central Semiconductor Manufacturing Corporation, Jilin Magic Semiconductor, Macronix International Co. Ltd., and Phenitec Semiconductor. In order to maximize our production capacity, some of our back-end assembly and testing operations are also subcontracted. Primary back-end subcontractors include Amkor, ASE, AUK, GEM Services, Hana Semiconductor, Liteon, Tak Cheong Electronics, Greatek, Etrend, AIC and UTAC Thai Ltd. Our operations and ability to satisfy customer obligations could be adversely affected if our relationships with these subcontractors were disrupted or terminated.

Delays in expanding capacity at existing facilities, implementing new production techniques, or incurring problems associated with technical equipment malfunctions, all could adversely affect our manufacturing efficiencies.

Our manufacturing efficiency is an important factor in our profitability, and we cannot assure you that we will be able to maintain our manufacturing efficiency or increase manufacturing efficiency to the same extent as our competitors. Our manufacturing processes are highly complex, require advanced and costly equipment and are continuously being modified in an effort to improve yields and product performance. Impurities or other difficulties in the manufacturing process can lower yields. We are constantly looking for ways to expand capacity or improve efficiency at our manufacturing facilities. For example, we are currently in the process of converting our facilities in South Korea, Utah and Maine from 6 inch wafers to 8 inch wafers. As is common in the semiconductor industry, we may experience difficulty in completing transitions to new manufacturing processes at existing facilities. As a consequence, we have suffered delays in product deliveries or reduced yields in the past and may experience such delays again in the future.

We may experience delays or problems in bringing new manufacturing capacity to full production. Such delays, as well as possible problems in achieving acceptable yields, or product delivery delays relating to existing or planned new capacity could result from, among other things, capacity constraints, construction delays, upgrading or expanding existing facilities or changing our process technologies, any of which could result in a loss of future revenues. Our operating results could also be adversely affected by the increase in fixed costs and operating expenses related to increases in production capacity if revenues do not increase proportionately.

We rely on subcontractors to reduce production costs and to meet manufacturing demands, which may adversely affect our results of operations.

Many of the processes we use in manufacturing our products are complex requiring, among other things, a high degree of technical skill and significant capital investment in advanced equipment. In some circumstances, we may decide that it is more cost effective to have some of these processes performed by qualified third party subcontractors. In addition, we may utilize a subcontractor to fill unexpected customer demand for a particular product or process or to guaranty supply of a particular product that may be in great demand. More significantly, as a result of the expense incurred in qualifying multiple subcontractors to perform the same function, we may designate a subcontractor as a single source for supplying a key product or service. If a single source subcontractor were to fail to meet our contractual requirements, our business could be adversely affected and we could incur production delays and customer cancellations as a result. We would also be required to qualify other subcontractors, which would be time consuming and cause us to incur additional costs. In addition, even if we qualify alternate subcontractors, those subcontractors may not be able to meet our delivery, quality or yield requirements, which could adversely affect our results of operations. In addition to these operational risks, some of these subcontractors are smaller businesses that may not have the financial ability to acquire the advanced tools and equipment necessary to fulfill our requirements. In some circumstances, we may find it necessary to provide financial support to our subcontractors in the form of advance payments, loans, loan guarantees, equipment financing and similar financial arrangements. In those situations, we could be adversely impacted if the subcontractor failed to comply with its financial obligations to us.

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Approximately two-thirds of our sales are made to distributors who can terminate their relationships with us with little or no notice. The termination of a distributor could reduce sales and result in inventory returns.

Distributors accounted for 68% of our net sales for the quarter ended June 26, 2011. Our top five distributors worldwide accounted for 21% of our net sales for the quarter ended June 26, 2011. As a general rule, we do not have long-term agreements with our distributors, and they may terminate their relationships with us with little or no advance notice. Distributors generally offer competing products. The loss of one or more of our distributors, or the decision by one or more of them to reduce the number of our products they offer or to carry the product lines of our competitors, could have a material adverse effect on our business, financial condition and results of operations. The termination of a significant distributor, whether at our or the distributor’s initiative, or a disruption in the operations of one or more of our distributors, could reduce our net sales in a given quarter and could result in an increase in inventory returns.

The semiconductor business is very competitive, especially in the markets we serve, and increased competition could reduce the value of an investment in our company.

We participate in the standard component or “multi-market” segment of the semiconductor industry. While the semiconductor industry is generally highly competitive, the “multi-market” segment is particularly so. Our competitors offer equivalent or similar versions of many of our products, and customers may switch from our products to our competitors’ products on the basis of price, delivery terms, product performance, quality, reliability and customer service or a combination of any of these factors. Competition is especially intense in the multi-market semiconductor segment because it is relatively easy for customers to switch between suppliers of more standardized, multi-market products like ours. In the past we have experienced decreases in prices during “down” cycles in the semiconductor industry, and this may occur again as a result of the recent downturn in global economic conditions. Even in strong markets, price pressures may emerge as competitors attempt to gain a greater market share by lowering prices. We compete in a global market and our competitors are companies of various sizes in various countries around the world. Many of our competitors are larger than us and have greater financial resources available to them. As such, they tend to have a greater ability to pursue acquisition candidates and can better withstand adverse economic or market conditions. Additionally, companies with whom we do not currently compete may introduce new products that may cause them to compete with us in the future.

We may not be able to attract or retain the technical or management employees necessary to remain competitive in our industry.

Our continued success depends on our ability to attract, motivate and retain skilled personnel, including technical, marketing, management and staff personnel. In the semiconductor industry, the competition for qualified personnel, particularly experienced design engineers and other technical employees, is intense, particularly when the business cycle is improving. During such periods competitors may try to recruit our most valuable technical employees. While we devote a great deal of our attention to designing competitive compensation programs aimed at accomplishing this goal, specific elements of our compensation programs may not be competitive with those of our competitors and there can be no assurance that we will be able to retain our current personnel or recruit the key personnel we require.

If we must reduce our use of equity awards to compensate our employees, our competitiveness in the employee marketplace could be adversely affected. Our results of operations could vary as a result of the methods, estimates and judgments we use to value our stock-based compensation.

Like most technology companies, we have a history of using employee stock based incentive programs to recruit and retain our workforce in a competitive employment marketplace. Our success will depend in part upon the continued use of stock options, restricted stock units, deferred stock units and performance-based equity awards as a compensation tool. Our current practice is to seek stockholder approval for increases in the number of shares available for grant under the Fairchild Semiconductor 2007 Stock Plan as well as other amendments that may be adopted from time to time which require stockholder approval. If these proposals do not receive stockholder approval, we may not be able to grant stock options and other equity awards to employees at the same levels as in the past, which could adversely affect our ability to attract, retain and motivate qualified personnel, and we may need to increase cash compensation in order to attract, retain and motivate employees, which could adversely affect our results of operations. Additionally, since 2009 we have relied almost exclusively on grants of restricted stock units, deferred stock units and performance based equity awards in place of stock options. We expect to continue that practice in 2011. While we believe that our compensation policies are competitive with our peers, we cannot provide any assurance that we have not, and will not continue in the future to lose opportunities to recruit and retain key employees as a result of these changes.

Changes in forecasted stock-based compensation expense could impact our gross margin percentage, research and development expenses, marketing, general and administrative expenses and our tax rate.

37

We may face product warranty or product liability claims that are disproportionately higher than the value of the products involved.

Our products are typically sold at prices that are significantly lower than the cost of the equipment or other goods in which they are incorporated. For example, our products that are incorporated into a personal computer may be sold for several dollars, whereas the personal computer might be sold by the computer maker for several hundred dollars. Although we maintain rigorous quality control systems, we manufacture and sell approximately 16 billion individual semiconductor devices per year to customers around the world, and in the ordinary course of our business we receive warranty claims for some of these products that are defective or that do not perform to published specifications. Since a defect or failure in our product could give rise to failures in the goods that incorporate them (and consequential claims for damages against our customers from their customers), we may face claims for damages that are disproportionate to the revenues and profits we receive from the products involved. We attempt, through our standard terms and conditions of sale and other customer contracts, to limit our liability by agreeing only to replace the defective goods or refund the purchase price. Nevertheless, we have received claims for other charges, such as for labor and other costs of replacing defective parts or repairing the products into which the defective products are incorporated, lost profits and other damages. In addition, our ability to reduce such liabilities, whether by contracts or otherwise, may be limited by the laws or the customary business practices of the countries where we do business. And, even in cases where we do not believe we have legal liability for such claims, we may choose to pay for them to retain a customer’s business or goodwill or to settle claims to avoid protracted litigation. Our results of operations and business could be adversely affected as a result of a significant quality or performance issue in our products, if we are required or choose to pay for the damages that result. For example, from 2001 to 2008 we received claims from a number of customers seeking damages resulting from certain products manufactured with a phosphorus-containing mold compound, and we were named in lawsuits relating to these mold compound claims.

Our operations and business could be significantly harmed by natural disasters.

Our manufacturing facilities in China, South Korea, Malaysia, the Philippines and the many of the third party contractors and suppliers that we currently use are located in countries that are in seismically active regions of the world where earthquakes and other natural disasters, such as floods and typhoons may occur. While we take precautions to mitigate these risks, we cannot be certain that they will be adequate to protect our facilities in the event of a major earthquake, flood, typhoon or other natural disaster. Although we maintain insurance for some of the damage that may be caused by natural disasters, our insurance coverage may not be sufficient to cover all of our potential losses and would not cover us for lost business. As a result, a natural disaster in one of these regions could severely disrupt the operation of our business and have a material adverse effect on our financial condition and results of operations.

Natural disasters could affect our supply chain or our customer base which, in turn, could have a negative impact on our business, the cost of and demand for our products and our results of operations.

While the recent earthquake and tsunami in Japan had only limited direct impact on us, the occurrence of natural disasters in certain regions, could have a negative impact on our supply chain, our ability to deliver products, the cost of our products and the demand for our products. These events could cause consumer confidence and spending to decrease or result in increased volatility to the U.S. and worldwide economies. Any such occurrences could have a material adverse effect on our business, our results of operations and our financial condition.

Our international operations subject our company to risks not faced by domestic competitors.

Through our subsidiaries we maintain significant operations and facilities in the Philippines, Malaysia, China, South Korea and Singapore. We have sales offices and customers around the world. Approximately 74% of our revenues in the first six months 2011 were from Asia. The following are some of the risks inherent in doing business on an international level:

• economic and political instability;

• foreign currency fluctuations;

• transportation delays;

• trade restrictions;

38

• changes in laws and regulations relating to, amongst other things, import and export tariffs, taxation, environmental regulations, land use rights and property,

• work stoppages; and

• the laws of, including tax laws, and the policies of the U.S. toward, countries in which we manufacture our products.

We acquired significant operations and revenues when we acquired a business from Samsung Electronics and, as a result, are subject to risks inherent in doing business in Korea, including political risk, labor risk and currency risk.

We have significant operations and sales in South Korea and are subject to risks associated with doing business there. Korea accounted for approximately 11% of our revenue for the quarter ended June 26, 2011.

Relations between South Korea and North Korea have been tense over most of South Korea’s history, and more recent concerns over North Korea’s nuclear capability, and relations between the U.S. and North Korea, have created a global security issue that may adversely affect Korean business and economic conditions. We cannot assure you as to whether or when this situation will be resolved or change abruptly as a result of current or future events. An adverse change in economic or political conditions in South Korea or in its relations with North Korea could have a material adverse effect on our Korean subsidiary and our company. In addition to other risks disclosed relating to international operations, some businesses in South Korea are subject to labor unrest.

Our Korean sales are increasingly denominated primarily in U.S. dollars while a significant portion of our Korean operations’ costs of goods sold and operating expenses are denominated in South Korean won. Although we have taken steps to fix the costs subject to currency fluctuations and to balance won revenues and won costs as much as possible, a significant change in this balance, coupled with a significant change in the value of the won relative to the dollar, could have a material adverse effect on our financial performance and results of operations (see Item 7a, Quantitative and Qualitative Disclosures about Market Risk).

A change in foreign tax laws or a difference in the construction of current foreign tax laws by relevant foreign authorities could result in us not recognizing any anticipated benefits.

Some of our foreign subsidiaries have been granted preferential income tax or other tax holidays as an incentive for locating in those jurisdictions. A change in the foreign tax laws or in the construction of the foreign tax laws governing these tax holidays, or our failure to comply with the terms and conditions governing the tax holidays, could result in us not recognizing the anticipated benefits we derive from them, which would decrease our profitability in those jurisdictions. We continue to monitor the tax holidays, the income tax laws governing the tax holidays, and our compliance with the terms and conditions of the tax holidays, to ensure that the current and future tax impacts on our subsidiaries in these countries are anticipated and refined.

We have significantly expanded our manufacturing operations in China and, as a result, will be increasingly subject to risks inherent in doing business in China, which may adversely affect our financial performance.

We expect a significant portion of our production from our Suzhou, China facility will be exported out of China, however, we are hopeful that a significant portion of our future revenue will result from the Chinese markets in which our products are sold, and from demand in China for goods that include our products. Our ability to operate in China may be adversely affected by changes in that country’s laws and regulations, including those relating to taxation, foreign exchange restrictions, import and export tariffs, environmental regulations, land use rights, property and other matters. In addition, our results of operations in China are subject to the economic and political situation there. We believe that our operations in China are in compliance with all applicable legal and regulatory requirements. However, there can be no assurance that China’s central or local governments will not impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures. Changes in the political environment or government policies could result in revisions to laws or regulations or their interpretation and enforcement, increased taxation, restrictions on imports, import duties or currency revaluations. In addition, a significant destabilization of relations between China and the U.S. could result in restrictions or prohibitions on our operations or the sale of our products in China. The legal system of China relating to foreign trade is relatively new and continues to evolve. There can be no certainty as to the application of its laws and regulations in particular instances. Enforcement of existing laws or agreements may be sporadic and implementation and interpretation of laws inconsistent. Moreover, there is a high degree of fragmentation among regulatory authorities resulting in uncertainties as to which authorities have jurisdiction over particular parties or transactions.

39

We are subject to many environmental laws and regulations that could affect our operations or result in significant expenses.

Increasingly stringent environmental regulations restrict the amount and types of pollutants that can be released from our operations into the environment. While the cost of compliance with environmental laws has not had a material adverse effect on our results of operations historically, compliance with these and any future regulations could require significant capital investments in pollution control equipment or changes in the way we make our products. In addition, because we use hazardous and other regulated materials in our manufacturing processes, we are subject to risks of liabilities and claims, regardless of fault, resulting from our use, transportation, emission, discharge, storage, recycling or disposal of hazardous materials, including personal injury claims and civil and criminal fines, any of which could be material to our cash flow or earnings. For example:

• we currently are remediating contamination at some of our operating plant sites;

• we have been identified as a potentially responsible party at a number of Superfund sites where we (or our predecessors) disposed of wastes in the past; and

• significant regulatory and public attention on the impact of semiconductor operations on the environment may result in more stringent regulations, further increasing our costs.

Although most of our known environmental liabilities are covered by indemnification agreements with Raytheon Company, National Semiconductor, Samsung Electronics and Intersil Corporation, these indemnities are limited to conditions that occurred prior to the consummation of the transactions through which we acquired facilities from those companies. Moreover, we cannot assure you that their indemnity obligations to us for the covered liabilities will be available, or, if available, adequate to protect us.

Our senior credit facility limits our flexibility and places restrictions on the manner in which we run our operations.

At June 26, 2011 we had total debt of $300.1 million and the ratio of this debt to equity was approximately 0.2 to 1. As of June 26, 2011, our senior credit facility includes $400 million in a revolving line of credit. Adjusted for outstanding letters of credit, we had up to $98.7 million available under the revolving loan portion of the senior credit facility. In addition, there is a $150 million uncommitted incremental revolving loan feature. Despite the significant reductions we have made in our long-term debt, we continue to carry indebtedness which could have significant consequences on our operations. For example, it could:

• require us to dedicate a portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, research and development efforts and other general corporate purposes;

• increase the amount of our interest expense, because our borrowings are at variable rates of interest, which, if interest rates increase, could result in higher interest expense;

• increase our vulnerability to general adverse economic and industry conditions;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• restrict us from making strategic acquisitions, introducing new technologies or exploiting business opportunities;

• make it more difficult for us to satisfy our obligations with respect to the instruments governing our indebtedness;

40

• place us at a competitive disadvantage compared to our competitors that have less indebtedness; or

• limit, along with the financial and other restrictive covenants in our debt instruments, among other things, our ability to borrow additional funds, dispose of assets, repurchase stock or pay cash dividends. Failing to comply with those covenants could result in an event of default which, if not cured or waived, could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to generate the necessary amount of cash to service our indebtedness, which may require us to refinance our indebtedness or default on our scheduled debt payments. Our ability to generate cash depends on many factors beyond our control.

Our historical financial results have been, and we anticipate that our future financial results may be subject to substantial fluctuations. While we currently have sufficient cash flow to satisfy all of our current obligations, we cannot assure you that our business will continue to generate sufficient cash flow from operations to enable us to pay our indebtedness or to fund our other liquidity needs in the future. Further, we can make no assurances that our currently anticipated cost savings and operating improvements will be realized on schedule or at all, or that future borrowings will be available to us under our senior credit facility in an amount sufficient to satisfy our liquidity needs. In addition, because our senior credit facility has a variable interest rate, our cost of borrowing will increase if market interest rates increase. If we are unable to meet our expenses and debt obligations, we may need to refinance all or a portion of our indebtedness on or before maturity, sell assets or raise equity. We cannot assure you that we would be able to renew or refinance any of our indebtedness, sell assets or raise equity on commercially reasonable terms or at all, which could cause us to default on our obligations and impair our liquidity. Restrictions imposed by the credit agreement relating to our senior credit facility restrict or prohibit our ability to engage in or enter into some business operating and financing arrangements, which could adversely affect our ability to take advantage of potentially profitable business opportunities.

The operating and financial restrictions and covenants in the credit agreement relating to our senior credit facility may limit our ability to finance our future operations or capital needs or engage in other business activities that may be in our interests. The credit agreement imposes significant operating and financial restrictions on us that affect our ability to incur additional indebtedness or create liens on our assets, pay dividends, sell assets, engage in mergers or acquisitions, make investments or engage in other business activities. These restrictions could place us at a disadvantage relative to our competitors many of which are not subject to such limitations.

In addition, the senior credit facility also requires us to maintain specified financial ratios. Our ability to meet those financial ratios can be affected by events beyond our control, and we cannot assure you that we will meet those ratios. As of June 26, 2011, we were in compliance with these ratios. A breach of any of these covenants, ratios or restrictions could result in an event of default under the senior credit facility. Upon the occurrence of an event of default under the senior credit facility, the lenders could elect to declare all amounts outstanding under the senior credit facility, together with accrued interest, to be immediately due and payable. If we were unable to repay those amounts, the lenders could proceed against our assets, including any collateral granted to them to secure the indebtedness. If the lenders under the senior credit facility accelerate the payment of the indebtedness, we cannot assure you that our assets would be sufficient to repay in full that indebtedness and our other indebtedness.

We have investments in auction rate securities that subject us to market risk which could adversely affect our liquidity and financial results.

As of June 26, 2011, we owned auction rate securities with a par value of $49.5 million and market value of $29.3 million. We originally purchased these securities believing them to be safe, short-term and highly liquid investments. However, as a result of the systemic failure of the auction rate securities market, these securities are no longer liquid. While we continue to accrue and receive interest on these securities at the contractual rate, there can be no assurance that there will ever be an active market for our auction rate securities. Uncertainties in the credit and capital markets could lead to further downgrades of our auction rate securities and additional impairments. Additionally, auction failures have limited our ability to fully recover the par value of our investment in the short term and even if we hold the securities to maturity, the long-term value of the auction rate securities may potentially be impacted by issuer defaults. We do not anticipate that the lack of liquidity or future downgrades and impairments will materially impact our ability to fund out working capital needs, capital expenditures or other business requirements.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information with respect to purchases made by the company of its own common stock during the second quarter of 2011.

Period	Total Number of Shares (or Units) Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate  Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
March 28, 2011 - April 24, 2011		96,485	$	18.00	—	—
April 25, 2011 - May 22, 2011		—		—	—	—
May 23, 2011 - June 26, 2011		627,383		17.54	—	—
Total		723,868		17.60	—	—

For the majority of restricted stock units granted, the number of shares issued on the date the restricted stock units vest is net of the minimum statutory withholding requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees. Although these withheld shares are not issued or considered common stock repurchases and are not included in the table above, the cash paid for taxes is treated in the same manner as common stock repurchases in our financial statements, as they reduce the number of shares that would have been issued upon vesting.

Item 6. Exhibits

Exhibit No.	Description
10.35	Credit Agreement dated as of May 20, 2011, among Fairchild Semiconductor International, Inc. Fairchild Semiconductor Corporation, as borrower, the lenders thereto and JPMorgan Chase Bank, N.A., as administrative agent.
31.01	Section 302 Certification of the Chief Executive Officer.
31.02	Section 302 Certification of the Chief Financial Officer.
32.01	Certification, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Mark S. Thompson.
32.02	Certification, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Mark S. Frey.
101.INS 1	XBRL Instance Document
101.SCH 1	XBRL Taxonomy Extension Schema Document
101.CAL 1	XBRL Taxonomy Extension Calculation Linkbase Document
101. DEF	XBRL Taxonomy Definition Linkbase Document
101.LAB 1	XBRL Taxonomy Extension Label Linkbase Document
101.PRE 1	XBRL Taxonomy Extension Presentation Linkbase Document

¹  XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

Items 3, 4 and 5 are not applicable and have been omitted.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Fairchild Semiconductor International, Inc.
Date: August 5, 2011	/S/     ROBIN A. SAWYER
	Robin A. Sawyer
	Vice President, Corporate Controller
	(Principal Accounting Officer)

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EX-10.35

Exhibit 10.35

CREDIT AGREEMENT

dated as of

May 20, 2011

among

FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC.,

as Holdings,

FAIRCHILD SEMICONDUCTOR CORPORATION,

as the Borrower,

The Lenders Party Hereto

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

J.P. MORGAN SECURITIES LLC,

as Joint Lead Arranger and Joint Bookrunner

HSBC BANK USA, NA,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

and

RBS CITIZENS, N.A.,

as Joint Lead Arrangers and Joint Bookrunners

BANK OF AMERICA, N.A.,

HSBC BANK USA, NA

and

RBS CITIZENS, N.A.,

as Co-Syndication Agents

TABLE OF CONTENTS

		Page
ARTICLE I
Definitions
SECTION 1.01.	Defined Terms		1
SECTION 1.02.	Types of Loans and Borrowings		33
SECTION 1.03.	Terms Generally		33
SECTION 1.04.	Accounting Terms; GAAP; Pro Forma Calculations		34
ARTICLE II
The Credits
SECTION 2.01.	Commitments		35
SECTION 2.02.	Loans and Borrowings		35
SECTION 2.03.	Requests for Borrowings		36
SECTION 2.04.	Swingline Loans		37
SECTION 2.05.	Letters of Credit		38
SECTION 2.06.	Funding of Borrowings		44
SECTION 2.07.	Interest Elections		45
SECTION 2.08.	Termination and Reduction of Commitments		46
SECTION 2.09.	Repayment of Loans; Evidence of Debt		47
SECTION 2.10.	Prepayment of Loans		48
SECTION 2.11.	Fees		48
SECTION 2.12.	Interest		49
SECTION 2.13.	Alternate Rate of Interest		50
SECTION 2.14.	Increased Costs		51
SECTION 2.15.	Break Funding Payments		52
SECTION 2.16.	Taxes		53
SECTION 2.17.	Payments Generally; Pro Rata Treatment; Sharing of Setoffs		56
SECTION 2.18.	Mitigation Obligations; Replacement of Lenders		58
SECTION 2.19.	Defaulting Lenders		59
SECTION 2.20.	Incremental Commitments		61
ARTICLE III
Representations and Warranties
SECTION 3.01.	Organization; Powers		64
SECTION 3.02.	Authorization; Enforceability		64
SECTION 3.03.	Governmental Approvals; Absence of Conflicts		65
SECTION 3.04.	Financial Condition; No Material Adverse Change		65
SECTION 3.05.	Properties		65

i

SECTION 3.06.	Litigation and Environmental Matters	66
SECTION 3.07.	Compliance with Laws and Agreements	66
SECTION 3.08.	Investment Company Status	66
SECTION 3.09.	Taxes	66
SECTION 3.10.	ERISA; Labor Matters	67
SECTION 3.11.	Subsidiaries and Joint Ventures	67
SECTION 3.12.	Insurance	67
SECTION 3.13.	Solvency	67
SECTION 3.14.	Disclosure	68
SECTION 3.15.	Collateral Matters	68
SECTION 3.16.	Use of Proceeds; Federal Reserve Regulations	69
SECTION 3.17.	Anti-Terrorism Law	69
SECTION 3.18.	Senior Indebtedness	70
ARTICLE IV
Conditions
SECTION 4.01.	Effective Date	70
SECTION 4.02.	Each Credit Event	72
ARTICLE V
Affirmative Covenants
SECTION 5.01.	Financial Statements and Other Information	73
SECTION 5.02.	Notices of Material Events	75
SECTION 5.03.	Additional Subsidiaries	75
SECTION 5.04.	Information Regarding Guarantees and Collateral	75
SECTION 5.05.	Existence; Conduct of Business	76
SECTION 5.06.	Payment of Obligations	76
SECTION 5.07.	Maintenance of Properties	76
SECTION 5.08.	Insurance	76
SECTION 5.09.	Books and Records; Inspection and Audit Rights	76
SECTION 5.10.	Compliance with Laws	77
SECTION 5.11.	Use of Proceeds and Letters of Credit	77
SECTION 5.12.	Further Assurances	77
SECTION 5.13.	Certain Post-Closing Obligations	77
ARTICLE VI
Negative Covenants
SECTION 6.01.	Indebtedness; Certain Equity Securities	77
SECTION 6.02.	Liens	80
SECTION 6.03.	Fundamental Changes; Business Activities	81
SECTION 6.04.	Investments, Loans, Advances, Guarantees and Acquisitions	82

ii

SECTION 6.05.	Asset Sales	85
SECTION 6.06.	Sale/Leaseback Transactions	86
SECTION 6.07.	Hedging Agreements	87
SECTION 6.08.	Restricted Payments; Certain Payments of Indebtedness	87
SECTION 6.09.	Transactions with Affiliates	88
SECTION 6.10.	Restrictive Agreements	89
SECTION 6.11.	Interest Expense Coverage Ratio	89
SECTION 6.12.	Leverage Ratio	90
SECTION 6.13.	Fiscal Year	90
ARTICLE VII
Events of Default
ARTICLE VIII
The Administrative Agent
ARTICLE IX
Miscellaneous
SECTION 9.01.	Notices	97
SECTION 9.02.	Waivers; Amendments	98
SECTION 9.03.	Expenses; Indemnity; Damage Waiver	100
SECTION 9.04.	Successors and Assigns	102
SECTION 9.05.	Survival	105
SECTION 9.06.	Counterparts; Integration; Effectiveness	106
SECTION 9.07.	Severability	106
SECTION 9.08.	Right of Setoff	106
SECTION 9.09.	Governing Law; Jurisdiction; Consent to Service of Process	107
SECTION 9.10.	WAIVER OF JURY TRIAL	107
SECTION 9.11.	Headings	108
SECTION 9.12.	Confidentiality	108
SECTION 9.13.	Release of Liens and Guarantees	109
SECTION 9.14.	USA PATRIOT Act Notice	109
SECTION 9.15.	No Fiduciary Relationship	109
SECTION 9.16.	Non-Public Information	109

SCHEDULES:

Schedule 1.01(a) — Foreign Pledges

Schedule 2.01 — Commitments

Schedule 3.11 — Subsidiaries and Joint Ventures

Schedule 3.12 — Insurance

iii

Schedule 6.01 — Existing Indebtedness

Schedule 6.02 — Existing Liens

Schedule 6.04(b) — Existing Investments

Schedule 6.04(o) — Specified Foreign Subsidiaries

Schedule 6.10 — Existing Restrictions

EXHIBITS:

Exhibit A — Form of Assignment and Assumption

Exhibit B — Form of Borrowing Request

Exhibit C — Form of Compliance Certificate

Exhibit D — Form of Global Intercompany Note

Exhibit E — Form of Guarantee and Collateral Agreement

Exhibit F — Form of Intercompany Subordination Agreement

Exhibit G — Form of Interest Election Request

Exhibit H — Form of Perfection Certificate

iv

CREDIT AGREEMENT dated as of May 20, 2011 (this “Agreement”), among FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC., a Delaware corporation (“Holdings”), FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware corporation (the “Borrower”), the LENDERS party hereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

The parties hereto agree as follows:

ARTICLE I

Definitions

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

“ABR”, when used in reference to any Loan or Borrowing, means that such Loan, or the Loans comprising such Borrowing, bears interest at a rate determined by reference to the Alternate Base Rate.

“Adjusted LIBO Rate” means, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

“Adjusted Net Income” means, for any period (including any period a portion of which occurs prior to the Effective Date), Consolidated Net Income, plus

(a) without duplication, and to the extent deducted in computing Consolidated Net Income for such period, all non-cash charges for such period (excluding any such non-cash charge in respect of an item that was included in Consolidated Net Income in a prior period and any amounts attributable to depreciation and amortization for such period),

provided that any cash expenditure made with respect to any non-cash item added back in computing Adjusted Net Income for any prior period pursuant to this clause (a) (or that would have been added back had this Agreement been in effect during such prior period) shall be subtracted in computing Adjusted Net Income for the period in which such cash expenditure is made so long as such cash expenditure does not otherwise reduce Consolidated Net Income at such time, minus

(b) without duplication, and to the extent included in computing Consolidated Net Income for such period, all non-cash items of income and non-cash gains for such period.

“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent hereunder and under the other Loan Documents, and its successors in such capacity as provided in Article VIII.

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

“Affiliate” means, with respect to a specified Person, another Person that directly or indirectly Controls or is Controlled by or is under common Control with the Person specified; provided, however, that for purposes of Section 6.09, the term “Affiliate” also means any Person that is a director or an executive officer of the Person specified, any Person that directly or indirectly beneficially owns Equity Interests in the Person specified representing 5% or more of the aggregate ordinary voting power or the aggregate equity value represented by the issued and outstanding Equity Interests in the Person specified and any Person that would be an Affiliate of any such beneficial owner pursuant to this definition (but without giving effect to this proviso).

“Aggregate Commitment” means the sum of the Commitments of all the Revolving Lenders.

“Aggregate Revolving Exposure” means the sum of the Revolving Exposures of all the Revolving Lenders.

“Agreement” has the meaning assigned to such term in the preamble hereto.

“Alternate Base Rate” means, for any day, a rate per annum 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 Adjusted LIBO Rate on such day (or if such day is not a Business Day, the immediately preceding Business Day) for a deposit in dollars with a maturity of one month plus 1%. For purposes of clause (c) above, the Adjusted LIBO Rate on any day shall be based on the rate per annum appearing on the Reuters “LIBOR01” screen displaying British Bankers’ Association Interest Settlement Rates (or on any successor or substitute screen provided by Reuters, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such screen, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to such day for deposits in dollars with a maturity of one month. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

“Anti-Terrorism Law” has the meaning assigned to such term in Section 3.17(a).

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“Applicable Percentage” means, at any time, with respect to any Revolving Lender, the percentage of the Aggregate Commitment represented by such Lender’s Commitment at such time; provided that, in the case of Section 2.19, when a Defaulting Lender shall exist, “Applicable Percentage” shall mean the percentage of the Aggregate Commitment (disregarding any Defaulting Lender’s Commitment) represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments and to any Lender’s status as a Defaulting Lender at the time of determination.

“Applicable Rate” means, for any day, (a) with respect to any ABR Loan, 0.75% per annum, and (b) with respect to any Eurocurrency Loan, 1.75% per annum.

“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in commercial loans and similar extensions of credit in the ordinary course and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Arrangers” means each of J.P. Morgan Securities LLC, HSBC Bank USA, NA, Merrill Lynch, Pierce, Fenner & Smith Incorporated and RBS Citizens, N.A., in its capacity as a joint lead arranger and joint bookrunner for the credit facility provided for herein.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee, with the consent of any Person whose consent is required by Section 9.04, and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

“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; provided, further, 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.

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“BermudaCo” means Fairchild Semiconductor (Bermuda) Ltd., a Bermuda company.

“Bermuda Asset Transfer” has the meaning set forth in Section 6.04(o).

“Bermuda Subsidiary Transfer” has the meaning set forth in Section 6.04(o).

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

“Borrower” has the meaning assigned to such term in the preamble hereto.

“Borrowing” means (a) Loans of the same Type made, converted or continued on the same date and, in the case of Eurocurrency Loans, as to which a single Interest Period is in effect, or (b) a Swingline Loan.

“Borrowing Request” means a request by the Borrower for a Borrowing in accordance with Section 2.03 or 2.04, as applicable, which shall be, in the case of any such written request, in the form of Exhibit B or any other form approved by the Administrative Agent.

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

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP; the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP, and the final maturity of such obligations shall be the date of the last payment of such or any other amounts due under such lease (or other arrangement) prior to the first date on which such lease (or other arrangement) may be terminated by the lessee without payment of a premium or a penalty. For purposes of Section 6.02, a Capital Lease Obligation shall be deemed to be secured by a Lien on the property being leased and such property shall be deemed to be owned by the lessee.

“Change in Control” means (a) the failure by Holdings to own, beneficially and of record, all the outstanding Equity Interests in the Borrower; (b) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Exchange Act and the rules of the SEC thereunder) of Equity Interests in Holdings representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in Holdings; (c) persons who were (i) directors of Holdings on the date hereof, (ii) nominated by the

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board of directors of Holdings or (iii) appointed by directors who were directors of Holdings on the date hereof or were nominated as provided in clause (ii) above, in each case other than any person whose initial nomination or appointment occurred as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors on the board of directors of Holdings (other than any such solicitation made by the board of directors of Holdings), ceasing to occupy a majority of the seats (excluding vacant seats) on the board of directors of Holdings; or (d) the occurrence of any “change of control” (or similar event, however denominated) with respect to Holdings, the Borrower or any Subsidiary under and as defined in any indenture or other agreement or instrument evidencing, governing the rights of the holders of or otherwise relating to any Material Indebtedness of Holdings, the Borrower or any Subsidiary or any preferred Equity Interests in Holdings.

“Change in Law” means the occurrence, after the date of this Agreement (or with respect to any Lender, if later, the date on which such Lender becomes a Lender), of any of the following: (a) the adoption of any rule, regulation, treaty or other law, (b) any change in any rule, regulation, treaty or other law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) of any Governmental Authority; provided that, notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case shall be deemed to be a “Change in Law”, regardless of the date enacted, adopted, promulgated or issued.

“CNTA Basket Amount” means, at any time, 15% of Consolidated Net Tangible Assets (calculated based on the most recent consolidated balance sheet of Holdings delivered to the Administrative Agent pursuant to Section 5.01 as of such time).

“CNTA Expenditures” means Investments made pursuant to Section 6.04(c), loans or advances made pursuant to Section 6.04(d), Guarantees made pursuant to Section 6.04(e) and Investments made pursuant to 6.04(n), in each case that are based on usage of the CNTA Basket Amount.

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

“Collateral” has the meaning assigned to such term in the Collateral Agreement.

“Collateral Agreement” means the Guarantee and Collateral Agreement among Holdings, the Borrower, the Subsidiary Loan Parties and the Administrative Agent, substantially in the form of Exhibit E, together with all supplements thereto.

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

(a) the Administrative Agent shall have received from Holdings, the Borrower, each Domestic Subsidiary in existence on the Effective Date and each subsequently acquired or formed Domestic Subsidiary that is a Material Subsidiary either (i) a counterpart of the Collateral Agreement duly executed and delivered on behalf of such Person or (ii) in the case of any Person that becomes a Domestic Subsidiary that is a Material Subsidiary (including as a result of the acquisition of formation thereof) after the Effective Date, a supplement to the Collateral Agreement, in the form specified therein, duly executed and delivered on behalf of such Person, together with documents and opinions of the type referred to in paragraphs (b) and (c) of Section 4.01 with respect to such Domestic Subsidiary;

(b) all Equity Interests in the Borrower or any Subsidiary directly owned by or on behalf of any Loan Party shall have been pledged pursuant to the Collateral Agreement or, in the case of Equity Interests in (i) any Foreign Subsidiary set forth on Schedule 1.01(a) or (ii) any Foreign Subsidiary that becomes a Material Subsidiary (including as a result of the acquisition of formation thereof) after the Effective Date, where the Administrative Agent so reasonably requests in connection with the pledge of such Equity Interests, a Foreign Pledge Agreement (provided that the Loan Parties shall not be required to pledge more than 65% of the outstanding voting Equity Interests of any Foreign Subsidiary to the extent that the pledge of any greater percentage would result in adverse tax consequences to Holdings or the Borrower), and the Administrative Agent shall, to the extent required by the Collateral Agreement, have received certificates or other instruments representing all such Equity Interests, together with undated stock powers or other instruments of transfer with respect thereto endorsed in blank;

(c) all Indebtedness of Holdings, the Borrower and each Subsidiary that, in each case, is owing to any Loan Party shall be evidenced by the Global Intercompany Note and shall have been pledged pursuant to the Collateral Agreement, and the Administrative Agent shall have received the Global Intercompany Note, together with an undated instrument of transfer with respect thereto endorsed in blank; and

(d) all documents and instruments, including Uniform Commercial Code financing statements, required by applicable law or reasonably requested by the Administrative Agent to be filed, registered or recorded to create the Liens intended to be created by the Security Documents in effect at such time and perfect such Liens to the extent required by, and with the priority required by, the Security Documents in effect at such time, shall have been filed, registered or recorded or delivered to the Administrative Agent for filing, registration or recording.

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The foregoing definition shall not require the creation or perfection of pledges of or security interests in, or the obtaining of legal opinions or other deliverables with respect to, particular assets of the Loan Parties if, and for so long as, the Administrative Agent, in consultation with Holdings and the Borrower, determines that the cost of creating or perfecting such pledges or security interests in such assets, or obtaining such legal opinions or other deliverables in respect of such assets shall be excessive in view of the benefits to be obtained by the Lenders therefrom. The Administrative Agent may grant extensions of time for the creation and perfection of security interests in or the obtaining of legal opinions or other deliverables with respect to particular assets (including extensions beyond the Effective Date or in connection with assets acquired, or Subsidiaries formed or acquired, after the Effective Date) where it determines that such action cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or the Security Documents.

“Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate permitted amount of such Lender’s Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08, (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04 or (c) increased pursuant to Incremental Commitments of such Lender under Section 2.20. The initial amount of each Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption or Incremental Facility Agreement pursuant to which such Lender shall have assumed its Commitment, as applicable. The initial aggregate amount of the Lenders’ Commitments is $400,000,000.

“Compliance Certificate” means a Compliance Certificate in the form of Exhibit C or any other form approved by the Administrative Agent.

“Consolidated Cash Interest Expense” means, for any period, the excess of (a) the interest expense (including imputed interest expense in respect of Capital Lease Obligations) of Holdings and its consolidated subsidiaries for such period, determined on a consolidated basis in accordance with GAAP and any cash payments made during such period in respect of obligations referred to in clause (b) below that were amortized or accrued in a previous period, minus (b) to the extent included in such consolidated interest expense for such period, noncash amounts attributable to amortization of debt discounts, upfront fees and other financing costs (including legal and accounting costs) or accrued interest payable in kind for such period.

“Consolidated Current Liabilities” means, as of any date, all amounts which, in conformity with GAAP, would be classified as current liabilities on a consolidated balance sheet of Holdings and its consolidated subsidiaries as at such date (excluding (i) liabilities that by their terms are extendable or renewable at the option of the obligor to a date more than 12 months after the date of determination and (ii) current maturities of long-term debt).

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“Consolidated EBITDA” means, for any period (including any period a portion of which occurs prior to the Effective Date), Consolidated Net Income for such period, plus

(a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of

(i) consolidated interest expense for such period (including imputed interest expense in respect of Capital Lease Obligations), determined on a consolidated basis in accordance with GAAP,

(ii) consolidated income tax expense for such period,

(iii) all amounts attributable to depreciation and amortization for such period (excluding amortization expenses attributable to a prepaid cash expense that was paid in a prior period),

(iv) any extraordinary charges for such period,

(v) any noncash charges for such period (including noncash charges related to equity compensation (it being agreed that payments of taxes on behalf of employees do not constitute noncash charges) and impairment charges and excluding any additions to bad debt reserves or bad debt expense),

(vi) any losses attributable to the early extinguishment of Indebtedness or obligations under any Hedging Agreement,

(vii) the cumulative effect of a change in accounting principles; and

(viii) restructuring charges (including severance charges incurred in connection with restructurings) for such period and nonrecurring charges for such period consistent with the nonrecurring charges added back in computing adjusted net income in the public disclosures by Holdings (provided that the charges added back pursuant to this clause (a)(viii) in computing Consolidated EBITDA shall not exceed $30,000,000 in any four consecutive fiscal quarter period), and

(ix) financing fees, financial and other advisory fees, accounting fees, legal fees (and similar advisory and consulting fees), and related costs and expenses incurred in connection with issuances of Indebtedness, Equity Interests, Material Acquisitions and Material Dispositions (whether or not consummated),

provided that any cash expenditure made with respect to any noncash items added back in computing Consolidated EBITDA for any prior period pursuant to clause (a)(v) above (or that would have been added back had this Agreement been in effect during such prior period) shall be subtracted in computing Consolidated EBITDA for the period in which such cash expenditure is made; and minus

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(b) without duplication and to the extent included in determining such Consolidated Net Income,

(i) any extraordinary gains for such period, all determined on a consolidated basis in accordance with GAAP,

(ii) any gains attributable to the early extinguishment of Indebtedness or obligations under any Hedging Agreement and

(iii) the cumulative effect of a change in accounting principles;

provided further that Consolidated EBITDA shall be calculated so as to exclude the effect of any gain or loss that represents after-tax gains or losses attributable to any sale of assets by Holdings or any of its consolidated subsidiaries, other than dispositions of inventory and other dispositions in the ordinary course of business.

“Consolidated Intangibles” means, as of any date, all assets of Holdings and its consolidated subsidiaries, determined on a consolidated basis, that would, in conformity with GAAP, be classified as intangible assets on a consolidated balance sheet of Holdings and its consolidated subsidiaries as at such date, including unamortized debt discount and expense, unamortized organization and reorganization expense, costs in excess of the fair market value of acquired companies, patents, trade or service marks, franchises, trade names, goodwill and the amount of all write-ups in the book value of assets resulting from any revaluation thereof (other than revaluations arising out of foreign currency valuations in conformity with GAAP).

“Consolidated Net Income” means, for any period, the net income or loss of Holdings and its consolidated subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income of any Person (other than Holdings) that is not a consolidated subsidiary of Holdings except to the extent of the amount of cash dividends or similar cash distributions actually paid by such Person to Holdings or, subject to clauses (b) and (c) below, to any other consolidated subsidiary of Holdings during such period, (b) the income of, and any amounts referred to in clause (a) above paid to, any consolidated subsidiary of Holdings (other than any Loan Party) to the extent that, on the date of determination, the declaration or payment of cash dividends or similar cash distributions by such subsidiary is not permitted without any prior approval of any Governmental Authority that has not been obtained or is not permitted by the operation of the terms of the organizational documents of such subsidiary, any agreement or other instrument binding upon Holdings, the Borrower or any Subsidiary or any law applicable to Holdings, the Borrower or any Subsidiary, unless such restrictions with respect to the payment of cash dividends and other similar cash distributions has been legally and effectively waived, and (c) the income or loss of, and any amounts referred to in clause (a) above paid to, any consolidated subsidiary of Holdings that is not wholly-owned directly or indirectly by Holdings to the extent such income or loss or such amounts are attributable to the noncontrolling interest in such consolidated subsidiary.

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“Consolidated Net Tangible Assets” means, as of any date, the amount equal to (a) the amount that would, in conformity with GAAP, be included as assets on the consolidated balance sheet of Holdings and its consolidated subsidiaries as at such date minus (b) the sum of (i) Consolidated Intangibles of Holdings and its consolidated subsidiaries at such date and (ii) the Consolidated Current Liabilities of Holdings and its consolidated subsidiaries at such date.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies, or the dismissal or appointment of the management, of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Co-Syndication Agents” means each of Bank of America, N.A., HSBC Bank USA, NA and RBS Citizens, N.A., in its capacity as a co-syndication agent for the credit facility provided for herein.

“Credit Party” means the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender.

“Cumulative Adjusted Net Income” means, at any time, the sum of the Adjusted Net Income (whether positive or negative) for each fiscal year of Holdings completed after the Effective Date and prior to such time and for which financial statements have been delivered to the Administrative Agent pursuant to Section 5.01.

“Default” means any event or condition that constitutes, or upon notice, lapse of time or both would constitute, 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 Swingline Loans or (iii) pay over to any Credit Party 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 Lender’s 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 Credit Party 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 Lender’s 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 Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will

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comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

“Disqualified Equity Interest” means, with respect to any Person, any Equity Interest in such Person that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable, either mandatorily or at the option of the holder thereof), or upon the happening of any event or condition:

(a) matures or is mandatorily redeemable (other than solely for Equity Interests in such Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares of such Equity Interests), whether pursuant to a sinking fund obligation or otherwise;

(b) is convertible or exchangeable, either mandatorily or at the option of the holder thereof, for Indebtedness or Equity Interests (other than solely for Equity Interests in such Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares of such Equity Interests); or

(c) is redeemable (other than solely for Equity Interests in such Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares of such Equity Interests) or is required to be repurchased by Holdings, the Borrower or any Subsidiary, in whole or in part, at the option of the holder thereof;

in each case, on or prior to the date 91 days after the Maturity Date; provided, however, that an Equity Interest in any Person that would not constitute a Disqualified Equity Interest but for terms thereof giving holders thereof the right to require such Person to redeem or purchase such Equity Interest upon the occurrence of an “asset sale” or a “change of control” (or similar event, however denominated) shall not constitute a Disqualified Equity Interest if any such requirement becomes operative only after repayment in full of all the Loans and all other Loan Documents Obligations that are accrued and payable, the cancellation or expiration of all Letters of Credit and the termination or expiration of the Commitments.

“dollars” or “$” refers to lawful money of the United States of America.

“Domestic Subsidiary” means any Subsidiary incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia that is not a Foreign Subsidiary.

“EBITDA” means, with respect to any Subsidiary for any period, the portion of Consolidated EBITDA attributable to such Subsidiary and its consolidated subsidiaries during such period.

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“Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund and (d) any other Person, other than, in each case, a natural person or Holdings, the Borrower, any Subsidiary or any other Affiliate of Holdings.

“Engagement Letter” means the Engagement and Commitment Letter dated April 15, 2011, among the Borrower, JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, HSBC Bank USA, NA and RBS Citizens, N.A.

“Environmental Laws” means all rules, regulations, codes, ordinances, judgments, orders, decrees and other laws, and all injunctions or binding agreements, issued, promulgated or entered into by or with any Governmental Authority and relating in any way to the environment, to preservation or reclamation of natural resources, to the management, Release or threatened Release of, or exposure to, any Hazardous Material or to related health or safety matters.

“Environmental Liability” means any liability, obligation, loss, claim, action, order or cost, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties and indemnities), directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Equity Interests” means shares of capital stock, partnership interests, membership interests, beneficial interests or other ownership interests, whether voting or nonvoting, in, or interests in the income or profits of, a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974.

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

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived), (b) any failure by any Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, in each case whether or not waived, (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA, of an application for a waiver of the minimum funding standard with respect to any Plan, (d) a

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determination that any Plan is, or is expected to be, in “at-risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code), (e) the incurrence by Holdings or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan, (f) the receipt by Holdings or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (g) the incurrence by Holdings or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan, or (h) the receipt by Holdings or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from Holdings or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA or in endangered or critical status, within the meaning of Section 305 of ERISA.

“Eurocurrency”, when used in reference to any Loan or Borrowing, means that such Loan, or the Loans comprising such Borrowing, bears interest at a rate determined by reference to the Adjusted LIBO Rate.

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

“Exchange Act” means the United States Securities Exchange Act of 1934.

“Excluded Taxes” means, with respect to any payment to be made by any Loan Party under any Loan Document, any of the following Taxes imposed on or with respect to a Recipient: (a) income, franchise or other similar Taxes imposed on (or measured by) net income by the United States of America or by the jurisdiction under the laws of which such Recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits Taxes imposed by the United States of America or any similar Taxes imposed by any other jurisdiction referred to in the preceding clause (a) and (c) in the case of a Non-U.S. Lender (other than an assignee pursuant to a request by the Borrower under Section 2.18(b)), any U.S. Federal withholding Taxes resulting from any law in effect (including FATCA) on the date such Non-U.S. Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Non-U.S. Lender’s failure to comply with Section 2.16(f), except to the extent that such Non-U.S. Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from a Loan Party with respect to such withholding Taxes pursuant to Section 2.16(a).

“Executive Order” has the meaning set forth in Section 3.17.

“Existing Credit Agreement” means the Credit Agreement, dated as of June 26, 2006, as amended prior to the date hereof, among Holdings, the Borrower, the lenders party thereto, Deutsche Bank Trust Company Americas, as administrative agent, and the other agents party thereto.

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“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 (rounded upwards, if necessary, to the next 1/100 of 1%) 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 (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Fee Letters” means each of the Fee Letters (as defined in the Engagement Letter) dated April 15, 2011.

“Financial Officer” means, with respect to any Person, the chief financial officer, principal accounting officer, treasurer, assistant treasurer or controller of such Person.

“Foreign Pledge Agreement” means a pledge or charge agreement granting a Lien on Equity Interests in a Foreign Subsidiary to secure the Secured Obligations governed by the law of the jurisdiction of organization of such Foreign Subsidiary and in form and substance reasonably satisfactory to the Administrative Agent.

“Foreign Subsidiary” means (i) a Subsidiary treated as a corporation for U.S. federal income tax purposes that is incorporated or organized outside of the United States, (ii) a Subsidiary all of whose assets consist only of one or more Subsidiaries described in clause (i) of this definition (other than cash and de minimis assets incidental to the organization and existence of such Subsidiary), (iii) a Subsidiary treated as a disregarded entity for U.S. federal income tax purposes all of whose assets consist only of more than 65% of the voting stock of one or more Subsidiaries described in clause (i) of this definition (other than cash and de minimis assets incidental to the organization and existence of such Subsidiary) or (iv) a Subsidiary of any of the foregoing.

“GAAP” means generally accepted accounting principles in the United States of America, applied in accordance with the consistency requirements thereof.

“Global Intercompany Note” means a promissory note substantially in the form of Exhibit D evidencing Indebtedness of Holdings, the Borrower and each Subsidiary that, in each case, is owing to any Loan Party from time to time.

“Governmental Approvals” means all authorizations, consents, approvals, permits, licenses and exemptions of, registrations and filings with, and reports to, Governmental Authorities.

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

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or other obligation; provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount, as of any date of determination, of any Guarantee shall be the principal amount outstanding on such date of Indebtedness or other obligation guaranteed thereby (or, in the case of (i) any Guarantee the terms of which limit the monetary exposure of the guarantor or (ii) any Guarantee of an obligation that does not have a principal amount, the maximum monetary exposure as of such date of the guarantor under such Guarantee (as determined, in the case of clause (i), pursuant to such terms or, in the case of clause (ii), reasonably and in good faith by the chief financial officer of the Borrower)).

“Hazardous Materials” means all substances or wastes defined or regulated under any Environmental Law as explosive, radioactive, hazardous or toxic, including petroleum or petroleum distillates, fractions or by-products, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas and infectious or medical wastes.

“Hedging Agreement” means any agreement with respect to any swap, forward, future or derivative transaction, or any option or similar agreement, involving, or settled by reference to, one or more rates, currencies, commodities, prices of equity or debt securities or instruments, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value, or any similar transaction or combination of the foregoing 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 Holdings, the Borrower or the Subsidiaries shall be a Hedging Agreement.

“Holdings” has the meaning assigned to such term in the preamble hereto.

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“Incremental Commitments” means, with respect to any Lender, the commitment, if any, of such Lender, established pursuant to an Incremental Facility Agreement and Section 2.20, to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate permitted amount of such Lender’s Revolving Exposure under such Incremental Facility Agreement.

“Incremental Facility Agreement” means an Incremental Facility Agreement, in form and substance reasonably satisfactory to the Administrative Agent, among the Borrower, the Administrative Agent and one or more Incremental Revolving Lenders, establishing Incremental Commitments and effecting such other amendments hereto and to the other Loan Documents as are contemplated by Section 2.20.

“Incremental Revolving Lender” means a Lender with an Incremental Commitment.

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person (excluding trade accounts payable incurred in the ordinary course of business), (d) all obligations of such Person in respect of the deferred purchase price of property or services (including payments in respect of non-competition agreements or other arrangements representing acquisition consideration, in each case entered into in connection with an acquisition, but excluding (i) accounts payable incurred in the ordinary course of business, (ii) deferred compensation payable to directors, officers or employees of Holdings, the Borrower or any Subsidiary and (iii) any purchase price adjustment, earnout or deferred payment of a similar nature incurred in connection with an acquisition, except to the extent that the amount payable pursuant to such purchase price adjustment, earnout or deferred payment obligation is, or becomes, reasonably determinable), (e) all Capital Lease Obligations of such Person, (f) the maximum aggregate amount of all letters of credit and letters of guaranty in respect of which such Person is an account party, (g) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (h) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed by such Person, and (i) all Guarantees by such Person of Indebtedness of others. The Indebtedness of any Person shall include the Indebtedness of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such other Person, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by any Loan Party under any Loan Document and (b) Other Taxes.

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“Indemnitee” has the meaning assigned to such term in Section 9.03(b).

“Information” has the meaning assigned to such term in Section 9.12.

“Intercompany Subordination Agreement” means the Intercompany Subordination Agreement in the form of Exhibit F or any other form approved by the Administrative Agent in its reasonable discretion.

“Interest Election Request” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.07, which shall be, in the case of any such written request, in the form of Exhibit G or any other form approved by the Administrative Agent.

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline Loan), the last day of each March, June, September and December, (b) with respect to any Eurocurrency Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest Period of more than three months’ duration, such day or days prior to the last day of such Interest Period as shall occur at intervals of three months’ duration after the first day of such Interest Period, and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid.

“Interest Period” means, with respect to any Eurocurrency Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter (or, if agreed to by each Lender participating therein, nine or twelve months thereafter), as the Borrower may elect; provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“Investment” means, with respect to a specified Person, (i) any Equity Interests, evidences of Indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, or any capital contribution or loans or advances (other than advances made in the ordinary course of business that would be recorded as accounts receivable on the balance sheet of the specified Person prepared in accordance with GAAP) to, Guarantees of any Indebtedness or other obligations of, or any other investment in, any other Person that are held or made by the specified Person and (ii) the purchase or acquisition (in one transaction or a series of related transactions) of all or substantially all the property and assets or business of another Person or assets constituting a business unit, line of business, division or product line of such Person. The

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amount, as of any date of determination, of (a) any Investment in the form of a loan or an advance shall be the principal amount thereof outstanding on such date, without any adjustment for write-downs or write-offs (including as a result of forgiveness of any portion thereof) with respect to such loan or advance after the date thereof, (b) any Investment in the form of a Guarantee shall be determined in accordance with the definition of the term “Guarantee”, (c) any Investment in the form of a transfer of Equity Interests or other non-cash property by the investor to the investee, including any such transfer in the form of a capital contribution, shall be the fair value (as determined reasonably and in good faith by the chief financial officer of Holdings and the Borrower) of such Equity Interests or other property as of the time of the transfer, without any adjustment for increases or decreases in value of, or write-ups, write-downs or write-offs with respect to, such Investment after the date of such transfer, (d) any Investment (other than any Investment referred to in clause (a), (b) or (c) above) by the specified Person in the form of a purchase or other acquisition for value of any Equity Interests, evidences of Indebtedness, other securities or assets of any other Person shall be the original cost of such Investment (including any Indebtedness assumed in connection therewith), plus the cost of all additions, as of such date, thereto, and minus the amount, as of such date, of any portion of such Investment repaid to the investor in cash as a repayment of principal or a return of capital, as the case may be, but without any other adjustment for increases or decreases in value of, or write-ups, write-downs or write-offs with respect to, such Investment after the date of such Investment, and (e) any Investment (other than any Investment referred to in clause (a), (b), (c) or (d) above) by the specified Person in any other Person resulting from the issuance by such other Person of its Equity Interests to the specified Person shall be the fair value (as determined reasonably and in good faith by the chief financial officer of Holdings and the Borrower) of such Equity Interests at the time of the issuance thereof. For purposes of Section 6.04, if an Investment involves the acquisition of more than one Person, the amount of such Investment shall be allocated among the acquired Persons in accordance with GAAP; provided that pending the final determination of the amounts to be so allocated in accordance with GAAP, such allocation shall be as reasonably determined by a Financial Officer.

“IRS” means the United States Internal Revenue Service.

“Issuing Bank” means (a) JPMorgan Chase Bank, N.A. and (b) each Revolving Lender that shall have become an Issuing Bank hereunder as provided in Section 2.05(j) (other than any Person that shall have ceased to be an Issuing Bank as provided in Section 2.05(k)), each in its capacity as an issuer of Letters of Credit hereunder. Each Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate (it being agreed that such Issuing Bank shall, or shall cause such Affiliate to, comply with the requirements of Section 2.05 with respect to such Letters of Credit).

“LC Disbursement” means a payment made by an Issuing Bank pursuant to a Letter of Credit.

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“LC Exposure” means, at any time, the sum of (a) the aggregate amount of all Letters of Credit that remains available for drawing at such time and (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption or an Incremental Facility Agreement, other than any such Person that shall have ceased to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement, other than any such letter of credit that shall have ceased to be a “Letter of Credit” outstanding hereunder pursuant to Section 9.05.

“Leverage Ratio” means, on any date, the ratio of (a) Total Indebtedness as of such date to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of Holdings most recently ended on or prior to such date.

“LIBO Rate” means, with respect to any Eurocurrency Borrowing for any Interest Period, the rate appearing on the Reuters “LIBOR01” screen displaying British Bankers’ Association Interest Settlement Rates (or on any successor or substitute screen provided by Reuters, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such screen, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurocurrency Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, charge, security interest or other encumbrance on, in or of such asset, including any agreement to provide any of the foregoing and any arrangement entered into for the purpose of making particular assets available to satisfy any Indebtedness or other obligation, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

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“Loan Documents” means this Agreement, the Collateral Agreement, the other Security Documents, the Incremental Facility Agreements, the Intercompany Subordination Agreement and, except for purposes of Section 9.02, any promissory notes delivered pursuant to Section 2.09(c).

“Loan Documents Obligations” has the meaning set forth in the Collateral Agreement.

“Loan Parties” means Holdings, the Borrower and each Subsidiary Loan Party.

“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

“Material Acquisition” means (a) any acquisition, or a series of related acquisitions, of (i) Equity Interests in any Person if, after giving effect thereto, such Person will become a Subsidiary or (ii) assets comprising all or substantially all the assets of (or all or substantially all the assets constituting a business unit, division, product line or line of business of) any Person or (b) any Investment in Equity Interests, or series of related Investments (other than any Investment or series of Investments by Holdings, the Borrower or any Subsidiary in Holdings, the Borrower or any Subsidiary) in Equity Interests, including joint venture investments; provided that, in the case of each of clauses (a) and (b), the aggregate consideration therefor (including Indebtedness assumed in connection therewith, all obligations in respect of deferred purchase price (including obligations under any purchase price adjustment but excluding earnout or similar payments) and all other consideration payable in connection therewith (including payment obligations in respect of noncompetition agreements or other arrangements representing acquisition consideration)) exceeds $25,000,000.

“Material Adverse Effect” means an event or condition that has resulted, or could reasonably be expected to result, in a material adverse effect on (a) the business, assets, liabilities, operations, or condition (financial or otherwise) of Holdings, the Borrower and the Subsidiaries, taken as a whole, (b) the ability of any Loan Party to perform any of its material obligations under any Loan Document or (c) the rights of or benefits available to the Lenders under any Loan Document.

“Material Disposition” means any sale, transfer or other disposition, or a series of related sales, transfers or other dispositions, of (a) all or substantially all the issued and outstanding Equity Interests in any Person that are owned by Holdings, the Borrower or any Subsidiary, (b) assets comprising all or substantially all the assets of (or all or substantially all the assets constituting a business unit, division, product line or line of business of) any Person, (c) any Investment or (d) any other sale of assets outside the ordinary course of business and permitted by this Agreement; provided that, in the case of each of clauses (a), (b), (c) and (d), the aggregate consideration therefor (including Indebtedness assumed by the transferee in connection therewith, all obligations in respect of deferred purchase price (including obligations under any purchase price adjustment but excluding earnout or similar payments) and all other consideration payable in connection therewith (including payment obligations in respect of noncompetition agreements or other arrangements representing acquisition consideration)) exceeds $25,000,000.

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“Material Indebtedness” means Indebtedness (other than the Loans, Letters of Credit and Guarantees under the Loan Documents), or obligations in respect of one or more Hedging Agreements, of any one or more of Holdings, the Borrower and the Subsidiaries in an aggregate principal amount of $25,000,000 or more. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of Holdings, the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that Holdings, the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time.

“Material Subsidiary” means each Subsidiary (x)(a) the consolidated total assets of which exceed 10% of the combined total assets of Holdings and its subsidiaries, (b) the consolidated EBITDA of which exceeds 10% of the combined EBITDA of Holdings and its subsidiaries or (c) the consolidated total revenues of which exceed 10% of the combined total revenues of Holdings and its subsidiaries, in each case as of the end of or for the most recent fiscal year of Holdings for which financial statements have been delivered pursuant to Section 5.01(a) (or, prior to the first delivery of any such financial statements, as of the end of or for the period of four consecutive fiscal quarters of Holdings most recently ended prior to the date of this Agreement) or, in the case of a newly formed or acquired Subsidiary, as of the end of or for the most recent period of four consecutive fiscal quarters of Holdings for which financial statements have been delivered pursuant to Section 5.01(a) or 5.01(b) (or, prior to the first delivery of any such financial statements, as of the end of or for the period of four consecutive fiscal quarters of Holdings most recently ended prior to the date of this Agreement), calculated on a pro forma basis in accordance with Section 1.04(b), or (y) which owns or licenses rights to intellectual property, including patents, that are material to the business or operations of Holdings and the Subsidiaries, taken as a whole; provided that if at the end of or for any such fiscal year the combined consolidated total assets, combined consolidated EBITDA or combined consolidated revenues of all Subsidiaries that under clauses (x) and (y) above would not constitute Material Subsidiaries shall have exceeded 10% of the combined total assets of Holdings and its subsidiaries, 10% of the combined EBITDA of Holdings and its subsidiaries or 10% of the combined total revenues of Holdings and its subsidiaries, then one or more of such excluded Subsidiaries shall for all purposes of this Agreement be deemed to be Material Subsidiaries in descending order based on the amounts of their consolidated total assets, consolidated EBITDA or consolidated revenues, as the case may be, until such excess shall have been eliminated.

“Maturity Date” means the fifth anniversary of the Effective Date.

“MNPI” means material information concerning Holdings, the Borrower and the Subsidiaries and their securities that has not been disseminated in a manner making it available to investors generally, within the meaning of Regulation FD under the Securities Act and the Exchange Act.

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“Moody’s” means Moody’s Investors Service, Inc., and any successor to its rating agency business.

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

“Net Proceeds” means, with respect to any event, (a) the cash (which term, for purposes of this definition, shall include cash equivalents) proceeds (including, in the case of any casualty, condemnation or similar proceeding, insurance, condemnation or similar proceeds) received in respect of such event, including any cash received in respect of any noncash proceeds, but only as and when received, net of (b) the sum, without duplication, of (i) all reasonable fees and out-of-pocket expenses paid in connection with such event by Holdings, the Borrower and the Subsidiaries to Persons that are not Affiliates of Holdings, the Borrower or any Subsidiary, (ii) in the case of a sale, transfer, lease or other disposition (including pursuant to a Sale/Leaseback Transaction or a casualty or a condemnation or similar proceeding) of an asset, the amount of all payments required to be made by Holdings, the Borrower and the Subsidiaries as a result of such event to repay Indebtedness (other than Loans) secured by such asset and (iii) the amount of all taxes paid (or reasonably estimated to be payable) by Holdings, the Borrower and the Subsidiaries, and the amount of any reserves established by Holdings, the Borrower and the Subsidiaries in accordance with GAAP to fund purchase price adjustment, indemnification and similar contingent liabilities (other than any earnout obligations) reasonably estimated to be payable and that are directly attributable to the occurrence of such event (as determined reasonably and in good faith by the chief financial officer of Holdings). For purposes of this definition, in the event any contingent liability reserve established with respect to any event as described in clause (b)(iii) above shall be reduced, the amount of such reduction shall, except to the extent such reduction is made as a result of a payment having been made in respect of the contingent liabilities with respect to which such reserve has been established, be deemed to be receipt, on the date of such reduction, of cash proceeds in respect of such event.

“Non-Defaulting Lender” means, at any time, any Lender that is not a Defaulting Lender at such time.

“Non-U.S. Lender” means a Lender that is not a U.S. Person.

“OFAC” has the meaning set forth in Section 3.17.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient 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).

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“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, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment under Section 2.18(b)).

“Parent” means, with respect to any Lender, any Person of which such Lender is a direct or indirect subsidiary.

“Participants” has the meaning set forth in Section 9.04(c)(i).

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

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

“Perfection Certificate” means a certificate in the form of Exhibit H or any other form approved by the Administrative Agent.

“Permitted Acquisition” means the purchase or other acquisition by the Borrower or any Subsidiary of Equity Interests in, or all or substantially all the assets of (or all or substantially all the assets constituting a business unit, division, product line or line of business of), any Person; provided that:

(a) in the case of any purchase or other acquisition of Equity Interests in a Person, upon the consummation of such acquisition, such Person and each of its subsidiaries (collectively, the “Acquired Person”) (i) will be a wholly-owned Domestic Subsidiary (including as a result of a merger or consolidation between any Subsidiary and such Person) that shall become a Subsidiary Loan Party or (ii) if such Acquired Person shall not become a Subsidiary Loan Party, such Acquired Person shall become a direct, wholly-owned subsidiary of a Loan Party and the Equity Interests of such subsidiary shall be pledged as Collateral (subject to the limitations on pledges of Equity Interests in first-tier Foreign Subsidiaries set forth in the Collateral and Guarantee Requirement);

(b) in the case of any purchase or other acquisition of other assets, (i) such assets will be owned by the Borrower or a Subsidiary Loan Party or (ii) if such assets will not be owned by the Borrower or a Subsidiary Loan Party, such assets shall be owned by a direct, wholly-owned subsidiary of a Loan Party and the Equity Interests of such subsidiary shall be pledged as Collateral (subject to the limitations on pledges of Equity Interests in first-tier Foreign Subsidiaries set forth in the Collateral and Guarantee Requirement);

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(c) such purchase or acquisition was not preceded by, or consummated pursuant to, an unsolicited tender offer or proxy contest initiated by or on behalf of the Borrower or any Subsidiary,

(d) all transactions related thereto are consummated in accordance with applicable law,

(e) the business of the Acquired Person, or such assets, as the case may be, constitute a business of the type conducted by the Borrower and the Subsidiaries on the date hereof, reasonable extensions thereof and businesses reasonably related thereto,

(f) with respect to each such purchase or other acquisition, all actions required to be taken with respect to each newly created or acquired Subsidiary or assets in order to satisfy the requirements set forth in the definition of the term “Collateral and Guarantee Requirement” shall have been taken (or arrangements for the taking of such actions satisfactory to the Administrative Agent shall have been made), and

(g) at the time of and immediately after giving effect to any such purchase or other acquisition,

(i) no Default shall have occurred and be continuing,

(ii) Holdings shall be in compliance with the covenants set forth in Sections 6.11 and 6.12 on a pro forma basis in accordance with Section 1.04(b), and

(iii) the Borrower shall have delivered to the Administrative Agent a certificate of a Financial Officer of the Borrower, in form and substance reasonably satisfactory to the Administrative Agent, certifying that all the requirements set forth in this definition have been satisfied with respect to such purchase or other acquisition, together with reasonably detailed calculations demonstrating satisfaction of the requirement set forth in clause (g)(ii) above.

For purposes of the foregoing, if in connection with any purchase or acquisition, (x) in the case of a purchase or acquisition of Equity Interests of a Person pursuant to clause (a) above, either the combined total assets or combined total EBITDA of all Foreign Subsidiaries included in such Acquired Person exceed 20% of the combined total assets or combined total EBITDA, respectively, of such Acquired Person, in each case measured as of the last day of and for the period of four consecutive fiscal quarters ending on the last day of the fiscal quarter of the Acquired Person most recently ended prior to the consummation of such purchase or acquisition for which financial statements of such Acquired Person are available, or (y) in the case of a purchase or acquisition of assets pursuant to clause (b) above, more than 20% of such assets are located outside of the United States of America or would not be owned by the Borrower or a Subsidiary Loan Party, then, regardless of whether such transaction is consummated by a Loan Party or such acquired Person becomes a Loan Party, such transaction shall be deemed to be consummated in reliance on clause (a)(ii) or clause (b)(ii), as applicable, and shall constitute a “Permitted Acquisition” only if the requirements of such clause are satisfied.

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“Permitted Encumbrances” means:

(a) Liens imposed by law for Taxes that are not yet due or are being contested in compliance with Section 5.06;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.06;

(c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws;

(d) pledges and deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(e) judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

(f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business, and other minor title imperfections with respect to real property that are acceptable to the Administrative Agent in its reasonable discretion, that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

(g) banker’s liens, rights of setoff or similar rights and remedies as to deposit accounts or other funds maintained with depository institutions; provided that such deposit accounts or funds are not established or deposited for the purpose of providing collateral for any Indebtedness and are not subject to restrictions on access by Holdings, the Borrower or any Subsidiary in excess of those required by applicable banking regulations;

(h) Liens arising by virtue of Uniform Commercial Code financing statement filings (or similar filings under applicable law) regarding operating leases entered into by Holdings, the Borrower and the Subsidiaries in the ordinary course of business; and

(i) Liens representing any interest or title of a licensor, lessor or sublicensor or sublessor, or a licensee, lessee or sublicensee or sublessee, in the property subject to any lease, license or sublicense or concession agreement permitted by this Agreement;

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provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

“Permitted IP Transfer” means one or more sales of intellectual property after the Effective Date by the Borrower or any Domestic Subsidiary to a Foreign Subsidiary; provided that (a) any such sale is made solely for cash consideration paid by the acquiring Foreign Subsidiary to the Borrower or such Domestic Subsidiary, as the case may be, at the time of transfer in an amount not less than the fair market value of the intellectual property transferred, (b) no Liens (other than Permitted Encumbrances and Liens under the Security Documents) shall exist on any such transferred intellectual property at the time of its transfer, (c) the aggregate, cumulative fair market value of all such transferred intellectual property shall not exceed $50,000,000 and (d) the acquiring Foreign Subsidiary shall be (i) a Subsidiary at least 65% of the outstanding voting Equity Interests, and all other Equity Interests, of which shall have in fact been pledged pursuant to the Collateral Agreement or, where the Administrative Agent shall have so reasonably requested in accordance with the Collateral and Guarantee Requirement, a Foreign Pledge Agreement, or (ii) a subsidiary of a Foreign Subsidiary of the type described in the preceding clause (i).

“Permitted Investments” means:

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

(b) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within three years from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s;

(c) senior corporate debt obligations of an issuer organized under the laws of the United States or any state thereof that are rated BBB or better by S&P or Baa2 or better by Moody’s that mature not more than three years after the date of acquisition thereof and that are actively traded in a secondary market, provided that obligations described in this clause (c) that are rated BBB by S&P or Baa2 by Moody’s shall not at any time comprise more than 10% of all Permitted Investments held by Holdings, the Borrower and the Subsidiaries;

(d) investments in commercial paper maturing within one year after the date of acquisition thereof and having, at such date of acquisition, a credit rating of at least A-1 (or the equivalent thereof) from S&P or at least P-1 (or the equivalent thereof) from Moody’s;

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(e) investments in certificates of deposit, banker’s acceptances and demand or time deposits, in each case maturing within 180 days from the date of acquisition thereof, issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000;

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

(g) money market funds that (i) comply with the criteria set forth in Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000;

(h) in the case of any Foreign Subsidiary, other short-term investments that are analogous to the foregoing, are of comparable credit quality and are customarily used by companies in the jurisdiction of such Foreign Subsidiary for cash management purposes; and

(i) auction rate securities held as of the Effective Date;

provided, however, that the weighted average life to maturity of all Permitted Investments described in the preceding clauses (a), (b), (c), (d), (e) and (h) (to the extent relating to Permitted Investments of the type described in the preceding clauses (a), (b) and (e)) held by Holdings, the Borrower and the Subsidiaries at any time shall not exceed one year.

“Permitted Subordinated Indebtedness” means Indebtedness of the Borrower the payment of which is subordinated to the Borrower’s obligations in respect of the Loan Documents Obligations on market terms reasonably acceptable to, and approved in writing by, the Administrative Agent, and which Indebtedness (a) is unsecured, (b) is not Guaranteed by any Subsidiary other than by Subsidiary Loan Parties on an unsecured and subordinated basis on market terms reasonably acceptable to, and approved in writing by, the Administrative Agent, and (c) does not mature or require any amortization payment to be made prior to the date that is 91 days after the Maturity Date.

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

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA sponsored, maintained or contributed by Holdings or any ERISA Affiliate.

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“Platform” has the meaning assigned to such term in Section 9.16(b).

“Prepayment Event” means:

(a) any sale, transfer, lease or other disposition (including pursuant to a Sale/Leaseback Transaction or by way of merger or consolidation), or an exclusive license, of any asset of Holdings, the Borrower or any Subsidiary, including any sale or issuance to a Person other than Holdings, the Borrower or any Subsidiary of Equity Interests in a Subsidiary, other than (i) dispositions described in clauses (a) through (g), (i) and (j) of Section 6.05 and (ii) other dispositions resulting in aggregate Net Proceeds not exceeding $100,000,000 during any fiscal year of Holdings;

(b) any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any asset of Holdings, the Borrower or any Subsidiary resulting in aggregate Net Proceeds of $100,000,000 or more; or

(c) the incurrence by Holdings, the Borrower or any Subsidiary of any Indebtedness, other than any Indebtedness permitted to be incurred by Section 6.01.

“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. Each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“Private Side Lender Representatives” means, with respect to any Lender, representatives of such Lender that are not Public Side Lender Representatives.

“Public Side Lender Representatives” means, with respect to any Lender, representatives of such Lender that do not wish to receive MNPI.

“Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender and (c) the Issuing Bank.

“Reference Rate” means, for any day, in the case of a loan to which a LIBOR “floor” applies, the Adjusted LIBO Rate as of such day for a Eurocurrency Borrowing with an Interest Period of three months’ duration.

“Refinancing Indebtedness” means, in respect of any Indebtedness (the “Original Indebtedness”), any Indebtedness that extends, renews or refinances such Original Indebtedness (or any Refinancing Indebtedness in respect thereof); provided that (a) the principal amount of such Refinancing Indebtedness shall not exceed the principal amount of such Original Indebtedness except by an amount no greater than accrued and

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unpaid interest with respect to such Original Indebtedness, applicable prepayment premium with respect to such Original Indebtedness and reasonable fees, and expenses relating to such extension, renewal or refinancing; (b) the final maturity of such Refinancing Indebtedness shall not be earlier, and the weighted average life to maturity of such Refinancing Indebtedness shall not be shorter, than that of such Original Indebtedness; (c) such Refinancing Indebtedness shall not be required to be repaid, prepaid, redeemed, repurchased or defeased, whether on one or more fixed dates, upon the occurrence of one or more events or at the option of any holder thereof (except, in each case, upon the occurrence of an event of default or a change in control or as and to the extent such repayment, prepayment, redemption, repurchase or defeasance would have been required pursuant to the terms of such Original Indebtedness) prior to the earlier of (i) the maturity of such Original Indebtedness and (ii) the date 91 days after the Maturity Date; (d) such Refinancing Indebtedness shall not be issued or Guaranteed by Holdings, the Borrower or any Subsidiary that was not the issuer of, or a guarantor of, such Original Indebtedness; (e) if such Original Indebtedness was subordinated to the Loan Documents Obligations, such Refinancing Indebtedness shall be subordinated to the Loan Documents Obligations on terms not less favorable in any material respect to the Lenders; and (f) such Refinancing Indebtedness shall not be secured by any Lien on any asset other than the assets that secured such Original Indebtedness (or would have been required to secure such Original Indebtedness pursuant to the terms thereof) or, in the event Liens securing such Original Indebtedness shall have been contractually subordinated to any Lien securing the Loan Documents Obligations, by any Lien that shall not have been contractually subordinated to at least the same extent.

“Register” has the meaning set forth in Section 9.04(b).

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the directors, officers, partners, trustees, employees, agents and advisors of such Person and of such Person’s Affiliates.

“Release” means any spill, emission, leak, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the surface or subsurface environment or within, upon or underneath any building, structure, facility or fixture.

“Required Lenders” means, at any time, Lenders having Revolving Exposures and unused Commitments representing more than 50% of the sum of the Aggregate Revolving Exposure and unused Commitments at such time.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in Holdings, the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancelation or termination of, or any other return of capital with respect to, any Equity Interests in Holdings, the Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in Holdings, the Borrower or any Subsidiary; provided that, for the avoidance of doubt, “Restricted Payments” does not include, in connection with the vesting of restricted stock held by any current or former employee of Holdings or any Subsidiary, any shares of such restricted stock surrendered to cover taxes owed by such employee due to the vesting of restricted stock.

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“Revolving Borrowing” means a Borrowing of Revolving Loans.

“Revolving Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans and such Lender’s LC Exposure and Swingline Exposure at such time.

“Revolving Lender” means a Lender with a Commitment or Revolving Exposure.

“Revolving Loan” means a Loan made pursuant to Section 2.01.

“Sale/Leaseback Transaction” means an arrangement relating to property owned by Holdings, the Borrower or any Subsidiary whereby Holdings, the Borrower or such Subsidiary sells or transfers such property to any Person and Holdings, the Borrower or any Subsidiary leases such property, or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, from such Person or its Affiliates.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.

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

“Securities Act” means the United States Securities Act of 1933.

“Secured Obligations” has the meaning set forth in the Collateral Agreement.

“Secured Parties” has the meaning set forth in the Collateral Agreement.

“Security Documents” means the Collateral Agreement; the Foreign Pledge Agreements and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.03 or 5.12 to secure the Secured Obligations.

“Specified Foreign Subsidiary” has the meaning assigned to such term in Section 6.04(o).

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves), expressed as a decimal, established by the Board of Governors to which the Administrative Agent is subject for eurocurrency

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funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board of Governors). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“Subordinated Indebtedness” of any Person means any Indebtedness of such Person that is subordinated in right of payment to any other Indebtedness of such Person.

“subsidiary” means, with respect to any Person (the “parent”) at any date, (a) any Person the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date and (b) any other Person of which Equity Interests representing more than 50% of the equity value or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

“Subsidiary” means any subsidiary of the Borrower.

“Subsidiary Loan Party” means each Domestic Subsidiary that is a party to the Collateral Agreement.

“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the total Swingline Exposure at such time.

“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of Swingline Loans hereunder.

“Swingline Loan” means a Loan made pursuant to Section 2.04.

“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.

“Total Indebtedness” means, as of any date, the sum of the aggregate principal amount of Indebtedness of Holdings, the Borrower and the Subsidiaries outstanding as of such date, in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP (but without giving effect to any election to value any Indebtedness at “fair value”, as described in Section 1.04(a), or any other accounting principle that results in the amount of any such Indebtedness (other than zero coupon Indebtedness) as reflected on such balance sheet to be below the stated principal amount of such Indebtedness).

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“Transactions” means the execution, delivery and performance by each Loan Party of the Loan Documents to which it is to be a party, the borrowing of the Loans, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.

“Transferred Foreign Subsidiary” has the meaning set forth in Section 6.04(o).

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

“U.S.-Based Foreign Subsidiary” means any Subsidiary incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia meeting the criteria set forth in clause (ii) or (iii) of the definition of the term “Foreign Subsidiary”.

“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.

“U.S. Tax Certificate” has the meaning assigned to such term in Section 2.16(f)(ii)(D)(2).

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

“Weighted Average Yield” means, with respect to any loan as of any date, the weighted average yield to stated maturity of such loan based on the interest rate or rates applicable thereto and giving effect to all upfront or similar fees or original issue discount payable to the lenders making such commitments or advancing such loan and to any interest rate “floor” applicable thereto, but excluding any arrangement, commitment, structuring and underwriting fees paid or payable to the arrangers (or similar titles) or their affiliates, in each case in their capacities as such, in connection with such loan, provided that (a) for purposes of calculating the Weighted Average Yield of any Incremental Commitment or Revolving Loan thereunder, original issue discount shall be equated to interest based on an assumed four-year life to maturity and (b) for purposes of calculating the Weighted Average Yield of any loan to which an interest rate “floor” applies in connection with Section 2.20, to the extent that the Reference Rate for the effective date of the applicable Incremental Facility Agreement is less than the interest rate “floor” applicable to such loan, the amount of such difference shall be added to the interest rate assumed for such loan for such date in the calculation of such Weighted Average Yield.

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“wholly-owned”, when used in reference to a subsidiary of any Person, means that all the Equity Interests in such subsidiary (other than directors’ qualifying shares and other nominal amounts of Equity Interests that are required to be held by other Persons under applicable law) are owned, beneficially and of record, by such Person, another wholly-owned subsidiary of such Person or any combination thereof.

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

“Withholding Agent” means any Loan Party and the Administrative Agent.

SECTION 1.02. Types of Loans and Borrowings. For purposes of this Agreement, Loans and Borrowings may be classified and referred to by Type (e.g., a “Eurocurrency Loan” or “Eurocurrency Borrowing”).

SECTION 1.03. 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”. The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all real and personal, tangible and intangible assets and properties, including cash, securities, accounts and contract rights. The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply), and all judgments, orders, writs and decrees, of all Governmental Authorities. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document (including this Agreement and the other Loan Documents) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions on assignment set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) 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 and (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement.

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SECTION 1.04. Accounting Terms; GAAP; Pro Forma Calculations. (a) Except as otherwise expressly provided herein, all terms of an accounting or financial nature used herein shall be construed in accordance with GAAP as in effect from time to time; provided that (i) if Holdings or the Borrower, by notice to the Administrative Agent, shall request an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent or the Required Lenders, by notice to Holdings and the Borrower, shall request an amendment to any provision hereof for such purpose, it being agreed that Holdings and the Borrower shall not be required to pay any amendment fee to the Lenders in connection with such amendment), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith and (ii) notwithstanding any other provision contained herein, (A) all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159, The Fair Value Option for Financial Assets and Financial Liabilities, or any successor thereto (including pursuant to the Accounting Standards Codification), to value any Indebtedness of Holdings, the Borrower or any Subsidiary at “fair value”, as defined therein and (B) all computations of amounts of Indebtedness in respect of convertible or equity-linked securities shall be reflected as the stated principal amount of such Indebtedness.

(b) All pro forma computations required to be made hereunder giving effect to any Material Acquisition, Material Disposition, Permitted Acquisition or other transaction (i) shall be calculated after giving pro forma effect thereto (and, in the case of any pro forma computations made hereunder to determine whether such Material Acquisition, Material Disposition, Permitted Acquisition or other transaction is permitted to be consummated hereunder, to any other such transaction consummated since the first day of the period covered by any component of such pro forma computation and on or prior to the date of such computation) as if such transaction had occurred on the first day of the period of four consecutive fiscal quarters ending with the most recent fiscal quarter for which financial statements shall have been delivered pursuant to Section 5.01(a) or 5.01(b) (or, prior to the delivery of any such financial statements, ending with the last fiscal quarter included in the pro forma financial statements referred to in Section 3.04(b)), and, to the extent applicable, to the historical earnings and cash flows associated with the assets acquired or disposed of and any related incurrence or reduction of Indebtedness, all in accordance with Article 11 of Regulation S-X under the Securities Act, and (ii) in the case of any acquisition (including pursuant to a merger or consolidation), may reflect (for historical periods and the period of 365 days following consummation of any such acquisition) pro forma adjustments for cost savings that are reasonably expected to be realized within 365 days following such acquisition, to the extent that such cost savings would be permitted to be reflected in pro forma financial statements prepared in accordance with Article 11 of Regulation S-X under the Securities Act; provided that if any cost savings included in any pro forma calculations based on the expectation that such cost savings will be realized within 365 days following such acquisition shall at any time cease to be reasonably expected to be so realized (or are in fact not so realized) within such period, then on and after such time pro forma calculations required to be made hereunder shall not reflect such cost savings. If any

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Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Hedging Agreement applicable to such Indebtedness if such Hedging Agreement has a remaining term in excess of 12 months).

(c) For purposes of determining compliance with the covenants set forth in Sections 6.11 and 6.12 during any period during which a Material Acquisition or Material Disposition has occurred, Consolidated EBITDA and Consolidated Cash Interest Expense will be calculated for such period giving effect to such Material Acquisition or Material Disposition on a pro forma basis in accordance with paragraph (b) of this Section.

ARTICLE II

The Credits

SECTION 2.01. Commitments. Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in such Lender’s Revolving Exposure exceeding such Lender’s Commitment or the Aggregate Revolving Exposure exceeding the Aggregate Commitment. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Type made by the Lenders ratably in accordance with their individual Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

(b) Subject to Section 2.13, each Revolving Borrowing shall be comprised entirely of ABR Loans or Eurocurrency Loans as the Borrower may request in accordance herewith; provided that all Borrowings made on the Effective Date must be made as ABR Borrowings unless the Borrower shall have given the notice required for a Eurocurrency Borrowing under Section 2.03(a). Each Swingline Loan shall be an ABR Loan. Each Lender at its option may make any Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

(c) At the commencement of each Interest Period for any Eurocurrency Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000; provided that a Eurocurrency Borrowing that results from a continuation of an outstanding Eurocurrency Borrowing may be in an

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aggregate amount that is equal to such outstanding Borrowing. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000; provided that an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the Aggregate Commitment or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(f). Each Swingline Loan shall be in an amount that is an integral multiple of $500,000 and not less than $1,000,000. Borrowings of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of 10 Eurocurrency Borrowings outstanding.

(d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert to or continue, any Eurodollar Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

SECTION 2.03. Requests for Borrowings. To request a Revolving Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurocurrency Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of the proposed Borrowing (or, in the case of any Eurocurrency Borrowing to be made on the Effective Date, such shorter period of time as may be agreed to by the Administrative Agent) or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, on the day of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of an executed written Borrowing Request. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:

(i) the aggregate amount of such Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;

(iv) in the case of a Eurocurrency Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and

(v) the location and number of the account of the Borrower to which funds are to be disbursed or, in the case of any ABR Revolving Borrowing requested to finance the reimbursement of an LC Disbursement as provided in Section 2.05(f), the identity of the Issuing Bank that made such LC Disbursement.

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurocurrency Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

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SECTION 2.04. Swingline Loans. (a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of the outstanding Swingline Loans exceeding $10,000,000 or (ii) the Aggregate Revolving Exposure exceeding the Aggregate Commitment; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

(b) To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone not later than 12:00 noon, New York City time, on the day of the proposed Swingline Loan. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of an executed written Borrowing Request. Each such telephonic and written Borrowing Request shall specify the requested date (which shall be a Business Day) and the amount of the requested Swingline Loan and the location and number of the account of the Borrower to which funds are to be disbursed or, in the case of any Swingline Loan requested to finance the reimbursement of an LC Disbursement as provided in Section 2.05(f), the identity of the Issuing Bank that has made such LC Disbursement. Promptly following the receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise the Swingline Lender of the details thereof. The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a wire transfer to the account specified in such Borrowing Request or to the applicable Issuing Bank, as the case may be, by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.

(c) The Swingline Lender may by written notice given to the Administrative Agent not later than 10:00 a.m., New York City time, on any Business Day require the Revolving Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of the Swingline Loans in which Revolving Lenders will be required to participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Revolving Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender hereby absolutely and unconditionally agrees to pay, upon receipt of notice as provided above, to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender acknowledges and agrees that, in making any Swingline Loan, the Swingline Lender shall be entitled to rely, and shall not incur any liability for relying, upon the representation and warranty of Holdings and the Borrower deemed made pursuant to Section 4.02, unless, at least one Business Day prior to the time such Swingline Loan was made, the Required Lenders shall have notified the Swingline Lender (with a copy to the

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Administrative Agent) in writing that, as a result of one or more events or circumstances described in such notice, one or more of the conditions precedent set forth in Section 4.02(a) or 4.02(b) would not be satisfied if such Swingline Loan were then made (it being understood and agreed that, in the event the Swingline Lender shall have received any such notice, it shall have no obligation to make any Swingline Loan until and unless it shall be satisfied that the events and circumstances described in such notice shall have been cured or otherwise shall have ceased to exist). Each Revolving Lender further acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or any reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Revolving Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders pursuant to this paragraph), and the Administrative Agent shall promptly remit to the Swingline Lender the amounts so received by it from the Revolving Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other Person on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Revolving Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not constitute a Loan and shall not relieve the Borrower of its obligation to repay such Swingline Loan.

SECTION 2.05. Letters of Credit. (a) General. Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit for its own account (including for the benefit of any Subsidiary), denominated in dollars and in a form reasonably acceptable to the Administrative Agent and the applicable Issuing Bank, at any time and from time to time during the Availability Period. Notwithstanding anything contained in any letter of credit application furnished to any Issuing Bank in connection with the issuance of any Letter of Credit, (i) all provisions of such letter of credit application purporting to grant liens in favor of the Issuing Bank to secure obligations in respect of such Letter of Credit shall be disregarded, it being agreed that such obligations shall be secured to the extent provided in this Agreement and in the Security Documents, and (ii) in the event of any inconsistency between the terms and conditions of such letter of credit application and the terms and conditions of this Agreement, the terms and conditions of this Agreement shall control.

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(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit or the amendment, renewal or extension of an outstanding Letter of Credit, the Borrower shall hand deliver or fax (or transmit by electronic communication, if arrangements for doing so have been approved by the recipient) to the applicable Issuing Bank and the Administrative Agent, reasonably in advance of the requested date of issuance, amendment, renewal or extension, a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the requested date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to enable the applicable Issuing Bank to prepare, amend, renew or extend such Letter of Credit. If requested by the applicable Issuing Bank, the Borrower also shall submit a letter of credit application on such Issuing Bank’s standard form in connection with any such request. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon each issuance, amendment, renewal or extension of any Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension, (i) the LC Exposure will not exceed $50,000,000 and (ii) the Aggregate Revolving Exposure will not exceed the Aggregate Commitment. Each Issuing Bank agrees that it shall not permit any issuance, amendment, renewal or extension of a Letter of Credit to occur unless it shall have given to the Administrative Agent written notice thereof required under paragraph (l) of this Section.

(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the Maturity Date; provided that any such Letter of Credit may contain customary automatic renewal provisions agreed upon by the Borrower and the applicable Issuing Bank pursuant to which the expiration date of such Letter of Credit shall automatically be extended for a period of up to 12 months (but not to a date later than the date set forth in clause (ii) above), subject to a right on the part of such Issuing Bank to prevent any such renewal from occurring by giving notice to the beneficiary in advance of any such renewal.

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the applicable Issuing Bank or any Revolving Lender, the Issuing Bank that is the issuer thereof hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Revolving Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of such Issuing Bank, such Revolving Lender’s Applicable Percentage of each LC Disbursement made by such Issuing Bank under such Letter of Credit and not reimbursed by the Borrower on the date due as provided in

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paragraph (f) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or any reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Revolving Lender further acknowledges and agrees that, in issuing, amending, renewing or extending any Letter of Credit, the applicable Issuing Bank shall be entitled to rely, and shall not incur any liability for relying, upon the representation and warranty of Holdings and the Borrower deemed made pursuant to Section 4.02, unless, at least one Business Day prior to the time such Letter of Credit is issued, amended, renewed or extended, the Required Lenders shall have notified the applicable Issuing Bank (with a copy to the Administrative Agent) in writing that, as a result of one or more events or circumstances described in such notice, one or more of the conditions precedent set forth in Section 4.02(a) or 4.02(b) would not be satisfied if such Letter of Credit were then issued, amended, renewed or extended (it being understood and agreed that, in the event any Issuing Bank shall have received any such notice, it shall have no obligation to issue, amend, renew or extend any Letter of Credit until and unless it shall be satisfied that the events and circumstances described in such notice shall have been cured or otherwise shall have ceased to exist).

(e) Disbursements. Each Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit and shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by hand delivery or facsimile) of such demand for payment and whether such Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve such Borrower of its obligation to reimburse such LC Disbursement.

(f) Reimbursements. If an Issuing Bank shall make an LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than (i) if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on any Business Day, then 12:00 noon, New York City time, on such Business Day or (ii) otherwise, 12:00 noon, New York City time, on the Business Day immediately following the day that the Borrower receives such notice; provided that, if the amount of such LC Disbursement is $500,000 or more, the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.04 that such payment be financed with an ABR Revolving Borrowing or a Swingline Loan and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails to reimburse any LC Disbursement by the time specified above, the Administrative Agent shall notify each Revolving Lender of such failure, the payment then due from the Borrower in respect of the applicable LC Disbursement and such Revolving Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to

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the Administrative Agent its Applicable Percentage of the amount then due from the Borrower, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders pursuant to this paragraph), and the Administrative Agent shall promptly remit to the applicable Issuing Bank the amounts so received by it from the Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the applicable Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Revolving Lenders and such Issuing Bank as their interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse an Issuing Bank for an LC Disbursement (other than the funding of an ABR Revolving Borrowing or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.

(g) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (f) of this Section is absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision thereof or hereof, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by an Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this paragraph, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder. None of the Administrative Agent, the Lenders, the Issuing Banks or any of their Related Parties shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit, any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any other act, failure to act or other event or circumstance; provided that the foregoing shall not be construed to excuse any Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by such Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or wilful misconduct on the part of an Issuing Bank (as determined by a court of competent jurisdiction in a final and nonappealable judgment), such Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance

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with the terms of a Letter of Credit, an Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

(h) Interim Interest. If an Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement in full, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (f) of this Section, then Section 2.12(c) shall apply. Interest accrued pursuant to this paragraph shall be paid to the Administrative Agent, for the account of the applicable Issuing Bank, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (f) of this Section to reimburse such Issuing Bank shall be for the account of such Lender to the extent of such payment, and shall be payable on demand or, if no demand has been made, on the date on which the Borrower reimburses the applicable LC Disbursement in full.

(i) Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal to the LC Exposure attributable to Letters of Credit issued for the account of the Borrower as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default described in clause (h) or (i) of Article VII. The Borrower also shall deposit cash collateral in accordance with this paragraph as and to the extent required by Section 2.10(b). Each such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Banks for LC Disbursements for which they have not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure attributable to Letters of Credit issued for the account of the Borrower at such time or, if the maturity of the Loans has been accelerated, be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral

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hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived. If the Borrower is required to provide an amount of cash collateral hereunder pursuant to Section 2.10(b), such amount (to the extent not applied as aforesaid) shall be returned to the Borrower as and to the extent that, after giving effect to such return, the Aggregate Revolving Exposure would not exceed the Aggregate Commitment and no Default shall have occurred and be continuing.

(j) Designation of Additional Issuing Banks. The Borrower may, at any time and from time to time, with the consent of the Administrative Agent (which consent shall not be unreasonably withheld), designate as additional Issuing Banks one or more Revolving Lenders that agree to serve in such capacity as provided below. The acceptance by a Revolving Lender of an appointment as an Issuing Bank hereunder shall be evidenced by an agreement, which shall be in form and substance reasonably satisfactory to the Administrative Agent, executed by the Borrower, the Administrative Agent and such designated Revolving Lender and, from and after the effective date of such agreement, (i) such Revolving Lender shall have all the rights and obligations of an Issuing Bank under this Agreement and (ii) references herein to the term “Issuing Bank” shall be deemed to include such Revolving Lender in its capacity as an issuer of Letters of Credit hereunder.

(k) Termination of an Issuing Bank. The Borrower may terminate the appointment of any Issuing Bank as an “Issuing Bank” hereunder by providing a written notice thereof to such Issuing Bank, with a copy to the Administrative Agent. Any such termination shall become effective upon the earlier of (i) such Issuing Bank acknowledging receipt of such notice and (ii) the 10th Business Day following the date of the delivery thereof; provided that no such termination shall become effective until and unless the LC Exposure attributable to Letters of Credit issued by such Issuing Bank (or its Affiliates) shall have been reduced to zero. At the time any such termination shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the terminated Issuing Bank pursuant to Section 2.11(b). Notwithstanding the effectiveness of any such termination, the terminated Issuing Bank shall remain a party hereto and shall continue to have all the rights of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such termination, but shall not issue any additional Letters of Credit.

(l) Issuing Bank Reports to the Administrative Agent. Unless otherwise agreed by the Administrative Agent, each Issuing Bank shall, in addition to its notification obligations set forth elsewhere in this Section, report in writing to the Administrative Agent (i) periodic activity (for such period or recurrent periods as shall be requested by the Administrative Agent) in respect of Letters of Credit issued by such Issuing Bank, including all issuances, extensions, amendments and renewals, all expirations and cancelations and all disbursements and reimbursements, (ii) reasonably prior to the time that such Issuing Bank issues, amends, renews or extends any Letter of Credit, the date of such issuance, amendment, renewal or extension, and the face amount of the Letters of Credit issued, amended, renewed or extended by it and outstanding after

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giving effect to such issuance, amendment, renewal or extension (and whether the amounts thereof shall have changed), (iii) on each Business Day on which such Issuing Bank makes any LC Disbursement, the date and amount of such LC Disbursement, (iv) on any Business Day on which the Borrower fails to reimburse an LC Disbursement required to be reimbursed to such Issuing Bank on such day, the date of such failure and the amount of such LC Disbursement and (v) on any other Business Day, such other information as the Administrative Agent shall reasonably request as to the Letters of Credit issued by such Issuing Bank.

(m) LC Exposure Determination. For all purposes of this Agreement, the amount of a Letter of Credit that, by its terms or the terms of any document related thereto, provides for one or more automatic increases in the stated amount thereof shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at the time of determination.

SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon, New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as provided in Section 2.04. The Administrative Agent will make such Loans available to the Borrower by promptly remitting the amounts so received, in like funds, to an account of the Borrower or, in the case of ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(f), to the Issuing Bank specified by the Borrower in the applicable Borrowing Request.

(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance on such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of a payment to be made by the Borrower, the interest rate applicable to ABR Revolving Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

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SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing initially shall be of the Type and, in the case of a Eurocurrency Borrowing, shall have an initial Interest Period as specified in the applicable Borrowing Request or as otherwise provided in Section 2.03. Thereafter, the Borrower may elect to convert such Borrowing to a Borrowing of a different Type or to continue such Borrowing and, in the case of a Eurocurrency Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Borrowings, which may not be converted or continued.

(b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Revolving Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of an executed written Interest Election Request. Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and

(iv) if the resulting Borrowing is to be a Eurocurrency Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(c) Promptly following receipt of an Interest Election Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(d) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurocurrency Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing.

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Notwithstanding any contrary provision hereof, if an Event of Default under clause (h) or (i) of Article VII has occurred and is continuing, or if any other Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, has notified the Borrower of the election to give effect to this sentence on account of such other Event of Default, then, in each such case, so long as such Event of Default is continuing, (i) no outstanding Borrowing may be converted to or continued as a Eurocurrency Borrowing and (ii) unless repaid, each Eurocurrency Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.08. Termination and Reduction of Commitments. (a) Unless previously terminated, the Commitments shall terminate on the Maturity Date.

(b) The Borrower may at any time terminate, or from time to time permanently reduce, the Commitments; provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $20,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans or Swingline Loans in accordance with Section 2.11, the Aggregate Revolving Exposure would exceed the Aggregate Commitment.

(c) In the event and on each occasion that any Net Proceeds are received by or on behalf of Holdings, the Borrower or any Subsidiary in respect of any Prepayment Event, the Borrower shall, on the day such Net Proceeds are received (or, in the case of a Prepayment Event described in clause (a) or (b) of the definition of the term “Prepayment Event”, within three Business Days after such Net Proceeds are received), notify the Administrative Agent of the amount and receipt of such Net Proceeds, and on the date of such notice the Commitments shall be automatically and permanently reduced by an amount equal to the amount of such Net Proceeds; provided that, in the case of any event described in clause (a) or (b) of the definition of the term “Prepayment Event”, if the Borrower shall, prior to the date of such required notice, deliver to the Administrative Agent a certificate of a Financial Officer of the Borrower to the effect that the Borrower intends to cause the Net Proceeds from such event (or a portion thereof specified in such certificate) to be applied within 365 days after receipt of such Net Proceeds to acquire assets used or useful in the business of the Borrower or the Subsidiaries, and certifying that no Event of Default has occurred and is continuing, then no reduction of the Commitments shall occur pursuant to this paragraph in respect of the Net Proceeds of such event (or the portion of such Net Proceeds specified in such certificate, if applicable) except to the extent of any such Net Proceeds that have not been so applied by the end of such 365-day period (or within a period of 180 days thereafter if by the end of such initial 365-day period the Borrower or one or more of the Subsidiaries shall have entered into an agreement with a third party to acquire such assets with such Net Proceeds), at which time the Commitments shall be automatically and permanently reduced in an amount equal to the Net Proceeds that have not been so applied; provided further that (A) to the extent any such Net Proceeds shall be received in respect of assets owned by a Loan Party, such Net Proceeds may be reinvested only in assets owned by a Loan Party or, in the case of a Permitted Acquisition, by any Person that shall become a Subsidiary Loan Party upon the consummation thereof, (B) to the extent any such Net

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Proceeds shall be received in respect of assets owned by a Subsidiary that is not a Loan Party but the Equity Interests in which constitute Collateral, such Net Proceeds may be reinvested only in assets owned by a Loan Party (including Equity Interests in Foreign Subsidiaries) or assets owned by a Subsidiary the Equity Interests in which constitute Collateral and (C) the Borrower shall not be permitted to make elections pursuant to the immediately preceding proviso with respect to Net Proceeds in excess of $100,000,000 in the aggregate in any fiscal year of Holdings.

(d) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying the effective date thereof. Promptly following receipt of any notice from the Borrower pursuant to paragraph (c) of this Section or the immediately preceding sentence, the Administrative Agent shall advise the Revolving Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination or reduction of the Commitments under paragraph (b) of this Section may state that such notice is conditioned upon the occurrence of one or more events specified therein, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Revolving Lenders in accordance with their individual Commitments.

SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of the Borrower the then unpaid principal amount of each Revolving Loan of the Borrower on the Maturity Date, and the Borrower hereby unconditionally promises to pay to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least two Business Days after such Swingline Loan is made; provided that on each date that a Revolving Borrowing is made, the Borrower shall repay all Swingline Loans that were outstanding on the date such Borrowing was requested.

(b) The records maintained by the Administrative Agent and the Lenders shall be prima facie evidence of the existence and amounts of the obligations of the Borrower in respect of the Loans, LC Disbursements, interest and fees due or accrued hereunder; provided that the failure of the Administrative Agent or any Lender to maintain such records or any error therein shall not in any manner affect the obligation of the Borrower to pay any amounts due hereunder in accordance with the terms of this Agreement.

(c) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

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SECTION 2.10. Prepayment of Loans. (a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to the requirements of this Section.

(b) In the event and on each occasion that the Aggregate Revolving Exposure exceeds the Aggregate Commitment, the Borrower shall prepay Revolving Borrowings or Swingline Borrowings (or, if no such Borrowings are outstanding, deposit cash collateral in an account with the Administrative Agent in accordance with Section 2.05(i)) in an aggregate amount equal to such excess.

(c) The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by hand delivery or facsimile) of any optional prepayment and, to the extent practicable, any mandatory prepayment hereunder (i) in the case of prepayment of a Eurocurrency Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 12:00 noon, New York City time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date, the Borrowing or Borrowings (or portion thereof) to be prepaid, the principal amount of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment; provided that if a notice of optional prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.08, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.08. Promptly following receipt of any such notice (other than a notice relating solely to Swingline Loans), the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.12.

SECTION 2.11. Fees. (a) The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Lender a commitment fee, which shall accrue at a rate of 0.35% per annum on the daily unused amount of the Commitment of such Lender during the period from and including the date hereof to but excluding the date on which such Commitment terminates. Accrued commitment fees shall be payable in arrears on the last day of March, June, September and December of each year and on the date on which the Commitments terminate, commencing on the first such date to occur after the date hereof. All commitment fees shall be computed on the

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basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). For purposes of computing commitment fees, a Commitment of a Revolving Lender shall be deemed to be used to the extent of the outstanding Revolving Loans and LC Exposure of such Revolving Lender (and the Swingline Exposure of such Revolving Lender shall be disregarded for such purpose).

(b) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the Applicable Rate used to determine the interest rate applicable to Eurocurrency Revolving Loans on the daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily amount of the LC Exposure attributable to Letters of Credit issued by such Issuing Bank (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any such LC Exposure, as well as such Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third Business Day following such last day, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand. Any other fees payable to an Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.

(d) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to an Issuing Bank, in the case of fees payable to it) for distribution, in the case of facility fees and participation fees, to the Revolving Lenders entitled thereto. Fees paid shall not be refundable under any circumstances.

SECTION 2.12. Interest. (a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.

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(b) The Loans comprising each Eurocurrency Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% per annum plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2% per annum plus the rate applicable to ABR Revolving Loans as provided in paragraph (a) of this Section.

(d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of a Eurocurrency Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(e) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

SECTION 2.13. Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurocurrency Borrowing:

(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or

(b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Eurocurrency Borrowing for such Interest Period;

then the Administrative Agent shall give notice (which may be telephonic) thereof to the Borrower and the Lenders as promptly as practicable and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any

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Borrowing to, or continuation of any Borrowing as, a Eurocurrency Borrowing shall be ineffective, and such Borrowing shall be continued as an ABR Borrowing, and (ii) any Borrowing Request for a Eurocurrency Borrowing shall be treated as a request for an ABR Borrowing.

SECTION 2.14. Increased Costs. (a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or Issuing Bank (except any such reserve requirement reflected in the Adjusted LIBO Rate);

(ii) impose on any Lender or Issuing Bank or the London interbank market any other condition, cost or expense affecting this Agreement or Eurocurrency Loans made by such Lender or any Letter of Credit or participation therein; or

(iii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes and (B) Other Connection Taxes on gross or net income, profits or revenue (including value-added or similar Taxes)) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making or maintaining any Eurocurrency Loan (or of maintaining its obligation to make any such Loan), to increase the cost to such Lender, Issuing Bank or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or issue any Letter of Credit) or to reduce the amount of any sum received or receivable by such Lender, Issuing Bank or such other Recipient hereunder (whether of principal, interest or otherwise), then, from time to time upon request of such Lender or Issuing Bank, the applicable Borrower will pay to such Lender, Issuing Bank or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, Issuing Bank or such other Recipient, as the case may be, for such additional costs or expenses incurred or reduction suffered.

(b) If any Lender or Issuing Bank determines that any Change in Law regarding capital requirements has had or would have the effect of reducing the rate of return on such Lender’s or Issuing Bank’s capital or on the capital of such Lender’s or Issuing Bank’s holding company, if any, as a consequence of this Agreement, the Commitments of or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a level below that which such Lender or Issuing Bank or such Lender’s or Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or Issuing Bank’s policies and the policies of such Lender’s or Issuing Bank’s holding company with respect to capital adequacy), then, from time to time upon request of such Lender or Issuing Bank, the Borrower will pay to such Lender or Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or Issuing Bank or such Lender’s or Issuing Bank’s holding company for any such reduction suffered.

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(c) A certificate of a Lender or Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender or Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

(d) Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or Issuing Bank pursuant to this Section for any increased costs or expenses incurred or reductions suffered more than 180 days prior to the date that such Lender or Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or expenses or reductions and of such Lender’s or Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or expenses or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.15. Break Funding Payments. In the event of (a) the payment of any principal of any Eurocurrency Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert or continue any Eurocurrency Loan on the date specified in any notice delivered pursuant hereto, (d) the failure to prepay any Eurocurrency Loan on the date specified therefor in any notice of prepayment given by the Borrower (whether or not such notice may be revoked in accordance with the terms hereof) or (e) the assignment of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.18, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. Such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan (but not including the Applicable Rate applicable thereto), for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the London interbank market. A certificate of any Lender delivered to the Borrower and setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

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SECTION 2.16. Taxes. (a) Withholding of Taxes; Gross-Up. 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 Recipient receives the amount it would have received had no such withholding been made.

(b) Payment of Other Taxes by the Borrower. The Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) Evidence of Payments. As soon as practicable after any payment of Indemnified 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) Indemnification by the Loan Parties. The Loan Parties shall jointly and severally indemnify each Recipient for any Indemnified Taxes that are paid or payable by such Recipient in connection with any Loan Document (including amounts paid or payable under this Section 2.16(d)) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The indemnity under this Section 2.16(d) shall be paid within 10 days after the Recipient delivers to any Loan Party a certificate stating the amount and nature of any Indemnified Taxes so paid or payable by such Recipient and describing the basis for the indemnification claim. Such certificate shall be conclusive of the amount so paid or payable absent manifest error. Such Recipient shall deliver a copy of such certificate to the Administrative Agent.

(e) Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes, only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified 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 2.16(e) shall be paid within 10 days after the Administrative

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Agent delivers to the applicable Lender a certificate stating the amount and nature of Taxes so paid or payable by the Administrative Agent and describing the basis for the indemnification claim. Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

(f) Status of Lenders. (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 2.16(f)(ii)(A) through (E) below) shall not be required if in the Lender’s reasonable 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 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 the Borrower or the Administrative Agent, any Lender shall update any form or certification previously delivered pursuant to this Section 2.16(f). If any form or certification previously delivered pursuant to this Section 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 the 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, each Lender shall, if it is legally eligible to do so, deliver to the Borrower and the Administrative Agent (in such number of copies reasonably requested by the 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:

(A) in the case of a Lender that is a U.S. Person, IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;

(B) in the case of a Non-U.S. Lender 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 tax treaty and (2) with respect to any other applicable payments under this Agreement, 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 tax treaty;

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(C) in the case of a Non-U.S. Lender for whom payments under this Agreement constitute income that is effectively connected with such Lender’s conduct of a trade or business in the United States, IRS Form W-8ECI;

(D) in the case of a Non-U.S. Lender 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 C (a “U.S. Tax Certificate”) to the effect that such Lender 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;

(E) 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 (A), (B), (C), (D) and (F) 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 Lender; provided, however, that if the Lender 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 Lender may provide a U.S. Tax Certificate on behalf of such partners; or

(F) 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

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Withholding Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.16(f)(iii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(g) Treatment of Certain Refunds. 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 2.16 (including additional amounts paid pursuant to this Section 2.16), 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 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such indemnified party that are directly related to the receipt of such refund 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 indemnified 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 2.16(g), in no event will any indemnified party be required to pay any amount to any indemnifying party pursuant to this Section 2.16(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 2.16(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.

(h) Issuing Bank. For purposes of Section 2.16(e) and (f), the term “Lender” includes any Issuing Bank.

SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Setoffs. (a) The Borrower shall make each payment required to be made by it hereunder or under any other Loan Document prior to the time expressly required hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 12:00 noon, New York City time), on the date when due, in immediately available funds, without any defense, setoff, recoupment or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to such account as may be specified by the Administrative Agent, except that payments required to be made directly to any Issuing Bank or the Swingline Lender shall be so made, payments pursuant to Sections 2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein. The Administrative Agent shall distribute any such payment received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment under any Loan Document

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shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments under each Loan Document shall be made in dollars.

(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied towards payment of the amounts then due hereunder ratably among the parties entitled thereto, in accordance with the amounts then due to such parties.

(c) If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the amount of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amounts of principal of and accrued interest on their Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements or Swingline Loans to any assignee or participant, other than to Holdings, the Borrower, any Subsidiary or any other Affiliate of any of the foregoing (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

(d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or Issuing Banks hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or Issuing Banks, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or Issuing Banks, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

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(e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(c), 2.05(d) or (f), 2.06(b), 2.17(d) or 9.03(c), 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 Issuing Bank to satisfy such Lender’s 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.

SECTION 2.18. Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests compensation under Section 2.14, or if any Loan Party is required to pay any additional amount to any Lender or to any Governmental Authority for the account of any Lender pursuant to Section 2.16, then such Lender shall use commercially reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign and delegate its rights and obligations hereunder to another of its offices, branches or Affiliates if, in the judgment of such Lender, such designation or assignment and delegation (i) would eliminate or reduce amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment and delegation.

(b) If (i) any Lender requests compensation under Section 2.14, (ii) any Loan Party is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, (iii) any Lender becomes a Defaulting Lender or (iv) any Lender has failed to consent to a proposed amendment, waiver, discharge or termination that under Section 9.02 requires the consent of all the Lenders (or all the affected Lenders) and with respect to which the Required Lenders shall have granted their consent, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement and the other Loan Documents (or, in the case of any such assignment and delegation resulting from a failure to provide a consent, all its interests, rights and obligations under this Agreement and the other Loan Documents as a Lender) to an Eligible Assignee that shall assume such obligations (which may be another Lender, if a Lender accepts such assignment and delegation); provided that (A) the Borrower shall have received the prior written consent of the Administrative Agent (and, if a Commitment is being assigned, each Issuing Bank), which consent shall not unreasonably be withheld, (B) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans

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and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee or the Borrower, (C) in the case of any such assignment and delegation resulting from a claim for compensation under Section 2.14 or payments required to be made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or payments and (D) in the case of any such assignment and delegation resulting from the failure to provide a consent, the assignee shall have given such consent and, as a result of such assignment and delegation and any contemporaneous assignments and delegations and consents, the applicable amendment, waiver, discharge or termination can be effected. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver or consent by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation have ceased to apply. Each party hereto agrees that an assignment and delegation required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee and that the Lender required to make such assignment and delegation need not be a party thereto.

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 Commitment of such Defaulting Lender pursuant to Section 2.11(a);

(b) the Commitment and Revolving Exposure 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 9.02); 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 LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

(i) all or any part of the Swingline Exposure and LC Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages, but only to the extent the sum of all non-Defaulting Lenders’ Revolving Exposures plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting Lenders’ 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

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the Issuing Bank only the Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.05(i) for so long as such LC Exposure is outstanding;

(iii) if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC 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) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Sections 2.11(a) and 2.11(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and

(v) if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Bank or any other Lender hereunder, all facility fees that otherwise would have been payable to such Defaulting Lender (solely with respect to the portion of such Defaulting Lender’s Commitment that was utilized by such LC Exposure) and letter of credit fees payable under Section 2.11(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until and to the extent that such LC 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 Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure and the Defaulting Lender’s then outstanding LC Exposure will be 100% covered by the 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 Swingline 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 any Lender or a Parent 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 Issuing Bank 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 Swingline Loan and the Issuing Bank shall not be required to issue, amend or

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increase any Letter of Credit, unless the Swingline Lender or the Issuing Bank, as the case may be, shall have entered into arrangements with the applicable Borrower or such Lender, satisfactory to the Swingline Lender or the Issuing Bank, as the case may be, to defease any risk to it in respect of such Lender hereunder.

In the event that the Administrative Agent, the Borrower, the Swingline Lender and the Issuing Bank 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 LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage (without taking such Lender into account as a “Defaulting Lender” for purposes of the proviso in the definition of such term).

SECTION 2.20. Incremental Commitments. (a) The Borrower may on one or more occasions, by written notice to the Administrative Agent, request prior to the Maturity Date, the establishment of Incremental Commitments; provided that the aggregate, cumulative amount of all the Incremental Commitments pursuant to this Section 2.20 shall not exceed $150,000,000. Each such notice shall specify (i) the date on which the Borrower proposes that the Incremental Commitments shall be effective, which shall be a date not less than 10 Business Days (or such shorter period as may be agreed to by the Administrative Agent) after the date on which such notice is delivered to the Administrative Agent, (B) the amount of the Incremental Commitments being requested and (C) the identity of each Lender or other Person that the Borrower proposes become an Incremental Revolving Lender with respect thereto, together with the proposed aggregate amount of the Incremental Commitment for each such Lender or other Person (it being agreed that (x) any Lender approached to provide any Incremental Commitment may elect or decline, in its sole discretion, to provide such Incremental Commitment and (y) any such Person that is not a Lender must be an Eligible Assignee that is reasonably acceptable to the Administrative Agent and each Issuing Bank).

(b) The terms and conditions of any Incremental Commitment and Revolving Loans and other extensions of credit to be made thereunder (other than terms with respect to pricing, maturity and fees, to the extent set forth in the applicable Incremental Facility Agreement) shall be identical to the terms and conditions of the Commitments and Revolving Loans and other extensions of credit made thereunder; provided that (i) no Incremental Commitment or Revolving Loan made thereunder shall mature earlier than, or require any scheduled amortization or mandatory commitment reduction (other than on a pro rata basis in accordance with Section 2.08(c) of this Agreement) prior to, the Maturity Date, (ii) if the Weighted Average Yield applicable to any Incremental Commitment and the Revolving Loans made thereunder exceeds by more than 0.50% per annum the applicable Weighted Average Yield payable pursuant to the terms of this Agreement, as amended through the date of such calculation, then the Applicable Rate then in effect for Revolving Loans hereunder shall automatically be increased so that the Weighted Average Yield applicable to such Incremental

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Commitment and the Revolving Loans made thereunder is not more than 0.50% higher than that applicable to the Commitments and the Revolving Loans and other extensions of credit hereunder and (iii) notwithstanding anything to the contrary in this Section 2.20 or any Incremental Facility Agreement, unless it otherwise agrees, no Issuing Bank shall be required to issue Letters of Credit hereunder expiring after the termination date applicable to such Issuing Bank’s Commitment. For the avoidance of doubt, if the Weighted Average Yield applicable to any Incremental Commitment and the Revolving Loans made thereunder is less than the applicable Weighted Average Yield payable pursuant to the terms of this Agreement, as amended through the date of such calculation, then the Applicable Rate then in effect for the Revolving Loans hereunder shall not be decreased as a result thereof.

(c) The Incremental Commitments shall be effected pursuant to one or more Incremental Facility Agreements executed and delivered by the Borrower, each Incremental Revolving Lender providing such Incremental Commitments and the Administrative Agent; provided that no Incremental Commitments shall become effective unless (i) no Default or Event of Default shall have occurred and be continuing on the date of effectiveness thereof, both immediately prior to and immediately after giving effect to such Incremental Commitments and the making of Revolving Loans and other extensions of credit thereunder to be made on such date, (ii) on the date of effectiveness thereof, the representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct (A) in the case of the representations and warranties qualified as to materiality, in all respects and (B) otherwise, in all material respects, except in the case of any such representation and warranty that expressly relates to a prior date, in which case such representation and warranty shall be so true and correct on and as of such prior date, (iii) Holdings and the Borrower shall be in compliance, on a pro forma basis after giving effect to and the making of Revolving Loans and other extensions of credit thereunder to be made on the date of effectiveness thereof, with the covenants set forth in Sections 6.11 and 6.12 as of the end of the fiscal quarter of Holdings for which consolidated financial statements have theretofore been most recently delivered pursuant to Section 5.01(a) or 5.01(b), (iv) the Borrower shall make any payments required to be made pursuant to Section 2.15 in connection with such Incremental Commitments and the related transactions under this Section 2.20 and (v) the Borrower shall have delivered to the Administrative Agent such legal opinions, board resolutions, secretary’s certificates, officer’s certificates and other documents as shall reasonably be requested by the Administrative Agent in connection with any such transaction. Each Incremental Facility Agreement may, without the consent of any Lender, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable judgment of the Administrative Agent, to give effect to the provisions of this Section 2.20.

(d) Upon effectiveness of an Incremental Commitment of any Incremental Revolving Lender, (i) such Incremental Revolving Lender shall be deemed to be a “Lender” and a “Revolving Lender” hereunder, and henceforth shall be entitled to all the rights of, and benefits accruing to, Lenders and Revolving Lenders hereunder and shall be bound by all agreements, acknowledgements and other obligations of Lenders and Revolving Lenders hereunder and under the other Loan Documents, and (ii)(A) such

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Incremental Commitment shall constitute (or, in the event such Incremental Revolving Lender already has a Commitment, shall increase) the Commitment of such Incremental Revolving Lender and (B) the Aggregate Commitment shall be increased by the amount of such Incremental Commitment, in each case, subject to further increase or reduction from time to time as set forth in the definition of the term “Commitment”. For the avoidance of doubt, upon the effectiveness of any Incremental Commitment, the Revolving Exposure of the Incremental Revolving Lender holding such Commitment, and the Applicable Percentages of all the Revolving Lenders, shall automatically be adjusted to give effect thereto.

(e) On the date of the effectiveness of any Incremental Commitments, each Revolving Lender shall be deemed to have assigned to each Incremental Revolving Lender holding such Incremental Commitments, and each such Incremental Revolving Lender shall be deemed to have purchased from each Revolving Lender, at the principal amount thereof (together with accrued interest), such interests in the Revolving Loans and participations in Letters of Credit outstanding on such date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Revolving Loans and participations in Letters of Credit will be held by all the Revolving Lenders (including such Incremental Revolving Lenders) ratably in accordance with their Applicable Percentages after giving effect to the effectiveness of such Incremental Commitments. Any Revolving Loans outstanding immediately prior to the date of the effectiveness of such Incremental Commitments that are Eurocurrency Loans will (except to the extent otherwise repaid in accordance herewith) continue to be held by, and all interest thereon will continue to accrue for the accounts of, the Revolving Lenders holding such Loans immediately prior to the date of the effectiveness of such Incremental Commitments, in each case until the last day of the then-current Interest Period applicable to any such Loan, at which time it will be repaid or refinanced with new Revolving Loans made pursuant to Section 2.01 in accordance with the Applicable Percentages of the Revolving Lenders (including the Incremental Revolving Lenders) after giving effect to the effectiveness of such Incremental Commitments; provided, however, that upon the occurrence of any Event of Default, each Incremental Revolving Lender will promptly purchase (for cash at face value) assignments of portions of such outstanding Revolving Loans of other Revolving Lenders so that, after giving effect thereto, all Revolving Loans that are Eurocurrency Loans are held by the Revolving Lenders (including the Incremental Revolving Lenders) in accordance with their then-current Applicable Percentages. Any such assignments shall be effected in accordance with the provisions of Section 9.04, provided that the parties hereto hereby consent to such assignments and the minimum assignment amounts and processing and recordation fee set forth in Section 9.04(b) shall not apply thereto. If there are any ABR Loans outstanding on the date of the effectiveness of such Incremental Commitments, such Loans shall either be prepaid on such date or refinanced on such date (subject to the satisfaction of applicable borrowing conditions) with Revolving Loans made on such date by the Revolving Lenders (including the Incremental Revolving Lenders) in accordance with their Applicable Percentages. In order to effect any such refinancing, (i) each Incremental Revolving Lender will make ABR Loans by transferring funds to the Administrative Agent in an amount equal to the aggregate outstanding amount of such Loans of such Type times a percentage obtained by dividing the amount of such

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Incremental Revolving Lender’s Incremental Commitment by the Aggregate Commitment (after giving effect to the effectiveness of the Incremental Commitments on such date) and (ii) such funds will be applied to the prepayment of outstanding ABR Loans held by the Revolving Lenders other than the Incremental Revolving Lenders, and transferred by the Administrative Agent to the Revolving Lenders other than the Incremental Revolving Lenders, in such amounts so that, after giving effect thereto, all ABR Loans will be held by the Revolving Lenders in accordance with their then-current Applicable Percentages. On the date of the effectiveness of such Incremental Commitments, the Borrower will pay to the Administrative Agent, for the accounts of the Revolving Lenders receiving such prepayments, accrued and unpaid interest on the principal amounts of their Revolving Loans being prepaid. 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 the immediately preceding sentence.

(f) The Administrative Agent shall notify Lenders promptly upon receipt by the Administrative Agent of any notice from the Borrower referred to in Section 2.20(a) and of the effectiveness of any Incremental Commitments, in each case advising the Lenders of the details thereof and of the Applicable Percentages of the Revolving Lenders after giving effect thereto and of the assignments deemed to have been made pursuant to Section 2.20(e).

ARTICLE III

Representations and Warranties

Each of Holdings and the Borrower represents and warrants to the Lenders as to itself and each Subsidiary as follows:

SECTION 3.01. Organization; Powers. Holdings, the Borrower and each Subsidiary is duly organized, validly existing and (to the extent the concept is applicable in such jurisdiction) in good standing under the laws of the jurisdiction of its organization, has all power and authority and all material Governmental Approvals required for the ownership and operation of its properties and the conduct of its business as now conducted and as proposed to be conducted and is qualified to do business, and is in good standing, in every jurisdiction where such qualification is required, except in the case of each of the foregoing (other than the due organization and valid existence of the Loan Parties) where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.02. Authorization; Enforceability. The Transactions to be entered into by each Loan Party are within such Loan Party’s corporate or other organizational powers and have been duly authorized by all necessary corporate or other organizational and, if required, stockholder or other equityholder action of each Loan Party. This Agreement has been duly executed and delivered by each of Holdings and the Borrower and constitutes, and each other Loan Document to which any Loan Party is to be a party, when executed and delivered by such Loan Party, will constitute, a legal,

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valid and binding obligation of Holdings, the Borrower or such Loan Party, as the case may be, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03. Governmental Approvals; Absence of Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with or any other action by any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect and (ii) filings necessary to perfect Liens created under the Loan Documents, (b) will not violate any applicable law, including any order of any Governmental Authority, (c) will not violate the charter, by-laws or other organizational documents of Holdings, the Borrower or any Subsidiary, (d) will not violate or result (alone or with notice or lapse of time, or both) in a default under any indenture or other agreement or instrument binding upon Holdings, the Borrower or any Subsidiary or any of their assets, or give rise to a right thereunder to require any payment, repurchase or redemption to be made by Holdings, the Borrower or any Subsidiary, or give rise to a right of, or result in, any termination, cancellation, acceleration or right of renegotiation of any obligation thereunder, and (e) except for Liens created under the Loan Documents, will not result in the creation or imposition of any Lien on any asset of Holdings, the Borrower or any Subsidiary.

SECTION 3.04. Financial Condition; No Material Adverse Change. (a) Holdings has heretofore furnished to the Lenders its consolidated balance sheet and statements of operations, stockholders’ equity and cash flows (i) as of and for the fiscal year ended December 26, 2010, audited by and accompanied by the opinion of KPMG LLP, independent registered public accounting firm, and (ii) as of and for the fiscal quarter and the portion of the fiscal year ended March 27, 2011, certified by its chief financial officer. Such financial statements present fairly, in all material respects, the financial position, results of operations and cash flows of Holdings and its consolidated subsidiaries as of such dates and for such periods in accordance with GAAP, subject to normal year-end audit adjustments and the absence of certain footnotes in the case of the statements referred to in clause (ii) above.

(b) Except as disclosed in the financial statements referred to above or the notes thereto, after giving effect to the Transactions, none of Holdings, the Borrower or any Subsidiary has, as of the Effective Date, any material contingent liabilities, unusual long-term commitments or unrealized losses.

(c) Since December 26, 2010, there has been no event or condition that has resulted, or could reasonably be expected to result, in a material adverse change in the business, assets, operations, or condition (financial or otherwise) of Holdings, the Borrower and the Subsidiaries, taken as a whole.

SECTION 3.05. Properties. (a) Holdings, the Borrower and each Subsidiary has good title to, or valid leasehold interests in, all its property material to its business, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes, subject to Permitted Encumbrances.

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(b) Holdings, the Borrower and each Subsidiary owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by Holdings, the Borrower and the Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.06. Litigation and Environmental Matters. (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of Holdings, the Borrower or any Subsidiary, threatened against or affecting Holdings, the Borrower or any Subsidiary that (i) could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) involve any of the Loan Documents or the Transactions.

(b) Except with respect to any matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, none of Holdings, the Borrower or any Subsidiary (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received any written notice of any claim with respect to any Environmental Liability or (iv) has knowledge of any basis for any Environmental Liability other than as disclosed in Holdings’ filings with the SEC.

SECTION 3.07. Compliance with Laws and Agreements. Holdings, the Borrower and each Subsidiary is in compliance with all laws, including all orders of Governmental Authorities, applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to comply, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.

SECTION 3.08. Investment Company Status. None of Holdings, the Borrower or any Subsidiary is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.09. Taxes. Holdings, the Borrower and each Subsidiary has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) any Taxes that are being contested in good faith by appropriate proceedings and for which Holdings, the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent the failure to pay any Taxes or file any Tax return or report could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

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SECTION 3.10. ERISA; Labor Matters. (a) As of the Effective Date, (i) Holdings, the Borrower and each ERISA Affiliate do not sponsor, maintain or contribute to any Plan, (ii) Holdings, the Borrower and each ERISA Affiliate do not participate in or contribute to any Multiemployer Plan, and (iii) neither Holdings, the Borrower, or any ERISA Affiliate reasonably expects to sponsor, maintain, or contribute to any Plan, or participate in or contribute to any Multiemployer Plan.

(b) As of the Effective Date, neither Holdings, the Borrower or any ERISA Affiliate has incurred any liability in respect of any Plan or Multiemployer Plan.

(c) No ERISA Events have occurred or are reasonably expected to occur that could, in the aggregate, reasonably be expected to result in a Material Adverse Effect.

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

SECTION 3.11. Subsidiaries and Joint Ventures. Schedule 3.11 sets forth, as of the Effective Date, the name and jurisdiction of organization of, and the percentage of each class of Equity Interests owned by Holdings, the Borrower or any Subsidiary in, (a) each Subsidiary and (b) each joint venture in which Holdings, the Borrower or any Subsidiary owns any Equity Interests, and identifies each Material Subsidiary.

SECTION 3.12. Insurance. Schedule 3.12 sets forth a description of all insurance maintained by or on behalf of Holdings, the Borrower and the Subsidiaries as of the Effective Date.

SECTION 3.13. Solvency. Immediately after the consummation of the Transactions to occur on the Effective Date, including the making of each Loan to be made on the Effective Date and the application of the proceeds of such Loans, and after giving effect to the rights of subrogation and contribution under the Collateral Agreement, (a) the fair value of the assets of the Loan Parties, on a consolidated basis, will exceed their debts and liabilities, subordinated, contingent or otherwise, (b) the present fair saleable value of the assets of Loan Parties, on a consolidated basis, will be

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greater than the amount that will be required to pay the probable liability on their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured, (c) the Loan Parties, on a consolidated basis, will be able to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured and (d) the Loan Parties, on a consolidated basis, will not have unreasonably small capital with which to conduct the business in which they are engaged, as such business is now conducted and is proposed to be conducted following the Effective Date.

SECTION 3.14. Disclosure. None of the reports, financial statements, certificates or other information furnished by or on behalf of Holdings, the Borrower or any Subsidiary to the Administrative Agent, the Arrangers or any Lender in connection with the negotiation of this Agreement or any other Loan Document, included herein or therein or furnished hereunder or thereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to forecasts or projected financial information, Holdings and the Borrower represent only that such information was prepared in good faith based upon assumptions believed by it to be reasonable at the time made and at the time so furnished and, if furnished prior to the Effective Date, as of the Effective Date (it being understood that such forecasts and projections may vary from actual results and that such variances may be material).

SECTION 3.15. Collateral Matters. (a) The Collateral Agreement, upon execution and delivery thereof by the parties thereto, will create in favor of the Administrative Agent, for the benefit of the Secured Parties, a valid and enforceable security interest in the Collateral and (i) when the Collateral constituting certificated securities (as defined in the Uniform Commercial Code) is delivered to the Administrative Agent, together with instruments of transfer duly endorsed in blank, the security interest created under the Collateral Agreement will constitute a fully perfected security interest in all right, title and interest of the pledgors thereunder in such Collateral, prior and superior in right to any other Person, and (ii) when financing statements in appropriate form are filed in the applicable filing offices, the security interest created under the Collateral Agreement will constitute a fully perfected security interest in all right, title and interest of the Loan Parties in the Collateral to the extent perfection can be obtained by filing Uniform Commercial Code financing statements, prior and superior to the rights of any other Person, except for rights secured by Liens permitted under Section 6.02.

(b) Each Security Document, other than any Security Document referred to in the preceding paragraphs of this Section, upon execution and delivery thereof by the parties thereto and the making of the filings and taking of the other actions provided for therein, will be effective under applicable law to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a valid and enforceable security interest in the Collateral subject thereto, and will constitute a fully perfected security interest in all right, title and interest of the Loan Parties in the Collateral subject thereto, prior and superior to the rights of any other Person, except for rights secured by Liens permitted under Section 6.02.

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SECTION 3.16. Use of Proceeds; Federal Reserve Regulations. All proceeds of the Loans will be used by the Borrower to pay all principal, premium (if any), interest, fees and other amounts due or outstanding under the Existing Credit Agreement as of the Effective Date, to pay the fees and expenses relating to the Transactions and for lawful corporate and working capital purposes. No part of the proceeds of the Loans will be used, directly or indirectly, for any purpose that entails a violation (including on the part of any Lender) of any of the regulations of the Board of Governors, including Regulations U and X. Not more than 25% of the value of the assets of Holdings, the Borrower and the Subsidiaries subject to any provision of this Agreement or any other Loan Document that restricts the ability of Holdings, the Borrower or any Subsidiary to sell, create any Lien on or otherwise dispose of its assets will at any time be represented by margin stock.

SECTION 3.17. Anti-Terrorism Law. (a) No Loan Party and, to the knowledge Holdings and the Borrower, none of its Affiliates is in violation of any requirement of law relating to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), and the Patriot Act.

(b) No Loan Party and, to the knowledge of Holdings and the Borrower, no Affiliate or broker or other agent of such Loan Party acting or benefiting in any capacity in connection with the Loans and the Letters of Credit is any of the following:

(i) a person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

(ii) a person owned or controlled by, or acting for or on behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

(iii) a person with which any Lender or the Issuing Bank is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

(iv) a person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; or

(v) a person that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”) at its official website or any replacement website or other replacement official publication of such list.

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(c) No Loan Party (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any person described in paragraph (b) above, (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

SECTION 3.18. Senior Indebtedness. The Loan Documents Obligations constitute “Senior Indebtedness” (or any comparable term) under and as defined in the documentation governing any Subordinated Indebtedness of Holdings, the Borrower and the Subsidiary Loan Parties.

ARTICLE IV

Conditions

SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and of the Issuing Banks to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions shall be satisfied (or waived in accordance with Section 9.02):

(a) The Administrative Agent shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) evidence satisfactory to the Administrative Agent (which may include a facsimile transmission) that such party has signed a counterpart of this Agreement.

(b) The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent, the Lenders and the Issuing Banks and dated the Effective Date) of each of (i) Gibson, Dunn & Crutcher LLP, counsel for Holdings and the Borrower, and (ii) local or in-house counsel for Holdings and the Borrower in each jurisdiction in which any Subsidiary Loan Party is organized or in which any Foreign Subsidiary the Equity Interests of which shall have been pledged pursuant to a Foreign Pledge Agreement is organized, and the laws of which are not covered by the opinion letter referred to in clause (i) above, in each case in form and substance reasonably satisfactory to the Administrative Agent; provided that the Administrative Agent shall not require opinions of local counsel for Holding and the Borrower in any jurisdiction in which any Domestic Subsidiary that is not a Material Subsidiary is located to the extent that the Administrative Agent, in consultation with Holdings and the Borrower, determines that the cost of obtaining such opinions shall be excessive in view of the benefits to be obtained by the Lenders therefrom.

(c) The Administrative Agent shall have received such documents and certificates as the Administrative Agent may reasonably request relating to the organization, existence and good standing of each Loan Party in its jurisdiction of organization, the authorization of the Transactions and any other legal matters relating to the Loan Parties, the Loan Documents or the Transactions, all in form and substance reasonably satisfactory to the Administrative Agent.

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(d) The Administrative Agent shall have received a certificate, dated the Effective Date and signed by the chief executive officer or the chief financial officer of each of Holdings and the Borrower, confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.02 and the first sentence of paragraph (f) of this Section 4.01.

(e) The Administrative Agent shall have received all fees and other amounts due and payable and invoiced on or prior to the Effective Date, including, to the extent invoiced, payment or reimbursement of all fees and expenses (including fees, charges and disbursements of counsel) required to be paid or reimbursed by any Loan Party under the Engagement Letter, the Fee Letters or any Loan Document.

(f) The Collateral and Guarantee Requirement shall have been satisfied. The Administrative Agent shall have received a completed Perfection Certificate, dated the Effective Date and signed by an executive officer or a Financial Officer of each of Holdings and the Borrower, together with all attachments contemplated thereby, including the results of a search of the Uniform Commercial Code (or equivalent) filings made with respect to the Loan Parties in the jurisdictions contemplated by the Perfection Certificate and copies of the financing statements (or similar documents) disclosed by such search and evidence reasonably satisfactory to the Administrative Agent that the Liens indicated by such financing statements (or similar documents) are permitted under Section 6.02 or have been, or substantially contemporaneously with the initial funding of Loans on the Effective Date will be, released.

(g) The Lenders shall have received the financial statements, opinions and certificates referred to in Section 3.04.

(h) Prior to or substantially contemporaneously with the initial funding of Loans on the Effective Date, all principal, premium, if any, interest, fees and other amounts due or outstanding under the Existing Credit Agreement (other than letters of credit outstanding thereunder, for which arrangements reasonably satisfactory to the Administrative Agent and the issuing bank thereof shall have been made) shall have been or shall be paid in full, the commitments thereunder shall have been or shall be terminated and all guarantees and Liens existing in connection therewith shall have been or shall be discharged and released, and the Administrative Agent shall have received reasonably satisfactory evidence thereof. Immediately after giving effect to the Transactions, none of Holdings, the Borrower or any Subsidiary shall have outstanding any shares of preferred stock or other preferred Equity Interests or any Indebtedness, other than (i) Indebtedness incurred under the Loan Documents and (ii) Indebtedness set forth on Schedule 6.01.

(i) The Administrative Agent shall have received a certificate, dated the Effective Date and signed by the chief financial officer of each of Holdings and the Borrower, as to the solvency of the Loan Parties as of the Effective Date on a consolidated basis after giving effect to the Transactions, in form and substance reasonably satisfactory to the Administrative Agent.

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(j) The Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act.

The Administrative Agent shall notify Holdings, the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions shall have been satisfied (or waived in accordance with Section 9.02) at or prior to 5:00 p.m., New York City time, on May 20, 2011 (and, in the event such conditions shall not have been so satisfied or waived, the Commitments shall terminate at such time).

SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of each Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to receipt of the request therefor in accordance herewith and to the satisfaction of the following conditions:

(a) The representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct (i) in the case of the representations and warranties qualified as to materiality, in all respects and (ii) otherwise, in all material respects, in each case on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, except in the case of any such representation and warranty that expressly relates to a prior date, in which case such representation and warranty shall be so true and correct on and as of such prior date.

(b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.

On the date of any Borrowing or the issuance, amendment, renewal or extension of any Letter of Credit, Holdings and the Borrower shall be deemed to have represented and warranted that the conditions specified in paragraphs (a) and (b) of this Section have been satisfied and that, after giving effect to such Borrowing, or such issuance, amendment, renewal or extension of a Letter of Credit, the Aggregate Revolving Exposure (or any component thereof) shall not exceed the maximum amount thereof (or the maximum amount of any such component) specified in Section 2.01(a), 2.04(a) or 2.05(b).

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ARTICLE V

Affirmative Covenants

Until the Commitments shall have expired or been terminated, the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, all Letters of Credit shall have expired or been terminated and all LC Disbursements shall have been reimbursed, each of Holdings and the Borrower covenants and agrees with the Lenders that:

SECTION 5.01. Financial Statements and Other Information. Holdings and the Borrower will furnish to the Administrative Agent, on behalf of each Lender:

(a) within 90 days after the end of each fiscal year of Holdings (or, so long as Holdings shall be subject to periodic reporting obligations under the Exchange Act, by the date that the Annual Report on Form 10-K of Holdings for such fiscal year would be required to be filed under the rules and regulations of the SEC, giving effect to any automatic extension available thereunder for the filing of such form), its audited consolidated balance sheet and related consolidated statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal year, setting forth in each case in comparative form the figures for the prior fiscal year, all audited by and accompanied by the opinion of KPMG LLP or another independent registered public accounting firm of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly, in all material respects, the financial position, results of operations and cash flows of Holdings and its consolidated subsidiaries on a consolidated basis as of the end of and for such year in accordance with GAAP;

(b) within 45 days after the end of each of the first three fiscal quarters of each fiscal year of Holdings (or, so long as Holdings shall be subject to periodic reporting obligations under the Exchange Act, by the date that the Quarterly Report on Form 10-Q of Holdings for such fiscal quarter would be required to be filed under the rules and regulations of the SEC, giving effect to any automatic extension available thereunder for the filing of such form), its consolidated balance sheet and related consolidated statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the prior fiscal year, all certified by a Financial Officer of Holdings as presenting fairly, in all material respects, the financial position, results of operations and cash flows of Holdings and its consolidated subsidiaries on a consolidated basis as of the end of and for such fiscal quarter and such portion of the fiscal year in accordance with GAAP, subject to normal year-end audit adjustments and the absence of certain footnotes;

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(c) concurrently with each delivery of financial statements under clause (a) or (b) above, a completed Compliance Certificate signed by a Financial Officer of each of Holdings and the Borrower, (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Sections 6.11 and 6.12, (iii) certifying as to which Subsidiaries are Material Subsidiaries and certifying that none of the combined consolidated total assets, combined consolidated EBITDA or combined consolidated revenues of all Subsidiaries that do not constitute Material Subsidiaries exceeds 10% of the combined total assets of Holdings and its subsidiaries, 10% of the combined EBITDA of Holdings and its subsidiaries or 10% of the combined total revenues of Holdings and its subsidiaries, respectively, (iv) in the case of any Compliance Certificate that is delivered concurrently with financial statements delivered under clause (a) above, setting forth reasonably detailed calculations with respect to which Subsidiaries are Material Subsidiaries based on the information contained in such financial statements, (v) stating whether any change in GAAP or in the application thereof has occurred since the date of the consolidated balance sheet of Holdings most recently theretofore delivered under clause (a) or (b) above (or, prior to the first such delivery, referred to in Section 3.04) and, if any such change has occurred, specifying the effect of such change on the financial statements (including those for the prior periods) accompanying such certificate, (vi) certifying that all notices required to be provided under Sections 5.03 and 5.04 have been provided and (vii) in the case of any delivery of financial statements under clause (a) above, setting forth a reasonably detailed calculation of Adjusted Net Income for the applicable fiscal year;

(d) not later than 30 days after the commencement of each fiscal year of Holdings, a reasonably detailed consolidated budget for such fiscal year (including a projected consolidated balance sheet and related projected statements of income and cash flows as of the end of and for such fiscal year and setting forth the assumptions used for purposes of preparing such budget); and

(e) promptly after any reasonable request therefor, such other information regarding the operations, business affairs, assets, liabilities (including contingent liabilities) and financial condition of Holdings, the Borrower or any Subsidiary, or compliance with the terms of any Loan Document, as the Administrative Agent or any Lender may reasonably request.

Information required to be delivered pursuant to this Section shall be deemed to have been delivered if such information, or one or more annual or quarterly reports containing such information (including, in the case of certifications required pursuant to clause (b) above, the certifications accompanying any such quarterly report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002), shall have been posted by the Administrative Agent on an IntraLinks or similar site to which the Lenders have been granted access or shall be available on the website of the SEC at http://www.sec.gov. Information required to be delivered pursuant to this Section may also be delivered by electronic communications

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pursuant to procedures approved by the Administrative Agent. In the event any financial statements delivered under clause (a) or (b) above shall be restated, Holdings shall deliver, promptly after such restated financial statements become available, revised Compliance Certificates with respect to the periods covered thereby that give effect to such restatement, signed by a Financial Officer of Holdings.

SECTION 5.02. Notices of Material Events. Holdings and the Borrower will furnish to the Administrative Agent prompt written notice of the following:

(a) the occurrence of, or receipt by Holdings or the Borrower of any written notice claiming the occurrence of, any Default;

(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting Holdings, the Borrower or any Subsidiary that could reasonably be expected to result in a Material Adverse Effect or that in any manner questions the validity of any Loan Document;

(c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of Holdings, the Borrower and the Subsidiaries in an aggregate amount of $25,000,000 or more;

(d) any other development that has resulted, or could reasonably be expected to result, in a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of Holdings or the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

SECTION 5.03. Additional Subsidiaries. If any Subsidiary is formed or acquired after the Effective Date, or if any Equity Interests or Indebtedness are issued by any Subsidiary to any Loan Party after the Effective Date (in the case of Indebtedness, to the extent not evidenced by the Global Intercompany Note), Holdings and the Borrower will, as promptly as practicable thereafter, and in any event within 30 days (or such longer period as the Administrative Agent may agree to in writing), notify the Administrative Agent thereof and cause the Collateral and Guarantee Requirement, to the extent applicable, to be satisfied with respect to such Subsidiary and with respect to any Equity Interests in or Indebtedness of such Subsidiary owned by any Loan Party.

SECTION 5.04. Information Regarding Guarantees and Collateral. Holdings and the Borrower will furnish to the Administrative Agent prompt written notice of any change in (i) the legal name of any Loan Party, as set forth in its organizational documents, (ii) the jurisdiction of organization or the form of organization of any Loan Party (including as a result of any merger or consolidation), (iii) the location of the chief executive office of any Loan Party or (iv) the organizational identification number, if any, or, with respect to any Loan Party organized under the laws of a

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jurisdiction that requires such information to be set forth on the face of a Uniform Commercial Code financing statement, the Federal Taxpayer Identification Number of such Loan Party. Holdings and the Borrower agree not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Administrative Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral.

SECTION 5.05. Existence; Conduct of Business. Holdings, the Borrower and each Subsidiary will do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names, except as could not, individually or in the aggregate, reasonably be expected to be materially adverse to the conduct of the business of Holdings, the Borrower and the Subsidiaries as a whole; provided that the foregoing shall not prohibit any transaction permitted under Section 6.03 or 6.05.

SECTION 5.06. Payment of Obligations. Holdings, the Borrower and each Subsidiary will (i) pay all of its obligations, except such non-payment as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and (ii) pay its Tax liabilities prior to the date on which penalties attach thereto, provided that none of Holdings, the Borrower or any Subsidiary shall be required to pay any such Tax liability which is being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with GAAP.

SECTION 5.07. Maintenance of Properties. Holdings, the Borrower and each Subsidiary will keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted.

SECTION 5.08. Insurance. Holdings, the Borrower and each Subsidiary will maintain, with financially sound and reputable insurance companies, insurance in such amounts (with no greater risk retention) and against such risks as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations.

SECTION 5.09. Books and Records; Inspection and Audit Rights. Holdings, the Borrower and each Subsidiary will keep proper books of record and account in which full, true and correct entries in conformity with GAAP and applicable law are made of all dealings and transactions in relation to its business and activities. Holdings, the Borrower and each Subsidiary will permit the Administrative Agent or any Lender, and any agent designated by any of the foregoing, upon reasonable prior notice, (a) to visit and inspect its properties, (b) to examine and make extracts from its books and records and (c) to discuss its operations, business affairs, assets, liabilities (including contingent liabilities) and financial condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.

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SECTION 5.10. Compliance with Laws. Holdings, the Borrower and each Subsidiary will comply with all laws, including all orders of any Governmental Authority, applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.11. Use of Proceeds and Letters of Credit. The proceeds of the Revolving Loans and Swingline Loans will be used only (i) to pay all principal, premium (if any), interest, fees and other amounts due or outstanding under the Existing Credit Agreement as of the Effective Date and to pay the fees and expenses relating to the Transactions and (ii) for working capital and other lawful corporate purposes of the Borrower and the Subsidiaries. Letters of Credit will be issued only to support obligations of the Borrower incurred in the ordinary course of business.

SECTION 5.12. Further Assurances. Holdings, the Borrower and each other Loan Party will execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing of financing statements and other documents), that may be required under any applicable law, or that the Administrative Agent may reasonably request, to cause the Collateral and Guarantee Requirement to be and remain satisfied at all times or otherwise to effectuate the provisions of the Loan Documents, all at the expense of the Loan Parties. Holdings and the Borrower will provide to the Administrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Security Documents.

SECTION 5.13. Certain Post-Closing Obligations. To the extent that any Subsidiary set forth on Schedule 1.01(a) shall not have been reorganized as a subsidiary of BermudaCo or a subsidiary thereof (or, in the case of Fairchild Semiconductor Asia Pacific Pte. Ltd., a subsidiary of Fairchild Semiconductor Hong Kong Limited) on or prior to the date that is 180 days after the Effective Date (or such later date as may be agreed to by the Administrative Agent), Holdings and the Borrower shall cause the Equity Interests in such Subsidiary to be pledged pursuant to a Foreign Pledge Agreement, in accordance with the Collateral and Guarantee Requirement, by such date.

ARTICLE VI

Negative Covenants

Until the Commitments shall have expired or been terminated, the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, all Letters of Credit shall have expired or been terminated and all LC Disbursements shall have been reimbursed, each of Holdings and the Borrower covenants and agrees with the Lenders that:

SECTION 6.01. Indebtedness; Certain Equity Securities. (a) None of Holdings, the Borrower or any Subsidiary will create, incur, assume or permit to exist any Indebtedness, except:

(i) Indebtedness created under the Loan Documents;

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(ii) Indebtedness existing on the date hereof and set forth on Schedule 6.01 and Refinancing Indebtedness in respect thereof;

(iii) Indebtedness of any Subsidiary to Holdings, the Borrower or any Subsidiary; provided that (A) such Indebtedness shall not have been transferred to any Person other than Holdings, the Borrower or any Subsidiary, (B) any such Indebtedness owing by any Loan Party shall be subordinated to the Loan Documents Obligations pursuant to the Intercompany Subordination Agreement, (C) any such Indebtedness owing to any Loan Party shall be evidenced by the Global Intercompany Note, which shall have been pledged pursuant to the Collateral Agreement, and (D) any such Indebtedness owing by any Subsidiary that is not a Loan Party to any Loan Party shall be incurred in compliance with Section 6.04;

(iv) Guarantees incurred in compliance with Section 6.04;

(v) Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets; provided that (A) such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement and the principal amount of such Indebtedness does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (B) the aggregate principal amount of Indebtedness permitted by this clause (v) shall not exceed $75,000,000 at any time outstanding;

(vi) Indebtedness of any Person that becomes a Subsidiary (or of any Person not previously a Subsidiary that is merged or consolidated with or into a Subsidiary in a transaction permitted hereunder) after the date hereof, or Indebtedness of any Person that is assumed by any Subsidiary in connection with an acquisition of assets by such Subsidiary in a Permitted Acquisition or other acquisition permitted hereunder; provided that (A) such Indebtedness exists at the time such Person becomes a Subsidiary (or is so merged or consolidated) or such assets are acquired and is not created in contemplation of or in connection with such Person becoming a Subsidiary (or such merger or consolidation) or such assets being acquired, (B) the aggregate principal amount of Indebtedness permitted by this clause (vi) shall not exceed $75,000,000 at any time outstanding and (C) at the time of the acquisition or assumption of any such Indebtedness, the Borrower shall have delivered to the Administrative Agent a certificate executed by a Financial Officer of the Borrower demonstrating compliance, on a pro forma basis in accordance with Section 1.04(b), with the covenants set forth in Sections 6.11 and 6.12;

(vii) Indebtedness owed in respect of any overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing-house transfers of funds; provided that such Indebtedness shall be repaid in full within five Business Days of the incurrence thereof;

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(viii) Indebtedness of Foreign Subsidiaries in an aggregate principal amount not in excess of $50,000,000 at any time outstanding;

(ix) Permitted Subordinated Indebtedness, provided that, after giving effect to the incurrence thereof, Holdings and the Borrower shall be in compliance with the covenants set forth in Sections 6.11 and 6.12 on a pro forma basis in accordance with Section 1.04(b) and with the other covenants set forth in this Article VI after giving effect thereto;

(x) other Indebtedness of Holdings, the Borrower or any Subsidiary in an aggregate principal amount not exceeding $150,000,000, at any time outstanding; provided that (A) no Default or Event of Default then exists or would result therefrom, (B) no more than $25,000,000 in the aggregate of such Indebtedness at any time outstanding may be incurred by Subsidiaries pursuant to this clause (x), (C) such Indebtedness shall be unsecured except to the extent permitted pursuant to Section 6.02(i) and (D) no such Indebtedness shall mature or require any amortization payment to be made prior to the date that is 91 days after the Maturity Date;

(xi) Indebtedness in respect of letters of credit, bank guarantees and similar instruments issued for the account of Holdings, the Borrower or any Subsidiary in the ordinary course of business supporting obligations under (A) workers’ compensation, unemployment insurance and other social security laws and (B) bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and obligations of a like nature;

(xii) Indebtedness of the Borrower or any Subsidiary in the form of earn-outs or deferred payments of a similar nature incurred in connection with any Permitted Acquisition or other Investment permitted pursuant to Section 6.04; and

(xiii) other unsecured Indebtedness of Holdings or the Borrower, provided that (A) no Default or Event of Default then exists or would result therefrom, (B) such Indebtedness is not at any time guaranteed by any Subsidiary that is not a Loan Party, (C) the Leverage Ratio, calculated on a pro forma basis after giving effect to such Indebtedness, is less than 1.50 to 1.00 and (D) no such Indebtedness shall mature or require any amortization payment to be made prior to the date that is 91 days after the Maturity Date.

(b) Holdings shall not issue any preferred stock or other preferred Equity Interests; provided that (i) Holdings may issue preferred stock or other preferred Equity Interests that, in each case, do not constitute Disqualified Equity Interests.

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SECTION 6.02. Liens. None of Holdings, the Borrower or any Subsidiary will create, incur, assume or permit to exist any Lien on any asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

(a) Liens created under the Loan Documents;

(b) Permitted Encumbrances;

(c) any Lien on any asset of Holdings, the Borrower or any Subsidiary existing on the date hereof and set forth on Schedule 6.02; provided that (i) such Lien shall not apply to any other asset of Holdings, the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations that it secures on the date hereof and any extensions, renewals and refinancings thereof that do not increase the outstanding principal amount of such obligations and, in the case of any such obligations constituting Indebtedness, that are permitted under Section 6.01 as Refinancing Indebtedness in respect thereof;

(d) any Lien existing on any asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other asset of the Borrower or any Subsidiary, (iii) such Lien shall secure only those obligations that it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be and (iv) the Indebtedness secured thereby is permitted pursuant to Section 6.01(a)(vi);

(e) Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any Subsidiary; provided that (i) such Liens secure only Indebtedness permitted by clause (v) of Section 6.01(a) and obligations relating thereto not constituting Indebtedness and (ii) such Liens shall not apply to any other asset of the Borrower or any Subsidiary;

(f) in connection with the sale or transfer of all the Equity Interests in a Subsidiary in a transaction permitted under Section 6.05, customary rights and restrictions contained in agreements relating to such sale or transfer pending the completion thereof;

(g) in the case of any Subsidiary that is not a wholly-owned Subsidiary, any put and call arrangements related to its Equity Interests set forth in its organizational documents or any related joint venture or similar agreement;

(h) any Lien on assets of Foreign Subsidiaries securing Indebtedness or other obligations of Foreign Subsidiaries permitted hereunder;

(i) other Liens securing Indebtedness or other obligations in an aggregate principal amount not to exceed $25,000,000 at any time outstanding, provided that such Liens do not attach to properties or assets constituting Collateral;

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

(k) licenses and sublicenses of intellectual property granted in the ordinary course of business.

Notwithstanding anything to the contrary herein, (x) Holdings will not create, incur, assume or permit to exist any Lien on any asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect thereof, except Liens referred to in paragraphs (a), (b) and (c) of this Section, (y) none of Holdings, the Borrower or any other Subsidiary will at any time permit to exist any Lien (other than Permitted Encumbrances) on any intellectual property that has been transferred to a Foreign Subsidiary pursuant to a Permitted IP Transfer so long as such intellectual property is owned by any Foreign Subsidiary and (z) none of Holdings, the Borrower or any other Subsidiary will at any time permit to exist any Lien on the assets of or Equity Interests in any Foreign Subsidiary to secure any Indebtedness of any Loan Party (other than the Secured Obligations).

SECTION 6.03. Fundamental Changes; Business Activities. (a) Neither Holdings, the Borrower or any Subsidiary will merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing, (i) any Person may merge into the Borrower in a transaction in which the Borrower is the surviving corporation, (ii) any Person (other than the Borrower) may merge or consolidate with any Subsidiary in a transaction in which the surviving entity is a Subsidiary (and, if any party to such merger or consolidation is a Subsidiary Loan Party, is a Subsidiary Loan Party), (iii) any Subsidiary may merge into or consolidate with any Person in a transaction permitted under Section 6.05 in which the surviving entity is not a Subsidiary and (iv) any Subsidiary (other than any Material Subsidiary) may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders; provided that any such merger or consolidation involving a Person that is not a wholly-owned Subsidiary immediately prior thereto shall not be permitted unless it is also permitted under Section 6.04.

(b) None of Holdings, the Borrower or any Subsidiary will engage to any material extent in any business other than businesses of the type conducted by Holdings, the Borrower and the Subsidiaries on the date hereof and businesses reasonably related thereto.

(c) Except as set forth on Schedule 3.11, Holdings and the Borrower will not permit (i) any Person other than the Borrower, or one or more Domestic Subsidiaries, to own any Equity Interests in any Subsidiary meeting the criteria set forth in the definition of the term “Domestic Subsidiary” (other than any Foreign Subsidiary acquired pursuant to a Permitted Acquisition or other Investment permitted hereunder that owned

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such Equity Interests at the time of such acquisition), (ii) any Subsidiary treated as a disregarded entity for U.S. federal income tax purposes to own voting stock of any Foreign Subsidiary (other than any such Subsidiary acquired pursuant to a Permitted Acquisition or other Investment permitted hereunder that owned such stock of such Foreign Subsidiary) to the extent such ownership would cause such Subsidiary to constitute a U.S.-Based Foreign Subsidiary, or (iii) any Subsidiary to own any Foreign Subsidiaries (other than any such Subsidiary acquired pursuant to a Permitted Acquisition or other Investment permitted hereunder that owned such Foreign Subsidiary at the time of such acquisition) to the extent such ownership would cause such Subsidiary to constitute a U.S.-Based Foreign Subsidiary.

(d) Notwithstanding anything to the contrary herein, Holdings (i) will not engage in any business or activity other than its ownership of the Equity Interests of the Borrower and activities incidental thereto; provided that Holdings may engage in activities that are incidental to (A) the maintenance of its existence in compliance with applicable law, (B) its employment of members of management of the Borrower and (C) legal, tax and accounting matters in connection with the foregoing activities, and (ii) will not own or acquire any assets (other than Equity Interests in the Borrower, cash and Permitted Investments) or incur any liabilities (other than Indebtedness permitted to be incurred by it under Section 6.01, liabilities imposed by law, including liabilities in respect of Taxes, and other liabilities incidental to its existence and permitted business and activities).

SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. None of Holdings, the Borrower or any Subsidiary will purchase, hold, acquire (including pursuant to any merger or consolidation with any Person that was not a wholly-owned Subsidiary prior thereto), make or otherwise permit to exist any Investment, except:

(a) Permitted Investments;

(b) Investments existing on the date hereof in Subsidiaries, and other Investments existing on the date hereof and set forth on Schedule 6.04 (but not any additions thereto (including any capital contributions) made after the date hereof);

(c) Investments by Holdings, the Borrower and the Subsidiaries in Equity Interests in their subsidiaries; provided that (i) such subsidiaries are Subsidiaries prior to such investments, (ii) any such Equity Interests held by a Loan Party shall be pledged in accordance with the requirements of the definition of the term “Collateral and Guarantee Requirement” and (iii) the aggregate amount of such Investments by Loan Parties in, and loans and advances by Loan Parties to, and Guarantees by Loan Parties of Indebtedness and other obligations of, Subsidiaries that are not Loan Parties (excluding all such investments, loans, advances and Guarantees existing on the date hereof and permitted by clause (b) above) at any time outstanding shall not exceed an amount equal to (A) the CNTA Basket Amount minus (B) the aggregate amount of all other CNTA Expenditures outstanding, in each case as of the date on which any such Investment, loan, advance or Guarantee is made;

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(d) loans or advances made by Holdings, the Borrower or any Subsidiary to any other Subsidiary; provided that (i) the Indebtedness resulting therefrom is permitted by clause (iii) of Section 6.01(a) and (ii) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties shall be subject to the limitation set forth in clause (c) above;

(e) Guarantees by Holdings, the Borrower or any Subsidiary of Indebtedness or other obligations of Holdings, the Borrower or any Subsidiary (including any such Guarantees arising as a result of any such Person being a joint and several co-applicant with respect to any letter of credit or letter of guaranty); provided that (i) a Subsidiary that has not Guaranteed the Secured Obligations pursuant to the Collateral Agreement shall not Guarantee any Indebtedness or other obligations of any Loan Party, (ii) the aggregate amount of Indebtedness of Subsidiaries that are not Loan Parties that is Guaranteed by any Loan Party shall be subject to the limitation set forth in clause (c) above and (iii) the aggregate amount of obligations of Subsidiaries that are not Loan Parties that do not constitute Indebtedness and are Guaranteed by any Loan Party shall not exceed $50,000,000 at any time outstanding;

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

(g) Investments made as a result of the receipt of noncash consideration from a sale, transfer, lease or other disposition of any asset in compliance with Section 6.05;

(h) Investments by Holdings, the Borrower or any Subsidiary that result solely from the receipt by Holdings, the Borrower or such Subsidiary from any of its subsidiaries of a dividend or other Restricted Payment in the form of Equity Interests, evidences of Indebtedness or other securities (but not any additions thereto made after the date of the receipt thereof);

(i) Investments in the form of Hedging Agreements permitted under Section 6.07;

(j) payroll, travel and similar advances to directors and employees of Holdings, the Borrower or any Subsidiary to cover matters that are expected at the time of such advances to be treated as expenses of Holdings, the Borrower or such Subsidiary for accounting purposes and that are made in the ordinary course of business;

(k) loans or advances to directors and employees of Holdings, the Borrower or any Subsidiary made in the ordinary course of business; provided that the aggregate amount of such loans and advances outstanding at any time shall not exceed $10,000,000;

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(l) Investments in joint ventures not exceeding $75,000,000 in the aggregate at any time outstanding;

(m) Permitted Acquisitions;

(n) other Investments and other acquisitions; provided that, at the time each such Investment or acquisition is purchased, made or otherwise acquired, (A) no Default shall have occurred and be continuing or would result therefrom, (B) Holdings shall be in compliance with the covenants set forth in Sections 6.11 and 6.12 on a pro forma basis in accordance with Section 1.04(b) and (C) the aggregate amount of all Investments made in reliance on this clause (n) outstanding at any time (including the aggregate amount of all consideration paid in connection with all other acquisitions made in reliance on this clause (n)), shall not exceed the sum of (1) $100,000,000 and (2) an amount equal to (x) the CNTA Basket Amount minus (y) the aggregate amount of all other CNTA Expenditures outstanding, in each case as of the date on which any such Investment or acquisition is made or consummated;

(o) the reorganization of the Subsidiaries set forth on Schedule 6.04(o) hereto (each, a “Specified Foreign Subsidiary”), and certain other Subsidiaries from time to time after the Effective Date (together with the Specified Foreign Subsidiaries, the “Transferred Foreign Subsidiaries”) as subsidiaries of BermudaCo or a subsidiary thereof (each such reorganization, a “Bermuda Subsidiary Transfer”) and the transfer by any Loan Party of intangible assets to BermudaCo or a subsidiary thereof (each such transfer of assets, a “Bermuda Asset Transfer”); provided that (i) each Transferred Foreign Subsidiary shall, following the consummation of any Bermuda Subsidiary Transfer, remain a wholly-owned Subsidiary and (ii) the aggregate amount of Bermuda Subsidiary Transfers (other than Bermuda Subsidiary Transfers relating solely to Specified Foreign Subsidiaries) and Bermuda Asset Transfers shall not exceed $100,000,000 (it being agreed that, for purposes of this clause (o), the amount of any Bermuda Subsidiary Transfer or Bermuda Asset Transfer shall, as of any date of determination, be equal to the fair value (as determined reasonably and in good faith by the chief financial officer of Holdings and the Borrower) of the Equity Interests in the applicable Transferred Foreign Subsidiary or other applicable property as of the date of the applicable Bermuda Subsidiary Transfer or Bermuda Asset Transfer, without any adjustment for increases or decreases in value of, or write-ups, write-downs or write-offs with respect to, such Equity Interests or property after the date of such transfer);

(p) earn-outs or other deferred amounts payable in connection with any transaction permitted by Section 6.05;

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(q) Investments by Subsidiaries that are not Loan Parties, provided that any cash or other assets provided by a Loan Party and used in connection with any such Investment shall have been provided in compliance with clause (c) or (d) of this Section, as the case may be; and

(r) Investments by Holdings, the Borrower or any Subsidiary that is a Loan Party in, or acquisitions by any of them of all or substantially all the Equity Interests of, Foreign Subsidiaries in an aggregate amount not to exceed, at any time, (A) the sum of (1) $100,000,000 and (2) 50% of Cumulative Adjusted Net Income minus (B) the aggregate amount of all Restricted Payments previously or concurrently made in reliance on Section 6.08(a)(viii)(B) and all payments previously or concurrently made in reliance on Section 6.08(b)(iv).

SECTION 6.05. Asset Sales. None of Holdings, the Borrower or any Subsidiary will sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will any Subsidiary issue any additional Equity Interest in such Subsidiary (other than to Holdings, the Borrower or any Subsidiary in compliance with Section 6.04, and other than directors’ qualifying shares and other nominal amounts of Equity Interests that are required to be held by other Persons under applicable law), except:

(a) sales, transfers and other dispositions of (i) inventory, (ii) used or surplus equipment, (iii) obsolete, uneconomic or worn out property, plant and equipment that does not constitute an operating unit of the Borrower and the Subsidiaries and is not in use by the Borrower or any Subsidiary at the time of the sale, transfer or other disposition thereof, and (iv) cash and Permitted Investments, in the case of each of clauses (i)-(iv), in the ordinary course of business;

(b) sales, transfers, leases and other dispositions to Holdings, the Borrower or any Subsidiary (other than transfers, sales or dispositions of intellectual property owned by the Borrower or a Subsidiary Loan Party to a Subsidiary that is not a Loan Party, except to the extent permitted pursuant to Section 6.04(o)); provided that any such sales, transfers, leases or other dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Sections 6.04 and 6.09;

(c) sales, transfers or other dispositions of accounts receivable in connection with the compromise or collection thereof in the ordinary course of business and not as part of any accounts receivable financing transaction;

(d) dispositions of assets subject to any casualty or condemnation proceeding;

(e) dispositions of property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such disposition are applied within 90 days to the purchase price of such replacement property;

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(f) leases and licenses and sublicenses entered into in the ordinary course of business, to the extent that they do not materially interfere with the business of the Borrower or any Subsidiary;

(g) licenses or sublicenses of intellectual property granted by the Borrower or any Subsidiary to the Borrower or any wholly-owned Subsidiary; and

(h) sales, transfers, leases and other dispositions of assets that are not permitted by any other clause of this Section; provided that the aggregate fair value of all assets sold, transferred, leased or otherwise disposed of in reliance on this clause shall not exceed the greater of $100,000,000 and 7.5% of Consolidated Net Tangible Assets (calculated based on the most recent consolidated balance sheet of Holdings delivered to the Administrative Agent pursuant to Section 5.01 as of such time) during any fiscal year of Holdings;

(i) the sale of the Mountaintop, Pennsylvania facility and the property, plant and equipment directly related to such facility; and

(j) any Permitted IP Transfer;

provided that all sales, transfers, leases, licenses and other dispositions permitted hereby (other than those permitted by clause (b)) shall be made for fair market value and (other than those permitted by clause (b) (unless the disposition is by a Loan Party to a Subsidiary that is not a Loan Party), (d) or (e)(i)) for at least 75% cash consideration payable at the time of such sale, transfer or other disposition (provided that sales, transfers, leases, licenses and other dispositions permitted hereby in an aggregate amount not to exceed $50,000,000 in any fiscal year of Holdings shall not be required to be made for at least 75% cash consideration payable at such time).

Notwithstanding the foregoing, no such sale or transfer of any Equity Interests in any Subsidiary shall be permitted unless (i) such Equity Interests constitute all the Equity Interests in such Subsidiary held by Holdings, the Borrower and the Subsidiaries and (ii) immediately after giving effect to such transaction, Holdings, the Borrower and the Subsidiaries shall otherwise be in compliance with Section 6.04.

SECTION 6.06. Sale/Leaseback Transactions. None of Holdings, the Borrower or any Subsidiary will enter into any Sale/Leaseback Transaction unless (a) the sale or transfer of the property thereunder is permitted under Section 6.05, (b) any Capital Lease Obligations arising in connection therewith are permitted under Section 6.01 and (c) any Liens arising in connection therewith (including Liens deemed to arise in connection with any such Capital Lease Obligations) are permitted under Section 6.02.

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SECTION 6.07. Hedging Agreements. None of Holdings, the Borrower or any Subsidiary will enter into any Hedging Agreement, except (a) Hedging Agreements entered into to hedge or mitigate risks to which Holdings, the Borrower or any Subsidiary has actual exposure (other than in respect of Equity Interests or Indebtedness of Holdings, the Borrower or any Subsidiary) and (c) Hedging Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of Holdings, the Borrower or any Subsidiary.

SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness. (a) None of Holdings, the Borrower or any Subsidiary will declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that (i) Holdings may declare and pay dividends or make distributions with respect to its Equity Interests payable solely in additional Equity Interests of Holdings, (ii) any Subsidiary may declare and pay dividends or make other distributions with respect to its capital stock, partnership or membership interests or other similar Equity Interests, ratably to the holders of such Equity Interests, (iii) Holdings may repurchase Equity Interests upon the exercise of stock options if such Equity Interests represent a portion of the exercise price of such options, (iv) Holdings may make cash payments in lieu of the issuance of fractional shares representing insignificant interests in Holdings in connection with the exercise of warrants, options or other securities convertible into or exchangeable for capital stock in Holdings, (v) Holdings may make Restricted Payments, not exceeding $15,000,000 in the aggregate for any fiscal year, pursuant to and in accordance with stock option plans or other benefit plans or agreements for directors, officers or employees of Holdings, the Borrower and the Subsidiaries, (vi) the Borrower may pay cash dividends to Holdings for the purpose of paying (and so long as all the proceeds thereof are promptly used by Holdings to pay) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses; provided that the aggregate amount of all such dividends paid pursuant to this clause (vi) shall not exceed $2,000,000 in any fiscal year of Holdings, (vii) the Borrower may pay cash dividends to Holdings for the purpose of paying (so long as all the proceeds thereof are promptly used by Holdings to pay) franchise taxes and income taxes and interest and penalties with respect thereto, if any, payable by Holdings; provided that any refund of such taxes, interest or penalties shall be promptly paid by Holdings to the Borrower, and (viii) so long as no Default shall have occurred and be continuing at the time of any purchase or other Restricted Payment, (A) Holdings may repurchase shares of its common stock from, and following the death, disability, retirement, or termination of employment of employees, officers or directors of Holdings or its subsidiaries (and from any of their estates or heirs) for cash in an aggregate, cumulative amount for all such repurchases after the Effective Date not exceeding the sum of $4,000,000 and the net proceeds of any substantially concurrent issuance by Holdings of its common stock (or options to purchase common stock) to other employees, members of management, executive officers or directors of Holdings or any of its subsidiaries, (B) Holdings may make Restricted Payments in an amount not to exceed (1) the sum of (x) $100,000,000 and (y) 50% of Cumulative Adjusted Net Income, minus (2) the aggregate amount of (x) all Restricted Payments made in reliance on this clause (B) after December 26, 2010 at any time that the condition set forth in the proviso to the immediately succeeding clause (C) is not met, (y) all payments previously or concurrently made in reliance on Section 6.08(b)(iv) and (z) all Investments made in

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reliance on Section 6.04(r) and outstanding at such time and all acquisitions previously or concurrently made in reliance on Section 6.04(r), without duplication, (C) Holdings may make other Restricted Payments provided that, immediately after giving effect to any Restricted Payments made in reliance on this clause (C), the Leverage Ratio is, on a pro forma basis, less than or equal to 2.00 to 1.00 and (D) the Borrower may make Restricted Payments to Holdings necessary to permit Holdings to make Restricted Payments in reliance on clauses (v), (viii)(A), (viii)(B) and (viii)(C).

(b) None of Holdings, the Borrower any Subsidiary will make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any unsecured Indebtedness or Indebtedness that is subordinated in right of payment or security to the Loan Documents Obligations, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, conversion, retirement, acquisition, defeasance, cancelation or termination of any such Indebtedness, except:

(i) regularly scheduled interest and principal payments as and when due in respect of any Indebtedness, other than payments in respect of subordinated Indebtedness prohibited by the subordination provisions thereof;

(ii) refinancing of Indebtedness to the extent permitted under Section 6.01;

(iii) payments of or in respect of Indebtedness made solely with Equity Interests in Holdings; and

(iv) additional payments in respect of such Indebtedness in an aggregate amount not to exceed (A) the sum of (1) $100,000,000 and (2) 50% of Cumulative Adjusted Net Income minus (B) the aggregate amount of all Restricted Payments previously or concurrently made in reliance on Section 6.08(a)(viii)(B) and all Investments made in reliance on Section 6.04(r) and outstanding at such time and all acquisitions previously or concurrently made in reliance on Section 6.04(r), without duplication.

SECTION 6.09. Transactions with Affiliates. Neither Holdings, the Borrower or any Subsidiary will sell, lease, license or otherwise transfer any assets to, or purchase, lease, license or otherwise acquire any assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions in the ordinary course of business that are at prices and on terms and conditions not less favorable to Holdings, the Borrower or such Subsidiary than those that would prevail in arm’s-length transactions with unrelated third parties, (b) transactions between or among the Loan Parties not involving any other Affiliate and between Subsidiaries that are not Loan Parties not involving any other Affiliate, (c) any Restricted Payment permitted under Section 6.08, (d) issuances by Holdings of Equity Interests and receipt by Holdings of capital contributions, (e) compensation and indemnification of, and other employment arrangements with, directors, officers and employees of Holdings, the Borrower or any Subsidiary entered in the ordinary course of business, (f) loans and advances permitted under clauses (j) and (k) of Section 6.04 and (g) Bermuda Subsidiary Transfers and Bermuda Asset Transfers permitted under clause (o) of Section 6.04.

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SECTION 6.10. Restrictive Agreements. None of Holdings, the Borrower or any Subsidiary will, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that restricts or imposes any condition upon (a) the ability of Holdings, the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its assets to secure any Secured Obligations or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to its Equity Interests or to make or repay loans or advances to Holdings, the Borrower or any Subsidiary or to Guarantee Indebtedness of Holdings, the Borrower or any Subsidiary; provided that (i) the foregoing shall not apply to (A) restrictions and conditions imposed by law or by any Loan Document, (B) restrictions and conditions existing on the date hereof identified on Schedule 6.10 (but shall apply to any amendment or modification expanding the scope of, any such restriction or condition), and (C) in the case of any Subsidiary that is not a wholly-owned Subsidiary, restrictions and conditions imposed by its organizational documents or any related joint venture or similar agreement, provided that such restrictions and conditions apply only to such Subsidiary and to any Equity Interests in such Subsidiary and (D) customary negative pledge clauses and restrictions on the ability of Holdings, the Borrower or any Subsidiary to Guarantee Indebtedness; provided that such restrictions do not limit the Liens on Collateral to secure Secured Obligations or the guarantees of the Loan Parties under the Collateral Agreement, (ii) clause (a) of the foregoing shall not apply to (A) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by clause (v) or (vi) of Section 6.01(a) if such restrictions or conditions apply only to the assets securing such Indebtedness or (B) customary provisions in leases and other agreements restricting the assignment thereof and (iii) clause (b) of the foregoing shall not apply to (A) customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary, or a business unit, division, product line or line of business, that are applicable solely pending such sale, provided that such restrictions and conditions apply only to the Subsidiary, or the business unit, division, product line or line of business, that is to be sold and such sale is permitted hereunder, (B) restrictions and conditions imposed by agreements relating to Indebtedness of any Subsidiary in existence at the time such Subsidiary became a Subsidiary and otherwise permitted by clause (vi) of Section 6.01(a) (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), provided that such restrictions and conditions apply only to such Subsidiary, or (C) restrictions and conditions imposed by agreements relating to Indebtedness of Foreign Subsidiaries permitted under Section 6.01(a), provided that such restrictions and conditions apply only to Foreign Subsidiaries. Nothing in this paragraph shall be deemed to modify the requirements set forth in the definition of the term “Guarantee and Collateral Requirement” or the obligations of the Loan Parties under Sections 5.03, 5.04, 5.12 or 5.13 hereof or under the Security Documents.

SECTION 6.11. Interest Expense Coverage Ratio. Holdings and the Borrower will not permit the ratio of (a) Consolidated EBITDA to (b) Consolidated Cash Interest Expense, in each case for any period of four consecutive fiscal quarters, to be less than 3.00 to 1.00.

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SECTION 6.12. Leverage Ratio. Holdings and the Borrower will not permit the Leverage Ratio on the last day of any fiscal quarter to exceed 3.25 to 1.00 calculated on a pro forma basis in accordance with Section 1.04(c).

SECTION 6.13. Fiscal Year. Holdings will not, and Holdings and the Borrower will not permit any other Loan Party to, change its fiscal year to end on a date other than the last Sunday in December.

ARTICLE VII

Events of Default

If any of the following events (“Events of Default”) shall occur:

(a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement 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 otherwise;

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three Business Days;

(c) any representation, warranty or statement made or deemed made by or on behalf of Holdings, the Borrower or any Subsidiary in any Loan Document or in any report, certificate, financial statement or other information provided pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder shall prove to have been incorrect in any material respect when made or deemed made;

(d) Holdings or the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.05 (with respect to the existence of Holdings or the Borrower), 5.11 or 5.13 or in Article VI;

(e) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in clause (a), (b) or (d) of this Article), and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent or any Lender to the Borrower (with a copy to the Administrative Agent in the case of any such notice from a Lender);

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(f) Holdings, the Borrower or any Subsidiary shall fail to pay the principal of any Material Indebtedness at the time such principal becomes due and payable (including installments thereof) or to make any other payment (whether of interest, termination payment or other payment obligation and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable and in each case with all applicable grace periods having expired;

(g) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice and with all applicable grace periods having expired) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf, or, in the case of any Hedging Agreement, the applicable counterparty, to cause such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity or, in the case of any Hedging Agreement, to cause the termination thereof; provided that this clause (g) shall not apply to (A) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the assets securing such Indebtedness or (B) any Indebtedness that becomes due as a result of a refinancing thereof permitted by Section 6.01;

(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of Holdings, the Borrower or any Material Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Holdings, the Borrower or any Material Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(i) Holdings, the Borrower or any Material Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation (other than any liquidation permitted by clause (iv) of Section 6.03(a)), reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Holdings, the Borrower or any Material Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j) Holdings, the Borrower or any Material Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

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(k) one or more judgments for the payment of money in an aggregate amount in excess of $25,000,000 (other than any such judgment covered by insurance (other than under a self-insurance program) to the extent a claim therefor has been made in writing and liability therefor has not been denied by the insurer), shall be rendered against Holdings, the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of Holdings, the Borrower, or any Subsidiary to enforce any such judgment;

(l) one or more judgments for injunctive relief shall be rendered against Holdings, the Borrower, any Subsidiary or any combination thereof that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect;

(m) one or more ERISA Events shall have occurred that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect;

(n) any Lien purported to be created under any Security Document shall cease to be, or shall be asserted by any Loan Party not to be, a valid and perfected Lien on any material Collateral, with the priority required by the applicable Security Document, except (i) as expressly provided in Section 9.13 or (ii) as a result of the Administrative Agent’s failure to maintain possession of any stock certificate, promissory note or other instrument delivered to it under the Collateral Agreement;

(o) any Guarantee purported to be created under any Loan Document shall cease to be, or shall be asserted by any Loan Party not to be, in full force and effect, except upon the consummation of any transaction permitted under this Agreement as a result of which the Subsidiary Loan Party providing such Guarantee ceases to be a Subsidiary or upon the termination of such Loan Document in accordance with its terms; or

(p) a Change in Control shall occur;

then, and in every such event (other than an event with respect to Holdings or the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to Holdings and the Borrower, take any or all of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower hereunder,

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shall become due and payable immediately, and (iii) require the deposit of cash collateral in respect of LC Exposure as provided in Section 2.05(i), in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Holdings and the Borrower; and in the case of any event with respect to Holdings or the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate, the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower hereunder, shall immediately and automatically become due and payable and the deposit of such cash collateral in respect of LC Exposure shall immediately and automatically become due, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Holdings and the Borrower.

ARTICLE VIII

The Administrative Agent

Each of the Lenders and the Issuing Banks hereby irrevocably appoints the entity named as Administrative Agent in the heading of this Agreement and its successors to serve as administrative agent and collateral agent under the Loan Documents, and authorizes the Administrative Agent to take such actions and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto. In addition, to the extent required under the laws of any jurisdiction other than the United States, each of the Lenders and the Issuing Banks hereby grants to the Administrative Agent any required powers of attorney to execute any Security Document governed by the laws of such jurisdiction on such Lender’s or Issuing Bank’s behalf.

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender or an Issuing Bank as any other Lender or Issuing Bank and may exercise the same as though it were not the Administrative Agent, and such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with Holdings, the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or to exercise any discretionary power, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in the Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion, could expose the Administrative Agent to liability or

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be contrary to any Loan Document or applicable law, and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to Holdings, the Borrower, any Subsidiary or any other Affiliate of any of the foregoing that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith to be necessary, under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or wilful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by Holdings, the Borrower, a Lender or an Issuing Bank, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent or satisfaction of any condition that expressly refers to the matters described therein being acceptable or satisfactory to the Administrative Agent. Notwithstanding anything herein to the contrary, the Administrative Agent shall not have any liability arising from any confirmation of the Revolving Exposure or the component amounts thereof.

The Administrative Agent shall be entitled to rely, and shall not incur any liability for relying, upon any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the signatory, sender or authenticator thereof). The Administrative Agent also shall be entitled to rely, and shall not incur any liability for relying, upon any statement made to it orally or by telephone and believed by it to be made by the proper Person (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the signatory, sender or authenticator thereof), and may act upon any such statement prior to receipt of written confirmation thereof. The Administrative Agent may consult with legal counsel (who may be counsel for Holdings or the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

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The Administrative Agent may perform any of and all its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any of and all their duties and exercise their rights and powers through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facility provided for herein as well as activities as Administrative Agent.

Subject to the terms of this paragraph, the Administrative Agent may resign at any time from its capacity as such. In connection with such resignation, the Administrative Agent shall give notice of its intent to resign to the Lenders, the Issuing Banks and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its intent to resign, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent, which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed by the Borrower and such successor. Notwithstanding the foregoing, in the event no successor Administrative Agent shall have been so appointed and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its intent to resign, the retiring Administrative Agent may give notice of the effectiveness of its resignation to the Lenders, the Issuing Banks and the Borrower, whereupon, on the date of effectiveness of such resignation stated in such notice, (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents, provided that, solely for purposes of maintaining any security interest granted to the Administrative Agent under any Security Document for the benefit of the Secured Parties, the retiring Administrative Agent shall continue to be vested with such security interest as collateral agent for the benefit of the Secured Parties and, in the case of any Collateral in the possession of the Administrative Agent, shall continue to hold such Collateral, in each case until such time as a successor Administrative Agent is appointed and accepts such appointment in accordance with this paragraph (it being understood and agreed that the retiring Administrative Agent shall have no duty or obligation to take any further action under any Security Document, including any action required to maintain the perfection of any such security interest), and (b) the Required Lenders shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, provided that (i) all payments required to be made hereunder or under any other Loan Document to the Administrative Agent for the account of any Person other than the Administrative Agent shall be made directly to such Person and (ii) all notices and other communications required or contemplated to be given or made to the Administrative Agent shall also directly be given or made to each Lender and each Issuing Bank. Following the

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effectiveness of the Administrative Agent’s resignation from its capacity as such, the provisions of this Article and Section 9.03, as well as any exculpatory, reimbursement and indemnification provisions set forth in any other Loan Document, shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent and in respect of the matters referred to in the proviso under clause (a) above.

Each Lender and Issuing Bank acknowledges that it has, independently and without reliance upon the Administrative Agent, the Arrangers, the Co-Syndication Agents or any other Lender or Issuing Bank, or any of the Related Parties of any of the foregoing, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and Issuing Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent, the Arrangers, the Co-Syndication Agents or any other Lender or Issuing Bank, or any of the Related Parties of any of the foregoing, and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

Each Lender, by delivering its signature page to this Agreement and funding its Loans on the Effective Date, or delivering its signature page to an Assignment and Assumption pursuant to which it shall become a Lender hereunder, shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be delivered to, or be approved by or satisfactory to, the Administrative Agent or the Lenders on the Effective Date.

No Secured Party shall have any right individually to realize upon any of the Collateral or to enforce any Guarantee of the Secured Obligations, it being understood and agreed that all powers, rights and remedies under the Loan Documents may be exercised solely by the Administrative Agent on behalf of the Secured Parties in accordance with the terms thereof. In the event of a foreclosure by the Administrative Agent on any of the Collateral pursuant to a public or private sale or other disposition, the Administrative Agent or any Lender may be the purchaser or licensor of any or all of such Collateral at any such sale or other disposition, and the Administrative Agent, as agent for and representative of the Secured Parties (but not any Lender or Lenders in its or their respective individual capacities unless Required Lenders shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Loan Documents Obligations as a credit on account of the purchase price for any collateral payable by the Administrative Agent on behalf of the Secured Parties at such sale or other disposition. Each Secured Party, whether or not a party hereto, will be deemed, by its acceptance of the benefits of the Collateral and of the Guarantees of the Secured Obligations provided under the Loan Documents, to have agreed to the foregoing provisions.

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In furtherance of the foregoing and not in limitation thereof, no Hedging Agreement the obligations under which constitute Secured Obligations will create (or be deemed to create) in favor of any Secured Party that is a party thereto any rights in connection with the management or release of any Collateral or of the obligations of any Loan Party under any Loan Document. By accepting the benefits of the Collateral, each Secured Party that is a party to any such Hedging Agreement shall be deemed to have appointed the Administrative Agent to serve as administrative agent and collateral agent under the Loan Documents and agreed to be bound by the Loan Documents as a Secured Party thereunder.

Notwithstanding anything herein to the contrary, neither the Arrangers nor any Person named on the cover page of this Agreement as a Co-Syndication Agent shall have any duties or obligations under this Agreement or any other Loan Document (except in its capacity, as applicable, as a Lender or an Issuing Bank), but all such Persons shall have the benefit of the indemnities provided for hereunder.

The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Banks, and none of Holdings, the Borrower or any other Loan Party shall have any rights as a third party beneficiary of any such provisions.

ARTICLE IX

Miscellaneous

SECTION 9.01. Notices. (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by fax, as follows:

(i) if to Holdings or the Borrower, to it at 82 Running Hill Road, South Portland, Maine 04106, Attention of General Counsel (Fax No. (207) 775-8026);

(ii) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., Loan Operations, 10 South Dearborn, Floor 07, Chicago, Illinois 60603-2003, Attention of Joyce P. King (Fax No. (312) 385-7096), with a copy to JPMorgan Chase Bank, N.A., 2 Corporate Drive, Floor 07, Shelton, CT, 06484, Attention of Scott Farquhar (Fax No. (203) 944-8495);

(iii) if to any Issuing Bank, to it at its address (or fax number) most recently specified by it in a notice delivered to the Administrative Agent, Holdings and the Borrower (or, in the absence of any such notice, to the address (or fax number) set forth in the Administrative Questionnaire of the Lender that is serving as such Issuing Bank or is an Affiliate thereof);

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(iv) if to the Swingline Lender, to JPMorgan Chase Bank, N.A., Loan Operations, 10 South Dearborn, Floor 07, Chicago, Illinois 60603-2003, Attention of Joyce P. King (Fax No. (312) 385-7096); with a copy to JPMorgan Chase Bank, N.A., 2 Corporate Drive, Floor 07, Shelton, CT, 06484, Attention of Scott Farquhar (Fax No. (203) 944-8495); and

(v) if to any other Lender, to it at its address (or fax number) set forth in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by fax shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient); and notices delivered through electronic communications to the extent provided in paragraph (b) below shall be effective as provided in such paragraph.

(b) Notices and other communications to the Lenders and Issuing Banks hereunder may be delivered or furnished by electronic communications (including email and Internet and intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices under Article II to any Lender or Issuing Bank if such Lender or Issuing Bank, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. Any notices or other communications to the Administrative Agent, Holdings or the Borrower may be delivered or furnished by electronic communications pursuant to procedures approved by the recipient thereof prior thereto; provided that approval of such procedures may be limited or rescinded by any such Person by notice to each other such Person.

(c) Any party hereto may change its address or fax number for notices and other communications hereunder by notice to the other parties hereto.

SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Administrative Agent, any Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Banks and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the execution and delivery of this Agreement, the making of a Loan or the issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or any Issuing Bank may have had notice or knowledge of such Default at the time.

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(b) Except as provided in Section 2.20, none of this Agreement, any other Loan Document or any provision hereof or thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by Holdings, the Borrower, the Administrative Agent and the Required Lenders and, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, in each case with the consent of the Required Lenders, provided that (i) any provision of this Agreement or any other Loan Document may be amended by an agreement in writing entered into by Holdings, the Borrower and the Administrative Agent to cure any ambiguity, omission, defect or inconsistency so long as, in each case, the Lenders shall have received at least five Business Days’ prior written notice thereof and the Administrative Agent shall not have received, within five Business Days of the date of such notice to the Lenders, a written notice from the Required Lenders stating that the Required Lenders object to such amendment and (ii) no such agreement shall (A) increase the Commitment of any Lender without the written consent of such Lender, (B) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (C) postpone the scheduled maturity date of any Loan or the required date of reimbursement of any LC Disbursement, or any date for the payment of any interest or fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (D) change Section 2.17(b) or 2.17(c) in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender, (E) change any of the provisions of this Section or the percentage set forth in the definition of the term “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender; provided that, with the consent of the Required Lenders, the provisions of this Section and the definition of the term “Required Lenders” may be amended to include references to any new class of loans created under this Agreement (or to lenders extending such loans) on substantially the same basis as the corresponding references relating to the existing Loans or Lenders, (F) release all or substantially all the Subsidiary Loan Parties from their Guarantees under the Collateral Agreement (except as expressly provided in Section 9.13 or the Collateral Agreement), or limit their liability in respect of such Guarantee, without the written consent of each Lender and (G) release all or substantially all the Collateral from the Liens of the Security Documents, without the written consent of each Lender (except as expressly provided in Section 9.13 or the applicable Security Document (including any such release by the Administrative Agent in connection with any sale or other disposition of the Collateral upon the exercise of remedies under the Security Documents), it being understood that an amendment or other modification of the type of obligations secured by the Security Documents shall not be deemed to be a release of the Collateral from the Liens of the Security Documents); provided further that no such agreement shall amend, modify, extend or otherwise affect the rights or obligations of the Administrative Agent, any Issuing Bank or the Swingline Lender without the prior written consent of the Administrative Agent, such Issuing Bank or the Swingline Lender, as the case may be.

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SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Arrangers, the Co-Syndication Agents and their Affiliates, including the reasonable and documented fees, charges and disbursements of a single counsel for all of the foregoing, together with local counsel as necessary, in connection with the structuring, arrangement and syndication of the credit facility provided for herein and any credit or similar facility refinancing or replacing, in whole or in part, any of the credit facility provided for herein, including the preparation, execution and delivery of the Engagement Letter, as well as the preparation, execution, delivery and administration of this Agreement, the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by any Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Arrangers, the Co-Syndication Agents, any Issuing Bank or any Lender, including the reasonable and documented fees, charges and disbursements of a single counsel for the Administrative Agent and a single counsel for the other agents and Lenders, together in each case with local counsel as necessary, in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

(b) The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), the Arrangers, the Co-Syndication Agents, each Lender and Issuing Bank, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”), against, and hold each Indemnitee harmless from, any and all losses, claims, damages, penalties, liabilities and related expenses, including the fees, charges and disbursements of a single counsel (except in cases where an actual or potential conflict exists among Indemnitees), together with local counsel as necessary, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the structuring, arrangement and the syndication of the credit facility provided for herein, the preparation, execution, delivery and administration of this Agreement, the other Loan Documents or any other agreement or instrument contemplated hereby or thereby, the performance by the parties to this Agreement or the other Loan Documents of their obligations thereunder or the consummation of the Transactions or any other transactions contemplated thereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by any Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property currently or formerly owned or operated by Holdings, the Borrower or any Subsidiary, or any Environmental Liability related in any way to Holdings, the Borrower or any Subsidiary,

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or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and whether initiated against or by any party to this Agreement or any other Loan Document, any Affiliate of any of the foregoing or any third party (and regardless of whether any Indemnitee is a party thereto); provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or wilful misconduct of such Indemnitee or its Related Parties or the breach by such Indemnitee (or its Related Parties) of its confidentiality obligations hereunder or from disputes that are (x) solely among Lenders and (y) do not arise from the Borrower’s or any other Loan Party’s action or inaction or breach of its obligations under this Agreement or applicable law. This Section 9.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

(c) To the extent that the Borrower fails to pay any amount required to be paid by it under paragraph (a) or (b) of this Section to the Administrative Agent (or any sub-agent thereof), any Issuing Bank, the Swingline Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such Issuing Bank, the Swingline Lender or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or such sub-agent), such Issuing Bank or the Swingline Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), any Issuing Bank or the Swingline Lender in connection with such capacity. For purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the sum of the total Revolving Exposures, and unused Commitments at the time (or most recently outstanding and in effect).

(d) To the extent permitted by applicable law, neither Holdings nor the Borrower shall assert, or permit any of its Affiliates or Related Parties to assert, and each hereby waives, any claim against any Indemnitee (i) for any damages arising from the use by others of information or other materials obtained through telecommunications, electronic or other information transmission systems (including the Internet), or (ii) on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

(e) All amounts due under this Section shall be payable promptly after written demand therefor.

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SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter of Credit), except that (i) neither Holdings nor the Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender (and any attempted assignment or transfer by Holdings or 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. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section), the Arrangers, the Co-Syndication Agents and, to the extent expressly contemplated hereby, the Related Parties of any of the Administrative Agent, the Arrangers, the Co-Syndication Agents, any Issuing Bank and any Lender) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

(A) the Borrower; provided that no consent of the Borrower shall be required (1) for an assignment to a Lender, an Affiliate of a Lender or an Approved Fund and (2) if an Event of Default has occurred and is continuing, for any other assignment; provided further that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five Business Days after having received notice thereof; and

(B) the Administrative Agent, the Swingline Lender and each Issuing Bank.

(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 Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consents; provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

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(B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;

(C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and

(D) 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 MNPI) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable law, including Federal, State and foreign securities laws.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(v) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 9.03).

(iv) The Administrative Agent shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and records of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements 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 Issuing Banks 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, as to entries pertaining to it, any Issuing Bank or Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in this Section and any written consent to such assignment required by this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information

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contained therein in the Register; provided that the Administrative Agent shall not be required to accept such Assignment and Assumption or so record the information contained therein if the Administrative Agent reasonably believes that such Assignment and Assumption lacks any written consent required by this Section or is otherwise not in proper form, it being acknowledged that the Administrative Agent shall have no duty or obligation (and shall incur no liability) with respect to obtaining (or confirming the receipt of) any such written consent or with respect to the form of (or any defect in) such Assignment and Assumption, any such duty and obligation being solely with the assigning Lender and the assignee. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph, and following such recording, unless otherwise determined by the Administrative Agent (such determination to be made in the sole discretion of the Administrative Agent, which determination may be conditioned on the consent of the assigning Lender and the assignee), shall be effective notwithstanding any defect in the Assignment and Assumption relating thereto. Each assigning Lender and the assignee, by its execution and delivery of an Assignment and Assumption, shall be deemed to have represented to the Administrative Agent that all written consents required by this Section with respect thereto (other than the consent of the Administrative Agent) have been obtained and that such Assignment and Assumption is otherwise duly completed and in proper form. Each assignee, by its execution and delivery of an Assignment and Assumption, shall be deemed to have represented to the assigning Lender and the Administrative Agent that such assignee is an Eligible Assignee.

(c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent or any Issuing Bank, sell participations to one or more Eligible Assignees (“Participants”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) Holdings, the Borrower, the Administrative Agent, the Issuing Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement or any other Loan Document; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant or requires the approval of all the Lenders. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 (subject to the requirements and limitations therein, including the requirements under Section 2.16(f) (it being understood that the documentation required under Section 2.16(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 (A) agrees to be subject to the provisions of

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Sections 2.17 and 2.18 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 2.14 or 2.16, 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 a Change in Law 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 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.17(c) as though it were a Lender. Each Lender that sells a participation shall maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”) and shall make its Participant Register available to the Borrower upon request. 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.

SECTION 9.05. Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Arrangers, the Co-Syndication Agents, any Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any Loan Document is executed and delivered or any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. Notwithstanding the foregoing or anything else to the contrary set forth in this Agreement or any other Loan Document, in the event that, in connection with the refinancing or repayment in full of the credit facility provided for herein, an Issuing Bank shall have provided to the Administrative Agent a written consent to the release of the Revolving Lenders from their obligations hereunder with respect to any Letter of Credit issued by such Issuing Bank (whether as a result of the obligations of the Borrower (and any other account party) in respect of such Letter of Credit having been collateralized in full by a deposit of cash with such Issuing Bank, or being supported by a letter of credit that names such Issuing Bank as the beneficiary thereunder, or otherwise),

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then from and after such time such Letter of Credit shall cease to be a “Letter of Credit” outstanding hereunder for all purposes of this Agreement and the other Loan Documents, and the Revolving Lenders shall be deemed to have no participations in such Letter of Credit, and no obligations with respect thereto, under Section 2.05(d) or 2.05(f). The provisions of Sections 2.14, 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

SECTION 9.06. 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. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof, including the commitments of the Lenders and, if applicable, their Affiliates under the Engagement Letter and any commitment advices submitted by them (but do not supersede any other provisions of the Engagement Letter (or any separate letter agreements with respect to fees payable to the Administrative Agent or any Issuing Bank) that do not by the terms of such documents terminate upon the effectiveness of this Agreement, all of which provisions shall remain in full force and effect). Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 9.07. 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.

SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and Issuing Bank, and each Affiliate of any of the foregoing, is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) or other amounts at any time held and other obligations (in whatever currency) at any time owing by such Lender or Issuing Bank, or by such an Affiliate, to or for the credit or the account of Holdings or the Borrower against any of and all the obligations then due of Holdings or the Borrower now or hereafter existing under this Agreement held by such Lender or Issuing Bank,

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irrespective of whether or not such Lender or Issuing Bank shall have made any demand under this Agreement. The rights of each Lender and Issuing Bank, and each Affiliate of any of the foregoing, under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, Issuing Bank or Affiliate may have.

SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York.

(b) Each of Holdings and the Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court 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 any other Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, any Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against Holdings, the Borrower or any of their properties in the courts of any jurisdiction.

(c) Each of Holdings and the Borrower hereby irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

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

SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY

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OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 9.12. Confidentiality. Each of the Administrative Agent, the Lenders and the Issuing Banks agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Related Parties, including accountants, legal counsel and other agents and advisors, it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential, (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable law or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies under this Agreement or any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing confidentiality undertakings substantially similar to those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its Related Parties) to any swap or derivative transaction relating to Holdings, the Borrower or any Subsidiary and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Lender, any Issuing Bank or any Affiliate of any of the foregoing on a nonconfidential basis from a source other than the Borrower. For purposes of this Section, “Information” means all information received from Holdings or the Borrower relating to Holdings, the Borrower or any Subsidiary or their businesses, other than any such information that is available to the Administrative Agent, any Lender or any Issuing Bank on a nonconfidential basis prior to disclosure by Holdings or the Borrower; provided that, in the case of information received from Holdings or the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

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SECTION 9.13. Release of Liens and Guarantees. (a) A Subsidiary Loan Party shall automatically be released from its obligations under the Loan Documents, and all security interests created by the Security Documents in Collateral owned by such Subsidiary Loan Party shall be automatically released, upon the consummation of any transaction permitted by this Agreement as a result of which such Subsidiary Loan Party ceases to be a Subsidiary; provided that, if so required by this Agreement, the Required Lenders shall have consented to such transaction and the terms of such consent shall not have provided otherwise. Upon any sale or other transfer by any Loan Party (other than to Holdings, the Borrower or any Subsidiary) of any Collateral in a transaction permitted under this Agreement, or upon the effectiveness of any written consent to the release of the security interest created under any Security Document in any Collateral pursuant to Section 9.02, the security interests in such Collateral created by the Security Documents shall be automatically released.

(b) In connection with any termination or release pursuant to this Section, the Administrative Agent shall execute and deliver to any Loan Party, at such Loan Party’s expense, all documents that such Loan Party shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section shall be without recourse to or warranty by the Administrative Agent.

SECTION 9.14. USA PATRIOT Act Notice. Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies each Loan Party that pursuant to the requirements of the USA PATRIOT Act it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify such Loan Party in accordance with such Act.

SECTION 9.15. No Fiduciary Relationship. Each of Holdings and the Borrower, on behalf of itself and the Subsidiaries, agrees that in connection with all aspects of the transactions contemplated hereby and any communications in connection therewith, Holdings, the Borrower, the Subsidiaries and their Affiliates, on the one hand, and the Administrative Agent, the Lenders and their Affiliates, on the other hand, will have a business relationship that does not create, by implication or otherwise, any fiduciary duty on the part of the Administrative Agent, the Lenders or their Affiliates, and no such duty will be deemed to have arisen in connection with any such transactions or communications.

SECTION 9.16. Non-Public Information. (a) Each Lender acknowledges that all information, including requests for waivers and amendments, furnished by Holdings, the Borrower or the Administrative Agent pursuant to or in connection with, or in the course of administering, this Agreement will be syndicate-level information, which may contain MNPI. Each Lender represents to Holdings, the Borrower and the Administrative Agent that (i) it has developed compliance procedures regarding the use of MNPI and that it will handle MNPI in accordance with such procedures and applicable law, including Federal, state and foreign securities laws, and (ii) it has identified in its Administrative Questionnaire a credit contact who may receive information that may contain MNPI in accordance with its compliance procedures and applicable law, including Federal, state and foreign securities laws.

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(b) Holdings, the Borrower and each Lender acknowledge that, if information furnished by Holdings or the Borrower pursuant to or in connection with this Agreement is being distributed by the Administrative Agent through IntraLinks/IntraAgency, SyndTrak or another website or other information platform (the “Platform”), (i) the Administrative Agent may post any information that Holdings or the Borrower has indicated as containing MNPI solely on that portion of the Platform as is designated for Private Side Lender Representatives and (ii) if Holdings or the Borrower has not indicated whether any information furnished by it pursuant to or in connection with this Agreement contains MNPI, the Administrative Agent reserves the right to post such information solely on that portion of the Platform as is designated for Private Side Lender Representatives.

(c) Each of Holdings and the Borrower agrees, at the request of the Administrative Agent, to specify whether any information furnished by Holdings or the Borrower to the Administrative Agent pursuant to, or in connection with, this Agreement contains MNPI (it being acknowledged that nothing in this paragraph shall be deemed to obligate the Administrative Agent to make any such request).

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

FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC.
	by	/s/ Robin A. Sawyer
		Name: Robin A. Sawyer
		Title: Vice President and Controller

FAIRCHILD SEMICONDUCTOR CORPORATION
	by	/s/ Robin A. Sawyer
		Name: Robin A. Sawyer
		Title: Vice President and Controller

JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent,
	by	/s/ D. Scott Farquhar
		Name: D. Scott Farquhar
		Title: Senior Vice President

BANK OF AMERICA, N.A., as a Lender,
	by	/s/ Karen L. Cummings
		Name: Karen L. Cummings
		Title: Vice President

CITIBANK, N.A., as a Lender,
	by	/s/ Ahu Gures
		Name: Ahu Gures
		Title: Vice President

111

DEUTSCHE BANK TRUST COMPANY AMERICAS, as a Lender,
	by	/s/ Paul O’Leary
		Name: Paul O’Leary
		Title: Director

by	/s/ Michael Getz
	Name: Michael Getz
	Title: Vice President

IFTH THIRD BANK, as a Lender,
	by	/s/ Valerie Schanzzer
		Name: Valerie Schanzzer
		Title: Vice President

HSBC BANK USA NA., as a Lender,
	by	/s/ Elise M. Russo
		Name: Elise M. Russo
		Title: Global Relationship Manager

PEOPLE’S UNITED BANK, as a Lender,
	by	/s/ Matthew G. Modlish
		Name: Matthew G. Modlish
		Title: Senior Vice President

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RAYMOND JAMES BANK, FSB, as a Lender,
	by	/s/ Kathy Bennett
		Name: Kathy Bennett
		Title: Vice President

RBS CITIZENS, N.A., as a Lender,
	by	/s/ Tom Devlin
		Name: Tom Devlin
		Title: Senior Vice President, Senior Portfolio Manager

WEBSTER BANK, N.A., as a Lender,
	by	/s/ Raymond C. Hoefling
		Name: Raymond C. Hoefling
		Title: Senior Vice President

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EX-31.01

Exhibit 31.01

CERTIFICATION

I, Mark S. Thompson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fairchild Semiconductor International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2011	/s/ Mark S. Thompson
	Mark S. Thompson
	Chairman, President and Chief Executive Officer

EX-31.02

Exhibit 31.02

CERTIFICATION

I, Mark S. Frey, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fairchild Semiconductor International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2011	/s/ Mark S. Frey
	Mark S. Frey
	Executive Vice President, Chief Financial Officer and Treasurer

EX-32.01

Exhibit 32.01

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Fairchild Semiconductor International, Inc. (the “company”) on Form 10-Q for the period ended June 26, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark S. Thompson, Chief Executive Officer of the company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of the company.

/s/ Mark S. Thompson

Mark S. Thompson

Chief Executive Officer

August 5, 2011

EX-32.02

Exhibit 32.02

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Fairchild Semiconductor International, Inc. (the “company”) on Form 10-Q for the period ended June 26, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark S. Frey, Chief Financial Officer of the company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of the company.

/s/ Mark S. Frey

Mark S. Frey

Chief Financial Officer

August 5, 2011

XML



Goodwill And Intangible Assets (Schedule Of Carrying Value Of Goodwill) (Details) (USD $) In Millions	3 Months Ended	6 Months Ended
	Mar. 27, 2011	Jun. 26, 2011	Dec. 26, 2010
Goodwill balance, gross		$ 372.7	$ 368.1
Accumulated Impairment Losses		(203.3)	(203.3)
Goodwill balance, net		169.4	164.8
TranSiC acquisition	4.3	4.3
Other tax acquisition adjustment	0.3	0.3
MCCC [Member]
Goodwill balance, gross		165.1	164.8
Accumulated Impairment Losses
Goodwill balance, net		165.1	164.8
Other tax acquisition adjustment		0.3
PCIA [Member]
Goodwill balance, gross		153.1	148.8
Accumulated Impairment Losses		(148.8)	(148.8)
Goodwill balance, net		4.3
TranSiC acquisition		4.3
SDT [Member]
Goodwill balance, gross		54.5	54.5
Accumulated Impairment Losses		(54.5)	(54.5)
Goodwill balance, net

XML



Consolidated Balance Sheets (Parenthetical) (USD $) In Millions	Jun. 26, 2011	Dec. 26, 2010
Consolidated Balance Sheets
Accounts receivable, allowances	$ 29.8	$ 26.9

XML



Consolidated Statements Of Operations (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010
Consolidated Statements Of Operations
Total revenue	$ 433.2	$ 409.6	$ 846.2	$ 787.6
Cost of sales	272.5	266.3	533.5	522.7
Gross margin	160.7	143.3	312.7	264.9
Gross margin %	37.10%	35.00%	37.00%	33.60%
Operating expenses:
Research and development	39.9	29.1	76.8	57.5
Selling, general and administrative	58.3	56.0	113.4	108.3
Amortization of acquisition-related intangibles	4.7	5.6	10.3	11.2
Restructuring and impairments	2.9		5.4	2.4
Total operating expenses	105.8	90.7	205.9	179.4
Operating income	54.9	52.6	106.8	85.5
Other expense, net	3.3	2.6	4.4	5.0
Income before income taxes	51.6	50.0	102.4	80.5
Provision for income taxes	6.7	6.2	14.0	14.1
Net income	$ 44.9	$ 43.8	$ 88.4	$ 66.4
Net income per common share:
Basic	$ 0.35	$ 0.35	$ 0.70	$ 0.53
Diluted	$ 0.34	$ 0.34	$ 0.67	$ 0.52
Weighted average common shares:
Basic	127.9	125.2	127.0	125.0
Diluted	131.7	128.1	131.3	128.3

XML



Restructuring And Impairments (Summary Of Restructuring And Impairment Cost) (Details) (USD $) In Millions	3 Months Ended
	Jun. 26, 2011	Mar. 27, 2011	Jun. 27, 2010	Jun. 26, 2011 Employee Separation Costs [Member] 2009 Infrastructure Realignment Program [Member]	Mar. 27, 2011 Employee Separation Costs [Member] 2009 Infrastructure Realignment Program [Member]	Jun. 26, 2011 Employee Separation Costs [Member] 2010 Infrastructure Realignment Program [Member]	Mar. 27, 2011 Employee Separation Costs [Member] 2010 Infrastructure Realignment Program [Member]	Jun. 26, 2011 Employee Separation Costs [Member] 2011 Infrastructure Realignment Program [Member]	Mar. 27, 2011 Employee Separation Costs [Member] 2011 Infrastructure Realignment Program [Member]	Jun. 26, 2011 Lease Impairment Costs [Member] 2008 Infrastructure Realignment Program [Member]	Mar. 27, 2011 Lease Impairment Costs [Member] 2008 Infrastructure Realignment Program [Member]	Jun. 26, 2011 Fab Closure Costs [Member] 2009 Infrastructure Realignment Program [Member]	Mar. 27, 2011 Fab Closure Costs [Member] 2009 Infrastructure Realignment Program [Member]	Jun. 27, 2010 2009 Infrastructure Realignment Program [Member]	Mar. 28, 2010 2009 Infrastructure Realignment Program [Member]
Accrual Balance, Beginning balance	$ 10.6	$ 11.0		$ 8.4	$ 8.1	$ 1.7	$ 2.2			$ 0.5	$ 0.7
New Charges	3.0	2.5		0.5	0.6	0.9	1.0	1.3	0.7			0.3	0.2
Cash Paid	(1.5)	(2.9)			(0.3)	(0.3)	(1.5)	(0.7)	(0.7)	(0.2)	(0.2)	(0.3)	(0.2)
Reserve Release	(0.1)		(2.4)	(0.1)										(0.2)	(0.2)
Non-Cash Items	0
Accrual Balance, Ending balance	$ 12.0	$ 10.6		$ 8.8	$ 8.4	$ 2.3	$ 1.7	$ 0.6		$ 0.3	$ 0.5

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Jun. 26, 2011

Supplemental Cash Flow Information

Schedule Of Cash Flow Supplemental Disclosures

	Six Months Ended
	June 26, 2011		June 27, 2010
	(In millions)
Cash paid for:
Income taxes, net	$	15.1	$	7.7
Interest	$	2.5	$	4.9

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Document And Entity Information	6 Months Ended
	Jun. 26, 2011
Document And Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 26, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Entity Registrant Name	FAIRCHILD SEMICONDUCTOR INTERNATIONAL INC
Entity Central Index Key	0001036960
Current Fiscal Year End Date	--12-25
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	127,682,724

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Segment Information (Details) (USD $) In Millions	3 Months Ended				6 Months Ended
	Jun. 26, 2011		Jun. 27, 2010		Jun. 26, 2011		Jun. 27, 2010
Total revenue	$ 433.2		$ 409.6		$ 846.2		$ 787.6
Operating income	54.9		52.6		106.8		85.5
Restructuring and impairments expense	(2.9)				(5.4)		(2.4)
Stock-based compensation expense					(13.0)		(11.2)
Selling, general and administrative expense	(58.3)		(56.0)		(113.4)		(108.3)
Other expense, net	3.3		2.6		4.4		5.0
Income before income taxes	51.6		50.0		102.4		80.5
MCCC [Member]
Total revenue	166.1		168.8		328.1		324.9
Operating income	32.7		41.2		68.6		73.2
PCIA [Member]
Total revenue	224.4		190.6		434.3		369.7
Operating income	66.0		51.7		124.6		94.8
SDT [Member]
Total revenue	42.7		50.2		83.8		93.0
Operating income	8.8		10.3		17.7		18.1
Corporate [Member]
Restructuring and impairments expense	(2.9)		0		(5.4)		(2.4)
Stock-based compensation expense	(8.0)		(5.9)		(13.0)		(11.7)
Selling, general and administrative expense	(41.4)		(43.1)		(85.0)		(83.2)
Other	$ (0.3)	[1]	$ (1.6)	[1]	$ (0.7)	[1]	$ (3.3)	[1]

[1] Other primarily consists of accelerated depreciation related to the planned closure of the Mountaintop facility.

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Securities (Tables)

6 Months Ended

12 Months Ended

Jun. 26, 2011

Dec. 26, 2010

Securities

Available-For-Sale Securities

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Short-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	0.2	$	—	$	—		$	0.2
Total marketable securities	$	0.2	$	—	$	—		$	0.2
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Long-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	1.7	$	0.3				$	2.0
Corporate debt securities		0.3							0.3
Auction rate securities		35.6				(6.3	)		29.3
Total securities	$	37.6	$	0.3	$	(6.3	)	$	31.6

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Short-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	0.1	$	—	$	—		$	0.1
Total marketable securities	$	0.1	$	—	$	—		$	0.1
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Long-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	1.9	$	0.1	$	—		$	2.0
Corporate debt securities		0.3		—		—		$	0.3
Auction rate securities		35.3				(7.3	)		28.0
Total securities	$	37.5	$	0.1	$	(7.3	)	$	30.3

Available-For-Sale Securities By Contractual Maturity

	Amortized Cost		Market Value
	(In millions)
Due in one year or less	$	0.2	$	0.2
Due after one year through three years		0.4		0.4
Due after three years through ten years		1.2		1.4
Due after ten years	$	36.0	$	29.8
	$	37.8	$	31.8

Roll Forward Of The Amount Related To Credit Losses Recognized In Earnings

	Credit Losses Recognized in Earnings
	(In millions)
Balance at beginning of period	$	14.5
Accretion of impairments included in net income		(0.2	)
Balance at end of period	$	14.3

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Securities (Available-For-Sale Securities And Credit Losses Recognized In Earnings) (Details) (USD $) In Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 28, 2009	Jun. 26, 2011	Dec. 26, 2010
Securities
Balance at beginning of period	$ 0	$ 14.3	$ 14.5
Accretion of impairments included in net income		(0.2)
Balance at end of period	$ 0	$ 14.3	$ 14.5

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Derivatives

6 Months Ended

Jun. 26, 2011

Derivatives

Derivatives

Note 6 – Derivatives

Derivatives. The company uses derivative instruments to manage exposures to changes in foreign currency exchange rates and interest rates. In accordance with the requirements of the Derivatives and Hedging Topic of the FASB ASC, the fair value of these hedges is recorded on the balance sheet. For the fair value of derivatives, see Note 5.

Foreign Currency Derivatives. The company uses currency forward and combination option contracts to hedge a portion of its forecasted foreign exchange denominated revenues and expenses. The company monitors its foreign currency exposures to maximize the overall effectiveness of its foreign currency hedge positions. Currencies hedged include the euro, Japanese yen, Philippine peso, Malaysian ringgit, Korean won and Chinese yuan. The company's objectives for holding derivatives are to minimize the risks using the most effective methods to eliminate or reduce the impacts of these exposures. The maturities of the cash flow hedges are 12 months or less.

Changes in the fair value of derivative instruments related to time value are included in the assessment of hedge effectiveness. Hedge ineffectiveness, determined in accordance the Derivatives and Hedging Topic of the FASB ASC, did not have a material impact on earnings for the three and six months ended June 26, 2011 and June 27, 2010. No cash flow hedges were derecognized or discontinued during the three and six months ended June 26, 2011 and June 27, 2010.

Derivative gains and losses included in accumulated other comprehensive income (AOCI) are reclassified into earnings at the time the forecasted transaction is recognized. The company estimates that $2.3 million of net unrealized derivative gains included in AOCI will be reclassified into earnings within the next twelve months.

The company also uses currency forward and combination option contracts to offset the foreign currency impact of balance sheet translation. These derivatives have one month terms and the initial fair value, if any, and the subsequent gains or losses on the change in fair value are reported in earnings within the same income statement line as the impact of the foreign currency translation.

Interest Rate Derivatives. The company's variable-rate debt exposes the company to variability in interest payments due to changes in interest rates. The company used a forward interest rate swap to mitigate the interest rate risk on a portion of its variable-rate borrowings in order to manage fluctuations in cash flows resulting from changes in interest rates on variable-rate debt. This hedge expired on December 31, 2009.

Effectiveness of this hedge was calculated by comparing the fair value of the derivative to a hypothetical derivative that would be a perfect hedge of floating rate debt. The value of the hedge at inception was zero and any ineffectiveness during the life of the swap was immaterial.

Derivative gains and losses included in AOCI were reclassified into earnings at the time the forecasted transaction was recognized. The amounts were reclassified into interest expense as a yield adjustment in the same period in which the related interest on the floating-rate debt obligations affect earnings.

The tables below show the notional principal and the location and amounts of the derivative fair values in the consolidated balance sheet as of June 26, 2011 and December 26, 2010 as well as the location of derivative gains and losses in the statement of operations for the six months ended June 26, 2011 and June 27, 2010. Pursuant to the Derivatives and Hedging Topic of the FASB ASC, the company nets the fair value of all derivative financial instruments with counterparties for which a master netting arrangement is utilized. The notional principal amounts for these instruments provide one measure of the transaction volume outstanding as of the end of the period and do not represent the amount of the company's exposure to credit or market loss. The estimates of fair value are based on applicable and commonly used pricing models using prevailing financial market information as of June 26, 2011 and December 26, 2010. Although the following table reflects the notional principal and fair value of amounts of derivative financial instruments, it does not reflect the gains or losses associated with the exposures and transactions that these financial instruments are intended to hedge. The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures will depend on actual market conditions during the remaining life of the instruments.

The following tables present derivatives designated as hedging instruments under the Derivatives and Hedging Topic of the FASB ASC.

	As of June 26, 2011									As of December 26, 2010
	Balance Sheet Classification	Notional Amount		Fair Value			Amount of Gain (Loss) Recognized In AOCI			Balance Sheet Classification	Notional Amount		Fair Value			Amount of Gain (Loss) Recognized In AOCI
	(In millions)									(In millions)
Derivatives in Cash Flow Hedges
Foreign exchange contracts
Derivatives for forecasted revenues	Current assets	$	—	$	—		$	—		Current assets	$	41.9	$	0.8		$	0.8
Derivatives for forecasted revenues	Current liabilities		56.8		(1.1	)		(1.1	)	Current liabilities	$	12.0	$	(0.2	)		(0.2	)
Derivatives for forecasted expenses	Current assets		92.9		3.4			3.4		Current assets		110.3		1.8			1.8
Derivatives for forecasted expenses	Current liabilities		10.2		(0.0	)		(0.0	)	Current liabilities		—		—			—
Total foreign exchange contract derivatives		$	159.9	$	2.3		$	2.3			$	164.2	$	2.4		$	2.4

	For the Six Months Ended June 26, 2011							For the Six Months Ended June 27, 2010
	Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income			Amount of Gain (Loss) Reclassified from AOCI			Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income			Amount of Gain (Loss) Reclassified from AOCI
Derivatives in Cash Flow Hedges
Foreign Currency contracts	Revenue	$	(2.4	)	$	(2.4	)	Revenue	$	0.7		$	0.7
Foreign Currency contracts	Expenses		2.8			2.8		Expenses		2.0			2.0
Interest Rate contract	Interest Expense		—			—		Interest Expense		(1.8	)		(1.8	)
		$	0.4		$	0.4			$	0.9		$	0.9

	Gain (Loss) Recognized in OCI for Derivative Instruments (1)
	Six Months Ended June  26, 2011
Foreign exchange contracts	$	—

(1) This amount is inclusive of both realized and unrealized gains and losses recognized in OCI.

The following tables present derivatives not designated as hedging instruments under Derivatives and Hedging Topic of the FASB ASC.

	As of June 26, 2011						As of December 26, 2010
	Balance Sheet Classification	Notional Amount		Fair Value			Balance Sheet Classification	Notional Amount		Fair Value
	(In millions)						(In millions)
Derivatives Not Designated as Hedging Instruments
Foreign Exchange Contracts	Current assets	$	—	$	—		Current assets	$	—	$	—
Foreign Exchange Contracts	Current liabilities		25.6		(0.0	)	Current liabilities		20.7		(0.0	)
Total derivatives, net		$	25.6	$	(0.0	)		$	20.7	$	(0.0	)

	For the Six Months Ended June 26, 2011				For the Six Months Ended June 27, 2010
	Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income			Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income
	(In millions)
Derivatives Not Designated as Hedging Instruments
Foreign Exchange Contracts	Revenue	$	(0.2	)	Revenue	$	0.1
Foreign Exchange Contracts	Expenses		0.8		Expenses		0.4
Net gain (loss) recognized in income		$	0.6			$	0.5

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Segment Information (Tables)

6 Months Ended

Jun. 26, 2011

Segment Information

Schedule Of Selected Operating Segment Financial Information

	Three Months Ended						Six Months Ended
	June 26, 2011			June 27, 2010			June 26, 2011			June 27, 2010
				(In millions)
Revenue and operating income:
MCCC
Total revenue	$	166.1		$	168.8		$	328.1		$	324.9
Operating income		32.7			41.2			68.6			73.2
PCIA
Total revenue		224.4			190.6			434.3			369.7
Operating income		66.0			51.7			124.6			94.8
SDT
Total revenue		42.7			50.2			83.8			93.0
Operating income		8.8			10.3			17.7			18.1
Corporate
Restructuring and impairments expense		(2.9	)		0.0			(5.4	)		(2.4	)
Stock-based compensation expense		(8.0	)		(5.9	)		(13.0	)		(11.7	)
Selling, general and administrative expense		(41.4	)		(43.1	)		(85.0	)		(83.2	)
Other (1)		(0.3	)		(1.6	)		(0.7	)		(3.3	)
Total consolidated
Total revenue		433.2			409.6			846.2			787.6
Operating income		54.9			52.6			106.8			85.5
Other expense, net		3.3			2.6			4.4			5.0
Income before income taxes	$	51.6		$	50.0		$	102.4		$	80.5

(1) Other primarily consists of accelerated depreciation related to the planned closure of the Mountaintop facility.

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Derivatives (Derivatives Not Designated As Hedging Instruments) (Details) (Not Designated as Hedging Instrument [Member], USD $) In Millions	6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Dec. 26, 2010
Notional amount of derivatives not designated as hedging instruments	$ 25.6		$ 20.7
Derivatives not designated as hedging instruments at fair value	0		0
Amount of Gain (Loss) Recognized In Income	0.6	0.5
Foreign Exchange Contracts [Member] | Revenue [Member]
Amount of Gain (Loss) Recognized In Income	(0.2)	0.1
Foreign Exchange Contracts [Member] | Expenses [Member]
Amount of Gain (Loss) Recognized In Income	0.8	0.4
Foreign Exchange Contracts [Member] | Current Liabilities [Member]
Notional amount of derivatives not designated as hedging instruments	25.6		20.7
Derivatives not designated as hedging instruments at fair value	$ 0		$ 0

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Fair Value (Changes In Level 3 Securities) (Details) (Fair Value, Significant Unobservable Inputs ( Level 3) [Member], USD $) In Millions	6 Months Ended
	Jun. 26, 2011
Fair Value, Significant Unobservable Inputs ( Level 3) [Member]
Balance at beginning of period	$ 28.0
Total realized and unrealized gains or (losses) included in OCI	1.1
Accretion of impairments included in net income	0.2
Balance at end of period	$ 29.3

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Derivatives (Tables)

6 Months Ended

Jun. 26, 2011

Derivatives

Derivatives Designated As Hedging Instruments

	As of June 26, 2011									As of December 26, 2010
	Balance Sheet Classification	Notional Amount		Fair Value			Amount of Gain (Loss) Recognized In AOCI			Balance Sheet Classification	Notional Amount		Fair Value			Amount of Gain (Loss) Recognized In AOCI
	(In millions)									(In millions)
Derivatives in Cash Flow Hedges
Foreign exchange contracts
Derivatives for forecasted revenues	Current assets	$	—	$	—		$	—		Current assets	$	41.9	$	0.8		$	0.8
Derivatives for forecasted revenues	Current liabilities		56.8		(1.1	)		(1.1	)	Current liabilities	$	12.0	$	(0.2	)		(0.2	)
Derivatives for forecasted expenses	Current assets		92.9		3.4			3.4		Current assets		110.3		1.8			1.8
Derivatives for forecasted expenses	Current liabilities		10.2		(0.0	)		(0.0	)	Current liabilities		—		—			—
Total foreign exchange contract derivatives		$	159.9	$	2.3		$	2.3			$	164.2	$	2.4		$	2.4

Derivatives Designated As Hedging Instruments - Income Statement

	For the Six Months Ended June 26, 2011							For the Six Months Ended June 27, 2010
	Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income			Amount of Gain (Loss) Reclassified from AOCI			Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income			Amount of Gain (Loss) Reclassified from AOCI
Derivatives in Cash Flow Hedges
Foreign Currency contracts	Revenue	$	(2.4	)	$	(2.4	)	Revenue	$	0.7		$	0.7
Foreign Currency contracts	Expenses		2.8			2.8		Expenses		2.0			2.0
Interest Rate contract	Interest Expense		—			—		Interest Expense		(1.8	)		(1.8	)
		$	0.4		$	0.4			$	0.9		$	0.9

Gain (Loss) Recognized In OCI For Derivative Instruments

	Gain (Loss) Recognized in OCI for Derivative Instruments (1)
	Six Months Ended June  26, 2011
Foreign exchange contracts	$	—

(1) This amount is inclusive of both realized and unrealized gains and losses recognized in OCI.

Derivatives Not Designated As Hedging Instruments

	As of June 26, 2011						As of December 26, 2010
	Balance Sheet Classification	Notional Amount		Fair Value			Balance Sheet Classification	Notional Amount		Fair Value
	(In millions)						(In millions)
Derivatives Not Designated as Hedging Instruments
Foreign Exchange Contracts	Current assets	$	—	$	—		Current assets	$	—	$	—
Foreign Exchange Contracts	Current liabilities		25.6		(0.0	)	Current liabilities		20.7		(0.0	)
Total derivatives, net		$	25.6	$	(0.0	)		$	20.7	$	(0.0	)

	For the Six Months Ended June 26, 2011				For the Six Months Ended June 27, 2010
	Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income			Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income
	(In millions)
Derivatives Not Designated as Hedging Instruments
Foreign Exchange Contracts	Revenue	$	(0.2	)	Revenue	$	0.1
Foreign Exchange Contracts	Expenses		0.8		Expenses		0.4
Net gain (loss) recognized in income		$	0.6			$	0.5

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Contingencies

6 Months Ended

Jun. 26, 2011

Contingencies

Contingencies

Note 11 – Contingencies

Patent Litigation with Power Integrations, Inc. There are four outstanding proceedings with Power Integrations.

POWI 1: On October 20, 2004, the company and our wholly owned subsidiary, Fairchild Semiconductor Corporation, were sued by Power Integrations, Inc. in the U.S. District Court for the District of Delaware. Power Integrations alleged that certain of the company's pulse width modulation (PWM) integrated circuit products infringed four Power Integrations U.S. patents, and sought a permanent injunction preventing the company from manufacturing, selling or offering the products for sale in the U.S., or from importing the products into the U.S., as well as money damages for past infringement.

The trial in the case was divided into three phases. In the first phase of the trial that occurred in October of 2006, a jury returned a verdict finding that thirty-three of the companies PWM products willfully infringed one or more of seven claims asserted in the four patents and assessed damages against the company. The company voluntarily stopped U.S. sales and importation of those products in 2007 and has been offering replacement products since 2006. Subsequent phases of the trial conducted during 2007 and 2008 focused on the validity and enforceability of the patents. In December of 2008, the judge overseeing the case reduced the jury's 2006 damages award from $34 million to approximately $6.1 million and ordered a new trial on the issue of willfulness. The new trial was held in June of 2009 and then in January of 2011 the court awarded Power Integrations final damages in the amount of $12.2 million. We have challenged the final damages award, willfulness finding, injunction, and other issues on appeal. As a result of the appeal, the company may be required to post a bond or provide other security in an amount equal to the final damages award for the duration of the appeal process.

POWI 2: On May 23, 2008, Power Integrations filed another lawsuit against the company, Fairchild Semiconductor Corporation and our wholly owned subsidiary System General Corporation in the U.S. District Court for the District of Delaware, alleging infringement of three patents. Of the three patents claimed in this lawsuit, two are patents that were asserted against the company and Fairchild Semiconductor Corporation in the October 2004 lawsuit described above. As mentioned below, the majority of the claims asserted in the first lawsuit from these two patents have now received final rejections from the patent office, and the third patent has also received preliminary rejections. The company believes that it has strong defenses against Power Integrations' claims and intends to vigorously defend this second lawsuit.

On October 14, 2008, Fairchild Semiconductor Corporation and System General Corporation filed a patent infringement lawsuit against Power Integrations in the U.S. District Court for the District of Delaware, alleging that certain PWM integrated circuit products infringe one or more claims of three U.S. patents owned by System General. The lawsuit seeks monetary damages and an injunction preventing the manufacture, use, sale, offer for sale or importation of Power Integrations products found to infringe the asserted patents.

Both lawsuits have been consolidated and will be heard together in Delaware District Court. The trial is currently scheduled for spring of 2012.

POWI 3: On November 4, 2009, Power Integrations, Inc. filed a complaint for patent infringement against the company and two of the company's subsidiaries in the United States District Court for the Northern District of California alleging that several of our products infringe three of Power Integrations' patents. One of those patents has since been dropped from the case. The company intends to put on a vigorous defense against these claims. In the same lawsuit we have filed counterclaims against Power Integrations, alleging Power Integrations' products infringe certain claims of one of our patents.

Reexaminations: Parallel to the above federal court proceedings, the company also petitioned the U.S. Patent and Trademark Office (USPTO) for reexamination of all unexpired patents claims asserted in POWI 1 and POWI 2 (those being all asserted claims from three of the four patents asserted in POWI 1 (the fourth patent has expired) and all of the patent claims asserted in POWI 2). Of the claims asserted in the four patents from POWI 1 and POWI 2, Power Integrations has amended or cancelled a majority of those at issue.

POWI 4: On February 10, 2010 Fairchild and System General filed a lawsuit in Suzhou, China against four Power Integrations entities and seven vendors. The lawsuit claims that Power Integrations violates four Fairchild/System General patents. Fairchild is seeking an injunction against the Power Integrations products and over $17.0 million in damages. Power Integrations is currently seeking to invalidate the Fairchild/System General patents in proceedings before the Chinese patent office.

Fairchild Semiconductor Corporation v. Cadeka Microcircuits, LLC. Fairchild filed this lawsuit against a competitor for misappropriation of trade secrets, tortuous interference with contract and breach of contract. The competitor filed counterclaims alleging breach of contract, unjust enrichment and other claims. The case is pending in Colorado Larimer County District Court and will likely proceed to trial in late 2011 or early 2012. Fairchild is vigorously prosecuting and defending this case.

Other Legal Claims. From time to time the company is involved in legal proceedings in the ordinary course of business. The company believes that there is no such ordinary-course litigation pending that could have, individually or in the aggregate, a material adverse effect on our business, financial condition, results of operations or cash flows. Legal costs are expensed as incurred.

The company has analyzed the potential litigation outcomes from current litigation in accordance with the Contingency Topic of the FASB ASC. The company estimates the loss contingency by undertaking a process to determine an estimate of the possible loss or range of losses. For cases where the company believes it is probable that a loss has occurred, the company believes the range of possible losses is approximately $13.0 to $30.0 million. Based upon assessments of the potential liabilities using analysis of claims and historical experience in defending and/or resolving these claims, the company has recorded reserves for potential litigation outcomes of $14.7 million as of June 26, 2011. For cases where the company believes it is reasonably possible that a loss has occurred, the company believes the range of possible losses is approximately zero to $5.0 million. The company has recorded no reserves for potential litigation outcomes for reasonably possible losses.

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Financial Statement Details

6 Months Ended

Jun. 26, 2011

Financial Statement Details

Financial Statement Details

Note 2 – Financial Statement Details

	June 26, 2011		December 26, 2010
	(In millions)
Inventories, net
Raw materials		44.0	$	40.9
Work in process		134.0		121.1
Finished goods		75.4		70.7
		253.4	$	232.7
	June 26, 2011		December 26, 2010
	(In millions)
Property, plant and equipment
Land and improvements	$	24.0	$	24.0
Buildings and improvements		342.9		339.2
Machinery and equipment		1,736.5		1,679.6
Construction in progress		141.9		112.9
Total property, plant and equipment		2,245.3		2,155.7
Less accumulated depreciation		1,522.4		1,466.4
	$	722.9	$	689.3

	June 26, 2011		December 26, 2010
	(In millions)
Accrued expenses and other current liabilities
Payroll and employee related accruals	$	73.0	$	86.5
Taxes payable		27.7		23.0
Restructuring and impairments		12.0		11.0
Other		19.4		18.7
	$	132.1	$	139.2

	Six Months Ended
	June 26, 2011			June 27, 2010
	(in millions)
Other expense, net
Interest expense	$	3.4		$	6.0
Interest income		(1.3	)		(1.4	)
Other (income) expense, net		2.3			0.4
Other expense, net	$	4.4		$	5.0

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Computation Of Net Income Per Share (Schedule Of Earnings Per Share Basic And Diluted) (Details) (USD $) In Millions, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010
Computation Of Net Income Per Share
Net income	$ 44.9	$ 43.8	$ 88.4	$ 66.4
Basic weighted average shares outstanding	127.9	125.2	127.0	125.0
Net income per share, basic	$ 0.35	$ 0.35	$ 0.70	$ 0.53
Assumed exercise of common stock equivalents	3.8	2.9	4.3	3.3
Diluted weighted average common and common equivalent shares	131.7	128.1	131.3	128.3
Net income per share, diluted	$ 0.34	$ 0.34	$ 0.67	$ 0.52
Anti-dilutive common stock equivalents, non-vested stock, DSUs, RSUs, and PUs	4.3	11.0	4.6	12.0

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Segment Information

6 Months Ended

Jun. 26, 2011

Segment Information

Segment Information

Note 8 – Segment Information

The company is currently organized into three reportable segments. The organization is an application based structure which corresponds with the way the company manages the business. The majority of the company's activities are aligned into two focus areas; MCCC, which focuses on handset, computing and multimedia applications, and PCIA, which focuses on power supply and motor control solutions. Each of these segments has a relatively small set of leading customers, common technology requirements and similar design cycles. The Standard Discrete and Standard Linear (SDT) business is managed separately as a third segment. As of the first day of fiscal 2011, the infrared group was moved from PCIA to SDT. Prior year numbers have been restated to reflect this change which was not material to reported amounts.

The following table presents selected operating segment financial information for the three and six months ended June 26, 2011 and June 27, 2010.

	Three Months Ended						Six Months Ended
	June 26, 2011			June 27, 2010			June 26, 2011			June 27, 2010
				(In millions)
Revenue and operating income:
MCCC
Total revenue	$	166.1		$	168.8		$	328.1		$	324.9
Operating income		32.7			41.2			68.6			73.2
PCIA
Total revenue		224.4			190.6			434.3			369.7
Operating income		66.0			51.7			124.6			94.8
SDT
Total revenue		42.7			50.2			83.8			93.0
Operating income		8.8			10.3			17.7			18.1
Corporate
Restructuring and impairments expense		(2.9	)		0.0			(5.4	)		(2.4	)
Stock-based compensation expense		(8.0	)		(5.9	)		(13.0	)		(11.7	)
Selling, general and administrative expense		(41.4	)		(43.1	)		(85.0	)		(83.2	)
Other (1)		(0.3	)		(1.6	)		(0.7	)		(3.3	)
Total consolidated
Total revenue		433.2			409.6			846.2			787.6
Operating income		54.9			52.6			106.8			85.5
Other expense, net		3.3			2.6			4.4			5.0
Income before income taxes	$	51.6		$	50.0		$	102.4		$	80.5

(1) Other primarily consists of accelerated depreciation related to the planned closure of the Mountaintop facility.

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Acquisitions And Divestitures

6 Months Ended

Jun. 26, 2011

Acquisitions And Divestitures

Acquisitions And Divestitures

Note 13 — Acquisitions and Divestitures

On March 15, 2011, the company completed the acquisition of TranSiC, a silicon carbide power transistor company for $17.4 million. The acquisition provides the company with bipolar silicon carbide technology with demonstrated efficiencies and strong performance over MOSFET and JFET technology. As part of the acquisition, the company also acquired a team of experienced silicon carbide engineers and scientists, and multiple patents in silicon carbide technology. Products using this technology will be sold as discrete solutions and as part of our smart power modules. No pro forma results of operations are presented because the disclosures are not material.

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Goodwill And Intangible Assets

6 Months Ended

Jun. 26, 2011

Goodwill And Intangible Assets

Goodwill And Intangible Assets

Note 9 – Goodwill and Intangible Assets

The following table presents a summary of acquired intangible assets.

		As of June 26, 2011					As of December 26, 2010
	Period of Amortization	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
		(In millions)
Identifiable intangible assets:
Developed technology	2- 15 years	$	250.7	$	(207.1	)	$	238.9	$	(199.0	)
Customer base	8- 10 years		81.6		(67.2	)		81.6		(65.9	)
Core technology	10years		15.7		(2.1	)		13.1		(1.6	)
In Process R&D	indefinite lived		2.8		—			1.8		—
Covenant not to compete	5years		30.4		(30.4	)		30.4		(30.4	)
Assembled workforce	5years		1.0		(1.0	)		1.0		(0.9	)
Process technology	5years		1.6		(1.4	)		1.6		(1.2	)
Patents	4years		5.9		(5.7	)		5.9		(5.6	)
Trademarks and tradenames	1year		25.2		(25.2	)		25.2		(25.2	)
Subtotal			414.9		(340.1	)		399.5		(329.8	)
Goodwill			169.4		—			164.8		—
Total		$	584.3	$	(340.1	)	$	564.4	$	(329.8	)

As a result of the TranSiC acquisition in the first quarter of 2011, the company added $15.4 million of intangible assets, $2.6 million to Core Technology, $1.0 million to In Process R&D, and $11.8 million to Developed Technology. See Footnote 13 for further details on the TranSiC acquisition.

The following table presents the carrying value of goodwill by reporting unit.

	MCCC		PCIA			SDT			Total
	(In millions)
Balance as of December 26, 2010
Goodwill	$	164.8	$	148.8		$	54.5		$	368.1
Accumulated Impairment Losses		—		(148.8	)		(54.5	)		(203.3	)
	$	164.8	$	—		$	—		$	164.8
TranSiC acquisition	$	—	$	4.3		$	—		$	4.3
Other tax acquisition adjustment		0.3		—			—			0.3
Balance as of June 26, 2011
Goodwill	$	165.1	$	153.1		$	54.5		$	372.7
Accumulated Impairment Losses		—		(148.8	)		(54.5	)		(203.3	)
	$	165.1	$	4.3		$	—		$	169.4

During the first quarter of 2011, goodwill of $4.3 million was recorded as a result of the company's acquisition of TranSiC. See Footnote 13 for further details. In addition, a tax adjustment was recorded for $0.3 million.

The following table presents the estimated amortization expense for intangible assets for the remainder of 2011 and for each of the five succeeding fiscal years.

Estimated Amortization Expense:	(In millions)
Remaining Fiscal 2011		9.4
Fiscal 2012		18.0
Fiscal 2013		15.5
Fiscal 2014		7.6
Fiscal 2015		5.2
Fiscal 2016		5.5

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Financial Statement Details (Property, Plant And Equipment) (Details) (USD $) In Millions	Jun. 26, 2011	Dec. 26, 2010
Financial Statement Details
Land and improvements	$ 24.0	$ 24.0
Buildings and improvements	342.9	339.2
Machinery and equipment	1,736.5	1,679.6
Construction in progress	141.9	112.9
Total property, plant and equipment	2,245.3	2,155.7
Less accumulated depreciation	1,522.4	1,466.4
Property, plant and equipment	$ 722.9	$ 689.3

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Securities

6 Months Ended

Jun. 26, 2011

Securities

Securities

Note 7 – Securities

The company invests excess cash in marketable securities consisting primarily of money markets, commercial paper, corporate notes and bonds, and U.S. government securities. While the company still holds auction rate securities, the company no longer actively invests in them.

All of the company's securities are classified as available-for-sale. In accordance with the Investments – Debt and Equity Securities Topic of the FASB ASC, available-for-sale securities are carried at fair value with unrealized gains and losses included as a component of AOCI within stockholders' equity, net of any related tax effect, if such gains and losses are considered temporary. Realized gains and losses on these investments are included in interest income and expense. Declines in value judged by management to be other-than-temporary and credit related are included in impairment of investments in the statement of operations. The noncredit component of impairment is included in AOCI. For the purpose of computing realized gains and losses, cost is identified on a specific identification basis. There were no material realized gains or losses on sales of securities in the first six months of 2011 or 2010.

Securities are summarized as of June 26, 2011:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Short-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	0.2	$	—	$	—		$	0.2
Total marketable securities	$	0.2	$	—	$	—		$	0.2
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Long-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	1.7	$	0.3				$	2.0
Corporate debt securities		0.3							0.3
Auction rate securities		35.6				(6.3	)		29.3
Total securities	$	37.6	$	0.3	$	(6.3	)	$	31.6

In aggregate, the auction rate securities have been in an unrealized loss position for a year. The continued unrealized loss is attributable to the ongoing volatility in the global equities markets and uncertainty in the credit markets primarily from European debt situation and other global economic uncertainty. However, the company does not intend to sell or believe it is more likely than not that the company would be required to sell the securities before a recovery of the amortized cost basis of the investment. In addition, as a result of the continued performance of the issue and its' insurance guarantee, the company considers this decrease in fair value to be temporary in nature.

Securities are summarized as of December 26, 2010:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Short-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	0.1	$	—	$	—		$	0.1
Total marketable securities	$	0.1	$	—	$	—		$	0.1
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Long-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	1.9	$	0.1	$	—		$	2.0
Corporate debt securities		0.3		—		—		$	0.3
Auction rate securities		35.3				(7.3	)		28.0
Total securities	$	37.5	$	0.1	$	(7.3	)	$	30.3

The following table presents the amortized cost and estimated fair market value of available-for-sale securities by contractual maturity as of June 26, 2011.

	Amortized Cost		Market Value
	(In millions)
Due in one year or less	$	0.2	$	0.2
Due after one year through three years		0.4		0.4
Due after three years through ten years		1.2		1.4
Due after ten years	$	36.0	$	29.8
	$	37.8	$	31.8

As of June 26, 2011, auction rate securities with a market value of $29.3 million are included in the table above in contractual maturities due after ten years. The company's auction rate securities are composed of approximately $17.1 million of securities that are structured obligations of special purpose reinsurance entities associated with life insurance companies and $12.2 million of corporate debt securities issued by a special purpose financial services corporation that offers credit risk protection through writing credit derivatives. The company continues to accrue and receive interest on these securities based on a contractual rate.

In the fourth quarter of 2008, the company concluded that the impairment of its auction rate securities was other-than-temporary and recognized a loss of $19.0 million in the income statement. However, the company does not intend to sell or believe it is more likely than not that the company would be required to sell the securities before a recovery of the amortized cost basis of the investment. In the second quarter of 2009, based on the requirements of the Investments – Debt and Equity Securities Topic of the FASB ASC, the company analyzed the $19.0 million other-than-temporary loss that was recognized in the income statement in the fourth quarter of 2008 to determine the noncredit component. It was determined that $15.5 million of the loss was attributable to credit loss. As a result, in the second quarter of 2009, a cumulative adjustment of the remaining $3.5 million, which was attributable to changes in interest rates, was reclassified from retained earnings to AOCI. There is no portion of other-than-temporary impairment related to credit loss currently included in AOCI.

The following table presents a roll forward of the amount related to credit losses recognized in earnings during the six months ended June 26, 2011.

	Credit Losses Recognized in Earnings
	(In millions)
Balance at beginning of period	$	14.5
Accretion of impairments included in net income		(0.2	)
Balance at end of period	$	14.3

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Restructuring And Impairments (Narrative) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended		3 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010	Jun. 27, 2010 2009 Infrastructure Realignment Program [Member]	Mar. 28, 2010 2009 Infrastructure Realignment Program [Member]	Jun. 27, 2010 2010 Infrastructure Realignment Program [Member]	Mar. 28, 2010 2010 Infrastructure Realignment Program [Member]
Restructuring and impairment charges, net of releases	$ 2.9	$ 0	$ 5.4	$ 2.4
Employee separation costs					1.3	1.6	0.8	0.4
Fab closure costs					0.5	0.6
Reserve release	$ 0.1	$ 2.4			$ 0.2	$ 0.2

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Consolidated Statements Of Cash Flows (USD $) In Millions	6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010
Cash flows from operating activities:
Net income	$ 88.4	$ 66.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	75.6	79.7
Non-cash stock-based compensation expense	13.0	11.2
Non-cash interest income	(0.2)	(0.3)
Non-cash financing expense	0.5	0.8
Non-cash write-off of deferred financing fees	2.1
Loss on disposal of property, plant, and equipment	0.5	0.1
Deferred income taxes, net	(5.6)	2.9
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net	(6.0)	(39.1)
Inventories	(20.4)	(21.6)
Other current assets	(2.0)	0.3
Current liabilities		51.5
Other assets and liabilities, net	3.9	(10.8)
Net cash provided by operating activities	149.8	141.1
Cash flows from investing activities:
Maturity of marketable securities	0.1	0.1
Capital expenditures	(88.1)	(50.9)
Purchase of molds and tooling	(1.4)	(0.6)
Acquisitions, net of cash acquired	(16.5)	0
Net cash used in investing activities	(105.9)	(51.4)
Cash flows from financing activities:
Repayment of long-term debt	(320.6)	(27.6)
Borrowing from Revolving Credit Facility	300.0
Proceeds from issuance of common stock and from exercise of stock options	35.2	0.2
Purchase of treasury stock	(12.8)	(17.6)
Shares withheld for employees taxes	(9.4)	0
Debt financing costs	(5.2)	(0.8)
Net cash used in financing activities	(12.8)	(45.8)
Net change in cash and cash equivalents	31.1	43.9
Cash and cash equivalents at beginning of period	404.6	415.8
Cash and cash equivalents at end of period	$ 435.7	$ 459.7

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Computation Of Net Income Per Share

6 Months Ended

Jun. 26, 2011

Computation Of Net Income Per Share

Computation Of Net Income Per Share

Note 3 – Computation of Net Income per Share

Basic net income per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential future issuances of common stock relating to potentially dilutive securities. There is no dilution when a net loss exists. Potentially dilutive common equivalent securities consist of stock options, performance units (PUs), deferred stock units (DSUs) and restricted stock units (RSUs). In calculating diluted earnings per share, the dilutive effect of stock options is computed using the average market price for the respective period using the treasury share method. Certain potential shares of the company's outstanding stock options were excluded because they were anti-dilutive, but could be dilutive in the future. The following table sets forth the computation of basic and diluted earnings per share.

	Three Months Ended				Six Months Ended
	June 26, 2011		June 27, 2010		June 26, 2011		June 27, 2010
	(In millions, except per share data)
Basic:
Net income	$	44.9	$	43.8	$	88.4	$	66.4
Weighted average shares outstanding		127.9		125.2		127.0		125.0
Net income per share	$	0.35	$	0.35	$	0.70	$	0.53
Diluted:
Net income	$	44.9	$	43.8	$	88.4	$	66.4
Basic weighted average shares outstanding		127.9		125.2		127.0		125.0
Assumed exercise of common stock equivalents		3.8		2.9		4.3		3.3
Diluted weighted average common and common equivalent shares		131.7		128.1		131.3		128.3
Net income per share	$	0.34	$	0.34	$	0.67	$	0.52
Anti-dilutive common stock equivalents, non-vested stock, DSUs, RSUs, and PUs		4.3		11.0		4.6		12.0

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Derivatives (Narrative) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010	Dec. 31, 2009
Derivatives
Net unrealized derivative gains included in AOCI that will be reclassified into earnings within the next twelve months	$ 2.3		$ 2.3
Cash flow hedges derecognized	0	0	0	0
Maturities of the cash flow hedges			12 months or less
Value of the hedge at inception					$ 0

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Financial Statement Details (Schedule Of Inventories, Net) (Details) (USD $) In Millions	Jun. 26, 2011	Dec. 26, 2010
Financial Statement Details
Raw materials	$ 44.0	$ 40.9
Work in process	134.0	121.1
Finished goods	75.4	70.7
Inventories, net	$ 253.4	$ 232.7

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Goodwill And Intangible Assets (Schedule Of Finite Lived Intangible Assets Future Amortization Expense) (Details) (USD $) In Millions	6 Months Ended
	Jun. 26, 2011
Goodwill And Intangible Assets
Remaining Fiscal 2011	$ 9.4
Fiscal 2012	18.0
Fiscal 2013	15.5
Fiscal 2014	7.6
Fiscal 2015	5.2
Fiscal 2016	$ 5.5

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Supplemental Cash Flow Information

6 Months Ended

Jun. 26, 2011

Supplemental Cash Flow Information

Supplemental Cash Flow Information

Note 4 – Supplemental Cash Flow Information

	Six Months Ended
	June 26, 2011		June 27, 2010
	(In millions)
Cash paid for:
Income taxes, net	$	15.1	$	7.7
Interest	$	2.5	$	4.9

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Derivatives (Gain (Loss) Recognized In OCI For Derivative Instruments) (Details) (Foreign Exchange Contracts [Member], USD $)	6 Months Ended
	Jun. 26, 2011
Foreign Exchange Contracts [Member]
Gain (Loss) Recognized in OCI for Derivative Instruments		[1]

[1] This amount is inclusive of both realized and unrealized gains and losses recognized in OCI.

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Goodwill And Intangible Assets (Tables)

6 Months Ended

Jun. 26, 2011

Goodwill And Intangible Assets

Schedule Of Acquired Intangible Assets

		As of June 26, 2011					As of December 26, 2010
	Period of Amortization	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
		(In millions)
Identifiable intangible assets:
Developed technology	2- 15 years	$	250.7	$	(207.1	)	$	238.9	$	(199.0	)
Customer base	8- 10 years		81.6		(67.2	)		81.6		(65.9	)
Core technology	10years		15.7		(2.1	)		13.1		(1.6	)
In Process R&D	indefinite lived		2.8		—			1.8		—
Covenant not to compete	5years		30.4		(30.4	)		30.4		(30.4	)
Assembled workforce	5years		1.0		(1.0	)		1.0		(0.9	)
Process technology	5years		1.6		(1.4	)		1.6		(1.2	)
Patents	4years		5.9		(5.7	)		5.9		(5.6	)
Trademarks and tradenames	1year		25.2		(25.2	)		25.2		(25.2	)
Subtotal			414.9		(340.1	)		399.5		(329.8	)
Goodwill			169.4		—			164.8		—
Total		$	584.3	$	(340.1	)	$	564.4	$	(329.8	)

Schedule Of Carrying Value Of Goodwill

	MCCC		PCIA			SDT			Total
	(In millions)
Balance as of December 26, 2010
Goodwill	$	164.8	$	148.8		$	54.5		$	368.1
Accumulated Impairment Losses		—		(148.8	)		(54.5	)		(203.3	)
	$	164.8	$	—		$	—		$	164.8
TranSiC acquisition	$	—	$	4.3		$	—		$	4.3
Other tax acquisition adjustment		0.3		—			—			0.3
Balance as of June 26, 2011
Goodwill	$	165.1	$	153.1		$	54.5		$	372.7
Accumulated Impairment Losses		—		(148.8	)		(54.5	)		(203.3	)
	$	165.1	$	4.3		$	—		$	169.4

Schedule Of Finite Lived Intangible Assets Future Amortization Expense

Estimated Amortization Expense:	(In millions)
Remaining Fiscal 2011		9.4
Fiscal 2012		18.0
Fiscal 2013		15.5
Fiscal 2014		7.6
Fiscal 2015		5.2
Fiscal 2016		5.5

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Financial Statement Details (Schedule Of Accrued Expenses And Other Current Liabilities) (Details) (USD $) In Millions	Jun. 26, 2011	Dec. 26, 2010
Financial Statement Details
Payroll and employee related accruals	$ 73.0	$ 86.5
Taxes payable	27.7	23.0
Restructuring and impairments	12.0	11.0
Other	19.4	18.7
Accrued expenses and other current liabilities	$ 132.1	$ 139.2

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Derivatives (Derivatives Designated As Hedging Instruments) (Details) (Designated as Hedging Instrument [Member], USD $) In Millions	6 Months Ended		12 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Dec. 26, 2010
Notional Amount	$ 159.9		$ 164.2
Fair Value	2.3		2.4
Amount of Gain (Loss) Recognized In AOCI	2.3		2.4
Amount of Gain (Loss) Recognized In Income	0.4	0.9
Amount of Gain (Loss) Reclassified from AOCI	0.4	0.9
Derivatives for Forecasted Revenues [Member] | Current Assets [Member]
Notional Amount			41.9
Fair Value			0.8
Amount of Gain (Loss) Recognized In AOCI			0.8
Derivatives for Forecasted Revenues [Member] | Current Liabilities [Member]
Notional Amount	56.8		12.0
Fair Value	(1.1)		(0.2)
Amount of Gain (Loss) Recognized In AOCI	(1.1)		(0.2)
Derivatives for Forecasted Expenses [Member] | Current Assets [Member]
Notional Amount	92.9		110.3
Fair Value	3.4		1.8
Amount of Gain (Loss) Recognized In AOCI	3.4		1.8
Derivatives for Forecasted Expenses [Member] | Current Liabilities [Member]
Notional Amount	10.2
Fair Value	0
Amount of Gain (Loss) Recognized In AOCI	0
Foreign Currency Contracts [Member] | Revenue [Member]
Amount of Gain (Loss) Recognized In Income	(2.4)	0.7
Amount of Gain (Loss) Reclassified from AOCI	(2.4)	0.7
Foreign Currency Contracts [Member] | Expenses [Member]
Amount of Gain (Loss) Recognized In Income	2.8	2.0
Amount of Gain (Loss) Reclassified from AOCI	2.8	2.0
Interest Rate Contract [Member] | Interest Expense [Member]
Amount of Gain (Loss) Recognized In Income		(1.8)
Amount of Gain (Loss) Reclassified from AOCI		$ (1.8)

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Long-Term Debt (Tables)

6 Months Ended

Jun. 26, 2011

Long-Term Debt

Schedule Of Debt Instruments

	June 26, 2011		December 26, 2010
	(In millions)
Revolving Credit Facility borrowings	$	300.0	$	—
Term Loan	$	—	$	320.7
Other	$	0.1	$	—
Total debt		300.1		320.7
Current portion of long-term debt		—		(3.8	)
Long-term debt, less current portion	$	300.1	$	316.9

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Long-Term Debt

6 Months Ended

Jun. 26, 2011

Long-Term Debt

Long-Term Debt

Note 12 – Long-Term Debt

Long-term debt consists of the following at:

	June 26, 2011		December 26, 2010
	(In millions)
Revolving Credit Facility borrowings	$	300.0	$	—
Term Loan	$	—	$	320.7
Other	$	0.1	$	—
Total debt		300.1		320.7
Current portion of long-term debt		—		(3.8	)
Long-term debt, less current portion	$	300.1	$	316.9

On May 20, 2011, the company entered into a new senior secured revolving credit facility (Credit Facility.) Proceeds from the Credit Facility and an additional $18.8 million in cash were used to extinguish all outstanding obligations under the previous credit facility, which consisted of a term loan and an undrawn revolving credit facility which were scheduled to mature in June of 2013 and June of 2012, respectively. The Credit Facility consists of a $400.0 million revolving loan agreement, of which $300.0 million was drawn as of June 26, 2011. In addition, the new Credit Facility includes an incremental revolving commitment that enables the company to increase the size of the facility in an aggregate amount not to exceed $150 million. The maturity date of the Credit Facility is May 20, 2016. The company incurred cash charges of $5.2 million related to this financing, all of which was deferred and will be amortized over the term of the debt. Additionally, the company wrote off $2.1 million of the remaining deferred financing fees related to the prior facility.

Under the Credit Facility, borrowing may be in the form of either Eurocurrency Loans or Alternate Base Rate (ABR) loans. Eurocurrency Loans accrue interest at the London Interbank Offered Rate (LIBOR) plus 1.75%. The ABR is the highest of JP Morgan Chase Bank prime rate, the federal funds effective rate plus  ¹/2 of 1 percent, or adjusted LIBOR, as defined by the credit agreement, plus 1%. ABR loans accrue interest at the ABR rate plus 0.75%. The company also pays a commitment fee of 0.35% per annum on the unutilized commitments. There are also outstanding letters of credit under the Credit Facility totaling $1.3 million. These outstanding letters of credit reduce the amount available under the Credit Facility to $98.7 million. Borrowings under the Credit Facility are secured by a pledge of common stock of the company's first tier domestic subsidiaries and 65% of the stock of the company's first tier foreign subsidiaries. The payment of principal and interest on the Credit Facility is fully and unconditionally guaranteed by Fairchild Semiconductor International, Inc. and each of its domestic subsidiaries.

The Credit Facility includes restrictive covenants that place limitations on the company's ability to consolidate, merge, or enter into acquisitions, create liens or pay dividends, or make similar restricted payments, sell assets, invest in capital expenditures, and incur indebtedness. It also places limitations on the company's ability to modify its certificate of incorporation and bylaws, or enter into shareholder agreements, voting trusts or similar arrangements. In addition, the affirmative covenants in the Credit Facility also require the company's financial performance to comply with certain financial measures, as defined by the credit agreement. These financial covenants require us to maintain a minimum interest coverage ratio of 3.0 to 1.0 and a maximum leverage ratio of 3.25 to 1.0. It defines the interest coverage ratio as the ratio of cumulative four quarter trailing consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) to consolidated cash interest expense and defines the maximum leverage ratio as the ratio of total consolidated debt to the cumulative four quarter trailing consolidated EBITDA. Consolidated EBITDA, as defined by the credit agreement excludes restructuring, non-cash equity compensation and other certain adjustments. At June 26, 2011, the company was in compliance with these covenants.

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Long-Term Debt (Schedule Of Debt Instruments) (Details) (USD $) In Millions	Jun. 26, 2011	Dec. 26, 2010
Revolving Credit Facility borrowings	$ 300.0
Other	0.1
Total debt	300.1	320.7
Current portion of long-term debt		(3.8)
Long-term debt, less current portion	300.1	316.9
Senior Secured Revolving Credit Facility [Member]
Revolving Credit Facility borrowings	300.0
Term Loan [Member]
Term Loan		$ 320.7

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Fair Value

6 Months Ended

Jun. 26, 2011

Fair Value

Fair Value

Note 5 – Fair Value

Fair Value of Financial Instruments. In accordance with the requirements of the Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), the company groups its financial assets and liabilities measured at fair value on a recurring basis in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

• Level 1 – Valuation is based upon quoted market price for identical instruments traded in active markets.

• Level 2 – Valuation is based on quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

• Level 3 – Valuation is generated from model-based techniques that use significant assumptions not observable in the market. Valuation techniques include use of discounted cash flow models and similar techniques.

In accordance with the requirements of the Fair Value Measurements and Disclosures Topic of the FASB ASC, it is the company's policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements. When available, the company uses quoted market prices to measure fair value. If market prices are not available, the fair value measurement is based on models that use primarily market based parameters including interest rate yield curves, option volatilities and currency rates. In certain cases where market rate assumptions are not available, the company is required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument. Changes in the underlying assumptions used, including discount rates and estimates of future cash flows could significantly affect the results of current or future values. The results may not be realized in an actual sale or immediate settlement of an asset or liability.

The assets and liabilities measured at fair value on a recurring basis include securities and derivatives. Financial instruments classified as Level 1 are securities traded on an active exchange as well as U.S. Treasury, and other U.S. government and agency-backed securities that are traded by dealers or brokers in active over-the-counter markets. Derivatives are classified as Level 2 financial instruments. The only financial instruments classified as Level 3 are auction rate securities.

The fair value of securities is based on quoted market prices at the date of measurement, except for auction rate securities. The auction rate security market is no longer active and as a result there is no observable market data for these assets. Fair value estimates are based on judgments regarding current economic conditions, liquidity discounts and interest rate risks. These estimates involve significant uncertainties and judgments and cannot be determined with precision. As a result such calculated fair value estimates may not be realizable in a current sale or immediate settlement of the instrument. In addition, changes in the underlying assumptions used in the fair value measurement technique, including discount rates, liquidity risks and estimates of future cash flows could significantly affect these fair value estimates.

A discounted cash flow (DCF) calculation is performed to determine the estimated fair value of the auction rate securities. The assumptions used in preparing the DCF model included estimates for the amount and timing of future interest and principal payments and the rate of return required by investors to own these securities in the current environment. In making these assumptions, relevant factors that were considered included: the formula applicable to each security which defines the interest rate paid to investors in the event of a failed auction; forward projections of the interest rate benchmarks specified in such formulas; the likely timing of principal repayments; the probability of full repayment considering guarantees by third parties and additional credit enhancements provided through other means. The estimate of the rate of return required by investors to own these securities also considers the current reduced liquidity for auction rate securities. Inputs for DCF calculations are based upon publicly available data as well as the company's own estimates. The primary unobservable input to the valuation was the maturity assumption which ranged from four to ten years depending on the individual auction rate security. The maturity assumptions were based on the terms of the underlying instrument and the potential for restructuring the auction rate security.

All of the company's derivatives are traded in over-the-counter markets where quoted market prices are not readily available. For those derivatives, the company measures fair value using prices obtained from the counterparties with whom the company has traded. The counterparties price the derivatives based on models that use primarily market observable inputs, such as yield curves and option volatilities. Accordingly, the company classifies these derivatives as Level 2.

The company is exposed to credit-related losses in the event of non-performance by counterparties to hedging instruments. The counterparties to all derivative transactions are major financial institutions with investment grade credit ratings. However, this does not eliminate the company's exposure to credit risk with these institutions. This credit risk is generally limited to the unrealized gains in such contracts should any of these counterparties fail to perform as contracted. The company considers the risk of counterparty default to be minimal.

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of June 26, 2011.

	Fair Value Measurements
	Total			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(In millions)
Foreign Currency Derivatives
Assets	$	3.4			—	$	3.4			—
Liabilities		(1.1	)		—		(1.1	)		—
	$	2.3		$	—	$	2.3		$	—
Securities
Marketable securities	$	2.5		$	2.5		—			—
Auction rate securities		29.3			—		—			29.3
	$	31.8		$	2.5	$	—		$	29.3

The following table summarizes the changes in level 3 securities measured at fair value on a recurring basis for the six months ended June 26, 2011.

	Auction Rate Securities
	(In millions)
Balance at beginning of period	$	28.0
Total realized and unrealized gains or (losses)
Included in net income		—
Included in OCI		1.1
Accretion of impairments included in net income		0.2
Sales		—
Purchases, issuances and settlements		—
Balance at end of period	$	29.3

Long term debt is carried at amortized cost. However, the company is required to estimate the fair value of long term debt under the Financial Instrument Topic of the FASB ASC. The fair value of the term loan was determined utilizing current trading prices obtained from indicative market data. The carrying amount of the new revolving facility is considered approximate fair value as the company entered into the new revolving facility during the second quarter of 2011. See Note 12 for more information on the new credit facility.

	June 26, 2011				December 26, 2010
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
	(In millions)
Long-Term Debt:
Revolving Credit Facility	$	300.0	$	300.0
Term Loan					$	320.7	$	316.7

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Financial Statement Details (Tables)

6 Months Ended

Jun. 26, 2011

Financial Statement Details

Schedule Of Inventories, Net

	June 26, 2011		December 26, 2010
	(In millions)
Inventories, net
Raw materials		44.0	$	40.9
Work in process		134.0		121.1
Finished goods		75.4		70.7
		253.4	$	232.7

Property, Plant And Equipment

	June 26, 2011		December 26, 2010
	(In millions)
Property, plant and equipment
Land and improvements	$	24.0	$	24.0
Buildings and improvements		342.9		339.2
Machinery and equipment		1,736.5		1,679.6
Construction in progress		141.9		112.9
Total property, plant and equipment		2,245.3		2,155.7
Less accumulated depreciation		1,522.4		1,466.4
	$	722.9	$	689.3

Schedule Of Other Expense, Net

	Six Months Ended
	June 26, 2011			June 27, 2010
	(in millions)
Other expense, net
Interest expense	$	3.4		$	6.0
Interest income		(1.3	)		(1.4	)
Other (income) expense, net		2.3			0.4
Other expense, net	$	4.4		$	5.0

Schedule Of Accrued Expenses And Other Current Liabilities

	June 26, 2011		December 26, 2010
	(In millions)
Accrued expenses and other current liabilities
Payroll and employee related accruals	$	73.0	$	86.5
Taxes payable		27.7		23.0
Restructuring and impairments		12.0		11.0
Other		19.4		18.7
	$	132.1	$	139.2

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Fair Value (Fair Value Of Long-Term Debt) (Details) (USD $) In Millions	Jun. 26, 2011	Dec. 26, 2010
Fair Value
Carrying amount of term loan	$ 300.1	$ 320.7
Estimated fair value of term loan		316.7
Carrying amount of revolving credit facility	300.0
Estimated fair value of revolving credit facility	$ 300.0

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Restructuring And Impairments (Tables)

3 Months Ended

Jun. 26, 2011

Mar. 27, 2011

Restructuring And Impairments

Summary Of Restructuring And Impairment Costs

	Accrual Balance at 3/27/2011		New Charges		Cash Paid			Reserve Release			Non-Cash Items		Accrual Balance at 6/26/2011
2008 Infrastructure Realignment Program:
Lease Impairment Costs		0.5		—		(0.2	)		—			—		0.3
2009 Infrastructure Realignment Program:
Employee Separation Costs		8.4		0.5		—			(0.1	)		—		8.8
Fab Closure Costs		—		0.3		(0.3	)		—			—		—
2010 Infrastructure Realignment Program:
Employee Separation Costs		1.7		0.9		(0.3	)		—			—		2.3
2011 Infrastructure Realignment Program:
Employee Separation Costs		—		1.3		(0.7	)		—			—		0.6
	$	10.6		3.0		(1.5	)		(0.1	)		0.0	$	12.0

	Accrual Balance at 12/26/2010		New Charges		Cash Paid			Reserve Release		Non-Cash Items		Accrual Balance at 3/27/2011
2008 Infrastructure Realignment Program:
Lease Impairment Costs		0.7		—		(0.2	)		—		—		0.5
2009 Infrastructure Realignment Program:
Employee Separation Costs		8.1		0.6		(0.3	)		—		—		8.4
Fab Closure Costs		—		0.2		(0.2	)		—		—		—
2010 Infrastructure Realignment Program:		.
Employee Separation Costs		2.2		1.0		(1.5	)		—		—		1.7
2011 Infrastructure Realignment Program:
Employee Separation Costs		—		0.7		(0.7	)		—		—		—
	$	11.0	$	2.5	$	(2.9	)	$	—	$	—	$	10.6

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Consolidated Statements Of Comprehensive Income (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010
Consolidated Statements Of Comprehensive Income
Net income	$ 44.9	$ 43.8	$ 88.4	$ 66.4
Other comprehensive income, net of tax:
Net change associated with hedging transactions	0.5	(0.1)	0.4	1.7
Net amount reclassified to earnings for hedging	(0.4)	(1.6)	(0.4)	(0.9)
Net change associated with fair value of securities	0.5	(2.2)	1.1	0.7
Net change associated with pension transactions		(2.4)		(2.4)
Comprehensive income	$ 45.5	$ 37.5	$ 89.5	$ 65.5

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Computation Of Net Income Per Share (Tables)

6 Months Ended

Jun. 26, 2011

Computation Of Net Income Per Share

Schedule Of Earnings Per Share Basic And Diluted

	Three Months Ended				Six Months Ended
	June 26, 2011		June 27, 2010		June 26, 2011		June 27, 2010
	(In millions, except per share data)
Basic:
Net income	$	44.9	$	43.8	$	88.4	$	66.4
Weighted average shares outstanding		127.9		125.2		127.0		125.0
Net income per share	$	0.35	$	0.35	$	0.70	$	0.53
Diluted:
Net income	$	44.9	$	43.8	$	88.4	$	66.4
Basic weighted average shares outstanding		127.9		125.2		127.0		125.0
Assumed exercise of common stock equivalents		3.8		2.9		4.3		3.3
Diluted weighted average common and common equivalent shares		131.7		128.1		131.3		128.3
Net income per share	$	0.34	$	0.34	$	0.67	$	0.52
Anti-dilutive common stock equivalents, non-vested stock, DSUs, RSUs, and PUs		4.3		11.0		4.6		12.0

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Securities (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended		12 Months Ended			3 Months Ended
	Jun. 28, 2009	Jun. 26, 2011	Jun. 27, 2010	Dec. 26, 2010	Jun. 26, 2011 Auction Rate Securities [Member] Structured Obligations of Special Purpose Reinsurance Entities [Member]	Jun. 26, 2011 Auction Rate Securities [Member] Corporate Debt Securities [Member]	Jun. 28, 2009 Auction Rate Securities [Member]	Dec. 27, 2008 Auction Rate Securities [Member]	Jun. 26, 2011 Auction Rate Securities [Member]
Gains or losses on sales of securities realized		$ 0	$ 0
Investments, market value		29.8			17.1	12.2			29.3
Other-than-temporary loss	0	14.3		14.5				19.0
Loss attributable to credit loss							15.5
Cumulative adjustment attributable to changes in the interest rate							$ 3.5
Minimum maturity duration of contractual maturities of auction rate securities, years		10

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Fair Value (Tables)

6 Months Ended

Jun. 26, 2011

Fair Value

Fair Value Of Assets And Liabilities

	Fair Value Measurements
	Total			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(In millions)
Foreign Currency Derivatives
Assets	$	3.4			—	$	3.4			—
Liabilities		(1.1	)		—		(1.1	)		—
	$	2.3		$	—	$	2.3		$	—
Securities
Marketable securities	$	2.5		$	2.5		—			—
Auction rate securities		29.3			—		—			29.3
	$	31.8		$	2.5	$	—		$	29.3

Changes In Level 3 Securities

	Auction Rate Securities
	(In millions)
Balance at beginning of period	$	28.0
Total realized and unrealized gains or (losses)
Included in net income		—
Included in OCI		1.1
Accretion of impairments included in net income		0.2
Sales		—
Purchases, issuances and settlements		—
Balance at end of period	$	29.3

Fair Value Of Long-Term Debt

	June 26, 2011				December 26, 2010
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
	(In millions)
Long-Term Debt:
Revolving Credit Facility	$	300.0	$	300.0
Term Loan					$	320.7	$	316.7

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Basis Of Presentation

6 Months Ended

Jun. 26, 2011

Basis Of Presentation

Basis Of Presentation

Note 1 – Basis of Presentation

The accompanying interim consolidated financial statements of Fairchild Semiconductor International, Inc. (the company) have been prepared in conformity with accounting principles generally accepted in the United States of America, consistent in all material respects with those applied in the company's Annual Report on Form 10-K for the year ended December 26, 2010. The interim financial information is unaudited, but reflects all normal adjustments, which are, in the opinion of management, necessary to provide a fair statement of results for the interim periods presented. The financial statements should be read in conjunction with the financial statements in the company's Annual Report on Form 10-K for the year ended December 26, 2010. Certain amounts for prior periods have been reclassified to conform to the current presentation. The results for the interim periods are not necessarily indicative of the results of operations that may be expected for the full year.

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, investments, intangible assets, and other long-lived assets, legal contingencies, and assumptions used in the calculation of income taxes and customer incentives, among others. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The company adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity and foreign currency markets, and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

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Restructuring And Impairments

6 Months Ended

Jun. 26, 2011

Restructuring And Impairments

Restructuring And Impairments

Note 10 – Restructuring and Impairments

During the three and six months ended June 26, 2011, the company recorded restructuring and impairment charges, net of releases, of $2.9 million and $5.4 million, respectively. The detail of these charges is presented in the summary table below.

During the three and six months ended June 27, 2010, the company recorded restructuring and impairment charges, net of releases, of $0 and $2.4 million, respectively. The net amount of $0 recorded during the second quarter is comprised of a $2.4 million restructuring expense reversal as well as charges of $1.3 million in employee separation costs, $0.5 million of fab closure costs and $0.2 million in releases associated with the 2009 Infrastructure Realignment Program and $0.8 million in employee separation costs associated with the 2010 Infrastructure Realignment Program. The charges in the first quarter include $1.6 million of employee separation costs, $0.6 million of fab closure costs and $0.2 million in releases associated with the 2009 Infrastructure Realignment Program as well as $0.4 million in employee separation costs associated with the 2010 Infrastructure Realignment Program.

The 2011 Infrastructure Realignment Program includes costs for organizational changes in the company's supply chain management group, the website technology group, and both the PCIA and MCCC groups. The 2010 Infrastructure Realignment Program includes costs to simplify and realign some activities within the MCCC segment, costs for the continued refinement of the company's manufacturing strategy, and costs associated with centralizing the company's accounting functions. The 2009 Infrastructure Realignment Program includes costs associated with the planned closure of the Mountaintop, Pennsylvania manufacturing facility and the four-inch manufacturing line in Bucheon, South Korea, both of which were announced in the first quarter of 2009. The 2009 Program also includes charges for a smaller worldwide cost reduction plan to further right-size our company and remain financially healthy.

The following table presents a summary of the activity in the company's accrual for restructuring and impairment costs for the quarterly periods ended March 27, 2011 and June 26, 2011 (in millions).

	Accrual Balance at 12/26/2010		New Charges		Cash Paid			Reserve Release			Non-Cash Items		Accrual Balance at 3/27/2011
2008 Infrastructure Realignment Program:
Lease Impairment Costs		0.7		—		(0.2	)		—			—		0.5
2009 Infrastructure Realignment Program:
Employee Separation Costs		8.1		0.6		(0.3	)		—			—		8.4
Fab Closure Costs		—		0.2		(0.2	)		—			—		—
2010 Infrastructure Realignment Program:		.
Employee Separation Costs		2.2		1.0		(1.5	)		—			—		1.7
2011 Infrastructure Realignment Program:
Employee Separation Costs		—		0.7		(0.7	)		—			—		—
	$	11.0	$	2.5	$	(2.9	)	$	—		$	—	$	10.6
	Accrual Balance at 3/27/2011		New Charges		Cash Paid			Reserve Release			Non-Cash Items		Accrual Balance at 6/26/2011
2008 Infrastructure Realignment Program:
Lease Impairment Costs		0.5		—		(0.2	)		—			—		0.3
2009 Infrastructure Realignment Program:
Employee Separation Costs		8.4		0.5		—			(0.1	)		—		8.8
Fab Closure Costs		—		0.3		(0.3	)		—			—		—
2010 Infrastructure Realignment Program:
Employee Separation Costs		1.7		0.9		(0.3	)		—			—		2.3
2011 Infrastructure Realignment Program:
Employee Separation Costs		—		1.3		(0.7	)		—			—		0.6
	$	10.6		3.0		(1.5	)		(0.1	)		0.0	$	12.0

Payouts associated with the 2008 lease impairment will be made on a regular basis and will be complete by the fourth quarter of 2011. The consolidation of the South Korea fabrication processes and the planned closure of the Mountaintop facility are expected to be completed by the end of 2012.

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Long-Term Debt (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended				0 Months Ended	6 Months Ended	0 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011 Senior Secured Revolving Credit Facility [Member]	May 20, 2011 Senior Secured Revolving Credit Facility [Member]	May 20, 2011 Term Loan [Member]	Jun. 26, 2011 Term Loan [Member]	May 20, 2011 Revolving Credit Facility [Member]
Additional cash used to extinguish outstanding obligations					$ 18.8
Maturity date of previous credit facility					June of 2013		June of 2012
Credit facility, revolving loan agreement				400.0
Credit facility, amount drawn	300.0		300.0
Incremental revolving commitment				150
Maturity date of the credit facility			May 20, 2016
Cash charges incurred for new credit facility	5.2	0.8	5.2
Wrote off of deferred financing fees	2.1					2.1
Borrowings interest rate terms			Eurocurrency Loans accrue interest at the London Interbank Offered Rate (LIBOR) plus 1.75%. The ABR is the highest of JP Morgan Chase Bank prime rate, the federal funds effective rate plus  1/2 of 1 percent, or adjusted LIBOR, as defined by the credit agreement, plus 1%. ABR loans accrue interest at the ABR rate plus 0.75%
Commitment fee, per annum			0.35%
Outstanding letters of credit			1.3
Amount reduced to under the Credit Facility	$ 98.7
First tier foreign subs stock pledged to secure debt			65.00%
Financial covenant terms	minimum interest coverage ratio of 3.0 to 1.0 and a maximum leverage ratio of 3.25 to 1.0

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Financial Statement Details (Schedule Of Other Expense, Net) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010	Jun. 26, 2011	Jun. 27, 2010
Financial Statement Details
Interest expense			$ 3.4	$ 6.0
Interest income			(1.3)	(1.4)
Other (income) expense, net			2.3	0.4
Other expense, net	$ 3.3	$ 2.6	$ 4.4	$ 5.0

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Subsequent Events

6 Months Ended

Jun. 26, 2011

Subsequent Events

Subsequent Events

Note 14 – Subsequent Events

The company has evaluated subsequent events and did not identify any events that required disclosure.

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Consolidated Balance Sheets (USD $) In Millions	Jun. 26, 2011	Dec. 26, 2010
ASSETS
Cash and cash equivalents	$ 435.7	$ 404.6
Short-term marketable securities	0.2	0.1
Accounts receivable, net of allowances of $ 29.8 and $ 26.9 at June 26, 2011 and December 26, 2010, respectively	162.4	156.4
Inventories	253.4	232.7
Deferred income taxes, net of allowances	16.7	13.2
Other current assets	38.9	36.1
Total current assets	907.3	843.1
Property, plant and equipment, net	722.9	689.3
Deferred income taxes, net of allowances	18.3	15.5
Intangible assets, net	74.8	69.7
Goodwill	169.4	164.8
Long-term securities	31.6	30.3
Other assets	37.0	36.4
Total assets	1,961.3	1,849.1
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY
Current portion of long-term debt		3.8
Accounts payable	158.1	139.0
Accrued expenses and other current liabilities	132.1	139.2
Total current liabilities	290.2	282.0
Long-term debt, less current portion	300.1	316.9
Deferred income taxes	36.1	33.0
Other liabilities	40.7	38.5
Total liabilities	667.1	670.4
Commitments and contingencies (Note 11)
Temporary equity - deferred stock units	1.9	2.4
Stockholders' equity:
Common stock	1.3	1.3
Additional paid-in capital	1,471.7	1,432.4
Accumulated deficit	(99.1)	(187.5)
Accumulated other comprehensive loss	(4.5)	(5.6)
Less treasury stock (at cost)	(77.1)	(64.3)
Total stockholders' equity	1,292.3	1,176.3
Total liabilities, temporary equity and stockholders' equity	$ 1,961.3	$ 1,849.1

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Supplemental Cash Flow Information (Schedule Of Cash Flow Supplemental Disclosures) (Details) (USD $) In Millions	6 Months Ended
	Jun. 26, 2011	Jun. 27, 2010
Supplemental Cash Flow Information
Income taxes, net	$ 15.1	$ 7.7
Interest	$ 2.5	$ 4.9

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Goodwill And Intangible Assets (Schedule Of Acquired Intangible Assets) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 26, 2011	Dec. 26, 2010
Identifiable intangible assets, Gross Carrying Amount	$ 414.9	$ 399.5
Identifiable intangible assets, Accumulated Amortization	(340.1)	(329.8)
Goodwill	169.4	164.8
Identifiable intangible assets, including goodwill	584.3	564.4
Intangible assets added	15.4
Minimum [Member] | Customer Base [Member]
Identifiable intangible assets, Period of Amortization, years	8
Minimum [Member] | Developed Technology [Member]
Identifiable intangible assets, Period of Amortization, years	2
Maximum [Member] | Customer Base [Member]
Identifiable intangible assets, Period of Amortization, years	10
Maximum [Member] | Developed Technology [Member]
Identifiable intangible assets, Period of Amortization, years	15
In Process R&D [Member]
Identifiable intangible assets, Gross Carrying Amount	2.8	1.8
In Process R&D, Useful Life, years	indefinite lived
Intangible assets added	1.0
Covenant Not to Compete [Member]
Identifiable intangible assets, Gross Carrying Amount	30.4	30.4
Identifiable intangible assets, Accumulated Amortization	(30.4)	(30.4)
Identifiable intangible assets, Period of Amortization, years	5
Assembled Workforce [Member]
Identifiable intangible assets, Gross Carrying Amount	1.0	1.0
Identifiable intangible assets, Accumulated Amortization	(1.0)	(0.9)
Identifiable intangible assets, Period of Amortization, years	5
Process Technology [Member]
Identifiable intangible assets, Gross Carrying Amount	1.6	1.6
Identifiable intangible assets, Accumulated Amortization	(1.4)	(1.2)
Identifiable intangible assets, Period of Amortization, years	5
Patents [Member]
Identifiable intangible assets, Gross Carrying Amount	5.9	5.9
Identifiable intangible assets, Accumulated Amortization	(5.7)	(5.6)
Identifiable intangible assets, Period of Amortization, years	4
Trademarks and Tradenames [Member]
Identifiable intangible assets, Gross Carrying Amount	25.2	25.2
Identifiable intangible assets, Accumulated Amortization	(25.2)	(25.2)
Identifiable intangible assets, Period of Amortization, years	1
Customer Base [Member]
Identifiable intangible assets, Gross Carrying Amount	81.6	81.6
Identifiable intangible assets, Accumulated Amortization	(67.2)	(65.9)
Developed Technology [Member]
Identifiable intangible assets, Gross Carrying Amount	250.7	238.9
Identifiable intangible assets, Accumulated Amortization	(207.1)	(199.0)
Intangible assets added	11.8
Core Technology [Member]
Identifiable intangible assets, Gross Carrying Amount	15.7	13.1
Identifiable intangible assets, Accumulated Amortization	(2.1)	(1.6)
Identifiable intangible assets, Period of Amortization, years	10
Intangible assets added	$ 2.6

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Acquisitions And Divestitures (Details) (USD $) In Millions	Mar. 15, 2011
Acquisitions And Divestitures
Acquisition price	$ 17.4

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Securities (Summary Of Securities) (Details) (USD $) In Millions	Jun. 26, 2011	Dec. 26, 2010
Market Value	$ 31.8
Short-term Investments [Member]
Amortized Cost	0.2	0.1
Gross Unrealized Gains
Gross Unrealized Losses
Market Value	0.2	0.1
Short-term Investments [Member] | U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Amortized Cost	0.2	0.1
Gross Unrealized Gains
Gross Unrealized Losses
Market Value	0.2	0.1
Auction Rate Securities [Member] | Long-term Investments [Member]
Amortized Cost	35.6	35.3
Gross Unrealized Gains
Gross Unrealized Losses	(6.3)	(7.3)
Market Value	29.3	28.0
Long-term Investments [Member]
Amortized Cost	37.6	37.5
Gross Unrealized Gains	0.3	0.1
Gross Unrealized Losses	(6.3)	(7.3)
Market Value	31.6	30.3
Long-term Investments [Member] | U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Amortized Cost	1.7	1.9
Gross Unrealized Gains	0.3	0.1
Gross Unrealized Losses
Market Value	2.0	2.0
Long-term Investments [Member] | Corporate Debt Securities [Member]
Amortized Cost	0.3	0.3
Gross Unrealized Gains
Gross Unrealized Losses
Market Value	$ 0.3	$ 0.3

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Securities (Available-For-Sale Securities By Contractual Maturity) (Details) (USD $) In Millions	Jun. 26, 2011
Securities
Due in one year or less, amortized cost	$ 0.2
Due after one year through three years, amortized cost	0.4
Due after three years through ten years, amortized cost	1.2
Due after ten years, amortized cost	36.0
Total, amortized cost	37.8
Due in one year or less, market value	0.2
Due after one year through three years, market value	0.4
Due after three years through ten years, market value	1.4
Due after ten years, market value	29.8
Total, market value	$ 31.8

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Contingencies (Details) (USD $) In Millions				1 Months Ended
	Feb. 10, 2010 POWI 4 [Member]	Jun. 26, 2011 Probable Loss [Member]	Jun. 26, 2011 Possible Loss [Member]	Jan. 31, 2011 POWI1 [Member]	Dec. 31, 2008 POWI1 [Member]	Oct. 31, 2006 POWI1 [Member]
Damages awarded for infringement of the patents				$ 12.2	$ 6.1	$ 34.0
Assessed damages for infringement of Fairchild patents	17.0
Range of possible losses, minimum		13.0	0
Range of possible losses, maximum		30.0	5.0
Potential litigation outcomes		$ 14.7	$ 0

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Fair Value (Fair Value Of Assets And Liabilities) (Details) (USD $) In Millions	Jun. 26, 2011
Marketable securities	$ 31.8
Fair Value Measurements, Recurring [Member]
Assets	3.4
Liabilities	(1.1)
Total foreign currency derivatives	2.3
Total securities	31.8
Fair Value Measurements, Recurring [Member] | Auction Rate Securities [Member]
Total securities	29.3
Fair Value Measurements, Recurring [Member] | Auction Rate Securities [Member] | Fair Value, Significant Unobservable Inputs ( Level 3) [Member]
Total securities	29.3
Fair Value Measurements, Recurring [Member] | Marketable Securities [Member]
Marketable securities	2.5
Fair Value Measurements, Recurring [Member] | Marketable Securities [Member] | Fair Value, Quoted Prices in Active Markets ( Level 1) [Member]
Marketable securities	2.5
Fair Value Measurements, Recurring [Member] | Fair Value, Quoted Prices in Active Markets ( Level 1) [Member]
Total securities	2.5
Fair Value Measurements, Recurring [Member] | Fair Value, Significant Other Observable Inputs (Level 2) [Member]
Assets	3.4
Liabilities	(1.1)
Total foreign currency derivatives	2.3
Fair Value Measurements, Recurring [Member] | Fair Value, Significant Unobservable Inputs ( Level 3) [Member]
Total securities	$ 29.3